Category: Accounting and Financial Reporting (page 2 of 3)

North Carolina’s County and Municipal Fiscal Analysis Tool: Research Review

Have you ever used the County and Municipal Fiscal Analysis tool that is housed on Treasurer’s website?  It allows municipalities and counties in the state to see how they are doing with regard to financial condition and compare their performance to peers.  It has recently become the focus of new research coming from colleagues at the University of South Dakota and Indiana University.  Ed Gerrish and Luke Spreen presented their research on our benchmarking tool earlier this month at the Public Management Research Conference and it is forthcoming at the Journal of Public Administration Research and Theory.  In this Research Review I am going to discuss their research and pull a few findings that are especially notable for those of you that work in budgeting and finance.

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You Are Doing WHAT to the Governmental Funds?? – Part 3, The Long-Term Approach

Yogi Berra said it best.  “It’s déjà vu all over again.”  That is what should come to everyone’s mind upon reviewing the third measurement focus and basis of accounting proposal from the Governmental Accounting Standards Board’s (GASB) recent Invitation to Comment (ITC), Financial Reporting Model Improvements – Governmental FundsAs was noted in the previous blog post You Are Doing WHAT to the Governmental Funds?? –  Part 2, the Short-Term Approach, each proposal is moving further and further away from the current financial resource measurement focus and the modified accrual basis of accounting currently used in the governmental funds.  Well, this is an all-out retreat!!  In fact, it is also being referred to as the total financial resources approach.

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You Are Doing WHAT to the Governmental Funds?? – Part 2, The Short-Term Approach

In our last chapter, You Are Doing WHAT to the Governmental Funds?? – Part 1, The Near-Term Approach, we explored one of the three new measurement focus and basis of accounting (MFBA) options being considered for the governmental funds.  These approaches are presented in the Governmental Accounting Standards Board’s recent Invitation to Comment (ITC), Financial Reporting Model Improvements – Governmental Funds.  And you thought it was a scary chapter!?? The suspense continues with the second MFBA proposal – the short-term (or working capital) approach.  One spoiler alert (but it is for your own good) – each approach goes further away from the current resource measurement focus and modified accrual basis of accounting currently used by the governmental funds.  (Just wait until you read Part 3….)

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You Are Doing WHAT to the Governmental Funds?? – Part 1, The Near-Term Approach

In my previous post, Invitation to Comment – or Invitation to Disaster?? The Long Slog to a New Financial Reporting Model Begins!, I provided a fascinating overview of the Governmental Accounting Standards Board’s (GASB) new financial reporting model project.  As was noted, the actual Invitation to Comment (ITC), Financial Reporting Model Improvements – Governmental Funds is a first step in the long due process of developing a new GAAP standard.  As is the case here, an ITC usually provides an opportunity for the GASB to solicit feedback on various proposal considerations.  A significant aspect of the reporting model project is the reconsideration of the unique measurement focus used in the governmental funds (current financial resources).  The ITC details three new measurement focus approaches to consider – the near-term approach, the short-term approach, and the long-term approach.  This post, focusing on the near-term approach, is the first in a series that will provide (hopefully) a clearer insight into the plotting that is occurring in Norwalk.

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There are two sides to every coin: Or is there Common Sense about Cost Accounting in Government?

In the 1990s there was a wave of euphoria about cost accounting and particularly Activity Based Costing (ABC).  One book in particular stands out in my mind as particularly euphoric: Common Cents: The ABC Performance Breakthrough by Stephen Turney.  While it had a clever title, few people remember this book now, but many people remember ABC.  Many finance and budget managers do not recall ABC with fondness.  In fact, when government budget and finance managers are asked about the use of ABC in their organizations now, most will say that they are not using it.  However, when asked if they are doing some form of cost accounting, the measure is much higher.  In this post, I explore why budget and finance managers are willing to say that they are doing cost accounting and not ABC.  I further explore (and mix) the metaphor of common sense/cents about cost accounting by thinking of its uses as two sides of the same coin.

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Invitation to Comment – Or Invitation to Disaster?? The Long Slog to a New Financial Reporting Model Begins!

Well, it was inevitable. While we all are still reeling from the fun that has been GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments that was issued in June 1999, another chapter in the never-ending saga has begun. Yes, the Governmental Accounting Standards Board (GASB) recently added a new financial reporting model project to their official agenda. Now, the good news is that this type of project takes time – lots of time. The project that culminated in GASB Statement No. 34 was a 15-year process. The first implementers of GASB Statement No. 34 did so 15 years ago. So, one would hope that this is the beginning of another 15 year adventure and, at the end, most of us will be retired. Well, no such luck this time. While we do have time to possibly retire, the potential release of a new reporting model standard is currently slated for November 2021, with implementation certainly several years after that. However, we are not looking at a 15-year process.

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Whose Assets Are They Anyway?

The Governmental Accounting Standards Board (GASB) issued GASB Statement No. 84, Fiduciary Activities the last week in January 2017.  Obviously, this is breaking news – stop the presses!  The standard is the culmination of a long-term, wide-ranging project to address accounting and financial reporting for the following:

GASB Statement No. 68)

With GASB Statement No. 84, the GASB provides definitive guidance on how all fiduciary activities of a governmental entity should be reported. It is now definitive that assets that are associated with a fiduciary activity and are legally entrusted should be reported in one of three specific fiduciary fund types.  Those assets that are not legally entrusted but still meet the definition of a fiduciary activity are to be reported in a separate fiduciary fund type. This does clear some inconsistencies with fiduciary fund reporting currently where entrusted and non-entrusted assets may be reported in the same fund type (although many of us probably never lost much sleep over it).

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It is Going to Cost HOW Much to Retire It??

Everyone is well aware, or should be, that the cost of retiring is escalating almost by the minute.  There are financial advisors and estate planners who solely focus on enabling us to have a shot at a decent retirement, relatively free of financial concern.  Employers in both the public and private sectors are recognizing mammoth liabilities for the pension resources they are holding in trust for their employees.  But, are employees all that are going to retire from a state or local government?  Is that the only long-term cost that a governmental entity is going to be liable for (above and beyond normal indebtedness)?  The answer is obviously no or I would not be writing this post.

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Are all North Carolina County Property Tax Appraisers Subject to USPAP?

This is the exact question that I was asked recently.

“Are all North Carolina, county, ad valorem, real estate appraisers subject to the Uniform Standards of Professional Appraisal Practice (USPAP)?”

This could be a very short blog post. The answer to the question is, “no”. But a different question, “Should all North Carolina county ad valorem appraisers comply with USPAP?” leads to a more in depth discussion.  The answer to that question is, “yes”.  I believe if you act as an appraiser, you should comply with USPAP.

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Dark Stores

There are many worthy assessment-related questions posed on PTAX and elsewhere that I hope we can address during the life of this new blog. But given our blog title, Death and Taxes, and a topic looming around us that some have coined Dark Stores, it seems like a dark and creepy coincidence to start right here.
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