The Governmental Accounting Standards Board (GASB) Statement No. 101 updates GASB Statement No. 16 and addresses the matter of compensated absences for employees of state and local governments.

What is GASB 101?

GASB 101 is an update to the guidelines for state and local governments regarding paid employee leave, otherwise known as “compensated absences.” The purpose of this statement is to update the guidance for recognition and measurement of compensated absences.

What is the effective period?

The requirements of GASB 101 are effective for fiscal years beginning after December 15, 2023. All governmental entities with fiscal year ends of December 31, 2024 or later must implement the new guidance.

What is considered a compensated absence?

Compensated absence: leave for which employees receive compensation in the form of cash payments for time off, cash payments for unused leave if terminated, or a non-cash settlement.

Examples of compensated absences: paid time off, sick leave, holidays, parental leave, military leave, jury duty, bereavement, sabbatical, floating holidays.

When are liabilities recognized?

Liabilities for compensated absences must be recognized in the following cases: for unused leave and leave that has been used but not yet compensated.

1. Unused leave (unused leave must meet the following criteria to be recognized as a liability):
   1. The employee has performed the services required to earn the leave
   2. The leave accumulates (carries forward into future pay periods)
   3. The leave is more likely than not to be used for time off, or otherwise paid in cash or settled through non-cash means
2. Leave that has been used but not yet compensated (that is, paid in cash or settled through non-cash means)

As is the case under GASB 16, salary-related payments ­— including the employer’s share of payroll-related taxes (FICA, Medicare), defined pension contributions, and other post-employment benefit plans — should also be part of the compensated absence liability calculation.

Note: Liabilities for certain types of compensated absences that are sporadic in nature, such as parental leave, military leave, and jury duty leave, should not be recognized until the leave commences.

How to measure liability for compensated absences

For unused leave: To measure liability for unused leave, municipalities should use the employee’s pay rate as of the date of the financial statements, unless a compensated absence arrangement calls for a different pay rate at the time of payment (for example, sick pay based on 50% of the employee’s pay rate).

For leave that has been used but not yet paid or settled: To measure liability for leave that has been used but not yet paid or settled, municipalities should use the amount of the cash payment or non-cash settlement to be made.

What has changed from previous guidance?

• The most significant change brought about by GASB 101 is the application of the “more likely than not” condition when calculating the unused leave liability. This lower threshold will likely result in a higher compensated absences liability than under the previous “probable” threshold.
• Under the new guidance, liability for sick leave should now be calculated the same way as all other compensated absences.
• GASB 101 updates the previous requirement (established by GASB 16) to disclose gross increases and decreases in a liability for compensated absences. Governments can now choose to disclose only the net change in the liability, but they must identify this figure as the net change.
• In addition, under the new statement, government entities are no longer required to disclose which funds have been used to liquidate the liability for compensated absences.

What actions do municipalities need to take?

• Municipalities should look at their current compensated absences policy and make adjustments in line with GASB Statement No. 101.
• Municipalities should also review employee contracts and assess whether a change needs to be made to the compensated absence calculation.
• Municipalities will need to assess leave usage by asking key questions (the answers to these questions will depend largely on employee contracts):
  • What is the likelihood the leave will be used?
  • What is the likelihood the leave will be paid out upon termination, death or retirement?
  • At what rate will the leave be used or paid out?

Additional Resources

For more details on GASB 101, visit the GASB pronouncements page. For advice or assistance with your GASB 101 implementation, please don’t hesitate to reach out to us at RBT CPAs. We’re happy to answer your questions and help guide you through the most recent GASB updates.

New York State appears to be stepping up to get a grasp on the EMS crisis and plotting a potential course for what’s next.

Across the nation, EMS is in crisis. Response times are longer. More workers are leaving the field than entering it, with mental health and burnout to blame. Costs are up and funding is dwindling. Pay is on par with fast food restaurants (although many rural areas depend largely on volunteers). The public, in general, doesn’t realize EMS is not funded the same way as the local police but still counts on municipalities to ensure services are in place should they need them.

It’s a national problem that many say is due to an approach established 50 years ago that no longer works. Back then, emergency services were paid by an individual’s insurance. Today, Medicare only reimburses for transportation. So, if EMS goes to a home and resolves an issue without having to transport a patient to the hospital, there’s no federal reimbursement.

In January, the New York Association of Counties (NYSAC) acknowledged counties are being asked to help shore up resources, but local laws and other issues are exasperating the challenge. Still, NYSAC presented  proposals and legislation to address the issue. (By the end of the legislative session, one bill made it through both chambers, awaiting the Governor’s signature. It calls for ambulance services to be reimbursed by Medicaid when treatment in place is administered and/or when transportation is provided to a health care setting other than a general hospital.)

In March, New York State Comptroller Thomas P DiNapoli issued a report on “The Growing Role of Counties in Emergency Medical Services.” It discusses the variety of ways EMS is provided and funded in New York, and how a lack of data makes it difficult to assess what’s needed. It also points to counties playing a more active role in assessing and supplementing EMS services, as well as the need for greater State involvement.

According to the report, there were 989 agencies providing EMS in New York, with almost 64% classified as corporations and the majority being non-profit. The remaining 36% were owned by local governments, including 162 owned by fire districts.

Less than 20% rely solely on paid staff; about 50% rely solely on volunteers; and the balance work with a combination of the two. However, when it comes to city and county EMS agencies, most have paid staff like private for-profit EMS agencies. Some EMS staff also serve as firefighters.

In New York, patients are treated and transported regardless of ability to pay or coverage. Many agencies cover expenses by billing for services. At times, property taxes and other sources help with funding, as does fundraising by volunteer fire departments.

The report refers to the State Emergency Medical Services Council’s State EMS Sustainability Technical Advisory Group pointing out that most reimbursement is for transportation services, not medical services. Inadequate federal reimbursement rates and uncompensated care are issues. They also highlight a surge in county involvement with backup or mutual aid to meet residents’ needs.

The report concludes, “The current circumstances call for direct State involvement to support the efforts of counties and other local governments to turn fragmented and ad hoc responses into comprehensive solutions. While Regional EMS Councils and local government providers should conduct regular needs assessments, solutions need to start at the State level and include better statewide data collection, management and analysis to help EMS agencies identify where services are falling short and provide options for improving response times and outcomes. Better centralized guidance from the State about funding sources can help local officials make more informed decisions about how to pay for these services.”

It sounds like there’s more to come. As your municipality continues standing up to the many challenges associated with meeting residents’ needs, you can count on RBT CPAs for accounting, audit, tax, and advisory services. Why not give RBT CPAs a call to see how we can be Remarkably Better Together!

RBT CPAs never offshores work outside of the U.S. so you always know who is handling your financial information.

In the absence of Federal legislation governing AI, states are taking it upon themselves to try to get ahead of, or at least keep up with, its development and use. New York is among the forerunners, with legislation already adopted for state agencies and more being explored in relation to labor laws, penal law, the regulation of specific industries, and more.

Overall, legislation seems to be trying to balance unlocking AI potential for the public good while protecting the public from its downsides. Municipalities and their employees should stay abreast of what’s here and what’s coming to ensure compliance and make informed decisions about local AI applications and use.

AI Policy for NYS Agencies

In January, New York State’s Information Technology AI Policy took effect. While encouraging state agencies to adopt AI tools, it also sets guidance for doing so responsibly. While the policy does not cover authorities, boards, and other NYS Government organizations (i.e., the MTA and NYSERDA), these groups are encouraged to follow the policy or use it as guidance.

The policy is broad and should be reviewed in full to understand its full scope. In general, agencies are allowed to adopt their own policies if they are not less restrictive than the state’s policy. State agencies must appoint supervisors to oversee AI systems, which are not allowed to make decisions impacting the public without final approval by a human. State agencies should also have policies for processing personally identifiable, confidential, or sensitive information. They are also advised to consult counsel to ensure intellectual property protections aren’t undermined when inputting data.

The policy also includes best practices for addressing unacceptable uses of generative tools to deceive people, creating content without confirming data, and using AI chatbots without identifying them as such.

Proposed Updates to NY Penal Code

On the criminal law front, Governor Hochul proposed legislation in February as part of the FY 2025 budget to set “important guardrails” to protect against untrustworthy and fraudulent uses of AI. This would classify using AI for the unauthorized use of a person’s voice as a misdemeanor; allow for private action to combat digitally manipulated, false images; disclosure on digitized political communications published within 60 days of an election; and clarify current law regarding unlawful distribution of intimate or sexually explicit images.

Proposed NY Labor Law

NY Bill S07623 was proposed on February 28. If enacted, it would be unlawful to use an automated employment decision tool (AEDT) to screen applicants for jobs in NY, unless the AEDT underwent a disparate impact analysis in the past year, and the employer published a summary of the analysis on its website and provided the NY DOL with an annual summary. If enacted, it will take effect immediately. (This aligns with NYC’s Local Law 144 which took effect last July, setting rules for employer use of AEDTs for screening, hiring, and assessing employees for advancement.)

Private Sector Impacts

As for legislation covering the private sector, while a proposed state task force focusing on this was vetoed in 2023, proposed legislation and guidelines for different industries have been issued and/or are in the pipeline.

For example, the NYS Department of Financial Services issued a proposed circular letter on January 17 regarding the use of external consumer data and information sources(ECDIS), as well as AI systems (AIS), for insurance underwriting and pricing. It includes rules and principles to address “risks of inaccurate, arbitrary, capricious, or unfairly discriminatory outcomes that may disproportionately affect vulnerable communities and individuals or otherwise undermine the insurance marketplace in New York.” Comments on the letter were accepted until mid-March, so there may be more to come.

The insurance industry isn’t alone. For example, bills SB 7922 and AB 8098 target book publishers, requiring disclosure when books are produced with AI. When it comes to newspapers, magazines, and other publications printed or electronically published, SB 7847 would require the identification of any parts made with AI.

For all businesses, there’s AB 8179, which would impose a “Robot Tax” on businesses that displace workers with AI.  There’s also the Advanced Artificial Intelligence Licensing Act which would require the registration and licensing of advanced AI systems considered high-risk

No doubt, more is coming – a lot more. As you work with counsel to understand the impact of new laws and those in the pipeline, while making sure your employees are also up-to-speed, if your organization needs any accounting, audit, tax, or advisory services, you can continue to count on RBT CPAs to do the job professionally, ethically, on-time and within budget. Give us a call to learn more.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Please note: RBT CPAs is not a law firm and the information herein should not be construed as legal advice. As always, to ensure your policies comply with global, national, state, and local laws, it is in your best interest to seek legal counsel.

Last September, the Governmental Accounting Standards Board (GASB) issued a proposal to require certain types of capital assets be disclosed separately for purposes of note disclosures and certain assets to be classified as “held for sale.” Stakeholders have been reviewing the proposal and comments were accepted until January 5.

According to the Exposure Draft, Statement requirements would be effective fiscal years beginning after June 15, 2025 (although earlier application would be encouraged), with certain assets to be reported retroactively for periods covered by the basic financial statement.

State and local governments must provide details about capital assets in financial statement notes. Prompted by Statement 87 (Leases) and 96 (Subscription-Based Information Technology Arrangements) creating “right-to-use” assets, GASB began considering existing classifications’ effectiveness. The Board proposed certain types of assets be disclosed separately in capital assets note disclosures, including:

1. New! Capital assets held for sale, by major class of asset
2. Lease assets reported under Statement 87, by major class of underlying asset
3. Subscription assets reported under Statement 96, and
4. Intangible assets other than leases and subscriptions, by major class of assets.

The proposed new classification of “Capital assets held for sale” would be evaluated each reporting period and apply for assets the government has decided to sell if the sale would likely be finalized within one year of the financial statement date. Factors associated with the likelihood of sale include, but are not limited to:

1. Asset is available for immediate sale in current condition
2. An active program to locate a buyer has been initiated
3. Market conditions for that type of asset
4. Regulatory approvals to sell the asset

If requirements cannot be applied retroactively to all periods in a basic financial statement, a reason must be given. Changes adopted related to “capital assets held for sale” should be reported as a reclassification resulting from an accounting principle change.

Overall, proposed updates would make reporting across government entities more consistent and comparable, and the additional information would better inform decision-making and assess accountability.

We will keep you updated as more information becomes available. In the meantime, please know RBT CPAs are here to support your municipality’s accounting, tax, audit, and advisory needs. Give us a call to learn more.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.