Ninety-nine percent of counties, cities, towns, villages, and fire districts in New York State use OSC’s electronic filing software for preparing and filing their Annual Update Document (AUD).
However, recently OSC updated the AUD filing software, moving from version 5.95 to 5.96, to assist with the implementation of GASB 84. Now that it has, it’s time to ensure your implementation is complete. As you may be aware, the Government Accounting Standards Board (GASB) has been issuing new standards over the last few years in a bid to improve the financial reporting of U.S. and local governments. The GASB’s goal is to provide better information to financial statement users. OSC has determined that Statement 84 should be implemented for AUD filling purposes. As a refresher, GASB 84 outlines the specific criteria needed to determine which activities are fiduciary. Local governments and school districts must assess which activities are fiduciary under the new standards because there are significant changes in the way items can be reported in the future.
There are three types of fiduciary activities defined in Statement 84:
- Fiduciary component units, which include certain pension and other post-employment benefit (OPEB) arrangements and other component units that are fiduciary
- Pension and OPEB arrangements that are not component units
- Other fiduciary activities
Previously, agency fund activities only required balance sheet entries.
Now, however, activities that are reported in the governmental funds will need to also be included in the results of operation (revenues and expenditures). For example, when recording payroll expenditures in a governmental fund, local governments, and school districts will need to record a liability for withholdings and keep the related cash in the governmental fund until those amounts are cleared. While these concepts are not new from an accounting perspective, local governments and school districts need to be mindful of the differences between how assets were previously recorded in an agency fund and how they will now be recorded in a governmental fund. Should activities currently classified as fiduciary still be considered fiduciary in nature or should these activities now be reported in a governmental fund, as a business-type activity, or not even reported at all? Additionally, consider if any current unrecorded activities would now meet the fiduciary activities definition and need to be reported.
RBT CPA’s wants you to be prepared for crucial financial news that impacts you and your municipality.
We understand keeping up with these complex changes can sometimes be overwhelming. Our goal is to alleviate your stress by breaking down these important changes and making sure you can implement best practices for the most common situations you’re bound to run into. It’s important to start identifying your organization’s fiduciary funds as soon as possible, if you haven’t already done so. While complying with GASB 84 may be complicated initially, don’t worry—we’re here to help. We want to assist you in analyzing various activities and change the way you think about fiduciary activities so you’re never unprepared. You can click here to view our GASB 84 webinar with your team or contact our professional team to schedule an appointment and connect. Additionally, if your local government or school district would like to share examples of how you have implemented these changes successfully, please email me at email@example.com – we would love to hear your insight.