06-09-1997 Council Packet - Laserfiche WebLink

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J ' i il;> ; < Stt' f . J < f R eporting Model In January 1997, the Governmental Accounting Standards Board issued an exposure draft that would establish new and updated fliiancial reporting standards for state and local governments, including states, cities, towns, school districts, ?nd other local governmental units. If approved, this exposure draft is designed to make governments general purpose external financial reports ei^'ler to understand and more useful to the citizenry, legislamre and oversight bodies, and investors and creditors. The basic financial statements would continue to report much of the information currently reported in the general purpose financial statements. However, the proposed standards also would make some modifications and require additional information that governments have not previously reported. The most significant change wo^ require the governmental unit to report using an entity-wide perspective as well as the fund perspective which is similar to what is currently being used. The purpose of the entity-wide perspective is to provide a more comprehensive view of a government’s operations and financial position than is possible when information if reptn^ mily by fund or fund type. This statement would make numerous other changes to the reporting standards including requiring capitalization of infrastrucmre assets and depreciation of general fixed assets. The expected effective date for this exposure draft is for periods beginning after June 15, 2000. Tax Increment Financing The 1995 CMbw Tax Bill contained a provision which transferred the responsibility to enforce the Tax Increment Financing (TIF) laws from the Department of Revenue to the Office of the State Auditor (OSA). Accordingly, beginning in 1996, each TIF district is required to complete an annual disclosure statement, financial report, and debt repOTt for the preceding calender year and file the forms with the OSA. This statute also allows the OSA to examine and audit accounts and records on a random basis, without previous notice, as the auditor deems to be in the public interest. The OSA is now in the process of completing numerous audits of TIF districts. These audits review closely the contents of TIF plans, reporting forms, and other required supporting documentation. As these audits have been completed the OSA have revealed recurring problems. Most of the problems have occurred because of improper accounting for administrative expenses, inadequate TIF plan documents, inadequate documentation of developer expenditures, and inadequate records of TIF district expenditures. We recommend all municipalities review TIF district operations closely for compliance with these and other issues. -16- i { ■ ^ I \ i i