Cherokee County Board of Commissioners FINANCIAL UPDATE FY2014 Audit - - PowerPoint PPT Presentation

Cherokee County Board of Commissioners

FINANCIAL UPDATE

FY2014 Audit & CAFR Overview

CAFR – Comprehensive Annual Financial Report

Presented by Janelle Funk 4/21/2015

Cherokee County Audit & CAFR Overview Why Do We Do It? How Is it Done?

State Law

• State law requires local governments to publish a complete set of audited

financial statements each year. (O.C.G.A. § 36‐81‐7)

Federal

Requirements

• The County receives federal assistance through various grant programs and is

therefore required to undergo an annual “Single Audit” in conformity with the provision of OMB Circular A‐133.

How Do Auditors Conduct Audit:

• Exam, on a test basis, the amounts and disclosures in the financial statements.
• Assess accounting principles and significant estimates used.
• Perform tests of internal controls.
• Evaluate the overall financial statement presentation.

Auditors Duty:

• Obtain reasonable assurance the financial statements are free of material

misstatement.

• Report county’s compliance with A‐133 requirements that could have a direct

and material effect on County’s major federal programs.

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Cherokee County Audit & CAFR Overview Overview of the Process

CAFR is prepared County’s General Ledger now reflects Final, Post‐Audit Results Finance makes adjustments to financial statements Auditors discuss concerns with Finance & recommend adjustments Auditors perform audit on closed financial statements Finance Team closes financial statements at end of fiscal year (Final, Pre‐Audit Results)

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Cherokee County Audit & CAFR Overview 3 Types of Auditor’s Opinions

Unmodified (“Clean”) – financial statements are fairly presented in all material respects and comply with GAAP Modified – not necessarily negative, could be limited scope or unable to verify information Adverse - indicates serious problems with the audit, and can be very damaging to the County’s reputation and financial position

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Cherokee County Audit & CAFR Overview FY2014 Audit Opinion

Independent Auditor’s Report Cherokee County Received:

Unmodified (“Clean”) – financial statements are fairly presented in all material respects and comply with GAAP

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Cherokee County Audit & CAFR Overview What’s Done? What’s Next? What’s Done:

• 1. CAFR on County website
• 2. CAFR has been submitted to several entities including:

a) State Department of Audits and Accounts b) Georgia Department of Human Services c) CVIOG website (“TED”) d) ARC e) Banks, Bondholders, Rating Agencies, Bond Insurer f) GDOT g) Other agencies administering grants

• 3. Similar information submitted to DCA

What’s Next

• 1. Submitting our CAFR to the GFOA to be considered for GFOA’s Certificate of

Achievement for Excellence in Financial Reporting

• 2. State of Georgia should issue letter indicating acceptance of our CAFR (or

corrections required before acceptance) in May 2015

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Cherokee County received the GFOA Certificate of Achievement for Excellence in Financial Reporting for last year’s CAFR. We will submit for the award again for FY2014.

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Cherokee County Audit & CAFR Overview Basic Financial Statements ‐ Excerpt

Bottom Line: The CAFR is a 165 page document, mostly comprised of very technical accounting information. 20

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Cherokee County Audit & CAFR Overview Funding Sources

$150 $155 $160 $165 $170 $175 $180 $185 $190 $195

$189.6 $193.5

Total Funds $3.9M Better Than Budget

Budget Actual

Bottom Line: Almost all funds met or exceeded the revenue budget, or if not, trimmed expenditures to match revenues,

• r had adequate reserves to fund operations.

The is no consolidated report comparing Budget to Actual results in the CAFR. This chart is the result of summing results reported on pgs 21‐23 and 70‐ 78 of the CAFR. We also present this information in

• ur CAFR’s Transmittal Letter.

The biggest drivers of this $3.9M positive variance:

• UnCS Fund ‐ $1.5M
• Insurance Premium Tax, Building

Permits, COED Land Sale

• SPLOST‐ $2.3M
• Sales Taxes > Budget

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Cherokee County Audit & CAFR Overview Funding Sources

$30 $35 $40 $45 $50 $55 $60 $65

$61.6 $61.5

General Fund $0.1M Less Than Budget

Budget Actual

Bottom Line: The General Fund was properly funded for operations.

This chart is the result of summing Revenues and Other Funding Sources

• n pages 21 & 22 of the CAFR.

The most significant variances include:

• TAVT/MV +$0.5M
• Mortgage Related Taxes +$0.4M
• Property Taxes +$0.3M
• Other Taxes +$0.2M
• Other Misc +$0.2M
• Court Fines ‐$0.2M
• Sale of Old Admin Bldg ‐$1.6M

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Cherokee County Audit & CAFR Overview Expenditures & Other Funding Uses

$150 $160 $170 $180

$174.5 $161.8

Total Funds $12.7M Under Budget

Budget Actual

Bottom Line: Only two funds exceeded the budget, but by less than $3,000. The CAFR confirms this in Note 2: Legal Compliance – Budgets on page 39. $100 $110 $120 $130

$128.4 $124.7

Operating Funds $3.7M Under Budget

Budget Actual

$30 $40 $50 $60

$46.1 $37.1

Capital Funds $9.0M Under Budget

Budget Actual

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Cherokee County Audit & CAFR Overview Expenditures & Other Funding Uses

$30 $40 $50 $60 $70

$61.7 $60.2

General Fund $1.5M Under Budget

Budget Actual

Bottom Line: The General Fund expenditures did not exceed the Budget.

This chart is the summary of information found on pages 21 & 22 of the CAFR. The General Fund spent 98% of the Budget. The most significant variances include:

• Sheriff Office ‐$0.4M
• Judicial Services ‐$0.4M
• County Attorney ‐$0.2M
• Tax Commissioner ‐$0.1M
• Property Management ‐$0.1M

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Recommended Reading

Transmittal Letter

Provides background and context of CAFR CFO is “transmitting” the report to intended users and covers:

* Profile of Government * Economic Condition (Employment, Industry Mix, Population Statistics) * Major Initiatives * Overview of Current Year Results

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Cherokee County Board of Commissioners Appendix

Overview of a CAFR

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Need 3 things to comply with GAAP:

1. Management Discussion and Analysis (MD&A) 2. Basic Financial Statements 3. Required Supplementary Information (RSI) GAAP, however, encourages the production of the broader presentation in the format

• f CAFR.

CAFR Overview – Are We Required To Prepare A CAFR?

CAFR – Comprehensive Annual Financial Report

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General information on the government’s structure, services, and environment +

Management’s Discussion and Analysis

Government-wide Financial Statements Government Fund Financial Statements Proprietary Fund Financial Statements Fiduciary Fund Financial Statements Notes to the Financial Statements Additional Required Supplementary Information Information on individual funds and discretely presented component units and other supplementary information not required by GAAP + Trend data and non-financial data Introductory Section Financial Section

CAFR

Statistical Section

Mandatory Reporting (GAAP)

CAFR Overview – CAFR vs. Basic Financial Statements

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Introductory Section Financial Section Statistical Section

CAFR Overview – 3 Major Sections

• Transmittal Letter
• List of Principal Officials
• Organizational Chart
• Auditor’s Opinion
• Management Discussion

and Analysis (MD&A)

• Basic Financial Statements
• Notes
• Required Supplementary

Information

• Other Information

(Combining & Individual Statements)

• Financial Trends
• Revenue Capacity
• Debt Capacity
• Demographics and

Economy

• Operating Information

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CAFR Overview ‐ Introductory Section

Transmittal Letter

Provides background and context of CAFR CFO is “transmitting” the report to intended users and covers:

* Profile of Government * Economic Condition (Employment, Industry Mix, Population Statistics) * Major Initiatives * Awards & Acknowledgements

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CAFR Overview – Financial Section

Management Discussion & Analysis (MD&A)

• Narrative Overview Preceding Financial Statements
• GASB’s Intent:
• Financial Information should be Relevant to Users and Reliable
• Information Should be Understandable to

Knowledgeable Users

The MD&A Should…

• Be Objective,
• Be Easily Readable*, and
• Provide and Assess the Year‐Over‐Year

Financial Position

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CAFR Overview – Financial Section

Basic Financial Statements

• Government‐wide Financial Statements
• Accrual based
• Includes Components Units
• Long‐Term Focus
• Fund Financial Statements
• Modified Accrual
• Short‐Term Focus
• Budget v Actual Comparisons
• Names of Statements Are Different But…
• Reporting of Assets, Liabilities, Revenues,

Expenditures

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CAFR Overview – Financial Section

1. Summary of Significant Accounting Policies 2. Budgetary Information 3. Government-Wide to Fund Financial Stmt Reconciliation 4. Deposits & Investments 5. Receivables 6. Capital Assets 7. Short-Term Borrowings 8. Long-Term Debt 9. Interfund Activity

• 10. Defined Benefit Pension Plan
• 11. Defined Contribution Plan
• 12. Other Post Employee Benefits
• 13. Risk Management
• 14. Commitments and Contingent Liabilities
• 15. Hotel/Motel Lodging Tax
• 16. Restatement of Prior Year Balances

The notes to the financial statements provide greater clarity to the numbers.

Notes To Financial Statements

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CAFR Overview – Statistical Section

Financial Trends

• Revenues &

Expenses

• Assets
• Fund

Balances

Understand govt’s financial performance

• ver time

Revenue Capacity

• Tax Digest
• Tax Rates
• Principal

Taxpayers

• Tax Levies &

Collections

• Property Liens

Understand govt’s ability to carryout

• perations

and meet

• bligations

Debt Capacity

• Debt
• utstanding
• Debt Per

Capita

• Revenue to

cover debt

Understand govt’s affordability

• f
• utstanding

debt

Demographic & Economic Info

• Population
• Income per Capita
• Unemployment %
• Principal Employers
• Median Age
• School Enrollment

Understand economic indicators that could impact area & govt

• perations

Historical Information Over Last 10 Fiscal Years

Operating Indicators

Report # of:

• Employees By

Function

• Court Cases
• Business Licenses
• E911 Calls,
• Fires
• Arrests
• Rezone Cases
• Building Inspections
• Registered Voters
• Senior Meals

Delivered

• Animals Adopted
• EMS Dispatches
• Vehicles Maintained
• Other Metrics

Understand services & efficiency

• f
• perations

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