FORMULACION COMPONENTE URBANO DEL PBOT DE LA VEGA

Financial statement requirements are different for higher education institutions than for non-higher education agencies. Requirements vary among non-higher education agencies. Following is a discussion of the financial statement requirements.

4.1 Higher Education Financial Statements

Financial statements required of higher education governing boards and/or institutions are discussed in Higher education Accounting Standard No. 17. One copy of these statements and related notes are to be sent to the OSC by the date outlined in the open/close calendar along with Exhibit J. The Management Discussion and Analysis that is part of the Basic Financial Statements should be sent to the OSC as indicated in the open/close calendar. Exhibit J should reconcile the CORE individual proprietary fund statements as of the cutoff date for document entries for the Basic Financial Statements. The individual campus and government board statements are available in infoAdvantage in the CAFR folder.

4.2 Non-Higher Education Agencies Financial Statements

CORE generated financial statements report GA-001 meets the fiscal rule requirement for financial statement preparation for non-higher education agencies except for the following agencies that are required to prepare statements with full GAAP disclosures including Management Discussion and Analysis:

 State Fair Authority  Legislative Department

 Gaming Division of the Department of Revenue  Lottery Division of the Department of Revenue

 Colorado State Veteran’s Home at Homelake (Department of Human Services)  Colorado Student Loan Program dba College Assist

 CollegeInvest

 Colorado High Performance Transportation Enterprise  Colorado Bridge Enterprise

For the agencies listed above, one copy of financial statements and related notes are to be sent to the OSC by the due date in the open/close calendar along with an Exhibit J reconciliation that shows the reconciliation of the CORE closing balances to the departments financial statement line items. The Management Discussion and Analysis that is part of the Basic Financial Statements should be sent to the OSC by the due date in the open/close calendar.

Departments not on the list above may prepare full GAAP disclosure statements and/or additional supplementary information if they believe that the information would be beneficial to management. These agencies are not required to submit an Exhibit J. However, all agencies are required to certify on Exhibit I that they have reviewed CORE GA-0001 report.

4.3 Suggested PERA Pension Note Language

Suggested PERA footnote language, supporting allocation tables, and amortization schedules will be updated in this manual and/or be posted on the OSC’s website as soon as they are complete, which is anticipated to occur in early August.

4.4 Financial Statement Line Item Account Groupings

Chapter 3: Section 4 Page 62 and Exhibit J as specified in sections 4.1 and 4.2 of this chapter. The instructions for Exhibit J will refer to infoAdvantage reports that are currently being updated that list balance sheet accounts and operating statement accounts that comprise line items on the statewide financial statements. Basic financial statements include:

 STATEMENT OF NET POSITION (Government-wide)  BALANCE SHEET – GOVERNMENTAL FUNDS

 STATEMENT OF NET POSITION – PROPRIETARY AND FIDUCIARY FUNDS  STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND

BALANCES – GOVERNMENTAL FUNDS

 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS

 STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS

 STATEMENT OF CHANGES IN NET POSITION – FIDUCIARY FUNDS

As noted in the instructions, Exhibit J should be compiled so that all CORE trial balance accounts that accumulate to a financial statement line item are grouped together and subtotaled at the financial statement line item level. Throughout the year and at year-end an infoAdvantage report is available that aggregates balances into financial statement line items. Adjusting, reclassifying, and presentation entries affecting a financial statement line item should also be subtotaled at the line item level.

The cash flow statement prepared under the direct method format is unique in that it requires assigning both balance sheet and operating statement accounts to line items. Some cash flows are unrelated to operating statement activities including:

 Purchase and sale/maturity of investments,

 Acquisition or disposal (at book value) of a fixed asset,  Debt issuance and payments on principal,

 Lease principal payments,

 Receipts and disbursements of deposits held in custody or similar department type activity.

Balance sheet accounts reported as cash on the financial statements (10xx, 11xx, 2000, and 2712) are excluded from the cash flow statement table below because they are the cash target that the cash flow statement attempts to identify by reporting the operating statement account balances as adjusted for balance sheet accounts. Compensated absences operating statement accounts and balance sheet account changes should net to zero. If they do not, the OSC reports the difference as a payment to or for employees. Accounts such as depreciation are included in the table even though they do not result in cash flows. This is done to ensure that the effect on the balance (e.g., fixed assets) where the change in cash is being measured is accurately represented. The depreciation recorded should offset the change in accumulated depreciation resulting in no cash flow reported.

If your department records transactions in a proprietary fund, you may need to submit Exhibit V2. Higher education institutions are not required to submit Exhibit V2 because they are required to disclose noncash transactions on the cash flow statement exhibit (see Exhibit V1).

Preparation of the direct method format cash flow statement is adversely affected by accounting shortcuts often used by state agencies. Therefore, agencies should observe the following requirements when entering proprietary fund-type transactions. These requirements do not apply to higher education, which is reporting as a special purpose government engaged solely in business-type activities.

 Department fund-type accounting should not be done in proprietary funds. If you are holding and disbursing cash for another entity or fund (and therefore making no entries to operating statement accounts), the activity should be accounted for in an department fund.

 Journal voucher type transactions (account adjustments) should not be done on documents involving cash, such as PRCs, GAXs, CRs, etc.

 When holding cash or disbursements on the balance sheet, for instance in unearned revenue or undistributed charges or receipts, the transaction that eventually distributes the receipt/disbursement should include an impact on cash. This will result in an equal debit and credit to cash with zero net impact on cash, but it will allow the OSC to identify the operating statement account impacted by the deferred cash accounting distribution. 4.5 Discretely Presented Component Units Required by GASB Statement No. 39

GASB 39 requires foundations or other entities that meet certain requirements to be discretely presented as component units in the State financial statements. The State Controller policy is that foundations with assets or revenues in excess of $50 million would be discretely presented as component units in the State financial statements. The $50 million threshold is a starting point, and entities meeting the threshold will be further evaluated which may result in inclusion or exclusion of the entity as a discretely presented component unit. Currently this requirement applies only to higher education institution foundations. However, any state department that has a relationship with an entity that meets the requirements of GASB Statement No. 39 and exceeds the $50 million threshold must comply with the requirements of this section.

In order to evaluate these foundations and include as discretely presented component units (DPCUs), as applicable based on the further evaluation, the OSC needs the audited financial statements of the foundations meeting the $50 million threshold. The state department to which the DPCU is related must provide the audited foundation financial statements at the earliest date they are available, but not later than the due date in the open/close calendar. Because most of the DPCUs have the same fiscal year-end as the State, the OSC will present the applicable DPCUs financial information from the prior fiscal year in the Basic Financial Statements required by Colorado Revised Statutes at September 20 (delayed for FY2015 only to November 20). The OSC will update the DPCUs financial information for the Comprehensive Annual Financial Report using the applicable current year audited financial statements of the DPCUs.

The State Controller requires state agencies and institutions to prepare financial statements using Generally Accepted Accounting Principles (GAAP) similarly to how those standards apply to the State as a whole. Consistent with that requirement, the State Controller requires state agencies related to DPCUs of the State to include those entities as DPCUs in the departments audited financial statements.

If you have a receivable or payable with a foundation that meets the reporting requirements for a DPCU, please ensure that the receivable is recorded on CORE in balance sheet account 1395-Receivable from Component Units and the payable is recorded in balance sheet account 2350-Payable to Component Units, 2825-Capital Lease Payable to Component Units, or

Chapter 3: Section 4 Page 64 2980-Long Term Payable to Component Units.

4.6 Nonstatutorily Created Discretely Presented Component Units Required by GASB Statements No. 14, as amended by GASB Statement No. 61

The majority of entities potentially meeting the criteria in GASB Statements No. 14 and 61 for discrete presentation in the State’s financial statements are created in State statute. The OSC annually evaluates statutorily created entities as part of its review process. However, potential component units not created in statute must be reported to the OSC. For example, a nonprofit entity associated with a department or institution could meet the criteria for inclusion as a component unit in the State’s financial statements. Similar to GASB 39 entities, to evaluate and include these entities as discretely presented component units (DPCUs), as applicable, the OSC needs the audited financial statements of nonstatutorily created entities with assets or revenues in excess of $50 million. The state department to which the nonstatutorily created DPCU is related must provide the audited financial statements at the earliest date they are available, but not later than the due date in the open/close calendar. The requirements as outlined for GASB 39 entities in the previous section for similar inclusion in state department/institutional audited financial statements, and the use of specific receivable and payable coding apply to entities identified in this section.

Because most of the DPCUs have the same fiscal year-end as the State, the OSC will present the applicable DPCUs financial information from the prior fiscal year in the Basic Financial Statements required by Colorado Revised Statutes at September 20 (delayed for FY2015 only to November 20). The OSC will update the DPCUs financial information for the Comprehensive Annual Financial Report using the applicable current year audited financial statements of the DPCUs.

The State Controller requires state agencies and institutions to prepare financial statements using Generally Accepted Accounting Principles (GAAP) similarly to how those standards apply to the State as a whole. Consistent with that requirement, the State Controller requires state agencies related to DPCUs of the State to include those entities as DPCUs in the departments audited financial statements.

If you have a receivable or payable with a foundation that meets the reporting requirements for a DPCU, please ensure that the receivable is recorded on CORE in balance sheet account 1395-Receivable from Component Units and the payable is recorded in balance sheet account 2350-Payable to Component Units, 2825-Capital Lease Payable to Component Units, or 2980-Long Term Payable to Component Units.