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Reporting and Auditing Requirements – Tennessee Municipalities Section C Financial Reporting General: The basic financial statements of all municipalities should comply with the provisions of the Governmental Accounting Standards Board, as detailed in the Codification of Governmental Accounting and Financial Reporting Standards. If a separate financial report is issued for a fund of the municipality, all requirements of this section applicable to that fund financial report should be included. Additional guidelines for the departmental financial statements for municipal boards of education can be found on our website at http://www.comptroller.tn.gov/repository/CA/MG/BOEmemoupdated10-27- 06FINAL.pdf http://www.comptroller1.state.tn.us/ma/financialreporting.asp Additional Requirements of the Comptroller’s Office: Municipal officials are encouraged to issue a financial report that conforms to the requirements of the Governmental Accounting Standards Board (GASB) related to a comprehensive annual financial report (CAFR). However, audit reports for municipalities shall, at a minimum, conform to the general report outline in Section A of this manual and include the following supplemental information. The schedules required are significantly less than what would be required in a CAFR. Additional requirements and/or clarifications regarding the financial statements and required schedules are identified below. All supplemental information included in separately issued fund financial statements should be included in the financial report for the municipality as a whole. For component units that issue separate financial statements, the supplemental information from the separate report is generally not required to be included in the municipality’s financial report, although it is permissible. However, there may be circumstances where the audit approach will require certain supplemental information to be included or preclude such information from being included in the municipality’s financial report. That is, the Schedule of Expenditures of Federal Awards and State Financial Assistance is required regardless of the amount of grants. However, if a separate single audit is not conducted the information from that schedule would be included in the municipality’s schedule otherwiseIf a separate single audit is not conducted for a component unit, then the information in the Schedule of Expenditures of Federal Awards and State Financial Assistance for that separate audit is should not be included in the municipality’s schedule. 1. GASB permits budgetary information to be included as Required Supplementary Information or as basic financial statements for the general fund and each major special revenue fund for which a legally adopted annual budget is required. However, ourthis office requires the detailed legally adopted budgetary information for these funds to be included in the basic financial statements. The auditor’s opinion should cover this information. Budgetary information for other major funds would be included in supplemental information (see item 4.d. below). C-2
Reporting and Auditing Requirements – Tennessee Municipalities Section C 2. Additionally, an opinion on whether the accompanying information is fairly stated in all material respects in relation to the basic financial statements taken as a whole is preferred for ALL supplementary information. However, at a minimum the combining, individual fund, and budgetary schedules as well as the utility detail required by items 4.f.(3), (4) and (5) below and the Schedule of Expenditures of Federal Awards and State Financial Assistance must be opined on in relation to the basic financial statements. 3. Additional Detail Required for Revenues and Expenditures: In addition to revenues being presented by source (e.g., taxes, intergovernmental revenues, licenses and permits, and fines, and forfeits, etc.) as required by generally accepted accounting principles, taxes and intergovernmental revenues should be further detailed by specific source (e.g., property tax, TVA-in lieu of tax, beer tax, gasoline and motor fuel tax, etc.). In addition to being classified by function (or program) and character (e.g., current, capital outlay, debt service and intergovernmental expenditures) as required by generally accepted accounting principles, expenditures should be further detailed by object classes. . The additional detail of revenues by specific source and expenditures by object classes should be either in the financial and/or budgetary statements or schedules of the major and nonmajor funds or, asin additional supplemental schedules. Excessively detailed object classifications for expenditures should be avoided. 4. Supplemental Information: (Please refer to the Codification of Governmental Accounting and Financial Reporting Standards, Section 2200.184208 - 209, for additional details on all combining statements.) a. Combining statements for nonmajor governmental and proprietary funds. b. Combining statements for internal service funds. c. Combining statements for fiduciary funds (trust funds and agency funds). Please note that for agency funds, a combining statement of changes in assets and liabilities is required. d. Individual budgetary schedules for all governmental funds with annual appropriated budgets that were not included as basic financial statements. (The schedule should include three (3) columns, one for the original budgetary amounts, one for the C-3
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EXAMPLE OF A PROPOSAL EVALUATION ME
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