FY2017 PROPOSED BUDGET

Washington Metropolitan Area Transit Authority
Proposed Fiscal Year 2017 Budget
Appendix D
Appendix D Financial Standards
The Financial Standards are divided into three sections: general, business planning parameters,
and debt policy. The purpose of the general standards is to ensure that Metro prudently manages
its financial affairs and establishes appropriate cash reserves. The business planning parameters
provide management with a framework for developing the upcoming year’s budget and other
longer-term financial plans, as well as establishing future business targets for management to
achieve. The purpose of debt policy standards is to limit the level of debt that may be incurred and
to ensure that debt assumptions are based on financial parameters similar to or more conservative
than those that would be placed on Metro by the financial marketplace. Actual debt covenants may
differ from these standards, and in accordance with the debt policy, the actual covenants will be
disclosed in any Board report supporting a debt issuance.
Financial Standards – General
GAAP
• Complete and accurate accounting records are maintained in accordance with Generally
Accepted Accounting Principles (GAAP) as required by the Government Accounting
Standards Board.
Revenue and Expenditure Recognition
• Revenues are recognized in the period that they are earned and expenses are recognized in
the period in which they are incurred. Metro distinguishes between operating and nonoperating
revenues and expenses in its financial statements.
• The principal source of operating revenues (not including state or local operating subsidy
contributions) is passenger fares and parking fees, which make up approximately 90 to 95
percent of such revenues.
Fiscal Year
• The fiscal year-end for financial reporting purposes is June 30. The Board approves the
budget for each fiscal year by June 30 of the previous year.
Audited Comprehensive Annual Financial Report (CAFR)
• An independent certified public accounting firm performs an examination of Metro’s
consolidated financial statements, including Single Audit requirements. The goal is to
receive an unqualified opinion on the financial statements and an opinion that Metro is in
compliance with the Federal Single Audit requirements in all material respects and to
receive the Government Finance Officers Association (GFOA) award for excellence in
reporting.
Other Financial Policies and Guidelines
• Funds are invested within the guidelines of the Board’s approved investment policies and
in compliance with the investment guidelines in Metro’s Compact.
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