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BARS GAAP Manual

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General Ledger Accounts

1.2 General Ledger Accounts

1.2.10 The specific account numbers contained here are not prescribed, as long as equivalent detail is maintained. However, this general ledger has been carefully designed to meet several needs. Use of general ledger accounts in cash basis governments is OPTIONAL.

1.2.20 First, the accounts provide for detailed identification of assets, deferred outflows, liabilities, deferred inflows and fund balances and net position that any local government fund might acquire. Throughout the general ledger, the fifth and subsequent digits have been left for local governments to use in establishing more detailed breakdowns where needed.

1.2.30 Second, the general ledger has been designed to permit logical summarization of the detailed accounts at various levels. The table which follows on the next few pages illustrates in detail the structure of the general ledger. In general, the outline is as follows:

1.2.40 Third, the comprehensiveness of the general ledger combined with the uniform summarization outlined above is designed to make the preparation balance sheets a simple matter of extracting the balances at the same level for all the funds of a government. The headings on the chart which begins on the next page identify which digits to sort or summarize by for reporting purposes. The presentation of the balance sheet is structured in similar manner as the general ledger accounts.

  • The first digit identifies whether the account is an asset or a liability/fund balance or net position account (e.g., 1 or 2).
  • The second digit is used to categorize the major classification of assets, liabilities, fund balance, and net position. The outline on the previous page identifies these major classifications, which are used as subheadings on the balance sheet.
  • The third digit defines the reporting level for all assets and liabilities. In the fund balances/net position section, some subaccounts are combined for reporting purposes: accounts 276-278 and 281-283.
  • The fourth digit defines the prescribed accounting detail in the BARS general ledger. Ordinarily, this level of detail is not shown on the financial statements.

1.2.50 Finally, the BARS general ledger contains a set of optional control accounts that can be used to monitor budgetary and actual revenue and expenditure/expense account balances. These accounts summarize subsidiary ledger transactions and, depending on the amount of detail that a government elects to use, these control accounts will segregate and classify those transactions as they occur. The budgetary control accounts (291) provide a convenient summary of the total budget of a fund and of the amendments that have been made since the original budget was adopted. Much of the segregation illustrated in the control accounts can be automated by establishing rules by fund or fund type for which subsidiary accounts are summarized in each control account. Updating these control accounts, operating statements, and transferring the balance to the actual fund balance/net position accounts in the 270-280 series can then be done automatically as the subsidiary ledgers are posted.

ASSETS

110-14X CURRENT ASSETS

Include those assets which will be used up or converted into cash within the next operating cycle (e.g., twelve months).

111. Cash and Cash Equivalents

111.10 Cash

Money, negotiable money orders and checks, and balances on deposit with financial institutions after deducting outstanding checks. Include deposits in transit. Do not include petty cash items (see below). Also, for reporting purposes, do not include proprietary fund cash that may be used only for noncurrent purposes (account 150, Restricted Assets). Do not include time deposits or pass book savings accounts. Compensating balances should be disclosed parenthetically or in a note.

111.40 Cash in Treasury Pool Investments (Optional)

This account provides for optional segregation of those amounts of money not invested for a specific fund but included in treasury surplus and invested on behalf of the municipality.

111.70 Petty Cash

Any sum of money or other resources set aside for such specific purposes as minor disbursements, making change, and similar uses.

111.71 Change Funds (Segregation Optional)
111.74 Advance Travel (Segregation Optional)
111.77 Other Imprest Funds (Segregation Optional)

115. Deposits with Fiscal Agents/Trustees

115.10 Deposits with Internal Fiscal Agency (Optional)

This account provides for optional segregation of moneys set aside within the treasury to pay matured bonds and interest.

115.11 Cash (Segregation Optional)
115.12 Investments (Segregation Optional)

115.20 Deposits with External Fiscal Agents

Deposits with fiscal agents, such as commercial banks, for the payment of matured bonds and interest.

115.21 Cash (Segregation Optional)
115.22 Investments (Segregation Optional)

115.40 Deposits with Internal Bond Refunding Trustee

This account provides for optional segregation of moneys set aside within the treasury to invest and accumulate for eventual payment of interest and principal on refunded bonds when called or matured. Do not include any amounts in these accounts in the financial statements.

115.41 Cash (Segregation Optional)
115.42 Investments (Segregation Optional)

115.50 Deposits with External Bond Refunding Trustees

Deposits with bond refunding trustees, such as commercial banks, to invest and accumulate for eventual payment of interest and principal on refunded bonds when called or matured. Do not include any amounts in these accounts on the financial statements.

115.51 Cash (Segregation Optional)

115.52 Investments (Segregation Optional)

115.70 Other Internal Trusts (Not in Treasury)

Moneys held by municipal officials outside the main treasury on behalf of private individuals or organizations, or until ultimate disposition is determined. Include both cash and investments.

115.71 Court Trust (Segregation Optional)

115.72 Prisoner’s Cash (Segregation Optional)

115.90 Other External Trusts

Deposits with fiduciaries including banks, brokers and insurance companies made on behalf of private individuals or organizations.

115.92 Escrow Accounts (Segregation Optional)

118. Investments

Include all securities and other assets acquired primarily for the purpose of obtaining income or profit. Investments should be reported at fair value (for exceptions see the GASB Statement 31).

Investments with original maturities of three months or less may be considered cash equivalents and accounted for in the G.L. account 111.

Do not include investments restricted for specific purpose in proprietary funds (see account 150). Purchased interest should be posted to the revenue account 361.90 (G.L. account 292.10).

The government may use unassigned fourth and fifth digits to establish more detailed breakdowns for the accounting purposes.

121. Taxes Receivable (Net)

121.10 Taxes Receivable (Current Portion)

Include the uncollected portion of property tax which a government has levied and for which the due date has not yet passed. Also include any amounts of other uncollected taxes (see BARS 310 series) that are measurable and available. Do not include interfund receivables (see account 131).

121.30 Taxes Receivable (Delinquent)

Include taxes remaining unpaid on and after the date on which interest is assessed or a penalty for nonpayment attached. This segregation from current taxes is required only for the municipality which is the tax collection agent.

121.50 Interest Receivable on Taxes (Optional Segregation)

Include the uncollected portion of interest receivable on taxes. Include accruals to the end of the fiscal period.

121.70 Penalties Receivable on Taxes (Optional Segregation)

Include the uncollected portion of penalties receivable on taxes. Include accruals to the end of the fiscal period. Penalties assessed for failure to list personal property must be separately identified since they are distributed with taxes rather than remitted to the county general (current expense) fund (RCW 84.56.020(8)).

121.90 Allowance for Uncollectibles (Credit)

A valuation account used to indicate that portion of taxes and related interest and penalties which it is estimated will never be collected.

122. Customer Accounts Receivable (Net)

122.10 Accounts Receivable

Amounts due from customers on open account for goods and services provided. Significant receivable balances not expected to be collected within one year of the date of financial statements should be disclosed in the notes.

122.70 Unbilled Receivables

Amounts earned by the entity for goods or services furnished to private individuals or organizations for which billings have not been prepared at the end of the reporting period.

122.90 Allowance for Uncollectibles (Credit)

A valuation account used to indicate that portion of customer accounts which it is estimated will never be collected and will eventually be written off.

123. Special Assessments Receivable

123.10 Assessments Receivable (Current Portion)

Include the uncollected portion of special assessments which a governmental unit has levied and which are due within 60 days (for governmental funds). Exclude interfund assessments which should be reported in account 131. Also exclude any assessment accounted for in a proprietary fund, which should be reported in account 151.40.

123.30 Assessments Receivable (Delinquent)

Include the uncollected portion of special assessments which are past due. Exclude interfund assessments, which should be reported in account 131. Also exclude any assessment accounted for in a proprietary fund, which should be reported in account 151.50.

123.50 Interest Receivable on Assessments

Include the uncollected portion of interest receivable on special assessments in governmental funds. (Use account 151.60 for proprietary funds).

123.70 Penalties Receivable on Assessments

Include the uncollected portion of penalties receivable on special assessments in governmental funds. (Use account 151.70 for proprietary funds).

124. Interest Receivable

Interest earned on investments, notes, contracts and miscellaneous receivables. Do not include interest on taxes or special assessments. (See accounts 121.50 and 123.50).

125. Notes/Contracts Receivable (Current Portion)

Include current amounts due from private individuals or organizations evidenced by a written promise to pay. In governmental funds, use the account only for that portion due by the end of the current fiscal period; in proprietary funds, use this account for that portion due within the next 12 months.

126. Other Current Receivables (Net)

126.10 Receivable From Developers

Include amounts of impact or developers fees or reimbursable charges for services receivable from private developers.

126.20 Rent Receivable

126.40 Other

126.90 Allowance for Uncollectibles (Credit)

131. Due from Other Funds

A receivable for goods issued, work performed or services rendered to or for the benefit of another fund of the same government. Also use this account for subsidies and other transfers between funds that have been authorized but not yet paid. The owing fund should have an equal amount recorded under account 225. Include receivables between a primary government and blended component units.

132. Interfund Loans Receivable

Include the uncollected amounts of interfund loans. See Loans.

134. Due from Other Governments

Include amounts due to the reporting government from another government. These amounts may represent measurable and available intergovernmental grants, entitlements, or shared revenues; grants or taxes collected for the reporting government by an intermediary collecting government; loans; and charges for services rendered by the reporting unit for another government. Receivables for services that are not governmental in nature, such as insurance, utilities, rents, repairs, and supplies, should not be included here. Use account 122.

135. Due from Component Units

Amounts due to the reporting entity from discretely presented component units. The receivables from blended component units are presented in 131. Some transactions and balances previously recorded in 131 or 134 may need to be reclassified for presentation in the reporting entity (primary government) financial statements. The owing component unit(s) should have an equal amount recorded in 228.

136. Due from Primary Government

Include amounts due to the discretely presented component unit(s) from the primary government. The owing reporting entity (primary government) should have an equal amount recorded in 226. For details, see GAAP Reporting Requirements.

141. Inventories

Use this account for the cost of all stock-in-trade items acquired for sale to private individuals, to other governments, or to other funds and departments. Also include the cost of stockpiled raw materials for use in manufacture and the cost of finished goods manufactured by your government for sale. (Use account 145 to accumulate the costs of manufacturing these items.) The accounts may be subdivided to distinguish different kinds or grades of inventories, or a subsidiary ledger may be used.

General administrative and office supplies which will be consumed in routine operations should not be included in this account (see account 143.40). Merchandise and materials that are put to use as soon as they are acquired need not be charged to this account; however, all Work in Process should be closed to 141.7X and expensed from there.

141.10 Merchandise

Generally, goods supplied from vendors in the form and condition they will be used.

141.40 Raw Materials

This account includes material that may be used in a manufacturing process or as is, such as lumber, paint, and rock.

141.70 Finished Goods

This account is used for completed items that have been manufactured by your government (see account 145).

143. Prepayments

143.10 Insurance

Unexpired portion of insurance premiums (it is not necessary to record insurance prepayments except in proprietary funds).

143.40 Operating Supplies

Cost of stationery and office supplies held for use in routine operations. Use this account only if material amounts of supplies are on hand at the end of the reporting period. Do not include supplies acquired for sale (see account 141.10). For governmental funds, the offsetting credit is the account 282.50, Reserve for Prepaid Items. Note that the expenditure should not be reversed.

143.70 Other Prepayments

145. Other Current Assets

145.10 Work in Process

This account is used to accumulate the costs of manufacturing items for resale to private individuals, other governments, or other funds and departments. It is not used for capital construction (see 189.). Items manufactured for immediate internal use need not be charged to this account.

The various optional subaccounts are used to segregate the total costs to produce such items as crushed rock, asphalt, road signs, rebuilt parts, printing jobs, and other merchandising, jobbing and contract work. When the manufacturing process is complete, the total costs should be transferred to account 141.7X. For financial reporting, include all incomplete work orders not classified as construction in progress.

The accounts may be subdivided to distinguish different types of projects, or a subsidiary work order system may be used.

145.11 Raw Materials Put in Process (Segregation Optional). Include materials used in manufacture, either transferred from account 141.4X or directly purchased as they are needed.

145.13 Direct Labor (Segregation Optional). Include labor costs incurred by your government and related fringe benefits.

145.15 Equipment Charges (Segregation Optional). Include rental charges on equipment, whether paid to another department or fund or to an outside vendor.

145.17 Contracted Services (Segregation Optional). Include payments to vendors which do part or all of the processing of raw materials owned by your government. Examples include contracts for crushing rock from government-owned quarries and printing or fabrication jobs where part of the work is done in-house and part by an outside contractor.

145.19 Other Overhead (Segregation Optional). Include the cost of services and supplies other than those which may be properly included in the foregoing accounts. When labor or equipment rates include overhead, there is no need to accumulate a separate amount to charge to this account.

145.40 Other

150. RESTRICTED ASSETS

Restricted assets are those proprietary fund monetary assets which have their use limited by statute, bond covenant, or other contractual or trust relationship. For reporting purposes, restricted assets must be shown in account 150, although they may be accounted for during the year in separate funds, using current asset accounts (111, 118, 123, etc.). Separate funds are not required for restricted assets, even though bond covenants may stipulate a bond reserve fund, construction fund, etc. The bond covenant use of the term fund is not the same as the use in governmental accounting. For bond covenants, fund means only a segregation or separate account, not a self-balancing set of accounts. Most restricted assets are offset by corresponding current liabilities (accounts 241-245, Current Payable from Restricted Assets), non-current liabilities (accounts 246-248, Non-Current Payable from Restricted Assets), or by a restriction of net position (account 284.20). The common exception is bond proceeds received for construction purposes, which are separately categorized as construction account restricted assets and for which there is no offsetting current liability or net position.

It is not necessary to include cash with fiscal agents in the restricted assets category. It is acceptable to have two Deposits with Fiscal Agent accounts, but it is not necessary either. These amounts are offset by matured payables and the BARS treat both fiscal agent cash and related payables as current items in all funds, because the account titles are sufficient to indicate the limited use of the assets.

Assets restricted for debt service should include money set aside to pay current principal and interest on outstanding debt and money earmarked for deficiencies or contingencies and normally not used until the final retirement of the debt issue. Deposits include customer deposits and must be offset by account 245.10 or 248.10. Replacement accounts include renewal, replacement and emergency moneys that covenants or agreements require to be set aside.

151. Current Restricted Assets – Debt Service, Deposits and Replacements

151.10 Cash And Cash Equivalents

151.20 Investments

151.40 Utility Special Assessments – Current

151.50 Utility Special Assessments – Delinquent

151.60 Utility Special Assessments – Interest

151.70 Utility Special Assessments – Penalties

151.90 Other

152. Current Restricted Assets – Landfill Closure and Postclosure Care Costs
(RCW 70.95.215)

155. Current Restricted Assets ‑ Construction Accounts

155.10 Cash and Cash Equivalents

155.20 Investments

155.90 Other

156-197 NON-CURRENT ASSETS

156. Non-Current Restricted Assets – Debt Service, Deposits and Replacements

156.10 Cash and Cash Equivalents

156.20 Investments

156.40 Utility Special Assessments – Current

156.50 Utility Special Assessments – Delinquent

156.60 Utility Special Assessments – Interest

156.70 Utility Special Assessments – Penalties

156.90 Other

157. Non-Current Restricted Assets – Landfill Closure and Postclosure Care Costs
(RCW 70.95.215)

158. Non-Current Restricted Assets – Construction Accounts

158.10 Cash and Cash Equivalents

158.20 Investments

158.90 Other

161. Special Assessments – Non-Current

Include the uncollected portion of special assessments not due for 60 days (governmental funds) or l year (proprietary funds). Exclude interfund assessments which should be reported in account 165. In assessments accounted for in proprietary funds, make certain that all collections are recorded as restricted assets. The current portion and related interest and penalties should be recorded in account 123 (for governmental funds) or account 151 (for proprietary funds).

163. Notes/Contracts Receivable

Noncurrent amounts due from private individuals or organizations evidenced by a written promise to pay, including receivables on capital and financing leases. The current portion should be recorded in account 125.

165. Advances to Other Funds

The uncollected amounts of long-term interfund loans; that is, loans which do not meet the criteria of temporary defined in the Loans. Also include the amount of unearned assessments owed by other funds of the same government.

167. Investment in Joint Ventures (Net)

A joint venture is a legal entity or other organization that results from a contractual arrangement and that is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control, in which the participants retain (a) an on going financial interest or (b) an ongoing financial responsibility. The municipality’s investment should be accounted for using the equity method, if the investment is material.

170-191 CAPITAL ASSETS

Those assets acquired by the municipal corporation for its own use through purchase, lease, self-construction, donation, or gift, with a life expectancy of more than one year. In addition to land, buildings and equipment, capital assets also include land and air rights, depletable resources such as minerals or timber, improvements made to rented property and the cost of partly-completed capital projects.

In regulated utilities and certain other enterprise funds, plant facilities are primarily classified as to mode (facility type), e.g., source of supply, treatment plant, etc. Within these modes, the assets are segregated into categories of land, buildings, equipment, and other improvements. In the BARS, this scheme is reversed so that all the capital assets of a government can be classified the same way. In the optional detail accounts, the 5th digit can be used by utilities to identify plant-in-service modes. The same digit (and the 6th and 7th digits) may be used for other proprietary funds and for general government capital assets to segregate them by function or purpose.

171. Land (Net)

172‑173 Buildings and Structures (Net)

174. Capital Leases (Net)

175. Leasehold Improvements (Net)

176‑179 Other Improvements (Net)

181‑188 Machinery and Equipment (Net)

189. Construction in Progress

191. Intangible Assets (Net)

Include assets with no physical substance, such as a patent or license, with a useful life that exceeds one year.

191.10 Plant Acquisition Adjustments

Used only in utilities, this account includes the difference between the cost to the current governmental owner and the cost incurred by the person or company that first devoted the property to utility service.

191.30 Franchises and Licenses

Amounts paid to procure franchises, consents, licenses, or certificates of permission and approval, whether in perpetuity or for a specified term of more than one year, that give a government authority to operate certain facilities. Include related legal and filing expenses. Annual or other periodic payments under franchises should be charged to operating expenses. (For utilities, see also 191.7X.)

191.50 Computer Software

Amounts paid to acquire or develop data processing programs and related documentation. The cost of programs developed for sale to others must be expensed as incurred; only those programs developed or acquired for internal use may be capitalized. (The existence of this account is not meant to imply that any software costs must be capitalized, only that they may be.)

191.70 Other Intangible Assets

Include any amount paid by a utility to the assignor of a franchise that exceeds the amount paid by the original grantee.

191.90 Accumulated Amortization (Credit)

The amount of original cost of intangible assets which has already been charged against revenue (or as a use allowance) since the date of acquisition.

193-198 OTHER NONCURRENT ASSETS (NET)

193.10 Investments

Include all securities and other assets acquired primarily for the purpose of obtaining income or profit. Investments should be reported at fair value (for exception, see the GASB Statement 31).

Do not include investments restricted for specific purpose in proprietary funds (see account 150). Purchased interest should be debited to the revenue account 361.90 (G.L. account 292.10).

193.11 Unamortized Premiums on Investments. The unamortized portion of the excess of the amount paid for securities over their face value (excluding accrued interest).

193.12 Unamortized Discounts on Investments (Credit). The unamortized portion of the excess of the face value of securities over the amount paid for them (excluding accrued interest).

193.40 Property Held in Trust or for Future Use

Include nonmonetary property acquired by distraint, foreclosure or default, record at the amount of the tax lien. Use the purchase price for land acquired for a future plant site.

193.50 Pension Asset

The cumulative difference between the employer contribution to a pension plan and the annual pension cost.

193.70 Capital Assets Held for Resale

Include capital assets which have been declared surplus but are still owned by the government until they can be sold, traded, or otherwise disposed.

193.90 Accumulated Depreciation/Amortization (Credit)

195. Other Non-Current Assets

Not regularly recurring noncapital costs of operation that benefits future periods.

195.50 Extraordinary and Other Property Losses

This account is used only in proprietary funds to account for any expenses not recognized as a cost of operations of the period in which incurred, but carried forward to be written off in one or more future periods.

198. Deferred Outflows of Resources

A consumption of net assets by the government that is applicable to a future reporting period. This account should include transactions related to accumulated decrease in fair value of hedging derivatives, deferred amount on refunding [the unamortized difference between the net carrying amount of the debt and its reacquisition price (when the reacquisition price exceeds the net carrying amount – loss on refunding)], grants paid in advance, pension. The categories should be detailed in the financial statements.

LIABILITIES

210-23X CURRENT LIABILITIES

Include liabilities which are payable within next operating cycle (e.g., twelve months).

211. Warrants Payable

The amount of operating warrants issued and outstanding. This account will be credited when warrants are issued and debited when warrants are redeemed or canceled. Do not use this account to record the issuance of revenue warrants (see accounts 235 and 263). Code cities using checks instead of warrants should not use this account.

213. Accounts/Vouchers Payable

213.10 Accounts Payable

Amounts not yet vouchered but owed on open account to private persons or organizations for goods and services furnished to a government (but not including amounts due to other funds or to other governments).

213.40 Vouchers Payable

Liabilities for goods and services evidenced by vouchers which have been pre-audited and approved for payment but not yet paid.

215. Claims and Judgments Payable

Amounts owed as compensation or payment for injury or damage. Include unpaid losses not covered by an insurance contract or bond and amounts owed as the result of court decisions, such a condemnation awards for private property taken for public use.

217. Matured Long-Term Obligations Payable

Include the portion of all long-term debt which has become due. For explanation of the specific categories below, see accounts 251, 252, 253 and 263.

217.10 G.O. Bonds Payable

217.20 Revenue Bonds Payable

217.30 Special Assessment Bonds Payable

217.40 Revenue Warrants Payable

217.50 Leases and Installment Purchases Payable

217.90 Other

219. Matured Interest Payable

Include interest due on long-term debt. For interest accrued between due dates, use account 231.10.

221. Annuities Payable

Include pension benefits due and payable to retired employees in a public employee retirement system.

223. Contracts Payable

223.10 Construction Contracts Payable

Include amounts of progress payments due for construction of buildings and other improvements. If the amounts earned by contractors at the end of the fiscal period are material, they should be estimated and accrued if a progress billing is not available.

223.40 Retainage Payable

Include amounts due on construction contracts, representing a percentage of the progress billings. These amounts are not paid until final inspection, the lapse of a specified time period, or both. (RCW 50.24.130 and Chapter 60.28 RCW) Include amounts deposited to escrow accounts (see account 115.92) as well as amounts held in the municipal treasury.

223.70 Interest on Contracts Payable

Use this account to accumulate interest on retainage when requested by the contractor (RCW 60.28.010).

223.90 Other Contracts Payable

225. Due to Other Funds

A payable for goods issued, work performed or services rendered from or by another fund of the same government. Also use this account for subsidies and other transfers between funds that have been authorized but not yet paid. The recipient fund should have an equal amount recorded under account 131. Include payables between a primary government and blended component units.

226. Due to Component Units

Include amounts due to discretely presented component units from the primary government. The payables to blended component units are presented in 225. Some transactions and balances previously recorded in 225 and 229 may need to be reclassified for the presentation in the reporting entity (primary government) financial statements. The recipient component unit(s) should have an equal amount recorded in 136.

227. Interfund Loans Payable

The amounts of interfund loans not yet repaid. See Loans for further definition.

228. Due to Primary Government

Amounts due to the primary government from discretely presented component unit(s). The payables of blended component unit(s) are presented in 225. An equal amount should be recorded in 135. For details, see GAAP Reporting Requirements.

229. Due to Other Governments

Current amounts due to other governments. These amounts may represent intergovernmental grants or entitlements; loans; and charges for services rendered by another government. Payables for services that are not governmental in nature, such as insurance, utilities, rents, repairs, and supplies, should not be included here. Use account 213 or 231.

231. Other Accrued Liabilities

These are amounts of expenses/expenditures that have been incurred by the end of the fiscal period but will become payable at a future date. Do not include accruals for claims and judgments, annuities, or construction contracts in this account. See accounts 215, 221, and 223.

231.10 Interest Payable

Interest earned by creditors, including bondholders, since the last payment or coupon date.

231.20 Arbitrage Rebate Tax Payable

The interest earnings accrued at the end of the 5th year and due and payable to the U.S. Treasury. See Arbitrage Rebates.

231.30 Accrued Wages

Wages earned by employees since the last payroll. Include the current portion of the unpaid liability for employee absences (vacation and other accruable leave). Use account 259 to record the long-term liability for compensated absences.

231.50 Accrued Employee Benefits

Estimated benefits associated with accrued wages, account 231.30. Include payroll taxes.

231.70 Accrued Taxes

Estimated taxes that are not directly associated with other specific liability accounts, such as B&O taxes or excise taxes. Do not include payroll taxes (see account 231.50).

231.90 Other

235. Current Portion of Long-Term Obligations

The unmatured portion of all long-term debt which will become due within one year (proprietary funds) but which is not yet due and which will require current assets to redeem (see account 240 for the current portion of long-term debt payable from restricted assets). Do not include any portion of refunded debt. Special rules apply to certain types of intermediate-length financing (see accounts 239.60 and 263.60). For explanations of the other specific types of debt, see accounts 251, 252, 253 and 263.

235.10 G.O. Bonds Payable

235.20 Revenue Bonds Payable

235.30 Special Assessment Bonds Payable

235.40 Revenue Warrants Payable

235.50 Leases and Installment Purchases Payable

235.70 Other Notes Payable

235.90 Other

237. Custodial Accounts

A liability account for the net monetary assets held by a governmental unit in a trustee capacity or as a custodian for individuals, private organizations, other governmental units, or other funds. Include such items as sales and leasehold taxes collected for the state, prisoners’ cash, court trusts, contractors’ bonds (bid deposits), and suspense accounts (receipts pending classification and grants or taxes collected by the reporting government as an intermediary). County treasurers should use this account to offset the assets held in custodial funds for special purpose districts. Do not use this account for any fiduciary funds.

239. Other Current Liabilities

239.10 Customer Deposits (Nonproprietary)

Include liability for deposits made by customers as a prerequisite to receiving services. In proprietary funds use account 245.10 instead.

239.60 Anticipation Warrants/Notes

These are short-term financing instruments (Chapter 39.50 RCW). Include the entire principal of those notes and warrants unless the instruments were authorized in anticipation of a bond issue (see account 263.60). This debt should be treated as fund debt, even in governmental funds.

239.90 Other

241-245 CURRENT PAYABLE FROM RESTRICTED ASSETS

These accounts are used only in proprietary funds. Include the amounts of current liabilities and customer deposits for which the assets have been set aside as restricted in accounts 151-155. Do not include matured bonds or progress payments due to contractors; instead, the related assets should be treated as current and nonrestricted. For explanation of the specific types of debt, see accounts 239.60, 251, 252, 253, and 263.

241. Debt Principal Payable

241.10 Revenue Bonds Payable

241.20 Other Bonds Payable

241.40 Notes and Warrants Payable

242. Debt Interest Payable

245. Deposits and Other Payables

245.10 Deposits Payable

245.90 Other

246-260X NON-CURRENT LIABILITIES

246-248 NON-CURRENT PAYABLE from RESTRICTED ASSETS

These accounts are used only in proprietary funds. Include the amounts of current liabilities and customer deposits for which the assets have been set aside as restricted in accounts 156-158. Do not include matured bonds or progress payments due to contractors; instead, the related assets should be treated as current and nonrestricted. For explanation of the specific types of debt, see accounts 239.60, 251, 252, 253 and 263.

246. Debt Principal Payable

246.10 Revenue Bonds Payable

246.20 Other Bonds Payable

246.40 Notes and Warrants Payable

247. Debt Interest Payable

248. Deposits and Other Payables

248.10 Deposits Payable

248.90 Other

251. General Obligation Bonds Payable (Net)

251.10 G.O. Bonds at Face Value (for Capital Purposes)

The face value of all noncurrent bonds used for capital acquisitions and/or improvements for which the government has pledged its full faith and credit.

251.11 No Vote Required

251.12 Vote Required

251.15 Advance Refunding – Defeasance Method

251.16 Advance Refunding – Crossover Method

251.20 Unamortized Premium on G.O. Bonds

The unamortized portion of the excess of G.O. bond proceeds over their face value (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

251.30 Unamortized Discount on G.O. Bonds (Debit)

The unamortized portion of the excess of the face value of G.O. bonds over the amount received from their sale (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

251.40 G.O. Bonds at Face Value (for M and O Purposes)

The face value of all noncurrent bonds used for maintenance and operations (M and O) for which the government has pledged its full faith and credit.

251.41 No Vote Required

251.42 Vote Required

251.45 Advance Refunding – Defeasance Method

251.46 Advance Refunding – Crossover Method

251.90 Advance Refunded G.O. Bond Issues

The amount of any refunded bonds included in this account should not be reported in the financial statements. For further discussion, see Refunding Debt.

252. Revenue Bonds Payable (Net)

252.10 Revenue Bonds at Face Value (for Capital Purposes)

The face value of all revenue bonds used for capital acquisitions and improvements not due within one year.

252.11 No Vote Required

252.12 Vote Required

252.15 Advance Refunding ‑ Defeasance Method

252.16 Advance Refunding ‑ Crossover Method

252.20 Unamortized Premium

The unamortized portion of the excess of revenue bond proceeds over their face value (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

252.30 Unamortized Discount (Debit)

The unamortized portion of the excess of the face value of revenue bonds over the amount received from their sale (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

252.40 Revenue Bonds at Face Value (for M and O Purposes)

The face value of all revenue bonds used for maintenance and operations (M and O) and not due within one year.

252.41 No Vote Required

252.42 Vote Required

252.45 Advance Refunding – Defeasance Method

252.46 Advance Refunding – Crossover Method

252.90 Advance Refunded Revenue Bond Issues

The amount of any refunded bonds included in this account should not be reported in the financial statements. For further discussion, see Refunding Debt.

253. Special Assessment Bonds Payable (Net)

253.10 Special Assessment Bonds at Face Value

The face value of bonds issued for public improvements to be repaid (wholly or in part) from assessments levied against benefited properties. Bonds expected to be financed from special assessments should be recorded here even if the full faith and credit of the municipality is pledged.

253.11 LID Bonds

253.12 ULID Bonds

253.13 RID Bonds

253.14 Other Special Improvement Bonds

253.15 Advance Refunding – Defeasance Method

253.16 Advance Refunding – Crossover Method

253.20 Unamortized Premium

The unamortized portion of the excess of special assessment bond proceeds over their face value (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

253.30 Unamortized Discount (Debit)

The unamortized portion of the excess of the face value of special assessment bonds over the amount received from their sale (excluding accrued interest and issuance cost; see G.L. account 195.30 for issuance cost).

253.90 Advance Refunded Special Assessment Bond Issues

The amount of any refunded bonds included in this account should not be reported in the financial statements. For further discussion, see Refunding Debt.

255. Advances from Other Funds

The amounts of long-term interfund loans not yet repaid. Also include the amount of deferred assessments owed by a fund to other funds of the same government.

257. Unearned Revenue

Amounts recognized as receivables, including amounts due from other governments, which cannot be classified as revenues. Under the modified accrual basis of accounting, such amounts are measurable but not available. See the discussion of revenue accrual in Accrual of Revenues in Governmental Funds. Also include amounts collected that will not become revenues during the next fiscal year. For example, rental payment received for the last year of a lease running for several more years.

259. Compensated Absences

This account is used to record the noncurrent liability for employee absences. Such compensation should be recorded for all accrued vacation and for that portion of other leave, such as sick leave, for which the employee would be paid on termination. Use account 231.30 to record the current portion of these kinds of leave.

263. Other Noncurrent Liabilities

263.10 Claims and Judgments Payable

The noncurrent portion of amounts owed as compensation or payment for injury or damages.

263.20 Liability for Landfill Closure and Postclosure Care Costs

The estimated and accrued costs related to the closure of landfills in accordance with the Department of Ecology standards. See Solid Waste Utilities: Closure and Postclosure Cost Accounting.

263.30 Utility Operating Reserves

Amounts expensed by a proprietary fund and irrevocably set aside for pension, accident and death benefits, employee health and welfare, etc., but not included in restricted assets. Utilities may also use this account during the fiscal year for amounts expensed to meet the probable liability, not covered by insurance, for losses through accidents, fire, flood, or other hazards, and for losses from injury and damage claims. For reporting purposes, amounts that remain in this account at year-end which represent net self-insurance reserves must be credited against the related risk expense accounts, so that operating statements include as expenses only the actual judgments awarded and/or losses sustained.

263.40 Revenue Warrants Payable

The noncurrent portion of warrants issued with a set term for redemption (also known as time warrants). In most cases, they are backed by the earnings of a specific fund rather than the full faith and credit of the issuing government. Any premium or discount should be accounted for separately from the face value, using subaccounts of this account.

263.50 Leases and Installment Purchases

Include the noncurrent portion of capital leases and lease/purchases. An explanation of capital leases and the required accounting for them is in Leases.

263.60 Notes Payable

Include the noncurrent portion of promissory notes issued by a local government.

Include the entire unpaid principal of intermediate length financing instruments, such as anticipation notes and warrants (Chapter 39.50 RCW) authorized in anticipation of a bond issue, even though it may come due within 12 months.

Other anticipation notes or warrants should be classified as current debt even though payment may be delayed beyond 12 months (see account 239.60).

263.70 Arbitrage Rebate Tax Payable

The interest earnings accrued in years 1-4 that will be due to the U.S. Treasury at the end of the 5th year. Refer to discussion in Arbitrage Rebates.

263.80 Due to Other Governments

Include the noncurrent portion of intergovernmental loans.

263.90 Miscellaneous Noncurrent Liabilities

264. Pension Obligation (Net)

The cumulative difference between annual pension cost and the employer contribution to the pension plan.

267. Other Credits

This account is used in proprietary funds to account for gains that will be amortized over succeeding fiscal periods. Use the separate accounts provided for items such as unamortized debt premium (accounts 251.20, 252.20 and 253.20), customer advances to be refunded (account 245) and amounts held pending disposition (account 237).

271 DEFERRED INFLOWS of RESOURCES

An acquisition of net assets by the government that is applicable to future reporting period. This account should include transactions related to accumulated increase in fair value of hedging derivatives, deferred service concession arrangement receipts, deferred property tax, advance payments of property tax, special assessments, deferred amount on refunding [the unamortized difference between the net carrying amount of the debt and its reacquisition price (when the net carrying amount exceeds the reacquisition price – gain on refunding)], grants received in advance, pension. The categories should be detailed in the financial statements.

281-282 FUND BALANCE
286-288

These accounts are used to indicate the difference between the assets and liabilities reported in governmental funds.

281. Nonspendable Fund Balance

Indicates the portion of fund balance is inherently nonspendable in current period (e.g., prepaid items, inventories, long-term portion of loans receivable, nonfinancial resources held for resale, etc.).

282. Restricted Fund Balance

Indicates the portion of fund balance that is subject to externally enforceable legal restrictions (imposed by creditors, grantors, donors, other governments, etc.). The restrictions may be also imposed by law through constitutional provisions or enabling legislation.

286. Committed Fund Balance

Indicates the portion of fund balance that represents resources whose use is constrained by limitations that the government imposes upon itself at the highest level of decision making (normally the governing body) and that remain binding unless removed in the same manner.

287. Assigned Fund Balance

Indicates the portion of fund balance that reflects a government’s intended use of resources.

288. Unassigned Fund Balance

Indicates net resources in excess of nonspendable, restricted, committed, and assigned fund balance.

283-285 NET POSITION

283.10 Held in Trust for Pension Benefits

The difference between the assets and liabilities of pension plans reported by the employer or sponsor government in a pension (and other employee benefit) trust fund.

283.20 Held in Trust for Pool Participants

The difference between the assets and liabilities of external investment pools reported by the sponsor government in an investment trust fund.

283.90 Held in Trust for Other Purposes

The difference between the assets and liabilities of fiduciary funds, other than pension (and other employee benefit) trust funds or investment trust funds.

284.10 Net Investment in Capital Assets

Capital assets net of accumulated depreciation, reduced by the outstanding balances of borrowings attributable to the acquisition, construction, or improvement of those assets. Deferred outflows and inflows of resources attributable to the acquisition, construction, or improvement of those assets or related debt also should be included. If there are significant unspent related debt proceeds or deferred inflows of resources at the end of the reporting period, the portion of the debt or deferred inflows of resources attributable to the unspent amount should not be included.

284.20 Restricted for ___________

The component of net position that consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

284.21 Restricted for ________, Permanent Restriction. Restricted component of net position that may never be spent (e.g., endowments).

284.22 Restricted for ________, Temporary Restriction. Restricted component of net position that may be spent at some time, either in the present or future.

285. Unrestricted

The net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

290. CONTROL ACCOUNTS

An account containing totals of one or more types of transactions the detail of which appears in a subsidiary ledger or its equivalent. The balance of the control account equals the sum of the balances of the detail accounts.

291. Nominal Accounts Control ‑ Budgetary

Budgetary accounts record annual estimates that are formally integrated into an accounting system, whether those estimates are appropriations or merely management estimates. Budgetary accounts should be contrasted with actual accounts, which record true revenues, expenditures or expenses, assets, liabilities and fund balances. Budgetary accounts should also be contrasted with project accounts, which record both estimates and actual amounts, but not on an annual basis.

Nominal accounts are those accounts that are closed to fund balance at the end of each fiscal period. For simplicity of reporting, the BARS includes in the nominal control account only those accounts which appear on the operating statement (revenues, expenditures, etc.).

291.10 Estimated Revenue Control

This account records the total revenues it is estimated will be earned by a specific fund during a government’s own fiscal year.

291.11 Estimated Operating Revenue Control
291.14 Estimated Nonoperating Revenue Control
291.17 Estimated Other Income Control
291.20 Appropriation/Expense Control

This account records the estimated or legally authorized total expenditures or expenses to be incurred during a government’s own fiscal year.

291.21 Estimated Operating Expense Control
291.24 Estimated Nonoperating Expense Control
291.27 Estimated Other Expenses Control
291.30 Estimated Other Financing Sources Control

This account records the total proceeds of borrowings, transfers (and a few other items not regarded as revenues) it is estimated will be received during a government’s own fiscal year.

291.40 Estimated Other Financing Uses Control

This account records the estimated or legally authorized amount of transfers to be paid during a government’s fiscal year.

291.50 Estimated Noncash Transaction Affecting Income (Proprietary Funds Only/Optional)

This account may be used in proprietary funds to establish budgetary control over specific line items affecting outcome from operations.

291.51 Estimated Inventory Purchases
291.53 Estimated Prepayments
291.55 Estimated Work in Process
291.70 Estimated Beginning Fund Balance Control

(Used by governmental funds and for budgeting by object in proprietary funds.)

This account records the amount by which fund assets are expected to exceed fund liabilities at the beginning of the fiscal year.

291.80 Estimated Ending Fund Balance Control

(Used by governmental funds and for budgeting by object in proprietary funds.)

This account records the excess of fund assets over liabilities estimated to exist at the end of the fiscal year.

292. Nominal Accounts Control ‑ Actual

Actual accounts record true revenues earned and expenditures/expenses incurred during a fiscal period.

292.10 Revenue Control

This account records the actual revenues earned by a specific fund during a government’s own fiscal period. Do not include proceeds from long-term debt and transfers-in which are classified not as revenues but as other financing sources. See account 292.3X.

292.11 Operating Revenue Control
292.14 Nonoperating Revenue Control
292.17 Other Income Control
292.20 Expenditure/Expense Control

This account is used to record actual expenditures/expenses incurred during a government’s own fiscal year. Do not include transfers-out which are classified not as expenditures/expenses but as other financing uses. See account 292.4X.

292.21 Operating Expense Control
292.24 Nonoperating Expense Control
292.27 Other Expenses Control
292.30 Other Financing Sources Control

This account records the actual proceeds of borrowings, transfers (and other items not regarded as revenues) which are received during a government’s own fiscal year.

292.40 Other Financing Uses Control

This account records the actual amount of transfers paid during a government’s own fiscal year.

292.50 Noncash Transactions Affecting Income (Proprietary Funds Only)

This account may be used to segregate expenses for specific transactions affecting income from operations.

292.51 Inventory Purchase Control
292.53 Prepayments Control
292.55 Work in Process Control
292.70 Beginning Fund Balance Control

(Used by governmental funds and for budgeting by object in proprietary funds.)

This account records the amount by which fund assets exceed fund liabilities at the beginning of the fiscal year.

Entry to this account is normally made once a year as soon as the entity has closed its books for the previous year, by crediting this account and debiting account 292.8X for the amount of actual beginning fund balance.

292.80 Ending Fund Balance Control

(Used by governmental funds and for budgeting by object in proprietary funds.)

This account records the actual excess of fund assets over liabilities at any specific date. The first entry to this account should be made as soon as the entity has closed its books for the previous year, by debiting this account for the actual beginning fund balance (see account 292.7X for the offsetting entry). Thereafter, entries must be made periodically (no less often than monthly) to update fund balance by charging this account for the excess of fund resources over fund uses since the last time fund balance was updated.

295. Encumbrance Control

Encumbrances are commitments related to unperformed (executory) contracts for goods or services. These are recorded before the actual expenditure is incurred to prevent expenditures from exceeding appropriations.

296. Life-To-Date Accounts Control ‑ Budgetary

296.10 Grants/Projects Authorized

The total amount of ongoing grants/projects authorized through the current fiscal year. This amount should include all grant amendments to date.

296.20 Continuing Grants/Projects Appropriations

The total amount of appropriations for ongoing grants/projects authorized through the current fiscal year. This amount should include all grant amendments to date.

297. Life-to-Date Accounts Control ‑ Actual

297.10 Life-to-Date Resources Earned

Resources earned from inception of the project to date for ongoing projects that extend over a period that does not coincide with or fall within the current fiscal year.

297.20 Life-to-Date Expenditures/Uses

Expenditures incurred from inception of the project to date for ongoing projects that extend over a period that does not coincide with or fall within the current fiscal year.

297.30 Project/Grant Contra

The excess of 297.20, Life-To-Date Expenditures/Uses over 297.10, Life-to-Date Resources Earned. This account represents the current grant receivable and serves to prevent these accounts from impacting fund balance.

298. Net Position – General Government

The difference between (1) asset and deferred outflows of resources, and (2) liabilities and deferred inflows of resources. The local government may use this account for the government-wide financial statements.

This section was last edited by SAO on 01/18/19
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Introduction

2.4 Budget Compliance

2.4.1 Introduction

2.4.1.10 A budget is a legal document that forecasts the financial resources of a government and authorizes the spending of those resources for a fiscal period. At a minimum, local governments’ budget must meet the requirements of Washington state law and the State Auditor’s Office. The SAO does not prescribe how to budget or what a budget should look like. The adopted budget should be of sufficient detail to be meaningful and meet the intention of the law. The SAO considers budgets showing revenues and expenditures at the legal fund level to be the minimum acceptable level of detail.

2.4.1.20 Budgeting is more than just an activity to satisfy state law. It is a sophisticated process of strategic planning, communication and policy development resulting in a detailed plan of operations for allocating and monitoring the use of limited resources among various competing demands. Teaching how to budget is outside the scope of the BARS. However, there are many educational resources available to local governments, such as the Municipal Research and Services Center (mrsc.org) and the Government Finance Officers Association (gfoa.org).

2.4.1.30 Glossary of Budgetary Terms:

Appropriation. The legal spending level authorized by a budget ordinance or resolution. Spending should not exceed this level without prior approval of the governing body.

Original Budget. The first complete appropriated budget. The original budget may be adjusted by reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes before the beginning of the fiscal year. The original budget should also include actual appropriation amounts automatically carried over from prior years by law.

Final Amended Budget. The original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes applicable to the fiscal year, whenever signed into law or otherwise legally authorized.

Comprehensive Budget. An government-wide budget that includes all resources the government expects and everything it intends to spend or encumber during a fiscal period. The comprehensive budget contains annual/biennial appropriated budgets, the annual/biennial portion of continuing appropriations such as the capital improvement projects, debt amortization schedules, and grant projects, flexible budgets and all non-budgeted funds.

Fixed Budget. Those budgets which set an absolute maximum or ceiling on the expenditures of a particular fund, department, or other specific category. A fixed budget can be either an annual/biennial appropriated budget or a continuing appropriation. Fixed budgets must be adopted by ordinance or resolution, either for the government’s fiscal period or at the outset of a service project, debt issue, grant award, or capital project.

Annual/Biennial Appropriated Budget. A fixed budget adopted for the government’s fiscal period. The appropriated budget was traditionally used to determine a government’s property tax levy, and a ceiling on expenditures was made absolute so that the expenditures of a government unit would not exceed its revenues. This budget was also historically a balanced budget, estimated revenues equaling appropriations. The appropriated budget is still used to set tax levies and some budget statutes still require balanced budgets, but it is more generally used to authorize a specific amount of expenditures regardless of whether estimated resources meet or exceed that amount. Appropriated budgets are required by statute in cities (Chapter 35.32A RCW, Chapter 35.33 RCW and Chapter 35A.33 RCW), counties (Chapter 36.40 RCW), and most other local governments in Washington State. These budgets are also called legal budgets, adopted budgets, or formal budgets. The appropriated budgets should be adopted by ordinance or resolution.

Continuing Appropriation. A fixed budget which authorizes expenditures for a fiscal period that differs from the government’s fiscal year, such as capital projects, debt issues, grant awards, and other service projects. These expenditures require an ordinance or resolution to authorize the project, establish the assessment roll, adopt the debt amortization schedule, or accept the grant award. Such ordinances or resolutions set an absolute maximum or ceiling on the expenditures, but the time period for incurring expenditures does not coincide with the government’s fiscal year; it may even cover several years. The major difference between annual/biennial appropriated budgets and continuing appropriations is that the latter do not lapse at fiscal period end; this implies that no legislative action is required to amend the annual/biennial portion of a continuing appropriation, unless the total authorized expenditures would exceed the entire appropriation.

Flexible Budgets. Are usually regarded as managerial tools, which do not set a ceiling on expenses or expenditures but establish a plan for them at various levels of service. They are especially appropriate for the day-to-day operations of a public utility where it is essential to plan fluctuations in the demand for services and where revenues will automatically increase with demand, so that a balanced budget does not depend on establishing a ceiling for expenses.

Working Capital Budget. Combines flexible and fixed budget elements in one document for enterprise and internal service funds. Current operations are flexibly budgeted based on the estimated level of services to be provided and long-range sources and uses of assets are controlled by annual/biennial appropriations and continuing appropriations.

Capital Improvement Budget. Consists of two elements: the annual/biennial portion of capital projects and annual/biennial appropriations for the purchase, construction or replacement of major fixed assets in the current fiscal period.

Operating Budget. Presents the estimated expenditures and available resources necessary to provide the services for which the government was created. An operating budget will contain flexible budgets and fixed budgets; the fixed budgets will include annual/biennial appropriations for services and the annual/biennial portion of continuing appropriations for debt service and for service projects.

Encumbrances. Commitments related to unperformed (executory) contracts for goods or services should be utilized to the extent necessary to assure effective budgetary control and to facilitate cash planning. Encumbrances outstanding at year end represent the estimated amount of expenditures ultimately to result if unperformed contracts in process are completed; they do not constitute expenditures or liabilities.

This section was last edited by SAO on 01/23/19
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Fund Types and Accounting Principles

3.1 Accounting Principles and Internal Controls

3.1.1 Fund Types and Accounting Principles

3.1.1.10 The following principles of accounting and financial reporting are based on those set forth in the Governmental Accounting Standards Board’s (GASB) Codification of Governmental Accounting and Financial Reporting Standards. The BARS manual permits accounting and financial reporting that conforms to these principles in all respects and requires GAAP municipalities to account and report in conformity with these principles, except that the annual report required is not as extensive as the Comprehensive Annual Financial Report (CAFR).

3.1.1.20 ACCOUNTING AND REPORTING CAPABILITIES

A governmental accounting system must make it possible both: (a) to present fairly and with full disclosure the funds and activities at the government in conformity with generally accepted accounting principles; and (b) to determine and demonstrate compliance with finance-related legal and contractual provisions.

3.1.1.30 FUND ACCOUNTING SYSTEMS

A governmental accounting system should be organized and operated on a fund basis. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations. Fund financial statements should be used to report detailed information about primary government, including its blended component units. The focus of governmental and proprietary fund financial statements is on major funds.

3.1.1.40 TYPES OF FUNDS

In fund financial statements, governments should report governmental, proprietary, and fiduciary funds to the extent that they have activities that meet the criteria for using these funds.

Presented below is a system to classify all funds used by local government and the assignment of code numbers to identify each type of fund. A three digit code is used: the first digit identifies the fund type and the next two digits will be assigned by the governmental unit to identify each specific fund.

Governmental Funds

Code 000
General (Current Expense) Fund
– should be used to account for and report all financial resources not accounted for and reported in another fund.

Although a local government has to report only one general fund in its external financial reports, the government can have multiple general subfunds for its internal managerial purposes. These managerial subfunds have to be combined into one general fund for external financial reporting.

Code 100
Special Revenue Funds – should be used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital projects. Restricted revenues are resources externally restricted by creditors, grantors, contributors or laws or regulations of other governments or restricted by law through constitutional provisions or enabling legislation (similar to restricted component of net position used in government-wide reporting). Committed revenues are resources with limitations imposed by the highest level of the government, and where the limitations can be removed only by a similar action of the same governing body. Revenues do not include other financing sources (long-term debt, transfers, etc.).

The term proceeds of specific revenue sources establishes that one or more specific restricted or committed revenues should be foundation for a special revenue fund. They should be expected to continue to comprise a substantial portion of the inflows reported in the fund. While GASB Statement 54 has not provided a numeric range for substantial portion of inflows, it was recommended that at least 20 percent is a reasonable limit for reporting a special revenue fund. Local governments need to consider factors such as past resource history, future resource expectations and unusual current year inflows such as debt proceeds in their analysis.

They may use the calculation below to determine whether an activity would qualify for reporting as a special revenue fund.

Other resources (investment earnings and transfers from other funds, etc.) also may be reported in the fund if these resources are restricted, committed, or assigned to the specific purpose of the fund.

Governments should discontinue reporting a special revenue fund, and instead report the fund’s remaining resources in the general fund, if the government no longer expects that a substantial portion of the inflows will derive from restricted or committed revenue sources.

The Statement requires all revenue to be recognized in the special revenue fund. If the resources are initially received in another fund, such as the general fund, and subsequently remitted to a special revenue fund, they should not be recognized as revenue in the fund initially receiving them. They should be recognized as revenue in the special revenue fund from which they will be expended. So, the local governments can either receive resources directly into the special revenue fund, or account for the resources as agency deposits in the receiving fund and, after remitting them, recognize them as revenue to the special revenue fund.

Special revenue funds should not be used to account for resources held in trust for individuals, private organizations, or other governments.

The general fund of a blended component unit should be reported as a special revenue fund.

The state statutes contain many requirements for special funds to account for different activities. The legally required funds do not always meet GAAP standards for external reporting. So, while the local governments are required to follow their legal requirements, they will have to make some adjustment to their fund structure for external financial reporting.

Code 200
Debt Service Funds
– should be used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest. Debt service funds should be used to report resources if legally mandated. Financial resources that are being accumulated for principal and interest maturing in future years also should be reported in debt service funds. The debt service transactions for a special assessment for which the government is not obligated in any matter should be reported in an agency fund. Also, if the government is authorized, or required to establish and maintain a special assessment bond reserve, guaranty, or sinking fund, GASB Statement 6 requires using a debt service fund for this purpose.

Code 300
Capital Projects Funds
– should be used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays including the acquisition or construction of capital facilities or other capital assets. Capital outlays financed from general obligation bond proceeds should be accounted for through a capital projects fund. Capital project funds exclude those types of capital-related outflows financed by proprietary funds or for assets that will be held in trust for individuals, private organizations, or other governments (private-purpose trust funds).

Code 700
Permanent Funds
– should be used to account for and report resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government’s programs – that is for the benefit of the government or its citizens (public-purpose). Permanent funds do not include private-purpose trust funds which account for resources held in trust for individuals, private organizations, or other governments.

Proprietary Funds

Code 400
E
nterprise Fundsmay be used to report any activity for which a fee is charged to external users for goods or services. Enterprise funds are required for any activity whose principal revenue sources meet any of the following criteria:

  • Debt backed solely by a pledge of the net revenues from fees and charges.
  • Legal requirement to recover cost. An enterprise fund is required to be used if the cost of providing services for an activity including capital costs (such as depreciation or debt service) must be legally recovered through fees or charges.
  • Policy decision to recover cost. It is necessary to use an enterprise fund if the government’s policy is to establish activity fees or charges designed to recover the cost, including capital costs (such as depreciation or debt service).

These criteria should be applied in the context of the activity’s principal revenue source.

The term activity generally refers to programs and services. This term is not synonymous with fund. As a practical consequence, if an activity reported as a separate fund meets any of the three criteria, it should be an enterprise fund. Also, if a “multiple activity” fund (e.g., general fund) includes a significant activity whose principal revenue source meets any of these three criteria, the activity should be reclassified as an enterprise fund.

The determination of an activity’s principal revenue source is a matter of professional judgement. A good indicator of the activity’s significance may be comparing pledged revenues or fees and charges to total revenue. For example, consider a county auditor’s office that charges fees to provide a payroll service to various taxing districts. Even if the fee is meant to cover the cost of the service, the county auditor function as a whole is primarily supported with tax dollars from the general fund. It would be allowable in this case to leave the activity all within general fund.

Finding an appropriate fund type requires a careful analysis since there is not always a clear choice. For example, building permit fees may be accounted for in the general fund or a special revenue fund in certain circumstances, such as when they are partially supported by taxes. However, if there is a pricing policy to recover the cost of issuing those individual building permits, they should be reported in an enterprise fund.

In addition, GAAP mandate the use of enterprise funds for the separately issued financial statement of public-entity risk pools. Public-entity risk pools also are accounted for as enterprise funds when they are included within a sponsoring government’s report, provided the sponsor is not the predominant participant in the arrangement. Otherwise, they can use the general fund.

Separate funds should not be reported for bond redemption, construction, reserves, or deposits, for any utility that is accounted for on the full accrual basis, using either the BARS accounts or a nationally recognized utility chart of accounts such as FERC or NARUC. Separate funds should not be reported even though bond covenants may stipulate a bond reserve fund, bond construction fund, etc. The bond covenant use of the term fund is not the same as the use in governmental accounting. For bond covenants, fund means only a segregation or separate account, not a self-balancing set of accounts. (See account 150 in the general ledger chart of accounts.)

Code 500
Internal Service Funds
– may be used to report any activity that provides goods or services to other funds, departments or agencies of the government, or to other governments, on a cost-reimbursement basis. Internal service funds should be used only if the reporting government is the predominant participant in the activity. Otherwise, the activity should be reported in an enterprise fund.

Fiduciary Funds

Note: The new definitions of fiduciary funds per GASBS 84, Fiduciary Activities are required for reporting fiduciary activities in FY 2019 (i.e., reports submitted in 2020). Additional information regarding these changes is available here.

Code 600
Fi
duciary Funds – should be used to account for assets held by a government in a trustee capacity or as a custodian for individuals, private organizations, other governmental units, and/or other funds. These include (a) investment trust funds, (b) pension (and other employee benefit) trust funds, (c) private-purpose trust funds, and (d) custodial funds.

Code 600-609
Investment Trust Funds – should be used to report fiduciary activities from the external portion of investment pools and individual investment accounts that are held in a trust that meets the following criteria: the assets are (a) administered through a trust in which the government itself is not a beneficiary, (b) dedicated to providing benefits to recipients in accordance with the benefit terms, and (c) legally protected from the creditors of the government.

Code 610-619
Pension (and Other Employee Benefit) Trust Funds – should be used to report fiduciary activities for the following:

  • Pension plans and OPEB plans that are administered through trusts that meet the criteria in paragraphs 3 of GASB Statement 67 or paragraph 3 of GASB Statement 74, respectively.
  • Other employee benefit plans for which (1) resources are held in trust that meets the following criteria: the assets are (a) administered through a trust in which the government itself is not a beneficiary, (b) dedicated to providing benefits to recipients in accordance with the benefit terms, and (c) legally protected from the creditors of the government and (2) contributions to the trust and earnings on these contributions are irrevocable.

Code 620-629
Private-Purpose Trust Funds – should be used to report all fiduciary activities that (a) are not required to be reported in pension (and other employee benefit) trust funds or investment trust funds, and (b) are held in a trust that meets the following criteria: the assets are (a) administered through a trust in which the government itself is not a beneficiary, (b) dedicated to providing benefits to recipients in accordance with the benefit terms, and (c) legally protected from the creditors of the government.

Code 630-698
Custodial Funds – should be used to report all fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds or private purpose trust funds. The external portion of the investment pools that are not held in trust that meets criteria listed above should be reported in a separate external investment pool fund column under the custodial funds classification.

Code 699
External Investment Pool Fund – The external portion of the investment pools that are not held in trust and meet criteria listed above. Although this is consider a custodial fund, it should be reported in a separate external investment pool fund column under the custodial funds classification.

NOTE: The custodial funds are required to be used by business-type activities and enterprise funds, if the assets, upon receipt, are normally expected to be held for more than three months.

3.1.1.50 NUMBER OF FUNDS

Governments should establish and maintain those funds required by law and sound financial administration. Only the minimum number of funds consistent with legal and operating requirements should be established. Using numerous funds results in inflexibility, undue complexity and inefficient financial administration.

Local governments should periodically undertake a comprehensive evaluation of their fund structure to ensure that individual funds that became superfluous are eliminated from accounting and reporting.

Elected officials should be educated to the fact that accountability may be achieved effectively and efficiently by judicious use of department, program and other available account coding or cautious use of managerial (internal) funds.

3.1.1.60 REPORTING CAPITAL ASSETS

A clear distinction should be made between general capital assets and capital assets of proprietary and fiduciary funds. Capital assets of proprietary funds should be reported in both the government-wide and fund financial statements. Capital assets of fiduciary funds should be reported only in the statement of fiduciary net position. All other capital assets of the government are general capital assets. They should not be reported as assets in governmental funds but should be reported in the governmental activities column in the government-wide statement of net position. The Capital Assets (3.3.9 - 3.3.11) sections of the BARS manual provide additional information regarding accounting and reporting of capital assets.

3.1.1.90 REPORTING LONG-TERM LIABILITIES

A clear distinction should be made between fund long-term liabilities and general long-term liabilities. Long-term liabilities directly related to and expected to be paid from proprietary funds should be reported in the proprietary fund statement of net position and in the government-wide statement of net position. Long-term liabilities directly related to and expected to be paid from fiduciary funds should be reported in the statement of fiduciary net position. All other unmatured general long-term liabilities of the governmental unit should not be reported in governmental funds but should be reported in the governmental activities column in the government-wide statement of net position.

MEASUREMENT FOCUS AND BASIS OF ACCOUNTING IN THE BASIC FINANCIAL STATEMENTS

3.1.1.100 Government-Wide Financial Statements

The government-wide statement of net position and statement of activities should be prepared using the economic resources measurement focus and the accrual basis of accounting. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions should be recognized when the exchange takes place. Revenues, expenses, assets, and liabilities resulting from nonexchange transactions should be recognized in accordance with the GASB Statements 24 and 33.

3.1.1.110 Fund Financial Statements

In fund financial statements, the modified accrual or accrual basis of accounting, as appropriate, should be used in measuring financial position and operating results.

a. Financial statements for governmental funds should be presented using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues should be recognized in the accounting period in which they become available and measurable. Expenditures should be recognized in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on general long-term liabilities, which should be recognized when due.

b. Proprietary fund statements of net position and revenues, expenses, and changes in fund net position should be presented using the economic resources measurement focus and the accrual basis of accounting.

c. Financial statements of fiduciary funds should be reported using the economic resources measurement focus and the accrual basis of accounting, except for the recognition of certain liabilities of defined benefit pension plans and certain postemployment healthcare plans.

d. Transfers should be reported in the accounting period in which the interfund receivable and payable arise.

NOTE: The various fund types may be grouped in the following manner to more clearly portray their relationship to an accounting basis:

Flow of Current Financial Resources Measurement Focus Funds – use the modified accrual basis:

000

General (Current Expense) Fund

100

Special Revenue Funds

200

Debt Service Funds

300

Capital Projects Funds

700

Permanent Funds

Flow of Economic Resources Measurement Focus Funds – use full-accrual basis:

400

Enterprise Funds

500

Internal Service Funds

600-609

Investment Trust Funds

610-619

Pension (and Other Employee Benefit) Trust Funds

620-629

Private-Purpose Trust Funds

630-698

Custodial Funds

699

External Investment Pool Fund

3.1.1.120 BUDGETING, BUDGETARY CONTROL, AND BUDGETARY REPORTING

a. An annual/biennial budget should be adopted by every government.

b. The accounting system should provide the basis for appropriate budgetary control.

c. Budgetary comparison schedules should be presented as required supplementary information for the general fund and for each major special revenue fund that has a legally adopted annual/biennial budget. The budgetary comparison schedule should present both (a) the original and (b) the final appropriated budgets for the reporting period ad well as (c) actual inflows, outflows, and balances, stated on the government’s budgetary basis.

3.1.1.130 TRANSFER, REVENUE, EXPENDITURE, AND EXPENSE ACCOUNT CLASSIFICATIONS

a. Transfers should be classified separately from revenues and expenditures or expenses in the basic financial statements.

b. Proceeds of general long-term debt issues should be classified separately from revenues and expenditures in the governmental fund financial statements.

c. Governmental fund revenues should be classified by fund and source. Expenditures should be classified by fund, function (or program), organization unit, activity, character, and principal classes of objects.

d. Proprietary fund revenues should be reported by major sources, and expenses should be classified in essentially the same manner as those of similar business organizations, functions, or activities.

e. At a minimum, the statement of activities should present:

  1. Activities accounted for in governmental funds by function, to coincide with the level of detail required in the governmental fund statement of revenues, expenditures, and changes in fund balances.
  2. Activities accounted for in enterprise funds by different identifiable activities.

3.1.1.140 COMMON TERMINOLOGY AND CLASSIFICATION

A common terminology and classification should be used consistently throughout the budget, the accounts, and the financial reports of each fund.

3.1.1.150 ANNUAL FINANCIAL REPORTS

a. General purpose external financial reports should be prepared and published. Governments engaged in governmental and business-type activities should include, at a minimum:

(1) Management’s discussion and analysis (MD&A).

(2) Basic financial statements. The basic financial statements should include:

  • Government-wide financial statements.
  • Fund financial statements.
  • Notes to the financial statements.

(3) Required supplementary information (RSI) other than MD&A.

Governments engaged only in business-type activities should present only the financial statements required for proprietary funds. They should include:

(1) Management’s discussion and analysis (MD&A)

(2) Proprietary fund financial statements consisting of:

  • Statement of net position
  • Statement of revenues, expenses, and changes in fund net position
  • Statement of cash flows

(3) Notes to the financial statements

(4) Required supplementary information (RSI) other than MD&A, if applicable.

b. The statements and reports listed above follow national standards of financial reporting. They should not be confused with legal reporting requirements, which are prescribed by the State Auditor’s Office for all local governments in Washington State. The legal requirements are consistent with these national standards, but they are not identical. Specific legal reporting requirements are contained in reporting part of this Manual.

c. A comprehensive annual financial report may be prepared and published, covering all activities of the primary government (including its blended component units) and providing an overview of all discretely presented component units of the reporting entity including introductory section, management's discussion and analysis (MD&A), basic financial statements, required supplementary information other than MD&A, combining and individual fund statements, schedules, narrative explanations, and statistical section. The reporting entity is the primary government (including its blended component units) and all discretely presented component units.

d. The financial reporting entity consists of (1) the primary government, (2) organizations for which the primary government is financially accountable, and (3) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’ basic financial statements to be misleading or incomplete. The reporting entity's government-wide financial statements should display information about the reporting government as a whole distinguishing between the total primary government and its discretely presented component units as well as between the primary government's governmental and business-type activities. The reporting entity’s fund financial statements should present the primary government's (including its blended component units, which are, in substance, part of the primary government) major funds individually and nonmajor funds in the aggregate. Funds and component units that are fiduciary in nature should be reported only in the statements of fiduciary net position and changes in fiduciary net position.

e. The nucleus of a financial reporting entity usually is a primary government. However, a governmental organization other than a primary government (such as a component unit, joint venture, jointly governed organization, or other stand-alone government) serves as the nucleus for its own reporting entity when it issues separate financial statements. For all of these entities, the provisions the GASB Statement 14 should be applied in layers from the bottom up. At each layer, the definition and display provisions should be applied before the layer is included in the financial statements of the next level of the reporting government.

This section was last edited by SAO on 01/28/19
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GAAP Reporting Requirements

4.1 Reporting Principles and Requirements

4.1.1 GAAP Reporting Requirements

4.1.1.10 The requirements for financial reporting in accordance with generally accepted accounting principles (GAAP) are established by the Governmental Accounting Standards Board (GASB) in the GASB Statement 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments.

The following diagram illustrates the minimum requirements for general purpose external financial reports.

4.1.1.20 Comparative financial statements mean two complete sets of financial statements for each comparative year. Each set should contain basic financial statements (including notes) and RSI (including MD&A). Both years may be combined in one presentation; however, each element (MD&A, basic financial statements, notes and RSI) have to include information for both years.

1. Management Discussion and Analysis (MD&A)

4.1.1.30 MD&A should introduce the basic financial statements and provide an analytical overview of the local government’s financial activities. It is part of the Required Supplementary Information (RSI), however it should be presented before the basic financial statements. The MD&A should provide an objective and easily readable analysis of the local government’s financial activities. It should include comparisons of current year to the prior year based on the government-wide information. It also includes information regarding the local government budget variances, capital assets, long-term debt activity, and a description of currently known facts, decisions, or conditions expected to have a significant effect on financial position or results of operations.

2. Basic Financial Statements

Government-Wide Financial Statements

4.1.1.40 The government-wide financial statements consist of a statement of net position and a statement of activities. They are prepared using the economic resources measurement focus and the accrual basis of accounting. Each statement distinguishes between the governmental and business-type activities of the primary government and its discretely presented component units.

Statement of Net Position

4.1.1.50 The statement of net position presents the local government as one economic unit rather than a compilation of different funds. The statement focuses on type of activities, rather than type of funds. Local governments should report all capital assets, including infrastructure assets in the government-wide statement of net position. The net position should be reported in three categories: net investment in capital assets, restricted and unrestricted.

Statement of Activities

4.1.1.60 The statement of activities is a report on the results of the local government’s operations. The statement presents the cost of each function and the extent to which each of the local government’s functions, programs or services either contributes to or takes away from the local government’s general revenue.

The required format provides:

  1. Information indicating the extent to which current-year program revenues supported the cost of the current-year services, and

  2. How the local government finances its activities.

Fund Financial Statements

Governmental Fund Financial Statements

4.1.1.70 Governmental funds should be reported using the current financial resources measurement focus and the modified accrual basis of accounting. These funds are presented by general fund; major funds, and aggregated nonmajor funds.

There are two statements required - the balance sheet and the statement of revenues, expenditures and changes in fund balance. General capital assets and general long-term liabilities are not reported in the governmental fund balance sheet. (They are reported in the government-wide financial statements.)

4.1.1.80 The statement of revenues, expenditures and changes in fund balance reports information about the inflows, outflows, and balances of current financial resources of each major governmental fund and for the nonmajor governmental funds in the aggregate.

4.1.1.90 Each statement reports separate columns for the general fund and for other major governmental and enterprise funds. Major funds are funds whose revenues, expenditures/expenses, assets, or liabilities (excluding extraordinary items) are at least 10 percent of corresponding element totals for all funds of that category or type and at least five percent of the corresponding element total for all governmental or enterprise funds combined. The local government may choose to report any other funds as a major fund if they believe they are important to users. The nonmajor funds are reported in aggregate in a separate column.

Proprietary Funds Financial Statements

4.1.1.100 There are three required fund financial statements for proprietary funds:

  1. Statement of Net Position,
  2. Statement of Revenues, Expenses and Changes in Fund Net Position, and
  3. Statement of Cash Flows.

4.1.1.110 Proprietary funds continue to be presented on the economic resources measurement focus and the full accrual basis of accounting. Proprietary funds are reported the same way as in the government-wide financial statements. However, internal service funds should be reported as a fund type (aggregated) in a separate column. Major enterprise funds are reported in separate columns and nonmajor enterprise funds are aggregated in a single column.

4.1.1.120 The proprietary statement of net position presents assets and liabilities in a classified format. Restricted assets are reported separately. Net position should be reported in the following three components: net investment in capital assets, restricted and unrestricted.

4.1.1.130 The proprietary statement of revenues, expenses, and changes in fund net position reports in a specific format prescribed by the GASB Statement 34. All transactions that affect net position are included. Revenues are reported by major source. Expenses are reported by either detail (object) or function level. Revenues and expenses should distinguish between operating and nonoperating.

Fiduciary Fund Financial Statements

4.1.1.140 The following are required financial statements for fiduciary funds:

  1. Statement of Fiduciary Net Position, and
  2. Statement of Changes in Fiduciary Net Position.

The fiduciary statements are prepared using the economic resources measurement focus and full accrual basis of accounting (with some exceptions for liabilities for defined benefit pension plans and certain postemployment health care plans).

4.1.1.160 The statement of fiduciary net position should include information about the assets, liabilities, and net position for each fiduciary fund type and for similarly discretely presented component units of the reporting entity. The local government should provide details for all other fiduciary funds, or clearly indicate where the information is displayed.

4.1.1.170 The statement of changes in fiduciary net position should include information about the additions to, deductions from, and net increase (or decrease) for the year in net position for each fiduciary fund type and similar discretely presented component units. It should provide information about significant year-to-year changes in net position. The local government should provide additional details about investments and provide the level of details for all other fiduciary funds or clearly indicate where the information is displayed.

3. Notes to the Financial Statements

4.1.1.180 Notes to the financial statements are essential to fair presentation of the basic financial statements. The notes include the summary of significant accounting policies and summary disclosure of such matters as significant contingent liabilities, encumbrances outstanding, significant effects of subsequent events, pension plans, accumulated unpaid employee benefits (such as vacation and sick leave), material violations of finance-related legal and contractual provisions, debt service requirements to maturity, commitments under noncapitalized leases, construction and other significant commitments, any excess of expenditures over appropriations in individual funds, deficit balances of individual funds, and interfund receivables and payables. Any other disclosures necessary in the circumstances should also be included.

The NCGA has discussed the notes to financial statements in more detail in its Interpretation 6, which also provides guidance for presenting notes in a logical order.

4. Required Supplementary Information

4.1.1.190 Statements, schedules, statistical data, and other information the GASB deem necessary is reported as required supplementary information (RSI). Except for the MD&A, required supplementary information, including the budgetary comparison information, should be presented immediately following the notes to the financial statements.

There are four types of RSI (other than MD&A) that must be presented:

  • Budgetary comparisons (for the general fund and other individual special revenue funds), [1]
  • Infrastructure condition and maintenance data (for local governments using the modified approach),
  • Pension trend data (for certain pension plans and participating employers),
  • Revenue and claims development trend data (for public-entity risk pools).

Reporting Entity

4.1.1.200 In June 1991, GASB issued the Statement 14, The Reporting Entity, which is effective for financial statements for periods beginning after December 15, 1992. Statement 14 establishes standards for defining and reporting on the financial reporting entity and applies to financial reporting by primary governments, as well as to separately issued financial statements of governmental component units. The Statement 14 defines the financial reporting entity as consisting of (1) the primary government, (2) organizations for which the primary government is financially accountable and (3) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.

4.1.1.210 A primary government is financially accountable for those organizations that make up its legal entity as well as legally separate organizations if the primary government appoints a voting majority of an organization’s governing body, and either it can impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government.

4.1.1.220 Most organizations determined to be component units under the Statement 14 should be included in the financial reporting entity by discrete presentation that is, by presentation in one or more columns separate from the financial data of the primary government. However, some component units may, in substance, be the same as the primary government and should be reported as part of the reporting entity that is, the component unit’s balances and transactions are reported in a manner similar to those of the primary government, by blending. It is likely that an organization considered to be a component unit under existing standards and blended will continue to be considered a component unit under the Statement 14; however, according to the Statement 14, that component unit will probably be reported by discrete presentation.

The following flowchart will help to determine the reporting status of an organization. Refer to the Statement’s Glossary for definitions of the various terms.

4.1.1.230 In September 2006, GASB issued the Statement 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues. This Statement applies to all intra-entity transactions (sales and donations) that involve the transfer of financial assets, capital assets and future revenues.

When accounting for the transfer of capital and financial assets and future revenues within the same financial reporting entity, the transferee should recognize the assets or future revenues received at the carrying value of the transferor. The difference between the amount paid (exclusive of amounts that may be refundable) and the carrying value of the assets transferred should be reported as a gain or loss by the transferor (revenue in governmental funds) and as a revenue or expenditure/expense by the transferee in a separately-issued statements, but reclassified as transfers in the financial statements of the reporting entity. Application of this Statement should be the same for both discretely presented and blended component units.

4.1.1.240 Hospital Districts: The General Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards, section Ho5.601 supersedes the June 1996 AICPA Audit and Accounting Guide, Health Care Organizations, to the extent of financial reporting. However, the Guide continues to provide guidance on individual transactions that are unique to healthcare organizations. The Guide is considered Category B guidance in the hierarchy of GAAP.

Notes to Financial Reporting Entity Flowchart

PG = primary government, that is, the entity preparing financial statements
PCU = potential component unit, that is, the entity under consideration

1. An organization has separate legal standing if it is created as a body corporate or a body corporate and politic, or if it otherwise possesses the corporate powers that would distinguish it as being legally separate from the primary government.

2. Corporate powers give an organization the capacity to have a name; the right to sue and be sued in its own name without recourse to another state or local governmental unit; and the right to buy, sell, lease, and mortgage property in its own name.

3. The primary government’s appointment authority should be substantive and continuing. A primary government’s appointment authority is not substantive if the number of candidates is limited by the nominating process or if its responsibility is limited to confirming appointments made by individuals or groups other than the primary government’s officials or appointees. In the absence of continuing appointment authority, the ability of a primary government to unilaterally abolish an organization also provides the basis for ongoing accountability.

4. An organization is fiscally dependent if it cannot meet all three of the following requirements without substantive approval of a primary government:

  • Determine it budget,
  • Levy taxes or set rates or charges, and
  • Issue bonded debt.

It is also important to make a distinction between substantive and ministerial (compliance) approval. Ministerial approval is often a result of the general oversight of the respective state or local governments. This may include evaluation of programs, review for compliance with the statutory requirements, etc. Being subject to ministerial approval does not qualify an organization as fiscally dependent. Also, a primary government that is temporarily under the fiscal control of another government continues to be fiscally independent.

5. The benefit or burden relationship may result from legal entitlements or obligations, or it may be less formalized and exist because of a decision made by the primary government or agreements between the primary government and component unit.

An organization has a financial benefit or burden relationship with the primary government if any one of these conditions exists:

  • The primary government is legally entitled to or can otherwise access the organization’s resources.
  • The primary government is legally obligated or has otherwise assumed the obligation to finance deficits of, or provide financial support to, the organization.
  • The primary government is obligated in some manner for the debt of the organization.

Exchange transactions between organizations and the primary government are not considered a financial benefit or burden relationship.

The effect of the financial benefits or burdens on the primary government can be either direct or indirect. A direct effect occurs when the primary government itself is entitled to the resources or obligated for the deficits or debits of the organization. An indirect relationship occurs when one or more of the primary government’s component units is entitled to the resources and obligated for the deficits or debts of the organization. In both cases, the primary government has the benefit/burden relationship with the organization.

6. Certain organizations warrant inclusion because of the nature and significance of their relationship with the primary government, including their ongoing financial support of the primary government or its other component units. A legally separate, tax exempt organization should be reported as a discretely presented component unit if all of the following criteria are met:

  • The economic resources received or held by the organization are almost entirely for the direct benefit of the primary government, its component units, or its constituents.
  • The primary government is entitles to, or has the ability to otherwise access, a majority of the economic resources received or held by the separate organization.
  • The economic resources received or held by an individual organization that the specific primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to that primary government.

7. Other organizations should be evaluated as potential component units if they are closely related to or financially integrated with the primary government and included as component units if the nature and significance of their relationship with the primary governments is such that exclusion from the financial reporting entity would render the financial statements incomplete or misleading. It is a matter of professional judgment to determine whether the nature and the significance of a potential component unit’s relationship with the primary government warrant inclusion.

8. A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects, activities, or level of services performed or provided by the organization. The existence of any one of the following conditions indicates that the primary government has the ability to impose its will on an organization:

  • The ability to remove the appointed members of the organization’s governing body at will.
  • The ability to modify or approve the budget of the organization.
  • The ability to modify or approve the rate or fee changes affective revenues, such as water usage rate increases.
  • The ability to veto, overrule, or modify the decisions (other than those in b and c) of the organization’s governing body.
  • The ability to appoint, hire, reassign, or dismiss those persons responsible for the day-to-day operations (management) of the organization.

There may be other conditions indicating the possibility of imposing will. When assessing them, remember to make the distinction between substantive and ministerial approvals.

A potential component unit for which a primary government is financially accountable may be fiscally dependent on another government. An organization should be included as a component unit of only one reporting entity. Professional judgment should be used to determine the most appropriate reporting entity. A primary government that appoints a voting majority of the governing board of a component unit of another government should make the disclosures required for related organizations.

9. A component unit should be presented as blended when the component unit’s governing body is substantively the same as the governing body of the primary government and (1) there is a financial benefit/burden relationship between the primary government and the component unit or (2) management of the primary government has operational responsibility for the component unit.

Additionally, a component unit should be included using blending method if the component unit is organized as a not-for-profit corporation in which the primary government is the sole corporate member ( GASB Statement 80, Blending Requirements for Certain Component Units).

10. A component unit should be presented as blended when the component unit provides services entirely, or almost entirely, to the primary government or otherwise exclusively, or almost exclusively, benefits the primary government even though it does not provide services directly to it. The essence of this type of arrangement is much the same as an internal service fund – the goods or services are provided to the government itself rather than to the citizenry.

As prescribed in the GASB Statement 85, Omnibus 2017, for a primary government that is a business-type activity and uses a single column for financial statement presentation of its business-type activities, a component unit may be blended only if the component unit meets a criterion for blending in paragraph 53 of the GASB Statement 14, The Financial Reporting Entity.

The GASB Statement 14 (as amended by GASB Statements 34, 39, 61 and 80) allows flexibility in displaying the component units’ financial data. Please refer to the matrix in the Manual for a detailed listing of the possible displays for component units.

______________________________________________________________________________________

[1] As amended by the GASB Statement 39, Determining Whether Certain Organizations are Component Units

This section was last edited by SAO on 01/23/19
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Table of Contents

Index of Sections

CHARTS OF ACCOUNTS 
BARS Account Export 
Object Codes1.4
Revenue/Expenditure/Expense Accounts Overview1.3
Determining Operating/Nonoperating Revenues/Expenses in Proprietary Funds1.5
General Ledger Accounts1.2
Account Structure 
Applicability1.1.1
Structure1.1.2
  
BUDGETING 
Budget Compliance 
Introduction2.4.1
Budget Adoption and Amendments2.4.3
Budget Process2.4.2
  
ACCOUNTING 
Accounting Principles and Internal Control 
Fund Types and Accounting Principles3.1.1
Internal Control3.1.3
Original Supporting Documentation3.1.4
Sources of GAAP3.1.2
  
Assets 
Compensating Balances3.2.5
Deposits and Investments3.2.1
Investment in County's External Investment Pool3.2.2
Joint Ventures3.2.8
Money Held in Trust3.2.4
Special Assessments3.2.7
Sweeping Interest and Investment Returns into County General Fund3.2.3
  
Capital Assets 
Capital Assets Accounting3.3.10
Capital Asset Management3.3.9
Controls over Capital Assets3.3.11
  
Liabilities 
Arbitrage Rebates3.4.6
Bonds and Revenue Warrants3.4.3
Financial Guarantees3.4.12
Issuance of Duplicate Instruments3.4.5
Leases3.4.1
Legal and Other Contingencies3.4.11
Other Post-Employment Benefits (OPEB)3.4.7
Pensions3.4.2
Refunding Debt3.4.4
Risk Management Principles3.4.9
Solid Waste Utilities: Closure and Postclosure Cost Accounting3.4.8
  
Deferred Outflows/Inflows 
Accounting and Reporting of Property Tax3.5.2
Classification of Deferred Outflows/Inflows of Resources3.5.1
  
Revenues 
Cash Receipting3.6.1
County Auditor's Operation and Maintenance Fund (Recording Fees)3.6.2
County Treasurer's Operation and Maintenance Fund3.6.3
Criminal Justice Funding3.6.4
Diversion of County Road Property Tax3.6.5
Electronic Funds Transfer - Receipts3.6.6
Impact Fees3.6.7
Liquor Tax and Profits - Two Percent for Substance Abuse Treatment Programs3.6.8
Prosecuting Attorney's Salaries3.6.12
Revenue Accruals in Governmental Funds3.6.9
Suspense Funds3.6.11
Utility Tax3.6.13
Working Advances from Department of Social and Health Services (DSHS)3.6.10
  
Grants 
Grants Accounting3.7.1
Pass-Through Grants3.7.2
  
Expenditures 
Confidential Funds (Drug Buy Money, Investigative Funds)3.8.9
Electronic Funds Transfer - Disbursements3.8.11
Employee Travel3.8.2
Imprest, Petty Cash and Other Revolving Funds3.8.8
Memberships in Civic and Service Organizations3.8.13
Mobile Devices3.8.3
Paths and Trails - Accounting3.8.10
Purchase Cards3.8.4
Redeemed Warrants/Cancelled Checks3.8.7
Unemployment and Deferred Compensation3.8.1
Use of Payroll and Claims Funds3.8.6
Voter Registration and Election Costs Allocation3.8.12
Voucher Certification and Approval3.8.5
  
Interfund Activities 
Interfund Activities Overview3.9.8
Equipment Rental and Revolving (ER&R) Fund3.9.7
Internal Service Funds3.9.6
Loans3.9.1
Overhead Cost Allocation3.9.5
Property Transfers3.9.2
Reimbursements3.9.4
Utility Surplus Transfers3.9.3
  
Compliance 
Bond Coverage for Public Officials and Employees3.10.3
County Fair Operations3.10.1
Limitation of Indebtedness3.10.5
New Entity Creation and Dissolution Notification3.10.6
Promotional Hosting3.10.7
Public Works Records3.10.4
Reporting Losses of Public Funds or Assets or Other Illegal Activity3.10.2
  
Special Topics 
Transportation Benefit District (TBD)3.11.1
  
REPORTING 
Reporting Principles and Requirements 
GAAP Reporting Requirements4.1.1
BARS Reporting Requirements4.1.2
Summary of Reporting Requirements4.1.4
Certification4.1.3
GAAP versus Cash Reporting4.1.7
  
Government-Wide Financial Statements 
Presentation Requirements4.2.1
Statement of Net Position4.2.2
Statement of Activities4.2.3
Classification of Revenues and Expenses for the Statement of Activities4.2.4
Eliminations4.2.7
Net Position4.2.8
  
(Fund) Financial Statements 
Fund Types4.3.1
Major Funds4.3.2
Governmental Funds Financial Statements4.3.3
Proprietary Funds Financial Statements4.3.4
Internal Service Funds4.3.6
Fiduciary Funds Financial Statements4.3.5
  
Conversion and Reconciliation between Government-Wide and Fund Financial Statements4.4
  
Statement of Cash Flows4.5
  
Notes to Financial Statements 
Instructions4.6.1
  
Required Supplementary Information (RSI)4.7
  
Supplementary and Other Information 
DES Schedule of Expenses - Risk Pools4.14.2
List of Participating Members - Risk Pools4.14.1
Liabilities (Schedule 09)4.8.3
Expenditures of Federal Awards (Schedule 16)4.8.5
  
SAO Annual Report Schedules 
Revenues/Expenditures/Expenses (Schedule 01)4.8.1
Expenditures of State Financial Assistance (Schedule 15)4.8.16
Public Works (Schedule 17)4.8.6
Labor Relations Consultant(s) (Schedule 19)4.8.7
Sales and Use Tax for Public Facilities - Rural Counties (Schedule 20)4.8.8
Risk Management (Schedule 21)4.8.9
Assessment Questionnaire (Schedule 22) (Cash)4.8.14
  
GFOA Financial Reporting Recognition Program4.9
This section was last edited by SAO on 01/23/19
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Overview of Significant Changes

BARS Alerts

8/19/2019New BARS Code (This alert applies only to counties and cities)
3/5/2019Reporting of the USDA Federal Loans
8/1/2018BARS Manual Update - New Accounts and Changes to Object Code 50
3/21/2018Capital Assets Inventory in Counties
3/7/2018Tax Abatement information available on the DOR website (GAAP governments only)

Overview of Significant Changes – Applicable to the Reporting Year 2018

 

Topic

 

Reference

 

Description of Changes

 

  

CHART OF ACCOUNTS

BARS Account Export

3132500, Housing and Related Services Sale and Use Tax

New account for governments collecting sales and use tax as authorized in RCW 82.14.530.

BARS Account Export

3329330, Medical Transformation Demonstration

New account for revenues for Medicaid payments related to an implementation of the Transformation Plans. The addition was communicated on August 1, 2018 in BARS Alert

BARS Account Export

3329340, Ground Emergency Medical Transportation (GEMT) Payment Program

New account for revenues from Medicaid related to the GEMT program. The addition was communicated on August 1, 2018 in BARS Alert

BARS Account Export

3360211, County Fair Fund

Expanded definition to clarify use of this code.

BARS Account Export

3360700, PFD Lodging Tax Distribution

Code applicable only to Seattle and King County.

BARS Account Export

3432000, Television/Cable/Internet Sales and Services

Expanded the title and the definition to include internet services as authorized by Chapter 186, Laws of 2018.

BARS Account Export

3697000, Pension/OPEB Contributions

Revised title and definition to clarify use of this account for pension and OPEB related revenues only.

BARS Account Export

38110/38120, Interfund Loan Receipts

Removed these accounts since the loans are balance sheet transactions and their reporting on Schedule 01 was always optional.

BARS Account Export

51530, Legal Services

The account was divided between internal and external legal services. Within each category were created more separate accounts for different specific legal expenditures. The change will allow governments to analyze and compare costs much more effectively. This also aligns accounting records with procedures auditors are required by professional standards to perform an audit on legal liabilities, so it will help make the audit process more efficient. This change was already announced in 2016 and was not required for the FY 2017 reports; however, the new accounts will be required for 2018 reporting.

BARS Account Export

58110/58120, Interfund Loan Repayments

Removed these accounts since the loans are balance sheet transactions and their reporting on Schedule 01 was always optional.

Object Codes

 

 

Object code 50 was removed and the definitions of object codes 30 and 40 adjusted to include the transactions which were previously reported using object 50. For other details see BARS Alert issued August 1, 2018.

   
  

ACCOUNTING

Fund Types and Accounting Principles

 

3.1.1

GASB Statement 84, Fiduciary Activities – the Statement is effective for reporting periods beginning after December 15, 2018; however we incorporated the required changes in this version of manual. The additional information will be available on our website under Fiduciary Funds in BARS manual.

Also, updated was the discussion of enterprise [400] funds. There are no new reporting requirements and the update expands the current prescription.

Capital Assets Management

 

3.3.9

The update incorporates the changes to RCW 36.32.210 which removed the annual inventory requirement. The change was communicated on March 21, 2018 in BARS Alert.

Capital Assets Accounting

 

3.3.10

Based on additional research we made the following changes to clarify different areas related to capital assets:

  • Added guidance for options for accounting for replacements;
  • Moved all the guidance for componentization primarily to this section
  • Added GASBS 69 guidance;
  • Added GASBS 89 guidance;
  • Aligned useful life section with current GASB standards and terminology;
  • Clarified and expanded fully depreciated asset section;
  • Clarified and expanded group/composite depreciation section based on research and GASB codification guidance.

Capital Assets Accounting

 

3.3.10.50

Removed requirement to capitalize interests during construction. This is an early implementation of GASBS 89, Accounting for Interest Cost Incurred before the End of Construction Period which is applicable for reporting periods beginning after December 15, 2019.

Refunding Debt

 

3.4.4.91

Added GASBS 86, Certain Debt Extinguishment Issues update regarding accounting and reporting when the debt is refunded with the government’s own resources.

Arbitrage Rebate

 

3.4.6.90

Removed requirement to capitalize interests during construction. This is an early implementation of GASBS 89, Accounting for Interest Cost Incurred before the End of Construction Period which is applicable for reporting periods beginning after December 15, 2019.

Contingencies and Litigations

 

3.4.15

A new section was added to discuss and clarify concepts related to accounting and reporting of contingencies and litigations.

Other Postemployment Benefits (OPEB)

 

3.4.17

The entire section was updated to implement GASBS 74 and 75. [The update contains also notes and RSI requirements.]

County Auditor’s Operation and Maintenance Fund (Recording Fees)

 

3.6.2

The section was updated to reflect the 2018 legislative changes in the amounts of collected surcharges.

ER&R

 

3.9.7

New section was added regarding Equipment Rental and Revolving (ER&R) Fund. This guidance was previously available outside the BARS manual and it is now incorporated into the manual allowing an easy access.

Interfund Activities

 

3.9.8

Added a new section to provide a general overview of interfund transactions.

   
  

REPORTING

  

GASB Statement 84, Fiduciary Activities – the statement is effective for reporting periods beginning after December 15, 2018; however we incorporated the required changes in this version of manual. The following sections were updated: 4.1.1.150 (removed due to the changes in reporting requirements for custodial funds and they impact on CAFR); 4.1.4.20, 4.3.1.40, 4.3.2.70, 4.8.3.50, and 4.9.140. These changes involved only a title change from the agency to custodial funds.

The most significant change involves changes in financial reporting and these are incorporated into 4.3.5, Fiduciary Funds Financial Statements.

Statement of Cash Flows

 

4.5.100

Removed requirement to capitalize interests during construction. This is an early implementation of GASBS 89, Accounting for Interest Cost Incurred before the End of Construction Period which is applicable for reporting periods beginning after December 15, 2019.

Note 1 – Summary of Significant Accounting Policies

Section 7

Removed requirement to capitalize interests during construction. This is an early implementation of GASBS 89, Accounting for Interest Cost Incurred before the End of Construction Period which is applicable for reporting periods beginning after December 15, 2019.

Note X – Capital Assets

Subsection F, Interest Capitalization + Instructions [7]

Removed requirement to capitalize interests during construction. This is an early implementation of GASBS 89, Accounting for Interest Cost Incurred before the End of Construction Period which is applicable for reporting periods beginning after December 15, 2019.

Note X – Long-Term Debt

 

Added reporting requirements of GASBS 88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements. This Statement is applicable for reporting periods beginning after June 15, 2018.

Note X – Tax Abatement

 

Added link to the WA State Department of Revenue page containing information regarding state’s abatements. This update was communicated on March 7, 2018 in the BARS Alert.

Schedule 09

 

 

Clarified that the governments should be reporting both short- and long-term liabilities on the Schedule. Also added new ID. Numbers for registered warrants and lines of credits.

Schedule 16

 

4.8.5.60

4.8.5.120

4.8.5.130

4.8.5180

Note 4, Federal Loans

Revision reflect the clarification for reporting federal grants provided by federal agencies.

Remove discussion of ARRA grants.

The example of reporting FEMA grants was updated.

Updated for changes related to reporting the following grants: EPA Drinking Water (CFDA 66.468), Clean Water (CFDA 66.458), USDA Interim Financing (CFDA10.760) and (CFDA 10.766).

Revised rules for reporting grants with missing CFDA numbers.

Added sentence regarding interim financing.

Schedule 21

 

 

The Schedule was revised to provide relevant information needed in assessing and auditing governments’ risk management circumstances.

   
  

ONLINE FILING

Schedule 09

 

The Schedule 09, Schedule of Liabilities, includes a new validation check for net pension liabilities. Governments will receive a red flag if they have pension related liabilities but do not report them on the Schedule 09 or if they are using the incorrect ID No.

   

BARS Alerts

7/20/2017 BARS Manual Update - Coding Marijuana Excise Tax Distribution (Cities/Counties Only)
3/14/2017 BARS Update - Reporting Court Related Agency Deposits and Remittances (Cities/Counties Only)
1/4/2017 BARS Manuals Update - 2017 Filing System Update
Overview of Significant Changes – Applicable to the Reporting Year 2017
Topic Reference Description of Changes
CHART OF ACCOUNTS
Revenue/Expenditure/Expense Accounts 3132400, Local Infrastructure Financing Tool (LIFT) Added a new account for revenues from the local sales and use tax dedicated for LIFT projects.
Revenue/Expenditure/Expense Accounts 3340370, State Grant from CRAB The title was changed to Rural Arterial Program (RAP).
Revenue/Expenditure/Expense Accounts 3340372, CRAB Road Arterial – Projects The title was changed to County Arterial Preservation Project (CAPP).
Revenue/Expenditure/Expense Accounts 335/336 The titles for both categories was revised to State Shared Revenues, Entitlements and Impact Payments.
Revenue/Expenditure/Expense Accounts 3360425, Foundational Public Health Services A new account was added for 2017 distributions from the DOH.
Revenue/Expenditure/Expense Accounts 3360642, Marijuana Excise Tax Distribution A new account was added for the distribution of the marijuana excise tax from the State.
Revenue/Expenditure/Expense Accounts 3421000, Law Enforcement Services The definition was expanded to include payments from the WASP for processing the sex and kidnapping offenders’ registration.
Revenue/Expenditure/Expense Accounts 3670000, Contributions and Donations from Nongovernmental Sources The definition was clarified regarding connection fees.
Revenue/Expenditure/Expense Accounts 379, Capital Contributions The definition was clarified regarding connection fees.
Revenue/Expenditure/Expense Accounts 395, Disposition of Capital Assets Added a clarification regarding use of the account in the proprietary fund.
Revenue/Expenditure/Expense Accounts 398, Insurance Recoveries The account was split into two 3981, Insurance Recoveries for cash basis governments and 3985, Insurance Recoveries for GAAP. The split was necessary to accommodate reporting by cash basis proprietary funds since the BARS codes in 370 series are not available to them. The revised account 3985 replaces the original 398 code.
Revenue/Expenditure/Expense Accounts 50138, Depreciation Depletion, Amortization – Combined Water/Sewer/Solid Waste Utilities Changed title to Depreciation, Depletion, Amortization – Combined Utilities to correctly reflect the RCW.
Revenue/Expenditure/Expense Accounts 50195, Depreciation Depletion, Amortization – Infrastructure Added new account 50195, Depreciation, Depletion, Amortization – Infrastructure to include depreciation related to parking facilities.
Revenue/Expenditure/Expense Accounts 51530, Legal Services The account was divided between internal and external legal services. Within each category were created more separate accounts for different specific legal expenditures. The change will allow governments to analyze and compare costs much more effectively. This also aligns accounting records with procedures auditors are required by professional standards to perform on legal liabilities, so it will help make the audit process more efficient. This account will be required for 2018 reporting.
Revenue/Expenditure/Expense Accounts 51770, Unemployment Compensation Changed references to section of the BARS manual to correctly refer the current title (Payroll Accounting vs. Unemployment and Deferred Compensation).
Revenue/Expenditure/Expense Accounts 51830, Maintenance/Security/Insurance/Janitorial Services Clarified the definition regarding property insurance.
Revenue/Expenditure/Expense Accounts 51863, General Grants and Financial Assistance to Other Governments Revised title to General Grants, Financial Assistance and Other Distributions to Local Governments.
Revenue/Expenditure/Expense Accounts 538, Combined Water/Sewer/Solid Waste Utilities Revised title and definition to correctly reflect RCW 54.16.300 (i.e., Combined Utilities).
Revenue/Expenditure/Expense Accounts 562, Public Health The WA State DOH added additional detail accounts 562.11-562.15 for local governments subject to the DOH’s jurisdiction.
Revenue/Expenditure/Expense Accounts 593, Advance Refunding Escrow Added to the definition a reminder that this account should be reported also for proprietary funds.
Revenue/Expenditure/Expense Accounts 595, Roads/Streets and Other Infrastructure Added to the definition a reminder that this account should be reported also for proprietary funds.
Revenue/Expenditure/Expense Accounts 599, Payments to Refunded Debt Escrow Added to the definition a reminder that this account should be reported also for proprietary funds.
Account Structure 1.1.2 The section was revised to discontinue the old terminology regarding the seven-digit account codes (i.e., Prime, BASUB, etc.). The digits are now referred by their location within the code (i.e., first, second, etc.). This change was applied in all places in the BARS manual and the revised sections are not itemized in this listing.
Revenue/Expenditure Accounts Overview 1.3.10 The section was revised to discontinue the old terminology regarding the seven-digit account codes (i.e., Prime, BASUB, etc.). The digits are now referred by their location within the code (i.e., first, second, etc.).
ACCOUNTING
Fund Types and Accounting Principles 3.1.1.60-3.1.1.80 These paragraphs were related to capital assets and were removed since the topics are covered extensively in Capital Asset Accounting (3.3.10).
Utility Tax Levies 3.2.6 The section is no longer needed since we do not prescribe the G.L. accounts. The section was replaced with accounting and reporting for the B&O tax related to utilities (Utility Tax, 3.6.13).
Capital Assets Accounting 3.3.10.80 Added a flowchart to determine if the expenditures should be capitalized.
Leases 3.4.1.10 Clarified in the bullet 2 that the future lease principal payments should be recorded as debt redemption rather than other financing uses.
Refunding Debt 3.4.4.120 Updated the bullet 2 regarding remaining prepaid insurance (GASBS 86, Certain Debt Extinguishment Issues).
Accounting and Reporting of Property Tax 3.5.2.30 The section was revised to better describe the reporting of property tax (no substantive change).
Diversion of County Road Property Tax 3.6.5.20 The BARS previous procedures were revised to better assist compliance with the provisions of the law.
Working Advances from DSHS 3.6.10 The section was revised to provide accounting requirements reflecting the current status of the advances from the DSHS.
Payroll Accounting 3.8.1 The title was change to Unemployment and Deferred Compensation to better reflect the content of this section. There are no changes in the prescription.
Loans A new paragraph (3.9.1.30) was added. The paragraph discusses an issue of a government incorrectly using its own debt instruments as investments.
Voucher Certification and Approval 3.8.5 Updated the section to include electronic payments.
REPORTING
GAAP Reporting Requirements 4.1.1 Flowchart and Notes to the Flowchart: The flowchart was updated to incorporate GASBS 80, Blending Requirements for Certain Component Units regarding situation when the government is the sole corporate member. Also, paragraph 12 was updated to incorporate the GASBS 85, Omnibus 2017 regarding blending component units with business-type activities.
BARS Reporting Requirements 4.1.2 The matrix of reporting requirements was updated to eliminate reporting Schedules 07 and 11.
Summary of Reporting Requirements 4.1.4 The Matrix of Statutory Reporting Requirements was updated to eliminate reporting Schedules 07 and 11.
Note X – Asset Retirement Obligations A new note was added to meet the disclosure requirements of the GASBS 83, Certain Asset Retirement Obligations. Please note that the requirement is applicable for reporting years starting after June 15, 2018.
Note X – Deposits and Investments The note was revised to make the disclosure easier by adding tables and additional samples of text. There are no substantive changes.
Note X – Long-Term Debt Added additional instructions for preparers regarding disclosures when the debt is refunded with the government’s own resources. This addition incorporates the GASBS 86, Certain Debt Extinguishment Issues applicable for the year begining after June 15, 2017.
Note X – Tax Abatement Added a matrix to summarize the disclosure requirements for governments’ own abatements and abatements of others. Also added discussion regarding disclosure when, regardless of a tax abatement agreement, the overall tax revenue is not reduced.
Schedule 01 4.8.1.50 Column 4 – clarified the instruction regarding reporting of revenues and expenses for proprietary funds.
Schedule 09 Added 4.8.3.71 and 4.8.3.81 regarding reporting loans with forgiveness clause.
ONLINE FILING
Annual Street/Road Finance Report The pilot project with DOT has been extended another year to explore the possibility of an alternative reporting process to the existing Street/Road Finance Report required to filed to DOT for cities and counties.
Fund Balance – Beginning Check A minimum variance requirement within $1,000 added summarizing Schedule 01 funds reported.

BARS Alerts

4/21/2016 BARS Manual Update - Revisions to the Schedule of Expenditures of Federal Awards (SEFA/Schedule 16)
4/5/2016 BARS Codes for a New Distribution
2/10/2016 BARS Manual Update - Cash BARS only - Pension Accounting and Reporting
2/10/2016 BARS Manual Update - GAAP BARS only - Pension Liabilities
2/8/2016 BARS Manuals Update - BARS Coding of Miscellaneous Revenue
Overview of Significant Changes – Applicable to the Reporting Year 2016
Topic Reference Description of Changes
CHART OF ACCOUNTS
Revenue/Expenditure/Expense Accounts 31720, Leasehold Excise Tax The definition was updated to clarify that this tax can be imposed only by counties and cities and other governments receiving their share of this tax should code the proceeds to 337, Local Grants, Entitlements and Other Payments.
Revenue/Expenditure/Expense Accounts 31740, Timber Excise Tax The definition was updated to clarify that this tax can be imposed only by counties and other governments receiving their share of this tax should code the proceeds to 337, Local Grants, Entitlements and Other Payments.
Revenue/Expenditure/Expense Accounts 32180, Concessions A new account was added. This account should be used for revenues from awarding rights to use government’s property. Previously these proceeds were comingled with proceeds from an actual sales and coded to account 36280, Concession Proceeds and 36290, Other Rents, Leases and Concession Proceeds. Proceeds from governments own sales should be accounted for in 34170, Sales of Merchandise.
Revenue/Expenditure/Expense Accounts 32191, Franchise Fees and Royalties This account was updated to include royalty payments. Previously the royalties were accounted for in 36290, Other Rents, Leases and Concession Proceeds (e.g., property rights, etc.), 34790, Other Fees (e.g., publication royalties, etc.).
Revenue/Expenditure/Expense Accounts 36210, 36230, 36240, 36250, 36260 These accounts were combined into 36200, Rents and Leases. This account is designed only for rentals and leases which are not a part of the governments’ principal operation [those rents and leases should be accounted in the appropriate 340s service and sales accounts]. The new section Determining Operating/Nonoperating Revenues/Expenses in Proprietary Funds provides guidance for classification of revenues/expenses as operating/nonoperating for the proprietary funds.
Revenue/Expenditure/Expense Accounts 36280, Concession Proceeds Account removed. For revenues from awarding rights to use government’s property use 32180, Concessions. Proceeds from governments own sales should be accounted for in 34170, Sales of Merchandise.
Revenue/Expenditure/Expense Accounts 362900, Other Rents, Leases and Concession Charges Account removed. The revenues should be accounted in 36200, Rents and Leases, 32191, Franchise Fees and Royalties 34170, Sales of Merchandise or other appropriate account.
Revenue/Expenditure/Expense Accounts 36850, Special Assessment- Operating The title was changed to Special Assessment – Service and the definition was updated. If the service assessments are related to the governments’ principal operations, they should be coded in 340s as proceeds from sales of goods and services.
Revenue/Expenditure/Expense Accounts 36910, Sale of Scrap and Junk The title was changed to Sale of Surplus and a definition was added.
Revenue/Expenditure/Expense Accounts 36950, Special Items The account changed to account 385, Special/Extraordinary Items to better reflect the substance of the transaction [i.e., special items should not be classified as revenue] The account can be also used for extraordinary items, and the title was adjusted to reflect this.
Revenue/Expenditure/Expense Accounts 380, Nonrevenues
  • The title of this section of the chart was changed to Other Increases in Fund Resources.
  • A new account 385, Special/Extraordinary Items was added [previously accounted for in 36950, Special Items – see above row for description].
  • The account 388, Prior Period Adjustments was changed to 38810 and account 38850, Cumulative Effect of Change in Accounting Principle(s) was added.
  • Accounts 386 (1), Agency Deposits and 389, Other Nonrevenues were pooled and rearranged into:
    • 38910, Refundable Deposits,
    • 38920, Retainage Deposits,
    • 38930, Agency Type Collections,
    • 38940, Agency Type Deposits,
    • 38960, Agency Type Interest Earnings, and
    • 38990, Other Custodial Activities.
These accounts are still optional for GAAP governments. [Updated the definition of these codes to clarify that they should be used for custodial activities only – to record receipts and disbursements from fiduciary funds as well as any custodial activity reported in other fund types. Subaccount detail allows for reporting by major types of custodial activities in order to provide further clarity, align with internal tracking of custodial balances and support analysis.] (1) The change applicable to the courts’ deposits and remittances was updated on March 14, 2017. The following BARS Alert was sent to all cities and counties at that time. The BARS codes for agency deposits/remittances were revised this year and BARS account 386/586 was replaced by several 389/589 accounts. However, the recent submissions of the Schedule 01 indicate that this change creates some confusion. To avoid further misunderstanding at this time the Online reporting system will accept court related deposits and remittances coded as 386/586. All other non-court items should be coded to appropriate 389/589 accounts. We have updated the summary of significant changes in the BARS manual.
Revenue/Expenditure/Expense Accounts 51170, Lobbying Activities New account. The lobbying services were excluded from account 51120, Advisory Services and are now reported separately. [Lobbying expenditures are subject to specific compliance and reporting requirements, so governments need to separately track them. Also, the separation will allow cross-checking figure against PDC filings.]
Revenue/Expenditure/Expense Accounts 531, Storm Drainage Utilities The account description was revised to ensure that this account is used only when a local government has a separate utility for storm drainage. The storm drainage projects that are an integral part of streets and roads should be accounted with transportation codes which are generally accounted for in governmental funds.
Revenue/Expenditure/Expense Accounts 580, Nonexpenditures
  • The title of this section of the chart was retitled to Other Decreases in Fund Resources.
  • A new account 585, Special/Extraordinary Items was added [previously accounted for in 36950, Special Items – see account 385 for description].
  • The account 588, Prior Period Adjustments was changed to 58810 and account 58850, Cumulative Effect of Change in Accounting Principle(s) was added.
  • Accounts 586 (1) and 589, Other Nonexpenditures were pooled and rearranged into:
    • 58910, Refunds of Deposits,
    • 58920, Refund of Retainage,
    • 58930, Agency Type Remittances,
    • 58940, Agency Type Disbursements, and
    • 58990, Other Custodial Activities.
These accounts are still optional for GAAP governments.
  • The change applicable to the courts’ deposits and remittances was updated on March 14, 2017. The following BARS Alert was sent to all cities and counties at that time.
The BARS codes for agency deposits/remittances were revised this year and BARS account 386/586 was replaced by several 389/589 accounts. However, the recent submissions of the Schedule 01 indicate that this change creates some confusion. To avoid further misunderstanding at this time the Online reporting system will accept court related deposits and remittances coded as 386/586. All other non-court items should be coded to appropriate 389/589 accounts. We have updated the summary of significant changes in the BARS manual.
Determining Operating/Nonoperating Revenues/Expenses in Proprietary Funds 1.5 A new section was added with a guidance regarding classification of revenues/expenses as operating or nonoperating. This section is applicable only to proprietary GAAP funds. It contains a discussion and a spreadsheet showing the BARS classification. The new section should help governments to resolve the discrepancy between operating/nonoperating categories in their financial statements and in the FIT presentation.
ACCOUNTING
Capital Assets 3.4 Capital asset guidance that was previously split into nine different sections (3.3.1 – 3.3.7 and 4.2.5 – 4.2.6) were consolidated into three. While content has not fundamentally changed, most topics were updated and re-written to improve guidance and match the current environment and user needs. In particular, internal control guidance was expanded to help local governments with management of capital assets.
Deposits and Investments 3.2.1 Updated content to focus on an overview of requirements for deposits and investments and refer to the Office of State Treasurer’s Guide to Public Funds Investing for Local Governments publication for details.
Pensions – Application of GASB Statement 68, Accounting and Financial Reporting for Pensions 3.4.2 The pension section has been updated for the second year of pension reporting.
REPORTING
Liabilities (Schedule 09) 4.8.3.110 Added requirement for cities and counties to provide a BARS code for redemption and specific ID Numbers of debt related to streets/roads to accommodate the DOT Annual Street/Road Finance Report.
Note X – Self-insurance The note was removed. The information required in this note is already provided in other risk management related disclosures.
Note X – Deposits and Investments The note was updated to incorporate reporting requirements contained in GASB Statement 72, Fair Value Measurement and Application.
Note X – Pension Plans – Pensions Provided Through Certain Multiemployer Defined Benefit Pension Plans (nongovernmental Plans) Added a new note required when a government participates in a nongovernmental pension plan (GASBS 78).
Note X – Pension Plans The note instructions for local government plans that do not comply with GASBS 67/68 have been updated for the first phase of the implementation of GASBS 73. The pension notes and RSI templates for both state sponsored and local sponsored plans have been updated with 2016 information. The GAAP-basis pension illustration spreadsheet has been significantly updated for year two reporting including note disclosure examples, amortization tables, and reconciliation examples.
Note X – Tax Abatement This disclosure is required for fiscal years starting after December 15, 2015 (GASBS 77).
ONLINE FILING
Annual Street/Road Finance Report Steps added as a pilot project exploring an alternative to the DOT Annual Street/Road Finance Report.
591/594 in GAAP Enterprise Funds Added validation checking each individual enterprise fund for reporting accounts 591, Debt Repayment and 594, Capital Expenses as indicated in these accounts description. Both accounts should be reported even if the dollar amounts are $0.
Balance sheet footing requirement Section 4.8.1.25 adds balance sheet/statement of net position minimum variance requirements within $1,000. Validation tests each reporting fund.

BARS Alerts

12/23/2015 BARS Manuals Update - 2016 Filing System Update
10/05/2015 BARS Manual Update - GAAP Cities, Counties and Special Purpose Districts - Upcoming Changes
9/30/2015 BARS Manuals Update - Cities and Counties Only - Cash Basis and GAAP - Marijuana Enforcement Code
3/11/2015 BARS Manuals Update - Cash BARS Only - Reserved and Unreserved Cash and Investments
1/6/2015 BARS Manuals Update - Online Filing System Update
Overview of Significant Changes – Applicable to the Reporting Year 2015
Topic Reference Description of Changes
CHART OF ACCOUNTS
General Ledger Accounts 1.2 The following accounts were added to accommodate the accounting for pension: 193.50 [Pension Asset], 198.40 [Deferred Outflows: Pension], 264 [Pension Obligation (Net)], 271.80 [Deferred Inflows: Pension]. Reminder: the BARS numbering system in the general ledger is optional. The above codes are for informational purposes only.
The new revenue/expenditure/expense chart of accounts is an interactive application. To see accounts applicable to your government choose an appropriate government type.
Revenue/Expenditure/Expense Account 30810/50810 30880/50880 The accounts 30810/50810 [Beginning/Ending Reserved Fund Balance (GAAP)] were changed to 30819/50819 [Beginning/Ending Restricted Net Position]. The accounts 30880/50880 [Beginning/Ending Unreserved Fund Balance (GAAP)] were changed to 30889/50889 [Beginning/Ending Unrestricted Net Position].
Revenue/Expenditure/Expense Account 3086000 The account Net Investment in Capital Assets was added.
Revenue/Expenditure/Expense Account 3132100 The account title was changed to Public Transportation Systems.
Revenue/Expenditure/Expense Account 3322100 The account Equitable Sharing of Federally Forfeited Property was removed.
Revenue/Expenditure/Expense Account 3350301 The account LEOFF Special Funding was added.
Revenue/Expenditure/Expense Account 3360641 The account Marijuana Enforcement was added.
Revenue/Expenditure/Expense Account 3451100 The detailed codes listed in the 3451100, Soil and Water Conservation Services are optional and not required to be reported on the Schedule 01.
Revenue/Expenditure/Expense Account 3573900 The account Miscellaneous District/Municipal Court Cost Recoupment was removed.
Revenue/Expenditure/Expense Account 3688000 The account Deferred Assessment was removed.
Revenue/Expenditure/Expense Account 5010000 The account Depreciation was added.
Revenue/Expenditure/Expense Account 51860 The account 51860 [Risk Management] was changed to 519; account 51920 [Judgements and Settlement] became 51861, account 51970 [Jobbing and Contacting] became 51862; added account 51863 [General Grants and Financial Assistance to Other Governments].
Revenue/Expenditure/Expense Account 5510000 The account 55920 [Public Housing] was moved to 5510000 [Public Housing Services].
Revenue/Expenditure/Expense Account 8000000 New 800 series accounts - aggregated balance sheet information: 810 Cash, Cash Equivalents and Investments 820 Other Current Assets 830 Other Noncurrent Assets 840 Deferred Outflows 850 Current Liabilities 860 Noncurrent Liabilities 870 Deferred Inflows were added for GAAP reporting governments.
Object Codes 00 The object 00 was updated to include account 501[Depreciation] and exclude account 508 [Ending Balances].
ACCOUNTING
Cash Receipting 3.6.1.50 Added new section discussing requirements when a local government receives payments through third party vendors.
Electronic Fund Transfer 3.6 The section was divided into two sections: one for receipts (3.6.6) and other for disbursements (3.8.11).
Voucher Certification and Approval 3.8.5 Added checks and electronic payments.
Grants – Accounting 3.7.1 This section was updated for the New Uniform Guidance. The following subsections contain new information: 3.7.1.10, .40, .50 and .60.
Pensions – Implementing GASB Statement 68, Accounting and Financial Reporting for Pensions 3.4.2 This section discusses the new accounting and reporting requirements for single-employer and state sponsored pension plans mandated by GASBS 68. It also contains links to Excel spreadsheets containing instructions and examples of calculation of pension liabilities.
Transportation Benefit Districts (TBD) 3.11.1.120 This new section discusses accounting and reporting requirements for cities and counties assuming the TBDs as authorized by the 2015 legislation.
Accounting and Reporting for Property Tax 3.5.2 This new section provides detailed guidelines for reporting property tax according to GASBS 65.
REPORTING
GAAP Reporting Requirements 4.1.1 The Financial Reporting Entity Flowchart (and accompanying notes) was updated to include relationships other the component units that would have an effect on reporting entity. The GAAP criteria for reporting of component units and other types of relationships did not change; however the new chart will better reflect the existing reporting requirements.
Proprietary Funds Financial Statements 4.3.4 There are no substantive changes in proprietary funds reporting. This section was reformatted to accommodate the inclusion of the stand-alone reporting guidance for ports, transits, PUDs, housing authorities, risk pools, hospital, water, sewer and irrigation districts.
Required Supplementary Information (RSI) 4.7.261-.267 Sections 4.7.260-.330 were replaced with new (GASBS 68) reporting requirements for pensions. The new sections contain links to Excel spreadsheets with examples of required schedules.
Notes to Financial Statements The notes contain requirements for all different types of local governments. Some notes are applicable to all or most local governments. However some are unique to a very specific type of government. It’s the government responsibility to choose all applicable and necessary disclosures.
Note 1 – Summary of Significant Accounting Policies The new paragraph regarding pension plan policy was added (E.10). Other than this addition, there are no substantive changes in this disclosure. This note was reformatted to accommodate the inclusion of the stand-alone reporting guidance for ports, transits, PUDs, housing authorities, risk pools, hospital, water, sewer and irrigation districts.
Note X – Long-Term Debt The note was expanded to incorporate (if applicable) disclosures regarding loans with forgiveness clauses and grants with recoverable clauses.
Note X – Pension Plans The note was updated to meet the GASBS 68 requirements. It contains links to the WORD version.
Supplementary and Other Information Schedules 09 (Liabilities) and 16 (SEFA), if applicable, are required from all local governments; however since they are an integral part of the audit reports they were moved from the SAO Annual Report Schedules category to Supplemental and Other Information category to properly align with the audit reports.
Revenues/Expenditures/ Expense (Schedule 01) 4.8.1.25 Local governments completing the Schedule 01 for fiscal years ended on or after December 31, 2015 must ensure the data submitted is accurate. The online filing system will calculate ending fund balances/net position using government-submitted information. If the SAO calculated ending balances/net position result in a variance from the local government’s submitted ending balances of greater than $1,000, the local government will not be able to submit its annual report until corrected.
Liabilities (Schedule 09) Schedule 09 debt and liability IDs were changed from categorizing by fund type to categorizing based on obligation type (i.e., general obligations, revenue and other non-G.O. obligations and assessment obligations). The change allows for better alignment of categories with the debt limit calculation and avoids the need to allocate certain liabilities between different IDs in different categories. Since Schedule 09 uses general, revenue and assessment obligations as titles, the re-alignment will also improve the accuracy of this presentation. In addition, several ID numbers were added to facilitate calculation of debt limit and an ID number was also added for pension liabilities (264.30). Please review and update ID numbers.
Expenditures of Federal Awards (Schedule 16) 4.8 This is a transition year between the requirements of OMB Circular A-133 and the new Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 CFR 200 (Uniform Guidance). This section has been updated for the new Uniform Guidance as it will be applicable for the majority of the BARS users, specifically those entities with a calendar year end. The effective date for the Audit Requirements, which include the SEFA requirements, of the new Uniform Guidance found in Subpart F of 2 CFR 200 is for fiscal years beginning after December 26, 2014. For those entities which the Audit Requirements of the new Uniform Guidance is not effective yet (fiscal years beginning prior to December 26, 2014), we left the references to the OMB Circular A-133 in parenthesis. Click here for the new Uniform Guidance. Also sections 4.8.5.125 and 126 were added and Question 2 was revised. Information for Schedule 16 was updated in the BARS Manual in the fall of 2015; however, several items were inadvertently missed in those updates. The changes, which were put into effect on April 20, 2016. Here are the changes to the SEFA, with corresponding information from the Uniform Guidance: Amounts passed through to subrecipients: Same information, but a location change. (b) Schedule of Expenditures of Federal Awards. ... At a minimum, the schedule must: (4) Include the total amount provided to subrecipients from each Federal program. Change: Therefore, a column is being added to the SEFA and input for these amounts, and the disclosure will not be needed. No additional information is being requested, since the pass-through information was previously reported in the notes. Use of de minimis indirect cost rate: Additional affirmative disclosure by governments. (6) Include notes that describe that significant accounting policies used in preparing the schedule, and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. Change: The BARS Manual information for the SEFA notes has been updated, along with an instruction stating that it’s not an optional disclosure. Basis of Accounting note disclosure: (Minor change) Language was added to the sample note to recognize the fact that pre- and post-Uniform Guidance grants may have different bases for recognizing costs (i.e., cost principles). This disclosure will be needed during the transition period when a mixture of pre- and post-Uniform Guidance awards may be shown on the SEFA.
Risk Management (Schedule 21) Minor updates to add options and clarify questions encountered in practice.

BARS Alerts

  
  

Overview of Significant Changes – Applicable to the Reporting Year 2014

Topic

Reference

Description of Changes

  CHART OF ACCOUNTS
Revenue/Expenditure/Expense Account This Excel book contains three spreadsheets. The spreadsheets are different versions of the same BARS chart:

 

Above&Prescribed contains all prescribed accounts (including grants) and summary accounts which are above prescribed level and indicate categories of revenues and expenditures;

Prescribed_Only contains all prescribed accounts (including grants) but excludes summary accounts;

Prescribed_NoFederal_Grants contains only prescribed accounts and exclude federal grants.

These spreadsheets are just examples of different versions serving different purposes. You may reformat the chart of accounts similarly to meet your needs; however when reporting only valid prescribed accounts applicable to your entity type should be included on Schedule 01.

Account Structure1.1.2.30TheLocal Option field was removed from prescribed BARS code structure. The local governments can add additional digits for their internal purposes in any part of their BARS code; however when reporting to the SAO they have to follow the seven digit code requirement. The entire section was adjusted to reflect this update. The change does not have any impact on BARS coding since the removed fields were never prescribed.
Revenue/Expenditure/Expense Account In previous versions we indicated unprescribed digit with an X. In the current chart of accounts the X was replaced with 0 which, except for two instances where is specifically designated (general fund number and object code for fund balances, nonexpenditures, and transfers-out) indicates unprescribed digit.
Revenue/Expenditure/Expense Account Coding federal (direct - 331/indirect - 333), ARRA (direct - 3391/indirect - 3392), capital (direct – 374/indirect – 375) grants was simplified. The local governments have to use only first two digits of the CFDA for BARS coding. The BARS code still has to be seven digits long; however the last two digits are not prescribed.
Revenue/Expenditure/Expense Account3360104New account 3360104, Court Cost Reimbursement – Children’s Attorney was added.
Revenue/Expenditure/Expense Account3695000Added a new account for special items.
Revenue/Expenditure/Expense Account562The description of the account 562, Public Health Services contains the link to the DOH listing of elements/subelements for this BARS code. The supplement is no longer listed with BARS manuals.
Object Codes The object codes are not listed together with revenues and expenditures. They are now listed in a separate section.
  BUDGETING
  The entire budgeting part of manual was replaced with new one. There are NO changes in requirements. The revision included removal of outdated or unnecessary prescriptions and adding statutory requirements for special purpose districts.
  ACCOUNTING
Money Held in Trust3.2.4Updated the discussion of interest on deposits. Clarified the accounting requirements for Superior Court trust funds, emphasizing the need to reconcile accounts monthly.
Compensating Balances3.2.5Clarified the discussion of compensating balances and added informational links to MRSC and GFOA.
Depreciation3.3.6.15The new paragraphs describe when the entity should start depreciating an asset.
Financial Guarantees3.4.12Added new section discussing financial guarantees (GASBS 70).
Imprest, Petty Cash and Change Funds3.8.8.30Imprest, petty cash and change funds are not budgeted because they represent working capital for expenditures that are properly budgeted in other funds. The authorized balance of imprest, petty cash and change funds should be reported as cash in the general ledger. Expenditures should be recorded when such funds are replenished to their authorized balance.

 

The authorized balance should be reported as cash in the financial statements. All funds should be reconciled and replenished to the authorized balance as of fiscal year end to ensure expenditures are recorded.

Reimbursements3.9.4.20Added reminder that the offsetting transactions for reimbursements should be done on an object level.
Overhead Cost Allocation3.9.5.120Added new section with additional resources.
Transportation Benefit Districts (TBD)3.11.1The new section provides an overview of the transportation benefit districts and the accounting and reporting requirements.
  REPORTING
BARS Reporting Requirements4.1.2.35Added requirement to report any corrections made to already submitted financial statements.
GAAP versus Cash Reporting4.1.7The section discusses advantages and disadvantages of GAAP or cash basis reporting. This information was previously available on the SAO web site and now is incorporated into BARS manual.
Note 1-Summary of Significant Accounting Policies (also Hospital Districts, Housing Authorities, Risk Pools, and Water, Sewer, and Irrigation Districts) Added reminder for the disclosure of component units to provide sufficient detail to clarify the specific criteria under the GASBS 61 used to justify the inclusion of each individual component unit including both fiscal dependence and the ongoing relationship of financial benefit or burden. For blended component units, clearly state the blending criteria under the GASB Statement 61.
Note X-Changes in Long-Term Liabilities Updated first column; removed references to unamortized amounts; added lines for premiums and discounts; added pension to OPEB obligations; similar changes were made for business-type activities; also; a row for claims was added. The footnote with examples of claims was added.
Note X-Commitments This note was incorporated into Note X-Construction and Other Significant Commitments.
Note X-Construction and Other Significant Commitments The note was expanded to include other commitments; the title was adjusted to reflect new content.

 

The note was added to the housing authorities, hospital and water, sewer and irrigation districts reporting requirements.

Note X-Pension Plan (Hospitals) Added link to information in GAAP manual for defined benefit plans.
Note X-Major Component Units This is not a new requirement; however the note was listed only in the housing authority section of the manual. The note is now available for all GAAP governments.
Note X-Other Debits (Credits) Removed the note (GASBS 65, paragraph 29).
Note X-Other Disclosures The most common disclosures were made into separate notes and only very rare transactions are disclosed here. The note has a new title Unique and Unusual Transactions.
Statement of Net PositionExampleRemoved line Other Credits.
Revenue/Expenditure/Expense (Schedule 01)4.8.1.50In Column 2 added that the government reports only one fund, it should indicate the fund type and use 0XX for the governmental fund and 4XX for the proprietary fund type.
Expenditure of Federal Awards and State Financial Assistance (Schedule 16)4.8.5The Schedule of State Assistance was excluded from the Schedule 16 and it became a separate Schedule 15. There are no changes in the reporting requirements for this Schedule. Adjustments related to split of the previous Schedule 16 into two schedules were carried through the Manual.

 

The federal expenditures should be still reported on the Schedule of Expenditures of Federal Awards (Schedule 16). In addition to the requirement to submit a data collection form and reporting package to the Federal Audit Clearinghouse, governments are required to submit a copy of the reporting package to each pass-through entity per OMB Circular A-133 section .320 (e), which provides the results of the audit. As a courtesy, the SAO will distribute the reporting package to each pass-through agency listed on the SEFA if you will provide the following contact information:

  • Contact name
  • Contact email address
  • Contact phone number
Risk Management (Schedule 21)4.8.9Added sample note disclosures for housing authorities (HARRP).
  APPENDICES
Glossary of Accounting Terms Removed the outdated glossary of accounting terms.
Overview of Significant Changes The listing of changes focuses only on significant ones; revisions which do not have a substantive impact on accounting or reporting are not listed.