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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

General Accounting

Statement of Cash Flows

Application

Present a statement of cash flows (SOCF) for all proprietary and internal service funds based on the provisions of GASB 9, as amended by GASB 34.

Note: SOCF is not required for component units.

Use the direct method of presenting cash flows from operating activities, including a reconciliation of operating cash flows to operating income. This reconciliation is presented as a separate schedule as part of SOCF.

SOCF is submitted through the SOCF web application. For more information, see Instructions for the SOCF Web Application.

Note: All agencies are required to submit a certification within the SOCF web application (even if there is $0 activity). Each agency with enterprise funds (FT05) and internal service funds (FT06) must certify and submit a copy of the agency’s SOCF from its published AFR. The submitted copy must tie to the certified data in the SOCF web application. If SOCF data submitted through the SOCF web application does not tie to the agency’s SOCF from its published AFR, use the SOCF Reconciliation Template for each GAAP fund. Submit each SOCF Reconciliation Template as separate attachments through the ONDSS web application.

Purpose

The primary purpose of SOCF is to provide relevant information about an agency’s cash receipts and payments during the fiscal year. When used with related disclosures and information in the other financial statements, SOCF provides relevant information about an agency, such as:

  • Its ability to generate future net cash flows
  • Its ability to meet obligations when due
  • Its needs for external financing
  • The reasons for differences between operating income and associated cash receipts and payments
  • The effects on the agency’s financial position of both its:
    • Cash and noncash investing
    • Capital and financing transactions

Cash Equivalents

SOCF explains the change in cash and cash equivalents during the fiscal year regardless of restrictions on their use. The total amounts of cash and cash equivalents at the end of the fiscal year (as reported in SOCF) must be easily traceable to similarly titled line items or subtotals reported in the statement of net position.

For SOCF purposes, cash equivalents are defined as short-term, highly liquid investments that are both:

  • Readily convertible to known amounts of cash
    –AND–
  • Have an original maturity to the holding entity of three months or less

Not all qualifying short-term, highly liquid investments are treated as cash equivalents. Disclose the agency’s policy for determining those items treated as cash equivalents in Note 1. Apply this policy consistently throughout the year.

Examples of cash equivalents items that may be considered include:

  • Treasury bills
  • Commercial paper
  • Certificates of deposit
  • Money market funds
  • Cash management pools