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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

The Financial Reporting Entity
Jointly Governed Organizations

A jointly governed organization is a legally separate entity that is governed by representatives from two or more participating governments (cities, counties or agencies) in which no single participating government has financial accountability. Jointly governed organizations do not meet the criteria of financial accountability under GASB 14 (as amended). As a result, they are not reported as component units under the reporting agency.

Key Characteristics

Jointly governed organizations generally have the following attributes:

  • Governed by a board composed of representatives from multiple governments (cities, counties or agencies)
  • Shared decision-making authority (no single government controls operations)
  • Established to provide regional or cooperative services
  • No participating government (cities, counties or agencies) has unilateral authority to impose its will
  • No measurable equity interest in net position held by participants

Common Examples

  • Regional councils of governments
  • Multi-agency planning commissions
  • Shared service arrangements created by statute or interlocal agreement

Distinguishing from Other Arrangements

  • Component Units – Reported when financial accountability exists
  • Joint Ventures – Participants have an equity interest and typically share in net position

Financial Reporting Treatment

For jointly governed organizations, note disclosure is required (but only if the relationship is material to the agency’s financial statements). For further information on note disclosure requirements, see Jointly Governed Organizations in Note 19 — The Financial Reporting Entity.