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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

Notes & Samples

NOTE 1 – Summary of Significant Accounting Policies
Fund Structure

The Fund Structure section of Note 1 includes descriptions of all the different fund types and funds used by the agency. In the agency’s Note 1 submission, describe only those fund types and funds actually used by the agency. Be specific by including the appropriated fund title, appropriated fund number and a brief description of the fund’s purpose — how the fund is financed and used for the agency.

Governmental Fund Types

For information on governmental fund types, see Governmental Funds.

General Fund (GAAP FT01)

Include all the principal operating funds used to account for the state’s general activities. The general fund accounts for all financial resources except those accounted for in other funds.

Special Revenue Funds (GAAP FT02)

Include all special revenue funds used to account for and report the proceeds of specific revenue sources that are restricted or committed for specified purposes other than debt service or capital projects.

Debt Service Funds (GAAP FT03)

Describe debt service funds used to account for and report financial resources that are restricted, committed or assigned to expenditures for principal and interest. The use of a debt service fund is normally permitted rather than required. It is required if legally mandated or if financial resources are being accumulated in a debt service fund for principal and interest payments that will mature in future years.

Capital Project Funds (GAAP FT04)

Describe capital project funds used to account for and report financial resources that are restricted, committed or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets. 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.

Permanent Funds (GAAP FT19)

Describe permanent funds used to account for resources legally restricted to the extent that only earnings, but not principal, may be used for purposes that support the state’s programs.

Proprietary Fund Types

For information on proprietary fund types, see Proprietary Funds.

Enterprise Funds (GAAP FT05)

Describe enterprise funds that account for any activity for which a fee is charged to external users for goods or services. Activities must be reported as enterprise funds if any one of the following criteria is met:

  • The activity is financed with debt secured solely by a pledge of the net revenues from fees and charges of the activity.
  • The activity’s costs of providing services, including capital costs (such as depreciation or debt service), are recovered with fees and charges as required by laws or regulations.
  • The pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs.

Internal Service Funds (GAAP FT06)

Describe internal service funds that account for the financing of goods or services provided on a cost reimbursement basis by one fund, department or agency to other funds, departments or agencies.

Fiduciary Fund Types

For information on fiduciary fund types, see Fiduciary Funds.

Pension and Other Employee Benefit Trust Funds (GAAP FT10)

Describe pension trust funds that account for resources held in trust for the members and beneficiaries of defined benefit pension plans. FT10 funds also account for resources held for the benefit of the members and their beneficiaries of other postemployment benefit (OPEB) plans and other employee benefit plans.

External Investment Trust Funds (GAAP FT18)

Describe external investment trust funds that account for the agency’s external portion of investment pools reported by the sponsoring government.

Private-Purpose Trust Funds (GAAP FT20)

Describe private-purpose trust funds that account for all other trust arrangements whose principal and interest benefit individuals, private organizations or other governments.

Custodial Funds (GAAP FT22)

Describe custodial funds that account for resources that are not required to be reported in pension (and other employee benefit) trust funds, investment funds or private-purpose trust funds. FT22 funds are generally for the benefit of individuals and not part of the reporting agency.

Component Units

For information on component units, see Component Units.

Blended or Discretely Presented Component Units

The agency must disclose if it has blended and/or discrete component units. If no component units exist, include a statement to this effect. Specific component unit information is disclosed in Note 19. Discrete component units are reported under GAAP FT15.