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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 13 – Continuance Subject To Review

If your agency is subject to the Texas Sunset Act, disclose the effective date of abolishment (sunset date), unless a bill was passed by the Legislature authorizing the agency’s continued operation. If the agency was abolished, the agency has until Sept. 1 of the following year to conclude its operations. For information specific to your agency, contact the Sunset Advisory Commission at (512) 463-1300.

Each agency can verify if it is scheduled for a Sunset Review using the Comptroller Manual of Accounts:

  1. Click on State Agencies in the Browse navigation menu.
  2. Select your agency.
  3. Review information contained in the Notes section. Scheduled Sunset Review dates display in the right-hand summary box.

Since the Sunset Advisory Commission review dates are subject to change, verify the accuracy of these dates after each legislative session.

Going Concern Considerations

GASB 56, paragraphs 16–19, requires preparers of financial statements to evaluate whether there is substantial doubt about the agency’s ability to continue as a going concern for 12 months beyond the financial statement date. Indicators that there may be substantial doubt include:

  • Legislation
  • Default of bonds
  • Legal proceedings
  • Recurring unsubsidized losses in business-type activities

If the evaluation indicates that there is substantial doubt that the agency can continue as a going concern, disclose the following (as applicable) in the notes to the financial statements:

  • Significant events giving rise to the assessment
  • Possible effects of such events
  • Government officials’ evaluation and plans (such as prospective financial information)

Submit a copy of the agency’s Note 13 from its published AFR through the ONDSS web application. The required format is a Microsoft Word document (latest version: docx) with header information that includes: agency name/number and note number/name. If Note 13 does not apply, do NOT submit a note to indicate “not applicable.”