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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 18 – Management’s Discussion and Analysis (MD&A)

Agencies issuing stand alone or audited AFRs are required to prepare an MD&A section as part of the agency’s AFR. Some agencies choose to issue an audited AFR, whereas others are required by statute. For more information, see the List of Agencies with Independent Audits Required by Statute. For more information on the GASB 34 required MD&A, see Agencies that issue stand-alone or audited AFRs.

Agencies that do not issue an audited AFR are not required to submit an MD&A as part of the agency’s AFR, but do need to provide some additional information in Note 18 for the statewide ACFR MD&A section. These agencies must provide the following information in this note if the amounts involved are material:

  • Material financial highlights of the fund, if any (for example, changes in net position, revenues and expenses).
  • Material fund highlights (for example, new bond issues, new contracts).
  • Reasons for significant changes from the prior year (not just the amounts or percentage of change) including changes in net position and restrictions, commitments or other limitations that might affect the availability of fund resources.
  • Descriptions of currently known facts, decisions or conditions expected to have a significant effect on the financial position.
  • Descriptions of significant capital asset and long-term debt activity, including commitments made for capital expenditures, changes in credit ratings and debt limitations that may affect financing of planned activities.

The Comptroller’s office consolidates all of the information submitted by agencies to prepare a statewide MD&A to be included in the ACFR.

Submit a copy of the agency’s Note 18 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 18 does not apply, do NOT submit a note to indicate “not applicable.”