Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Resources

Agency Fiscal Year-End USAS Adjustments and AFR Checklist
Step 8 – Notes to the Financial Statements

• Note 1
• Note 2
• Note 3
• Note 4
• Note 5
• Note 6
• Note 7
• Note 8
• Note 9
• Note 10
• Note 11
• Note 12
• Note 13
• Note 14
• Note 15
• Note 16
• Note 17
• Note 18
• Note 19
• Note 20
• Note 22
• Note 23
• Note 24
• Note 25
• Note 26
• Note 27
• Note 28
• Note 29
• Note 30
• Note 31
• Note 32
• View All

Note 1 – Summary of Significant Accounting Polices (Submitted Through the ONDSS web application)

1. Submit descriptions of only the fund type and funds actually used by the agency. These descriptions must be specific to the agency rather than generic, except for the general fund.
2. Include a reference to the component units, if applicable. Include details or descriptions of the:
   1. Component units included in the financial reporting entity.
   2. Relationship between component units and the financial reporting entity.
   3. Rationale for including individual component units in the financial reporting entity.
   4. How individual component units are reported (i.e., blended, discretely presented, or as a fiduciary fund).
   5. How to obtain the separately issued financial statements of component units.
3. If the agency is a component unit, identify the primary agency and describe the nature of the relationship. The agency must also disclose the relationship that exists between the agency and any related organizations such as organizations for which the agency appoints the voting majority of the board members but does not have either:
   1. The ability to impose its will on the organization
      –OR–
   2. A relationship of financial benefit or burden with the organization
4. Disclose the omission of fiduciary funds and fiduciary-type component units from the government-wide financial statements.
5. Disclose whether the agency is composed solely of one or more funds of some other agency (other than a component unit), and the nature of that relationship (such as an enterprise fund or a departmental report).
6. Disclose the measurement focus and basis of accounting used in preparing the government-wide financial statements.
7. Disclose when revenue is susceptible to accrual in governmental funds.
8. Identify the specific availability period used for revenue recognition.
9. Specify the availability criteria for major revenue sources (such as property taxes, sales taxes, grants, etc.). Agencies must consider using a uniform availability period for governmental revenues. However, in situations when the agency wishes to extend the availability period in connection with expenditure-driven grants, consider retaining the shorter availability period for all other revenues.
10. Describe the agency’s policy for eliminating internal activity in the government-wide statement of activities (such as how the agency distinguishes overhead costs, which are eliminated in the process of consolidation, from interfund services provided and used between functions that are not eliminated in the process of consolidation).
11. Address the agency’s accounting policies for capital assets by disclosing the:
    1. Capitalization threshold(s) for capital assets.
    2. Method(s) used to calculate depreciation and amortization expense.
    3. Estimated useful lives of capital assets in sufficient detail to be meaningful (such as separately for each major class of capital assets)
12. If the agency elected to use the modified approach for one or more networks or subsystems of infrastructure assets, the agency must describe the modified approach.
13. Describe the types of transactions that are reported as program revenues.
14. If the agency allocated indirect costs without using a separate column in the government-wide statement of activities (such as indirect costs included in the program expense reported for individual functions and activities).
15. Disclose the agency’s policy for defining operating and nonoperating revenues and expenses in proprietary funds.
16. If cash flows reporting focuses on both cash and cash equivalents, the agency must define the cash equivalents.
17. Indicate how investments are valued.
18. Disclose the method used to report inventories and prepaids in governmental funds (such as consumption method or purchases method).
19. Disclose how inventories are valued (such as valued at cost in governmental funds, otherwise at lower of cost or market).
20. Disclose the method used to determine the cost of inventories, such as:
    1. Specific identification
    2. Weighted average
    3. First-in, first-out
    4. Last-in, first out
21. If the agency reports donated works of art, similar items or capital assets received pursuant to a service concession arrangement, the agency must disclose that such items have been valued at acquisition value (rather than at fair value).
22. If the agency presents major governmental funds or major enterprise funds, the agency must disclose the activities reported in those funds.
23. Disclose (if applicable) the purpose for each major special revenue fund, including the revenues and other resources that are reported in each of those funds.
24. If the agency presents internal service funds or fiduciary funds, the agency must disclose the activities reported in those fund types.

    Note: The description must be specific to the agency rather than generic.

25. Disclose the flow assumption used to determine the order in which restricted and unrestricted resources will be used in the government-wide and the proprietary fund statements (for example, restricted resources will be depleted prior to use of unrestricted resources). If both restricted and unrestricted resources may be used for the same purpose (such as construction project or school programs), the agency must disclose the flow assumption used.

    Note: The agency must disclose the amount of restricted net position that is reported as such because of restrictions imposed by enabling legislation.

26. Disclose whether the agency considers restricted amounts or unrestricted amounts (such as the total of committed, assigned and unassigned fund balance) that were spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance are available in a governmental fund.
27. Disclose whether committed, assigned or unassigned amounts are considered to be spent when expenditures are incurred in a governmental fund for purposes for which amounts in any of those unrestricted fund balance classifications could be used.
28. If the agency reports a portion of fund balance as committed, the agency must disclose:
    1. The agency’s or state’s highest level of decision-making authority
    2. The formal action that must be taken to establish, modify or rescind a fund balance commitment
29. If the agency reports a portion of fund balance as assigned, the agency must disclose:
    1. The body or official authorized to assign amounts to a specific purpose
    2. The policy established by the governing body pursuant to which that authorization is given
30. Submit a copy of the agency’s Note 1 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 1 does not apply, do NOT submit a note to indicate “not applicable.”