2019 Financial Reporting Workshop...Financial Reporting Workshop 2020 Presented By: Statewide...

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Financial Reporting Workshop 2020

Presented By: Statewide Financial Reporting Section (SFRS Team)

Bureau of Financial ReportingDivision of Accounting & Auditing

Florida Department of Financial Services

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Rules of PresentationPercentage of attendees from last yearGreen Color # for slide = Beginners read closelyRed Color # for slide = Everyone read closelyIf you are wanting CPE credit for this workshop, use the CPE

Form you should have received yesterday through email.Please take the poll questions seriously.

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Rules of PresentationEveryone is muted. If you have question, raise your hand in

the GoToWebinar or type your question in the question box. Staff member will monitor questions and we will try to accommodate or have a staff member follow-up with you directly after the workshop.

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Agenda for WorkshopIntroduction to the SFRS TeamCAFR Overview CAFR 2019 – Lessons Learned and Training OpportunitiesWhat’s in store for 2020?What’s in store for 2021? Agency FeedbackHow to contact SFRS?

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Introduction to the SFRS TeamA. Who, B. What, C. Where, D. When,E. Why, F. and How.

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WHO?Tammy Eastman,

Assistant Bureau Chief

Chunping Lin, Supervisor

Janine Knight,Gov’t Analyst II

Sherif Nessim,Gov’t Analyst II

Pam Barksdale, PAS

David James,Gov’t Analyst II

Vacant SMAS, Supervisor

Tiffany Millsapp,Gov’t Analyst II

Lyna Ty,Gov’t Analyst II

Vacant PAS,PAS

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1.A

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WHAT?The Statewide Financial Reporting Section (aka SFRS Team)

is responsible for the compilation, publication, and distribution of the CAFR for the CFO each year.They are also tasked with preparation of the Schedule of

Expenditures of Federal Awards (SEFA) and completion of the Statewide Cost Allocation Plan.

1.B

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WHERE?Under normal conditions, the SFRS works from the beautiful

offices of the Fletcher Building. Under COVID-19 situation we are teleworking.

1.C

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WHEN?The SFRS Team performs various tasks and provide

guidance/training all year long, but our “busy time” is mostly during the July to January months of the year.

1.D

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WHEN?Here is a functional timeline of our CAFR Preparation

process

Jan Feb March April May June July Aug Sept Oct Nov Dec Jan Feb

Planning, Improvements, Updates

Workshop Agency Closing

Review & Compilation

CFO/Audit Adjustments

Auditor General Audit

Publish CAFR

1.D

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WHY?So Why does the SFRS team need to prepare the CAFR?Florida Statute 216.102(3)Provides users with the necessary information to assess the financial

health of the State of Florida.

1.E

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HOW?The CAFR is produced through a series of internal and external

processes that calculate, compile, and analyze the data necessary for the CAFR to be created.This involves obtaining audit reports from external parties,

performing analytical procedures to ensure accuracy, compiling of data obtained through agency completed forms, and more.Most of these processes were developed over the years the

CAFR has been produced and always in compliance with Generally Accepted Accounting Principle (GAAP).

1.F

CAFR OVERVIEW

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CAFR Overview

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A. General OverviewB. Planning, Improvements, UpdatesC. WorkshopD. Agency ClosingE. Review & CompilationF. CFO and Audit AdjustmentsG. Publish CAFR

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CAFR OverviewA. General Overview Required by Section 216.102 (3), F.S. Provides a thorough and detailed presentation of the

state’s financial condition Prepared in accordance with generally accepted

accounting principles (GAAP) Governmental Accounting Standards Board (GASB) Due by February 28 annually Audited by the Florida Auditor General

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2.A

CAFR Overview

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CAFR

Introductory Section• CFO• EDR

Auditor's Report• Auditor

General

Management Discussion & Analysis (MD&A)• Agencies• EDR

Notes of the Financial Statements• Forms• SBA• DMS• DFS• DEO• DOR

Financial Statements• Agencies• Component

Units

Other Supplementary Information• Agencies• EDR

Statistical Section• Various

Agencies

FINANCIAL SECTION

2.A

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CAFR OverviewHere is a functional timeline of our CAFR Preparation

process

Jan Feb March April May June July Aug Sept Oct Nov Dec Jan Feb

Planning, Improvements, Updates

Workshop Agency Closing

Review & Compilation

CFO/Audit Adjustments

Auditor General Audit

Publish CAFR

2.A

Planning, Improvements, Updates

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Create Tasklist/Workplan for year Create Agency Closing Schedule & Agency Calendar Implement improvements. Reviewing and updating Forms, as deemed necessary. Reviewing and updating Procedures, as deemed necessary. Organize GASB implementation on current processes. Prepare Workshop presentation.

2.B

CAFR Workshop

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Statewide Financial Reporting Section (SFRS) team hosts an annualworkshop for all state agencies. The workshop provides information onprocess improvements, new GASB implementations, and acts as arefresher course on agency responsibilities for the upcoming CAFR.

CAFR WORKSHOP

2.C

CAFR Workshop

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Two hours of Continuing Professional Education (CPE) are currentlybeing offered to attendees of the workshop.

DBPR Course Number 0025475 Complete the CPE Form that was emailed to you before and after

workshop. Please take the poll question.

2.C

Agency Closing

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1) Tools Available for Agency Closing2) Forms3) Agency/Component Unit Adjustments4) “How to’s” for Better Success in Agency Closing

2.D

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a) Agency Closing Scheduleb) Agency Calendarc) Statewide Financial Statement Guidanced) Compliance Checkliste) WTB Databasef) Form 3 Completeness Database

Tools Available for Agency Closing 2.D.1

Agency Closing Schedule

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How SFRS sets Agency Closing Schedule?Why this is done? Example from 2020

2.D.1.a

Agency Calendar

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The Agency Calendar is a toolavailable for the agencies whichprovides the submissiondeadlines due to the SFRS team.It is available in June.

Once available, the SFRS teamsends an e-mail attaching theAgency Calendar to theagencies.

2.D.1.b

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c) Statewide Financial Statements Guidance Provides the necessary steps to comply with

the checklist items. It also providesaccounting guidance for specific subjects.

Can be located on our website at:https://www.myfloridacfo.com/Division/AA/Links/default.htm.

Tools Available For Agency Closing 2.D.1.c

Tools Available For Agency Closing

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d) Statewide Financial Statements Compliance Checklist Designed to identify essential tasks that must be

accomplished during and after the agency closing process. Due dates for some checklist items are provided on the

checklist itself and others are based on agency closingdates identified in the Agency Calendar.

Agencies Compliance Checklist responses are due inOctober signed by the chief fiscal officer. Checklist itemswith a “No” response, require completion and submissionof “Attachment A” for each no response.

The SFRS grades each checklist item for timeliness andaccuracy. Grading sheets will be available after workshopfor the most recent CAFR cycle.

2.D.1.d

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2.D.1.eTools Available For Agency Closinge) WTB Database

Access database utilized to provide various reports to support stateagencies with fulfilling CAFR requirements. Reports include: Specific compliance checklist item reports (01, 04-10, 12-14, 16

and 21). Analytical reports to identify potential errors.

From the second working day of July until the last CFO and AGadjustments are posted, the SFRS team updates the WTB database,updates it on the website, and notifies it was updated to theagencies via e-mail. It is located on the DFS website at https://www.myfloridacfo.com/Division/AA/Links/default.ht

m. Instructions for using the WTB are attached with the database.

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2.D.1.fTools Available For Agency Closingf) Form 3 Completeness Database Form 3 Completeness database is a tool available for

the agencies to ensure your Form 3 Intra and Form3-Inter data is in balance with your trial balance.

Form 3 Completeness database can be located athttps://www.myfloridacfo.com/Division/AA/Links/default.htm.

Instructions for using Form 3 are attached within thedatabase.

Forms

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a) Purpose of Forms and their Useb) Types of Formsc) Due Datesd) Form Exceptions

2.D.2

Forms

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a) Purpose of Forms and their Use The SFRS forms are used to gather required and/or

supplemental information from state agencies toprepare the State of Florida CAFR in accordance withGASB.

The forms are located on the website athttp://www.myfloridacfo.com/Division/AA/Forms/default.htm

Assure the General Ledger (GL) related formsreconcile with their Trial Balance before submission.

A revised form is required when GL balances aremodified.

2.D.2.a

Forms

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b) Types of Forms P-Forms P Forms are required for every

agency CU and CUR Forms CUR Forms are required for all DPCU

All Other Forms As applicable/No blank submissions

Database Forms Form 30 – Cash Flows Database

2.D.2.b

Forms

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c) Due DatesMost forms are due by August 27th, 2020. Exceptions include: Form P4, CU Forms, Adjustment

Form and Form 3 – See Agency Calendar andCompliance Checklist for due dates.

Note: A copy of all final forms submitted by the agencies issent to the Auditor General (AG) office.

2.D.2.c

Forms

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d) Form Exceptions The following forms are provided by the SFRS team.

The deadline for these forms is provided in the e-mailattaching the form(s). Agency Fund Change Statement. Change in Capital Assets Change in Long Term Liability

Form 30 “Cash Flows” form is the only form in adatabase format. Form 30 can be found on the website at

https://www.myfloridacfo.com/Division/AA/Links/default.htm.

2.D.2.d

Agency/Component Unit Adjustments

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After agencies are closed, the only method of adjusting GL balances inFLAIR is through adjustment forms.

An adjustment form (DFS-A1-1835) is completed either by agencies orthe SFRS team. The adjustment form can be located on the website at https://www.myfloridacfo.com/Division/AA/Forms/default.htm

Form Features: Fund number linked to SWGF and SWF fields Form(s) update notices Adjustment balance check

2.D.3

Agency/Component Unit Adjustments

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Types of Adjustments:Agency Adjustments are type “B”Audit Adjustments are type “A”.CFO Adjustments are type “C” adjustments and the following:G for General Revenue AdjustmentsI for Investments AdjustmentsL for Component Units AdjustmentsN for Inter/Intrafund Adjustments

2.D.3

Adjustment Form

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990000502000051

2.D.3

“How to’s” for Better Success in Agency Closing

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Utilize the WTB Database daily Develop a checklist of year-end tasks and entries. Compare current year and prior years entries. Record depreciation in FLAIR prior to agency closing Confirm INTER fund balances with other agencies early. Check your compliance checklist items.

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Review agency post-closing adjustments prior to submission to SFRS Adjustments in balance (debits = credits) Adjustment does not create atypical balances Adjustment based on current trial balance amounts Use adjustment form on DFS website

When a post-closing adjustment is processed and it effects a form, submit the revised form.

Contact SFRS if you have any questions or concerns.

“How to’s” for Better Success in Agency Closing

2.D.4

Review and Compilation

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During this stage the SFRS team performs the following: Verifies the agencies checklist items compliance. All forms were timely received and contain the appropriate signature and/or data. Compiles and reconciles the forms data. Coordinates with agencies to clear up discrepancies within the GL balances and the forms. Verifies agencies timely send revised forms when updating the GL balances. Verifies agencies send data requested in the planning emails by the due dates. Assures atypical balances are cleared up or appropriately explained. Performs different processes in order to produce CAFR (such GR, Intra/Inter, etc). Analytical procedures to assure data is correctly reported. Reconcile audit reports with the CAFR financial statements. Produce and submit the draft CAFR by December 31st to the AG office for review.

2.E

CFO and Audit Adjustments

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CFO adjustments are adjustments processed by the SFRS team. Itincludes annual year-end adjustments prepared by SFRS andadjustments to correct GL balances.CFO adjustments are type “C”.

Auditor adjustments are submitted by the AG office after SFRS teamdeadline of processing the type “C” adjustments.Auditor adjustments are type “A”.

2.F

Publish CAFR

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The State of Florida generally publishes CAFR around early to mid-February.

The Governmental Finance Officers Association (GFOA) grants the Certificate ofAchievement for Excellence in Financial Reporting Program (CAFR Program). In orderto achieve the certificate; GFOA asks state and local governments to submit theirreport within six months of the end of the fiscal year.

In the near future and with your collaboration, the State of Florida would like toachieve the certificate.

2.G

3CAFR 2019 Lessons LearnedA. Success from a Statistical Viewpoint

1) Adjustments2) Inter/Intrafund3) Compliance Checklist Grading4) How to increase your agencies statistical ratings

B. Training Opportunities

Statistical Viewpoints3.A

A Adj.

B. Adj.

C. Adj.

0

200

400

600

800

1000

1200

1400

2015 2016 2017 2018 2019

18 26 33 28 59

531576

693

558

652

11131044 987

12121156

Adjustments ProcessedFive-Year Comparison

A Adj. B. Adj. C. Adj.

3.A.1

INTERfund

2018

Total number of

rows

Total rows of data not balanced

% of Balanced

Data1st

Submission 4221 854 80%

2nd Submission

4361 342 92%

3rd Submission

4263 450 89%

2019

Total number of

rows

Total rows of data not balanced

% of Balanced

Data1st

Submission 4195 807 81%

2nd Submission

4356 299 93%

3rd Submission

4318 105 97%

INTER fund is journal transfer transactions between agencies. (Due to/from, Transfers in/out and Advances to/from)

3.A.2

Note: You can be in balance with your trial balance, but still be out of balance on the Fund1 Fund2 Agreement Report. Both must be in balance.

2018

Total number of

rows

Total rows of data not balanced

% of Balanced

Data

1st Submission

1466 184 87%

2nd Submission

1442 16 99%

2019

Total number of rows

Total rows of data not balanced

% of Balanced

Data

1st Submission

1419 173 88%

2nd Submission

1381 18 99%

INTRAfund 3.A.2

Note: You can be in balance with your trial balance, but still be out of balance on the Fund1 Fund2 Agreement Report. Both must be in balance.

INTRA fund is journal transfer transactions within agencies. (Due to/from, Transfers in/out and Advances to/from)

2019 Compliance Checklist Evaluations will be emailed to you on Wednesday

3.A.3Compliance Checklist GradingChecklist # Checklist Item Compliance CY Compliance PY YoY Change

1 Funds in Balance 97% 100% -3%2 Intrafund Activity within Agency 68% 68% 0%3 Interfund Activity with Other Agencies 42% 25% 17%4 Cash Balances 97% 97% 0%5 Treasury Investment Balances 100% 100% 0%6 Beg Fund Balance/Net Assets 97% 97% 0%7 General Revenue 97% 100% -3%8 Capital Assets Depreciation 100% 100% 0%9 Fund Balance Classification 96% 100% -4%

10 Net Investments in Capital Assets 92% 91% 0%11 Compensated Absences 89% 58% 31%12 Capital Asset Accounts 91% 91% 1%13 Long-term Debt Accounts 100% 100% 0%14 Analytical Procedures 72% 79% -7%15 Other Guidance 100% 100% 0%16 Fund Questionnaires for New Funds 100% 100% 0%17 SWFS Forms 81% 94% -14%18 Component Unit Financial Statements 94% 78% 16%19 SEFA 100% 92% 8%20 Fraud Certification 94% 97% -3%21 Final Budgeted Revenues 97% 100% -3%22 GASB Implementation Schedule Notification 100% 100% 0%23 Elimination of Revolving Funds 100% 100% 0%24 Interfund Loans 100% 100% 0%25 Compliance with Chapter 280, FL Statutes 100% 100% 0%

How to increase your agencies statistical ratings

Suggestion on Ways to Improve Your StatisticsDevelop your own checklist of year-end entries required. This helps ensure

the recording of all year-end entries (receivables, payables, etc.)Compare CY vs PY entries to ensure keyed correctly and amounts appear reasonableReconcile your JT transactions quarterly for both INTER and/or INTRAfund to

eliminate reconciling all data for the year, if you don’t already do so. (Checklists 2 & 3)

Use Analytical Reports provided in WTB “Within” Checklist 14 (e.g. Atypical GL Report, Invalid GL Report, GL Balance Analytics – CY vs

PY, No Change in GL Balance Report, Equity Constraints vs Total Ending Equity) “After” the numbered checklist items (e.g. Deficit Ending Equity Report, Ending Equity in

Agency Funds Report, Equity Comparison Report – CY vs PY, SWGF to Agency GAAFR Fund Comparison) to assist you in making adjustments, as required, prior to closing.

Ensure forms that are GL related agree with your trial balance when submitted

3.A.4

Training Opportunities1) Fund Questionnaire and Fund Classification.2) Year-End Closing Reports and Adjusting beginning balance3) Interfund/Intrafund Balance Accounting.

3.B

Training Opportunities1) Fund Questionnaire and Fund Classification.- What is our current process for creating funds?- What is the misstep in the process?- Real-life example

3.B.1

Training Opportunities2) Year-End Closing Reports and Adjusting beginning balance.- Lets look at an example.- SFRS sent out in March.- Its purpose and what you should do with the information from it?

3.B.2

Training Opportunities3) Interfund/Intrafund Balance Accounting.

- What is its purpose?- What is its overall goal?- Real Life Example

3.B.3

What’s in store for 2020?A. GASB Updates

1) GASB 952) Survey for Leases (GASB 87)

B. SFRS Form Changes/Additions1) Color Change2) Multi-Submission Option3) Change in Capital Assets, Long Term Liability, AFCS Forms.4) New Forms

C. Adjustments Interface (currently internal use only)D. WDesk New Generation Implementation

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What’s in store for 2020?A. GASB Updates

1) GASB 95This GASB standard is titled “Postponement of the Effective Dates of

Certain Authoritative Guidance.”This postponed most of the GASB implementation for the next couple

years.

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4.A.1

What’s in store for 2020?A. GASB Updates

2) Survey on Leases (GASB 87)In an effort to gather the necessary information for GASB 87 (Leases),

sometime near the end of 2020, SFRS will be requesting all agencies to complete a Leases survey.This survey is necessary to inventory the leases from an Enterprise

perspective to determine the appropriate capitalization threshold to set for capturing a fair presentation in the financial statements.

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4.A.2

What’s in store for 2020?B. SFRS Form Changes/Additions

1) Color Change• This is done to prevent agencies from using old forms.• Must use new forms this year.• Submissions utilizing old forms will not be accepted.

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4.B.1

What’s in store for 2020?B. SFRS Form Changes/Additions

2) Multi-Submission Option• Extra-tab• Multi-submission fields are the input fields from the single form in column

order. If you are familiar with CSV file format, same concept.• Example

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4.B.2

What’s in store for 2020?B. SFRS Form Changes/Additions

3) Change in Capital Asset, Long Term Liability, and AFCS Forms• We have simplified the building process for these files so that they are easier to manage

and we can get them to agencies and component units faster.• Next year, agencies will be required to obtain this form directly from the website and

submit like other forms.• Example

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4.B.3

What’s in store for 2020?B. SFRS Form Changes/Additions

4) New Forms• TIF Form – Technical Inquiry Form

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4.B.4

What’s in store for 2021?A. GASB 84B. GASB 90C. Form Renumbering/ChangesD. Website Project Continues

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What’s in store for 2021?A. GASB 84

Titled - Fiduciary ActivitiesEffective Date - For reporting periods beginning after December 15, 2018.Focus – to improve guidance regarding the identification of fiduciary activities for

accounting and financial reporting purposes and how those activities should be reported. Criteria – establishes specific criteria (for primary government and component units) for

identifying activities that should be reported as fiduciary activities and clarifying whether and how business-type activities should report their fiduciary activities.

Focuses on four questions:1) What type of relationship exists? (a fiduciary activity based on applicable criteria?)2) Who controls the assets of the fiduciary activities?3) Where the money is derived from?4) Who are the beneficiaries?Note: Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities.

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5.A

What’s in store for 2021?A. GASB 84 (continued)Reporting Requirements –Four types of Fiduciary funds

1) Pension (and other employee benefit) trust funds2) Investment trust funds3) Private-purpose trust funds4) Custodial funds

Governments should report fiduciary activities in the fiduciary fund financial statements of the basic financial statements based on the type.

A component unit determined to be a fiduciary activity and reported in the fiduciary fund financial statements of the primary government should include the combined information of its own component units that are fiduciary component units.

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5.A

What’s in store for 2021?A. GASB 84 (continued)Implementation Steps for Financial Reporting to determine ImpactFund List Review Component Units Fund List ReviewNote: Fund List Reviews will Start around January 2021 or earlier if possible

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5.A

What’s in store for 2021?B. GASB 90Titled - Majority Equity InterestsEffective Date - For reporting periods beginning after December 15, 2018.Focus –

1) Improve the consistency and comparability of reporting of a governments majority equity interest in a legally separate organization

2) To improve the relevance of financial statement information for certain component units Criteria – In conjunction with the organizations type (legally separate or component unit)

and investment determination under GASB 72, if a majority equity ownership interest exists, GASB 90 sets the measurement requirement used (i.e., equity method or as a component unit).

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5.B

What’s in store for 2021?B. GASB 90 (continued)Reporting Requirement –

If the government is holding a majority interest of a legally separate organization as an investment, the government should NOT be recording the legally separate organization as a component unit of the government using the equity method.

If the government is holding a majority interest of a legally separate organization NOT as an investment, the government should be recording the legally separate organization as a component unit of the government. (Financially Accountable Scenario)

Impact on Financial Reporting –Agencies impacted by GASB 90 will be contacted directly by SFRS with further instructions.

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5.B

What’s in store for 2021?C. Form Renumbering\ChangesSFRS will be renumbering our FormsAdding better referencing to our formsMinor field enhancements

D. Website Project ContinuesMay shift links aroundMay require additional communication to agencies

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5.C&D

Agency FeedbackEvaluation FormChange from Last YearNew Questions and Their Purpose

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How to Contact SFRS? 7• General Questions can be sent to SFRS@myfloridacfo.com.• For detailed inquiries, prepare and submit a Technical Inquiry Form

(TIF) to SFRS@myfloridacfo.com.• All requests sent to SFRS@myfloridacfo.com are assigned to staff

members with the substantive knowledge of the request subject.

How to Contact SFRS?

Tammy Eastman Tammy.Eastman@myfloridacfo.com (850) 413-5746

Chunping Lin Chunping.Lin@myfloridacfo.com (850) 413-5385

Pam Barksdale Pamela.Barksdale@myfloridacfo.com (850) 413-5803

David James David.James@myfloridacfo.com (850) 413-5871

Janine Knight Janine.Knight@myfloridacfo.com (850) 413-5458

Sherif Nessim Sherif.Nessim@myfloridacfo.com (850) 413-5559

Lyna Ty Lyna.Ty@myfloridacfo.com (850) 413-5592

Tiffany Millsapp Tiffany.Millsapp@myfloridacfo.com (850) 413-5511

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CPE Credit

• You are eligible for two hours of Continuing Professional Education (CPE) Credits for attending the CAFR workshop.

• Please complete the CPE Form and send to SFRS at SFRS@myfloridacfo.com.

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QUESTIONS?