GASB STATEMENT NO. 54 AND
IOWA SCHOOL DISTRICTS
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Agenda
• Provide a brief overview of GASB Statement No. 54 “Fund
Balance Reporting and Governmental Fund Type
Definitions”
• Governmental Fund Types
• Fund Balance Categories
• Discuss Implementation in Iowa School Districts
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GASB Statement No. 54
• Why?
• Two overall changes to financial reporting:
• Revised/Clarified definitions of governmental funds
• Changed fund balance reporting
• Effective for June 30, 2011
• No effect to the proprietary funds (enterprise funds or
internal service funds) or fiduciary funds
• No effect to government-wide statements
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GASB Statement No. 54
• General Fund: to account for and report all financial resources
not accounted for and reported in another fund
• Special revenue funds: specific revenue sources that are
restricted or committed to expenditure for specified purposes
other than debt service or capital projects
• Student Activity Fund
• Management Levy Fund
• Capital projects funds: financial resources that are restricted,
committed, or assigned to expenditure for capital outlays,
including the acquisition or construction of capital facilities and
other capital assets
• Physical Plant and Equipment Levy Fund-previously reported as a special
revenue fund is now a Capital Projects Fund, Fund 36.
• Capital Projects Fund
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GASB Statement No. 54
• Debt service funds: financial resources that are
restricted, committed, or assigned to expenditure for
principal and interest
• Permanent funds: financial resources that are restricted to
the extent that only earnings, and not principal, may be
used for the District’s programs
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GASB Statement No. 54
• Nonspendable
• Restricted
• Committed
• Assigned
• Unassigned
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GASB Statement No. 54
• Nonspendable: Not in a spendable form
• Cannot ever be spent: inventories or prepaid items
• Cannot currently be spent: Long-term portion of loans receivable
or assets held for sale
• If the proceeds must be used for a specific purpose, classify based on the
constraint
• Other long-term receivables are usually offset by the deferred revenue liability
and there is no fund balance as a result
• Legally or contractually required to be maintained intact-permanent
fund principal
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GASB Statement No. 54
• Restricted-externally imposed
• External: Creditors, grantors, contributors or laws or regulations of
other governments, such as the State
• Difference between restricted fund balance and restricted net assets on
the government-wide
• Committed
• Highest level of decision-making authority (Board)
• MUST be committed by the Board prior to year-end, must be
documented
• Assigned
• May be established by the governing body itself or the governing body
may delegate this to an official (Superintendent or Business Manager)
or another body within the organization (Finance Committee)
• Cannot be negative
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GASB Statement No. 54
• Unassigned
• Only allowed a positive unassigned fund balance in the General Fund
• Other governmental funds may report deficit balances as unassigned
• Remember, cannot report an assignment for an amount to a specific
purpose if the assignment results in a deficit unassigned fund balance
• Classification
• Determine nonspendable amounts first.
• Apply the District’s policy for whether restricted or unrestricted amounts
have been spent when an expenditure is incurred and both types of
resources are available.
• Next, apply the District’s policy for use of committed, assigned or
unassigned.
• Deficit position: Eliminate any amounts assigned and if residual is still
negative, then report a deficit unassigned amount
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Stabilization Arrangements
• Formally setting aside amounts for use only in certain
specific circumstances
• Reported as restricted or committed
• The formal action taken for setting aside the amounts
specifies the circumstances for use and organization must
prove non-routine nature
• If the formal action is not sufficient, the fund balance is
reported as unassigned
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Implementation
• Establish District policies
• Committed fund balances-need Board approval prior to June
• Assigned fund balances-need to determine the body or official
authorized to make assignments and the policy that delegated
entity is to follow
• Flows: In what order will the resources be used?
• Start now with the prior year audit report and determine
the fund balance reporting
• Draft the footnote disclosures based on the policies that
have been adopted
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Implementation
• Student Activity Special Revenue Fund
• Reported as restricted net assets on government wide statements
• Fund balance is restricted
• Management Levy Special Revenue Fund
• Reported as restricted net assets on government wide statements
• Source of revenue is the levy annually certified by the District
• Fund balance is restricted
• PPEL Capital Projects Fund
• Reported as restricted net assets on government wide statements
• Source of revenue is the levy annually certified by the District
• Fund balance is restricted
• Capital Projects Fund
• Reported as restricted net assets on government wide statements
• Statewide sales and service tax
• Fund balance is restricted
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Implementation
• Debt Service Fund
• Reported as restricted net assets on government wide statements
• Source of revenue is the levy specifically approved by voters
• Fund balance is restricted
• General Fund
• Categorical funding-restricted
• May have Committed and/or Assigned
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General Fund example
FY 2010 Fund Balance=$7,935,158
a. Any Nonspendable? Prepaid items
b. Any Restricted? Federal and state programs
c. Any Committed? None
d. Any Assigned? Federal and state programs
What is the Unassigned Balance?
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Sarah Bohnsack, Partner
563.343.9595
Mia Frommelt, Partner
913.660.3931
Sarah@governmentalservice.com
Mia@governmentalservice.com