County Financial Statements –
The County Official’s Role
Wisconsin Counties Association
September 22, 2015
Dave Geertsen, Kenosha County
David Maccoux, Schenck SC
Dawn Gunderson Schiel, Ehlers
County Finance Director’ Perspective
• What role do County officials play with the financial
statements?
• What is an audit, and was is not an audit?
• What is audit failure?
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Importance of Financial Statements
• Financial accounting and financial reporting
• Demonstrate stewardship to taxpayers and creditors
• Accountability of County officials
– Remain financially solvent
– Lack of business-like exchange of resources, with taxes levied on
taxpayers without necessarily receiving services
– Compliance with laws and regulations
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Independent Auditors’ Report
• Responsib
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Government-wide Financial Statements
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Statement of Net Position
• Illustrates what County owns
and how much does it owe.
• Assess County’s present
financial status and future
outlook.
• Based on historical cost
principles.
• Net position components
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Statement of Net Position – Capital Assets
• Additions typically represent
the purchase or addition to
assets owned by the County.
• Deletions represent the sale
or disposal of assets or, in
the case of construction in
progress, the classification to
asset categories.
• Importance – Are you
reinvesting in your assets?
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Statement of Net Position – Long-term
Obligations
• What does changes in your
long-term obligations
represent?
– Bonds and notes payable
– Employee obligations
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Statement of Activities
• Identify cost to provide
services to citizens.
• Difference between
general and program
revenues.
• What are the causes in
your changes in
financial position.
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Fund Financial Statements
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Balance Sheet – Governmental Funds
• More detailed look at your
finances, concentrating on
short-term view of basic
services provided.
• Major fund activities
reported
• Fund balance components
and what is important.
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Statement of Revenues, Expenditures and
Changes in Fund Balances
• Focus of statement is cash
and other financial resources
received within or shortly
after the year while
expenditures represent
services and goods received
and due to employees and
creditors.
• Focus on net change in fund
balance, and primary
reasons.
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Statement of Revenues, Expenditures and
Changes in Fund Balance – Budget and Actual
• How did your County’s
budget change during
the year?
• How does your actual
results compare to the
approved budget?
• Understanding your
levels of budgetary
control.
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Proprietary Funds
• Measurement basis
consistent with governmentwide financial statements.
• Enterprise and internal
service funds.
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Proprietary Funds
• Analysis of operating
revenues and
expenses.
• Non-operating
activities
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Proprietary Funds
• Key financial
statement to
identify sources
and uses of cash
compared to
operations.
• Identify future cash
needs and ability of
operations to meet
obligations.
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Notes to Financial Statements
• Notes in complimenting financial
statements of County.
• Provide additional detail, including
key accounting policies
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Required Supplemental Information
• Management’s Discussion and Analysis (MD&A)
– Introduction and overview of your financial statements
– Increased comprehension by readers of your financial
statements
– Management’s ability to highlight important issues
• Budgetary comparisons
• Other Post-employment Benefits (OPEB)
• Pension Information (WRS disclosures - FY 2015)
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Other Information
• Supplemental Information
– Combining statements of non-major funds
– Individual fund financial statements
• Statistical Section (CAFR)
– Historical trend data
– Demographics and other data
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Thank You
David Maccoux, CPA
Shareholder
920-455-4114
david.maccoux@schencksc.com
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Measurement of Financial Viability
Beyond the Basic Financial Statements
September 22, 2015
Measuring Financial Validity
• Finances
– Liquidity
– Budgetary Performance
– Budgetary Flexibility
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Economy
Management
Debt/Pension
Institutional Framework
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Finances
• Historical Trends in General Fund Revenues and
Expenditures
• Trends in Fund Balance (General Fund and Total
Governmental)
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Historical Trends in General Fund Revenues and
Expenditures
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Trends in Fund Balance (General Fund and Total
Governmental)
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Historical Trends in General Fund Revenues and
Expenditures
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Trend in Fund Balance
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Fund Balance as a % of Revenues
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Finances
• Changes in Cash Balance over 5 years
• Liquidity (What makes up fund Balance)
• Budgetary Performance (General Fund and Total
Governmental Funds)
• Budgetary Flexibility
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Economy
• Equalized Value – Total Value of taxable property in the
governmental unit’s boundaries. Size of tax base is a
reflection on its ability to pay. Composition of tax base
(Diverse)
• Trends in Equalized value and Assessed Values
• Average Annual Growth in tax base – Economic health
• Per Capita Equalized Value
• Top 10 Tax Payers
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Diversification of Tax Base
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Equalized Tax Base Trends
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Economy
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Largest employers
Building permits
Housing units
Trends in Employment and Unemployment Data
Census Population data
Average income and age statistics
Adjusted Gross Income per tax return
Adjusted Gross Income as Percentage of State Average
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Management (Recommended Practices)
• Establish Policies
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Fund Balance Policy
Debt Policy
Budget Policy
Investment Policy
• Monitor Policies and Live within them
• Long Range Planning
• Periodic Reporting to Elected Officials
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Policy Monitoring
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Policy Monitoring
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Debt/Pension
• Direct Debt Burden
• Overall Debt Burden
• Payout over Ten Years
• Percentage of Expenditures for Debt Service
• Pension Liability
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Institutional Framework
• Legal and Practical Environment in which you operate
• Predictability of Revenues & Expenses
• Statutory Limits
• Expenditure Restraints
• Levy Limits
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Issuance of Debt and Credit Rating
• Analysis of Credit Quality
• Assist the investor in determining the risk of an
investment
• Rating affects the price and interest rate that will be paid
when debt is issued
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Official Statement for Security Offering
• Purpose of the Official Statement (3 Basic functions)
– 1. Provide a description of the securities offered and the
transaction
– 2. Assists with marketing the security
– 3. Discloses risks and other material information associated with
investment in the securities
• Its purpose is to tell potential investors what they need to
know in order to decide whether or not to buy the
securities
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Dawn Gunderson Schiel
Senior Municipal Advisor
262-796-6166
dgunderson@ehlers-inc.com
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