Presented by C. Michelle Blackstock, CPA/CITP
Partner, Grau & Associates
State Audit Requirement
Pursuant to Section 218.39(1), Florida
Statutes :
 All counties, school districts, charter
school or technical center.
 All municipalities or special districts
based on revenues or expenditures
Single Audit Requirement
If the local government expends
$500,000 or more in either Federal
Awards or State Financial Assistance
programs
Know the Rules
What is the Purpose of an
Audit?
 Obtain reasonable assurance that the
financial statements are free of material
misstatements.
 Includes examining on a test basis
evidence supporting the amounts and
disclosures in the financial statements.
Planning
 Gain an understanding of the internal
controls
 Preliminary analytics
 Fraud inquiry
 Materiality
 Develop a plan
Fieldwork
Auditors execute the
audit plan and perform
substantive procedures
Completion
 Wrap up open items from the fieldwork
 Final discussions on any significant deficiencies,
material weaknesses, compliance issues or other
findings
 Review all potential audit adjustments
 Complete the financial statements and audit reports
 Issue report and complete all filings
Nonspendable Fund Balance
Amounts that cannot be spent because:
1. Not in a spendable form or
2. Legally or contractually required to be maintained
intact
Restricted Fund Balance
Amounts restricted for specific purposes where the use
of the resources are:
1. Externally imposed by others or
2. Imposed by law through constitutional provisions or
enabling legislation
Committed Fund Balance
Amounts to be used for a specific purpose pursuant to
formal action of the highest level of decision making
authority of the government unless removed or
changed by the same type of action (i.e.: resolution or
ordinance).
Assigned Fund Balance
Amounts that are constrained by the intent to be used
for specific purpose but are neither restricted or
committed.
Intent should be by the governing body itself or a body
or official delegated with the authority to assign the
amounts.
Unassigned Fund Balance
Fund balance that has not been assigned to other funds
and not restricted.
The general fund should be the only fund with a positive
unassigned fund balance.
Governmental Funds
 General fund is the operating fund.
 Special revenue funds are used for specific
revenues legally restricted for expenditures
for specified purposes.
 Debt service funds are used for the
accumulation of resources and the payment
of long-term debt.
Governmental Funds
 Capital projects funds are used to account
for financial resources to be used for the
acquisition/construction of major capital
facilities.
 Permanent funds are used to report legally
restricted resources.
Proprietary Funds
 Enterprise funds may be used for activities
where a fee is charged to external users for
goods or services.
 Internal service funds are used to report
activities that provide goods or services to
other funds or governments on a costreimbursement basis.
Fiduciary Funds
 Pension trust funds are used to report
resources that are required to be held in
trust for employee benefit plans.
 Investment trust funds are used to report
external investment pools or specific
investments held for others.
Fiduciary Funds
 Private-purpose trust funds are used to report
trust arrangements that benefit individuals,
private organizations, or other governments.
 Agency funds are used for situations where the
government’s role is custodial and do not involve a
formal trust agreement.
Component Units
 Blended Component
Units
 Discretely Presented
Component Units
Government Wide Statements
 Statement of Net Assets
 Statement of Activities
Fund Level Statements
 Balance Sheet
 Reconciliation of Balance Sheet – Governmental
Funds to the Statement of Net Assets
Fund Level Statements
 Statement of Revenues, Expenditures, and
Changes in Fund Balances
 Reconciliation of Statement of Revenues,
Expenditures, and Changes in Fund Balances
Governmental Funds to the Statement of Activities
Required Supplementary
Information (RSI)
 Management Discussion and Analysis (MD&A)
 Schedule of Revenues, Expenditures, and Changes
in Fund Balances – Budget and Actual (if not
included as a Statement)
 Infrastructure condition and maintenance date if
using the modified approach
Required Supplementary
Information (RSI)
 Pension and OPEB trend data (Schedule of
Funding Progress and Schedule of Employer
Contributions)
 Revenue and claims development trend data –
public-entity risk pools
Other Information
 Notes to the Financial Statements
 Introductory Section (only if CAFR prepared)
 Combining Statements (non major funds and
individual internal service and fiduciary funds)
 Statistical Section (only if CAFR prepared)
Hands On Examples
Independent Auditor Reports
 Independent Auditor’s Report - Opinion
 Internal Control over Financial Reporting and
Compliance and Other Matters
 Management Letter
Auditor General Reporting
If the audit findings in the preceding financial audit
report are uncorrected, the auditor must identify those
same findings that were included in the second
preceding fiscal year financial audit report. Any such
findings must be clearly referenced to the
corresponding findings included in each of the two
preceding financial audit reports.
Single Audit
 Report on compliance requirements on each major
program and internal control over that compliance
 Schedule of expenditures of federal or state awards
 Notes to the schedule
 Schedule of Findings and Questioned Costs
Annual Financial Report (AFR)
If you are required to provide for an audit
then submit the annual financial report
(AFR) and a copy of the audit to the
Department of Financial Services:
 45 days after the completion of the audit
 no later than 9 months after the fiscal year
end of the local governmental entity.
Annual Financial Report (AFR)
Official website must provide a link to the
Department’s website to view the entity’s
AFR that was submitted. If there is no
official website, then the county
government’s website must provide the
link for the local government.
Annual Financial Report
The Florida Department of Financial Services also
needs a copy of the financial statements for
certification of the AFR submission. You can
submit the financial statements electronically as a
PDF attachment to localgov@myfloridacfo.com
Auditor General Filing
 Currently one electronic copy and one paper copy are
required to be submitted.
 Specific requirements for the electronic filing apply
and can be found on the Auditor General’s website:
www.myflorida.com/audgen
Other Filing Requirements
 Federal Single Audit at harvestor.census.gov/sac
 MSRB EMMA
 Municipal Police & Firefighters Pension annual report
 CAFR submission to GFOA
State of Financial Emergency
Local governments that meet one or more of the
following conditions:
1. Failure to pay short-term loans or make long-term
debt payments when due as a result of lack of funds.
2. Failure to pay uncontested claims within 90 days due
to a lack of funds.
State of Financial Emergency
3. Failure to timely transfer payroll related obligations
due to a lack of funds.
4. Failure to pay wages, salaries or retirement benefits
due to a lack of funds.
State of Financial Emergency
No longer a condition:
Fund balance deficit in total or portion not classified
as restricted, committed, or nonspendable, or a total
or unrestricted net assets deficit and for which
sufficient resources are not available to cover the
deficit.
Financial Condition Assessment
 Local governments are required to notify the Governor
and the Legislative Auditing Committee when one or
more of the conditions have occurred or will occur if
action is not taken to assist the entity.
 Independent auditors are required to notify the local
government of deteriorating financial conditions that
may cause a financial emergency.
Vocabulary Test
 Audit
 Federal Single Audit/SEFA
 State Single Audit
 Annual Financial Report (“AFR”)
 Comprehensive Annual Financial Report (“CAFR”)
 Financial Condition Assessment (“FCA”)
Mandatory Reading List
 GFOA’s Governmental Accounting, Auditing, and
Financial Reporting (the “Blue Book”)
 Rules of the Auditor General Chapter 10.550 Local
Governmental Entity Audits
Contact information:
mblackstock@graucpa.com