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THE REPORTING ENTITY

THE REPORTING ENTITY. GASB #14. The Reporting Entity includes :. The “Primary Government” (PG); Those the PG is “financially accountable” for; and, All Others deemed to be “significant”. A. The Primary Government (PG).

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THE REPORTING ENTITY

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  1. THE REPORTING ENTITY GASB #14

  2. The Reporting Entity includes: • The “Primary Government” (PG); • Those the PG is “financially accountable” for; and, • All Others deemed to be “significant”.

  3. A. The Primary Government (PG) • PG is defined as an entity whose Board is elected by citizens, legally separate, and fiscally independent of other entities. It can: • Determine its own budget • Levy taxes • Issue bonded debt • In order to be a PG, must be able to do all 3 without needing approval by another govt.

  4. Those for which the PG is “Financially Accountable” • To be “financially accountable”: • PG appoints a voting majority of CU governing body, AND: • is able to impose its will; OR, • there is a potential for the CU to provide specific financial benefits or impose financial burdens on the PG.

  5. “financially accountable” (cont.) • Regardless of the previous condition, PG may be financially accountable if the CU is fiscally dependent on it.

  6. C. OTHERS, if significant • Examples include: • Finance Authorities created to issue debt on behalf of the local government and serves as a conduit for repayment (off balance sheet financing) • Educational Foundations

  7. “Impose Its Will” Defined: • The PG can impose its will if it can: • unilaterally abolish the CU; • remove Board members; • hire/fire managers; • modify or approve budget or rate changes; • veto decisions of the CU

  8. Benefits and Burdens • A benefit or burden relationship exists if: • PG is legally entitled the CU’s resources (net income of the lottery, for example); OR, • PG assumes deficits of CU or provides financial support (state colleges); OR, • PG is obligated for the debt of a CU.

  9. Fiscally Dependent • An example of fiscal dependency would be where a local school board, even though elected by the public or state, must obtain approval for the school district’s budget from a city – or perhaps the city must approve any tax levies.

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