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Jennifer Rodenbeck, CPA, CPFO City of Cedar Falls Finance Manager/City Clerk July 24, 2013

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Presentation on theme: "Jennifer Rodenbeck, CPA, CPFO City of Cedar Falls Finance Manager/City Clerk July 24, 2013"— Presentation transcript:

1 Jennifer Rodenbeck, CPA, CPFO City of Cedar Falls Finance Manager/City Clerk July 24, 2013

2 Class Today Class List with Handouts – Wait to them to you Definitions Breaks

3 Introductions What City you are from Approximate size of City What is your position How long in your position Most difficult thing you are dealing with currently at work as it relates to finances

4 You are full of Bologna (Baloney)

5 On Cloud nine

6 Try to Understand

7 Basic Accounting Assets – Definition: Resources of the City that may or may not be currently available to conduct the activity of the City. Ex. Cash, investments, equipment (Debit Balance) Liabilities – Definition: Demands and obligations upon the City. Ex. Accounts Payable(Credit Balance) Fund Balance (Equity) – Credit Balance Revenues – Credit Balance Expenses – Debit Balance Double Entry – Definition: Every entry has two parts, a debit and a credit Journal Entry – Definition: A balanced set of entries used to reflect transactions.

8 Assets Liabilities Expenses Revenues Fund Balance (Net Difference)

9 Governmental Accounting Why different??? Funds Double - Double Entries for everything

10 Manual Accounting Why is it important??? Understanding what your software is doing! Why??? Doesn’t Balance Make Corrections Setting up new software

11 General Ledger Why is it important to us??? Accurate information for annual reporting, budgeting Audit Public record

12 MY CITY: LEDGERS Three Ledgers needed General Ledger Subsidiary Ledger Budget Ledger Double Entry Accounting: Every entry has two parts, a debit and a credit within each of the ledger types.

13 GENERAL LEDGER Definition: The fund summary or monthly recording of activities which combine the values of the subsidiary and budgetary ledgers to establish financial position of the City.

14 MY CITY FINANCIAL PICTURE

15 SUBSIDIARY LEDGER Definition: The record of detail used for individual accounts within a cost center and/or fund. Each line item or account number has a running total throughout the year Each line item or account number must belong to a larger grouping: revenue type or department or function

16 MY CITY FINANCIAL PICTURE

17 BUDGET LEDGER Definition: The record of budgetary expenditures compared to the allocated budget for that function, fund or project. Used to monitor or control revenues by type Used to monitor or control expenditures by functions Usually some portion of account number or code is used to generate totals for ledger (chart of accounts)

18 MY CITY FINANCIAL PICTURE

19 Budget

20 City Standard Chart of Accounts Definition: A standardized method to insure consistency between budget, accounting, and financial reporting activities.

21 Account Numbers Expense: – General Fund – Police – Full Time Salary Revenue: – General Fund – Police – Misc Revenue - Fines Cash: – General Fund – Cash Accounts Payable: – General Fund – Accounts Payable Fund Balance: – General Fund – Unreserved Fund Balance

22 A PRACTICAL GUIDE

23 GENERAL LEDGER Assets Liabilities Fund Balance Revenue Control Expenditure Control

24 SUBSIDIARY LEDGER - Revenue Property Taxes Hotel/Motel Taxes Revenue Control Interest Income

25 SUBSIDIARY LEDGER - Expenditures Office Supplies Professional Fees Expenditure Control Capital Outlay

26 BUDGET LEDGER Estimated Revenues Appropriations Budget Fund Balance

27 GENERAL LEDGER Cash Accts Payable Unreserved Fund Balance $5,000 Dr. Cash $5,000 Cr. Equity $5,000 - To record beginning balance

28 BUDGET LEDGER Estimated Revenues Appropriations Budget Fund Balance $50,000 $0

29 Received the following revenues: $40,000 Property Tax Revenue $2,000 Building Permits $1,000 Interest Income

30 Dr. Cash$43,000 Cr. P/T Rev $40,000 Cr. Bldg Permit Rev $ 2,000 Cr. Int Income $ 1,000 Total$43,000 $43,000

31 SUBSIDIARY LEDGER - Revenue Property Taxes Building Permits Revenue Control Interest Income $40,000 $2,000 $1,000 $43,000

32 GENERAL LEDGER Cash Accts Payable Unreserved Fund Balance $5,000 $43,000

33 BUDGET LEDGER Estimated Revenues Appropriations Budget Fund Balance $50,000 $0 $43,000

34 Paid the following expenditures: $3,000 New City Clerk Desk $10,000 Audit Fee $20,000 Police Car

35 Dr. Office Supp $3,000 Dr. Prof Fees $10,000 Dr. Cap Outlay $20,000 Cr. Cash $33,000 Total$33,000 $33,000

36 SUBSIDIARY LEDGER - Expenditures Office Supplies Professional Fees Expenditure Control Capital Outlay $3,000 $10,000 $20,000 $33,000

37 GENERAL LEDGER Cash Accts Payable Unreserved Fund Balance $5,000 $43,000 $33,000 $15,000

38 BUDGET LEDGER Estimated Revenues Appropriations Budget Fund Balance $50,000 $0 $43,000 $33,000 $7,000 $17,000 $10,000

39 Annual Financial Report

40

41 City of Boondocks Cash on Hand at Beginning of Year = $10,000 Only One Fund – General Fund Received the following revenues: Property taxes - $75,000 Mobile home taxes = $1,000 Interest Income = $2,000 Electrical Permits = $5,000 Swimming Pool receipts = $20,000 Library donation = $30,000 Paid the following expenses: Staff training = $2,000 Building repair = $10,000 Auditor = $25,000 Engineer Study = $50,000 Clerk’s desk = $5,000 Total budgeted revenues = $200,000 Total budgeted expenses = $180,000

42 Entries & Annual Financial Report Preparation

43

44 Payroll Gross Payroll - –payroll + city share of benefits = TOTAL COST OF PAYROLL EE ER Gross Wages $500 FICA/Medicare (7.65%) 38 IPERS (5.95%/8.93%) Fed/State W/H 10 Net Wages $422 Total Benefits Paid by City 83 Total Cost to City $583

45 Dr. Salaries$500 Dr. FICA$ 38 Dr. IPERS$ 45 Cr. Cash $422 Cr. Cash $ 83 Cr. W/H Liab $ 78 Total$583 $583

46 GENERAL LEDGER Cash Accrued Payroll Taxes Unreserved Fund Balance $422 $583 $78 $83 $505

47 SUBSIDIARY LEDGER - Expenditures Salaries FICA Expenditure Control IPERS $500 $38 $45 $583

48 GENERAL LEDGER Cash Accrued Payroll Taxes Unreserved Fund Balance $422 $583 $78 $83 $505 $78 $583 Assets + Liab = Equity

49 Voided Checks Cash on Hand Rents Journal Entry: DRCR Returned: Bad check for rental

50 Sale of Bonds Cash on Hand Proceeds from Bonds and Premiums Journal Entry: DRCR ,000Bond Fund ,000

51 Investment Cash on Hand Investments Journal Entry: DRCR ,500.00Purchased a CD for General Fund , $2,500.00

52 Investment Cash on Hand Investments Journal Entry: DRCR $2,500.00CD Redeemed for General Fund $2, $100.00interest income $2, $0 ________

53 Co-Mingled Investments Cash on Hand Investments Journal Entry: DRCR ,500.00Purchase a CD for General, Refuse & Sewer , , , , , , ,000.00

54 Petty Cash Cash on Hand Petty Cash Journal Entry: DRCR Set up a petty cash fund $200.00

55 Transfers Journal Entry: DRCR ,000.00Transfers Out ,000.00Cash ,000.00Cash ,000.00Transfers In Are they authorized or budgeted?

56 Refunds Do you have a revenue line item for refunds? Do you allow refunds against expense line items? How do you handle credits from a vendor?

57 Who cares? How can the City monitor and control it?

58 Control/monitor? Budget Control Definition: A limit of expenditures imposed when the Council adopts the budget. Expectation of revenues based upon information availability during the budget process. Budget Amendment Definition: Alternation of adopted budget approved by the Council after conducting a public hearing (384.18) Unappropriated Surplus Definition: Available cash and investments in excess of all revenues, expenditures and reserve liabilities.

59

60 Type of Reports Budget to Actual Reports Bank Reconciliation Annual Financial Report Audit Report Annual Budget Forms List of Long-Term Liabilities (Bonds, separate by type of bond) Street Report Grant Reports TIF Report

61 Audit Report Cash Basis vs. GAAP GAAP – Definition: Generally Accepted Accounting Principles

62

63 Fund Balance/Reserves Reserves – Definition: Accounts used to earmark funds designated for a special purpose by the Council. GASB – Definition: Governmental Accounting Standards Board GASB 54 – New Classifications of Fund Balance (Governmental Funds only): Nonspendable – By nature can’t be spent (Reserved for inventories) Restricted – Limitation established by external creditor or law, or legislation Committed – Self imposed - highest level of authority (Council) Assigned – Self imposed – intended use by decision making body or official designated Unassigned

64 GASB 54 Exercise Street Fund (Road Use Tax) - Local Option Sales Tax Fund – Tourism Fund (H/M Tax) – TIF Fund – Block Grant Fund – Bond Fund – Cemetery Perpetual Care Fund – Pool Capital Fund - Sewer Fund -

65 GASB 54 Exercise Street Fund (Road Use Tax) – Restricted – Iowa Code Local Option Sales Tax Fund – Restricted - Voters Tourism Fund (H/M Tax) – Restricted - Voters TIF Fund – Restricted – Iowa Code Block Grant Fund – Restricted – Grantor Parking Fund – Committed – Council by Ordinance Bond Fund – Restricted – Bond Restriction Cemetery Perpetual Care Fund – Restricted – Iowa Code Pool Capital Fund – Assigned – Internally decide to keep the capital fund Sewer Fund – N/A – only governmental funds

66 GASB 54 – Fund Types GASB 54 also gives more clarification on fund types: Special Revenue – used to account for and report specific revenue sources that are restricted or committed for a specific purpose Capital Projects – used to account for and report financial resources restricted, committed, or assigned for capital outlays.

67 Other Accounts Library Funds Fire Funds Donations – separate foundation

68 Other Topics GASB 63/65 – Use of the term Deferred and Equation Capital Assets Imaging Systems Computer Software Internal Controls New Audit Requirements Other????

69 Resources Code of Iowa – Chapter 384 Auditors State Auditor’s Office Government Finance Officers Assoc. GFOA League of Iowa Cities Mentors Department of Management Software support

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