Financial Reporting
New Information
- Comptroller's Directive No. 1-13, Directive Compliance Guidelines for State Agencies
- Comptroller's Directive No. 2-13, Directive Compliance Guidelines for Higher Education Institutions
- Report on Statewide Financial Management and Compliance (Quarterly Report) - Quarter Ending December 31, 2012 - February 27, 2013
- Report on Statewide Financial Management and Compliance (Quarterly Report) - Quarter Ending September 30, 2012 - December 17, 2012
- 2012 Comprehensive Annual Financial Report (CAFR) - December 17, 2012
- 2012 Popular Report - December 17, 2012
- Report on Statewide Financial Management and Compliance (Quarterly Report) - Quarter Ending June 30, 2012 - Nov 2, 2012
- 2012 Preliminary Report - August 15, 2012
- Report on Statewide Financial Management and Compliance (Quarterly Report) - Quarter Ending March 31, 2012 - Aug 14, 2012
- Report on Statewide Financial Management and Compliance (Quarterly Report) - Quarter Ending December 31, 2011 - June 14, 2012
- What's New for 1099 Reporting - December 14, 2011
- 2011 IRS Due Dates and Information Returns - December 9, 2011
Overview
The financial reporting activity includes preparation of three annual financial reports, three
Financial Statement Directives
and the Schedule of Expenditures of Federal Awards for inclusion in the Statewide Single Audit Report. The
Preliminary Report
is issued on August 15 for the previous fiscal year and summarizes the ending cash-basis position of the General Fund. The data in this report is used to implement the subsequent year's budget and provide the undesignated (surplus) balance, if any, which is available for future appropriation.
The audited December 15
Comprehensive Annual Financial Report (CAFR)
is prepared on the basis of generally accepted accounting principals (GAAP) and is used extensively by rating agencies, investment banks and other involved in the issuance and marketing of Commonwealth bonds. Virginia has produced a GAAP-basis report that has received an unqualified audit opinion every year since 1986.
The Code of Virginia establishes the basis for statewide financial reporting. Principal
Code directions include the following.
The Comptroller shall...make a preliminary annual report to the Governor on or before August 15...(and)...a final report on or
before December 15...the final report shall be prepared, insofar as practical, in conformance with generally accepted accounting
principles. (§2.2-813)
DOA's Financial Reporting unit also houses the statewide fixed assets monitoring and reporting activity because the purchase of land, buildings and equipment represents a particularly important type of disbursement involving assets of relative high value and longer useful life.
Organization
Financial Reporting has several subactivities.
The Code of Virginia (§2.2.4811 et seq., the Virginia Debt Collection Act) assigns DOA the responsibility to provide
oversight reporting, and monitoring for the procedures used by state agencies to collect accounts receivable. Data on
accounts receivable balances are compiled quarterly. These data are also used for the Comprehensive Annual Financial
Report of the Commonwealth
(
CAFR)
and the Report to the Citizens of the Commonwealth
(
PAFR).
During the course of the Auditor of Public Accounts audits of agencies and institutions, internal control and compliance matters are frequently noted. Agencies and institutions are required to submit a Corrective Action Workplan (CAW) pursuant to CAPP Manual Topic 10205. The Department of Accounts receives and evaluates the CAW for reasonableness and monitors the status of corrective action implementation.
Cash-Basis Reporting
The Virginia Constitution requires that accounts be maintained and reported based on when cash is received and paid out.
This subactivity involves ongoing reporting of cash activity in the state accounts throughout the year. Reports typically
produced for the Governor, Secretary of Finance and General Assembly include monthly reports on the cash position of the
Commonwealth as reconciled to the Department of the Treasury and other selected General Fund and Non-General Fund cash
basis financial information. This subactivity also produces the August 15
Preliminary Report
to the Comptroller that is required by law.
Each quarter DOA provides the Governor, Cabinet and Agency Heads with a comprehensive report on various measures used to monitor the degree to which executive branch agencies have complied with various accounting and financial management policies, procedures, and standards of performance.
The Commonwealth's institutions of higher education are required to meet five basic
Management Standards
each year to become, or remain, eligible for certain rewards specified in the Appropriation Act. The Department of Accounts
determines compliance by institutions with three of the standards. The
Auditor of Public Accounts
determines compliance by institutions with the other two standards.
This subactivity produces the State Agency, Higher Education, and Component Unit Financial Statement Directives. It is
through this subactivity that Financial Reporting provides guidance and assistance to State Agencies, Institutions of
Higher Education, and Component units on the GAAP presentation of financial statement information.
Financial Reporting Quality Assurance
The Audited December 15
Comprehensive Annual Financial Report (CAFR)
is prepared on the basis of generally accepted accounting principles (GAAP) and is used extensively by rating agencies,
investment banks and others involved in the issuance and marketing of Commonwealth bonds. Virginia has produced a GAAP
basis report that has received an unqualified audit opinion every year since 1986. This activity involves selecting state
agencies for quality assurance reviews based on risk analysis. A review of the agency prepared financial reporting attachments
is conducted and documented. A report is prepared detailing findings and recommendations for improvement in the process and
is discussed with agency management. This activity improves the reliability of accounting data submitted for inclusion in the
Comprehensive Annual Financial Report and helps to define
agency training needs as it relates to financial reporting.
This subactivity accounts for all major land, building and equipment assets of the Commonwealth. Also included is the
accounting for certain capital leases which are reflected as assets in the Commonwealth financial statements.
GAAP-Basis Reporting
This subactivity produces the
Comprehensive Annual Financial Report (CAFR)
of the Commonwealth which is audited by the
Auditor of Public Accounts.
Generally accepted accounting principles (GAAP) are promulgated by the
Governmental Accounting Standards Board (GASB)
and include the recognition of accrued assets and liabilities along with other non-cash accounting requirements. Planning,
information gathering, and preparation of this report take approximately 6 1/2 months. During the late winter and spring,
efforts within this subactivity are focused on the technical analysis necessary to incorporate new standards for GAAP,
as well as Code of Virginia changes, which will become effective for the next reporting year. The volume of technical
analysis increases each year.
provides information regarding accounting pronouncements used during preparation of the Commonwealth's CAFR. It is
non-authoritative and should not be viewed as an all-inclusive source of information.
General Ledger Reconciliation Quality Assurance
To ensure accuracy and uniformity in the preparation and reconciliation of financial data input to the Commonwealth Accounting and Reporting System (CARS), all internally prepared accounting records, data submission logs and other accounting data must be reconciled to reports produced by CARS. Such reconciliations shall be performed and certified to the Department of Accounts (DOA) monthly, as described in
CAPP Topic (20905), CARS Reconciliation Requirements (PDF)
, and at fiscal year-end as prescribed by the Comptroller's annual
Fiscal Year-End Closing Procedures
memorandum to agencies. This activity involves selecting a representative sample of a state agency's general ledger reconciliations to be reviewed based on risk analysis. A report is prepared detailing recommendations for improvement in agency reconciliation processes and agency training needs are defined and addressed.
Indirect Cost Plans
This subactivity is responsible for preparing two indirect cost allocation plans. The first is prepared in accordance with OMB
Circular A-87 and is used by agencies entitled to recover indirect costs from federal grants and contracts. DOA's plan is
audited and approved by the federal government on behalf of the Commonwealth. The second "full costing" plan is developed
for DPB that supports the recovery of indirect costs borne by the General Fund on behalf of nongeneral funded agencies and
programs. The Appropriation Act is used to recover these costs for the General Fund.
Title 31 U.S.C. (the Cash Management Improvement Act of 1990) imposes on the states a responsibility to develop and negotiate agreements governing the flow of cash from the U.S. Treasury to the Commonwealth. Careful analysis and monitoring of this program is critical due to the interest penalty that accrues for the time that a state agency holds federal cash. Download CMIA Worksheets[Excel].
Internal Control Compliance Quality Assurance
This activity involves reviewing state agencies implementation of
Agency Risk Management and Internal Control Standards (ARMICS).
These Standards provide guidance for establishing and assessing agency internal controls in order to more effectively manage
risk and maintain accountability. These Standards are an extension and clarification of existing requirements contained in
the annual Comptroller's Financial Reporting Directives and the Commonwealth Accounting Policies and Procedures Topic 10305,
Internal Control. This activity includes the review and testing of agency internal controls and development of reports and
recommendations for improvement in the agency's implementation of ARMICS. Additionally, the results of the review are used
to determine the extent of training needed by agency management and staff charged with ARMICS implementation.
This activity provides guidance and assistance in compiling and reporting annual information returns in accordance with Internal Revenue Service requirements. The Financial Reporting unit maintains and updates CAPP Topics related to 1099 reporting, prepares an on-line training program, and provides a CARS-compatible 1099 Adjustment and Reporting System for optional use by state agencies and institutions.
This subactivity summarizes and simplifies the presentation of information contained in the Commonwealth's Comprehensive Annual Financial Report. This type of report is often referred to as a "popular report." It is intended to better inform the public about the Commonwealth's financial condition without excessive detail or the use of technical accounting terms.
The
Code of Virginia (§2.2-4347 - 2.2-4356. et seq.) assigns DOA the responsibility to provide oversight reporting, and monitoring for the procedures used by state agencies to promptly pay invoices. Data on prompt payment of invoices are compiled quarterly. This data is used in the
Report on Statewide Financial Management and Compliance (Quarterly Report)
issued by the Comptroller's Office. Data by agencies and institutions are reported quarterly on DOA's web-based Reportline application.
Schedule of Expenditures of Federal Awards
This subactivity produces the Schedule of Expenditures of Federal Awards for inclusion in the Statewide Single Audit Report, available from the
Auditor of Public Accounts.
The schedule is prepared in accordance with the requirements of OMB Federal Circular A-133. This subactivity provides guidance to State Agencies, Institutions of Higher Education and Component Units on the preparation of their federal Schedules. This subactivity requires the services of a highly technical financial analyst for about two months.
This activity analyzes training needs surveys of state agency fiscal personnel and prepares an
annual training plan
for agency fiscal personnel. This activity conducts continuous training for agency fiscal management and staff keeping them abreast of changes in accounting standards and new reporting requirements. Additionally, this activity provides assistance and advice to state agency fiscal staff regarding accounting and compliance issues and participates in the procurement of professional training services.
