GAAP Forms - OSF Form X-1 Instructions
This conversion package is designed to gather the miscellaneous information not in OSF records or requested in the other packages at the close of business on June 30.
A. Carefully read the key terms in Part III.
B. The Miscellaneous Summary form (summary) should reflect amounts as of close of business on June 30.
C. Round all dollar amounts to the nearest whole dollar.
D. All working papers are subject to audit by the State Auditor & Inspector (SA&I). The agency is required to keep a copy of the completed summary form and all associated working papers for three years after the completion of the SA&I audit.
E. The person who completes and signs the summary form should keep a copy. OSF will contact this per-son if there are any questions.
F. If needed, call your agency’s financial reporting analyst for guidance.
G. Return the completed summary form to OSF no later than the due date shown on the form. If you can return it earlier, please do so. Mail should be sent to the Office of State Finance, 3812 N. Santa Fe Ave., Suite 290, Oklahoma City, OK 73118. Completed summaries may also be emailed to your financial reporting analyst.
A. Advance Refunding/Defeasance exists when bonds are issued to refinance an outstanding bond issue before the date the outstanding bond becomes due. Proceeds of the advance refunding bonds are deposited in a trust or with a fiduciary and are used to redeem the underlying bonds at their maturity and pay interest on the bonds.
B. Authorized, Unissued Debt is debt that has been legally authorized but not issued and that can be issued and sold without further authorization.
C. Guaranteed Debt is debt or obligation of another party for which the state agrees to pay the debt service costs as a third party. The guarantee may not be conditioned or contingent in any way upon an attempt to collect from the obligor or upon an attempt to realize on any property pledged as collateral for the debt.
D. Infrastructure assets are long-lived assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples include roads, bridges, tunnels, drainage systems, water and sewer systems, dams, and lighting systems. Buildings should not be considered infrastructure assets except for those that are an ancillary part of a network of infrastructure assets.
E. Inventory Inventories are assets that have a short useful life, usually less than one year. Land, buildings, improvements, construction in progress, infrastructure, and machinery and equipment are fixed assets and not inventory. (See Capital Assets Conversion Package.)
The two classifications of inventory are:
Inventory of Materials and Supplies represents the dollar value of materials and supplies on hand at June 30 that will be used or consumed in the normal course of operations.
Inventory of Goods for Resale or Distribution represents the dollar value of goods on hand at June 30 that are being held by the agency for resale or distribution to the public or to other agencies rather than held for consumption in the normal course of operations.
F. Liability is an obligation resulting from past transactions (or occurrences) that will (or is likely to) result in future payments and/or reductions in revenue.
G. Litigation includes past, current, and future disputes or legal contests carried out and resolved through the judicial process. In everyday language, litigation and lawsuits mean nearly the same thing. Only litigation NOT being handled by the Attorney General's office or reported to OSF in the Litigation Conversion Package is to be included in this conversion package.
The types of litigation that will be included in this package are:
1. Litigation by others against the state that at June 30 will or may result in claims against the state's current or future resources. This includes lawsuits against the state, one or more of its agencies, or one or more of its officials; and that at June 30, are:
2. Litigation of the state against others that will result in a gain to the state. This includes lawsuits that, at June 30, are:
H. Moral Obligation Debt is debt that is not backed by the full faith and credit of the issuer, but state law permits the issuer or other government entity to recognize a moral, rather than a legal, obligation to provide a means of payment of the debt.
I. Questioned Costs are those costs that have been questioned by an audit of a federal program. Generally, the criteria for reporting questioned costs relate to unallowable costs, undocumented costs, unapproved costs, and unreasonable costs.
J. Prepaid Expenses are items that have been paid or are included in accounts payable as expenditures but your agency has not yet received full benefit from the expenditure. Prepaid expenses include prepaid rent, prepaid insurance, prepaid interest, etc.
K. Sinking Fund is a fund established to account for the accumulation of resources for, and the payment of, general long-term debt principal and interest, also called a debt service fund.
L. Subsequent Events are events or transactions that both:
M. Pollution Remediation Obligations are the estimated outlays to remedy the current or potential detrimental effects of existing pollution. This excludes prevention and control activities with respect to current operations, future pollution remediation activities required upon retirement of an asset, landfill closure and post closure care. Estimated outlays are recorded as a liability or capitalized.
A. Completing the Miscellaneous Summary Form
1. Enter the agency CAFR code, name, and funds/accounts to be included on the summary.
2. Provide the name, title, phone number and date for each person who completes and approves this summary form. The finance officer or executive director should approve the form before sending it to OSF. Keep a copy of the form. When submitting via email it should come from the address of the approving officer. This will act as an implicit electronic signature verifying the form has been reviewed and approved for validity, accuracy and completeness.
3. Complete all 25 questions.
If a question is not applicable to your agency, indicate this with a NO.
If your response to any question requires additional space; please complete your response on additional paper and attach it to the summary form.
4. Question 23, Pollution Remediation Obligations: Agencies are required to report estimated pollution remediation obligations to the Financial Reporting Unit. The liabilities to be reported exclude pollution prevention and control activities which are part of the normal current operations of an agency, the retirement of an agency asset, or landfill closure and monitoring.
Pollution remediation obligations include activities such as site assessments and cleanup expenses. The obligations are reported as liabilities or capitalized. The occurrence of any of the five specified obligating events below can trigger the reporting requirement.
1. Agency is compelled to take pollution remediation action because of an imminent endangerment.
2. Agency violates a pollution prevention related permit or license.
3. Agency is named, or expects to be named, by a regulator as a responsible or potentially responsible party for sharing pollution remediation costs.
4. Agency is named, or expects to be named, in a lawsuit to compel participation in pollution remediation.
5. Agency commences or legally obligates itself to commence pollution remediation.
If you answered Yes on Question 23, complete lines 23a – 23f.
Note: If there are multiple remediation sites, a spreadsheet should be prepared that captures all of the information related to Question 23 and attached to Package X.
23a. Enter a number from 1 – 5 which identifies the type of obligating event listed above.
23b. Enter a brief description of the nature and source of the obligation. For example, “Compelled to remove asbestos because it presented an imminent threat to employees health in building X, Oklahoma City, OK.”
23c. Provide the actual amount spent on pollution remediation during the current fiscal year for all pollution remediation projects identified and started in prior fiscal years.
Future pollution remediation costs should be estimated using the expected cash flow technique (example follows) and the liability reported to the Financial Reporting Unit. The estimated costs should be divided into current estimated obligations (due within 1 year) and long term estimated obligations. Although some costs may be subject to capitalization, most costs will not qualify and should be accrued as a liability.
Remediation costs should be capitalized if the costs are incurred (1) to prepare property for sale in anticipation of a sale, (2) prepare property for use when the property was acquired with known or suspected pollution that was expected to be remediated, (3) to perform pollution remediation that restores a pollution-caused decline in service utility that impaired the asset, or (4) to acquire property, plant, and equipment that have a future alternative use other than remediation efforts.
Example: Obligating Event – An agency discovers a problem in a building under renovation. The floor and ceiling tiles are made of asbestos and must be removed because the asbestos is friable. Consequently, the agency is compelled to take immediate action because of imminent endangerment and gets several estimates for the cost of remediation. The actual work will begin next fiscal year.
Measure the liability as the sum of probability-weighted amounts in a range of possible estimated amounts – the estimated mean or average. Consider all expectations about possible cash flows to determine the range of possible liabilities.
1. Estimate the probability the liability will be the maximum or minimum amount.
2. Average the possibilities by weight.
Estimates received are $150,000, $180,000, and $250,000.
Probability for the low estimate is 25%, the middle estimate is 50%, and the high estimate is 25%.
The calculated liability amount would be:
($150,000 x 25%) + ($180,000 x 50%) + ($250,000 x 25%) = $190,000
23d. Provide a description of the assumptions used for the estimate. For example, “The amount of the estimate is the weighted average costs derived from three construction bids.”
23e. A description of the potential for change in the assumptions. For example, “The amount of the estimated costs could change when one bid has been accepted and remediation begins next fiscal year.”
23f. Estimated amounts that could potentially be recovered from other responsible parties. For example, if prior owners of the property were held responsible for the pollution, enter the
amount that could reasonably be recovered from them or the amount that could be reimbursed by other tenants or agencies.
B. Working Papers
The agency should keep any documents that support data on the summary form. For example, agencies should thoroughly document: