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Does Your Local Government Have a Comprehensive GASB Statement No. 54 Policy? by Alexandria Battaglia, CPA
GASB Statement No. 54 was released in March 2009 and is effective for the periods beginning after June 15, 2010. This Statement enhances the usefulness of fund balance information by providing clear fund balance classifications that can be more consistently applied and clarifies the existing governmental fund type definitions. In order to address the implications of GASB Statement No. 54, a comprehensive fund balance policy should be developed to include but not limited to the following elements:
*Delegate responsibility for enforcement of the policy
*Order of resource use
*Statutory fund balance limitations
*Minimum fund balance
*Replenishing deficiencies
Be sure that appropriate Board action is taken on these policies and procedures since the information needs to be disclosed in the footnotes of the financial statements.
For more information on GASB Statement No. 54 see our "New Developments, Year End Update, And 1040 Considerations" located on our website at www.rsabrams.com or join Marianne Van Duyne, CPA and Alexandria Battaglia, CPA as they will be presenting GASB #54 - Creating New Fund Balance Policies at the New York State GFOA 33rd Annual Conference in Albany on Wednesday, April 4th. |
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Property Tax Levy Limit
by Dan Ruckdeschel, CPA
During the week of February 13th, the New York State Education Department and the Office of the New York State Comptroller held training sessions on calculating a school districts property tax levy limit and guidance on completing the Office of the New York State Comptroller's Real Property Tax Calculation Form online.
A key component of the online session focused on school district exclusions from the calculation of the 2% tax levy limit.. Exclusions include the following:
- Adding current year (2011-12) receivables for payments in lieu of taxes (PILOTS) and subtracting out the future period (2012-13) receivables.
- Tort actions (Court orders or judgments exceeding 5% of prior fiscal year tax levy).
- New York State Retirement Systems expenditures in excess of 2 percentage points
- The State and Local Employees' Retirement System (ERS) rate increased by an average of 2.6 percentage points which allows for .6% of the projected ERS salary base to be excluded from the calculation.
- There is no exclusion for the Teachers' Retirement System (TRS) expenditures in the calculation of the 2012-2013 year.
- The OSC website provides for a pension calculator that can be used to assist with this calculation.
- Capital expenditures for the 2011-2012 are excluded from the tax levy limit computation however; these amounts must be reduced if their revenue source is from reserves, fund balance, or aid.
- In the 2012-2013 budget calculation, you would identify your total estimated capital expenditures (including but not limited to equipment codes, capital fund expenditures, and bond principal and interest payments, capital lease expenditures, installment purchase debt expenditures, Bond Anticipation Note expenditures) and subtract out the estimated building aid, excel or transportation aid in the future period as well. The net amount is an addition to the tax levy limit for the 2012-2013 calculation.
School districts are required to submit their proprty tax limit information on the OSC website by March 1, 2012. However, the website will remain open until April 21, 2012 for any updates or changes.
A training webinar will be held by OSC for City and Village officials on March 15, 2012, registration and additional information regarding the property tax levy limit can be obtained at http://www.osc.state.ny.us/localgov/realprop/index.htm
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Payroll Tax and Unemployment Benefits Update
On February 17, 2012, U.S. lawmakers have signed the Conference Report for HR 3630, the "Middle Class Tax Relief and Job Creation Act of 2012". This Report includes an extension of the payroll tax cut through the end of 2012. The payroll tax cut was previously extended on December 23, 2011 for an additional 2 months and was set to expire on February 29, 2012. The original payroll tax cut reduced the amount of employee contributions for Social Security payroll tax from 6.2% to 4.2%. This extension will allow for current payroll withholdings to remain intact with no adjustments needed by the employer until the following 2013 year.
The agreement also addresses the current unemployment insurance program which will reduce the number of maximum number of weeks an unemployed individual can receive benefits from 99 weeks to 73 weeks by the end of the 2012 year. This number can also be further reduced to as low as 40 weeks depending upon an individual state's rate of unemployment. A majority of the states that have an unemployment rate similar to the national average of 8.3% would be reduced to 63 weeks maximum. States with unemployment averages above 9% would be reduced to 73 weeks. New York State is currently at an 8% unemployment rate which would reduce the total maximum number of weeks for collecting unemployment to 63 weeks. |
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Nonprofit Update
On February 16, 2012, State Attorney General Eric Schneiderman proposed additional mandates and accountability requirements for the many nonprofits that are registered in New York State. A recent review committee (Leadership Committee for Nonprofit Revitalization) appointed by the State Attorney General in 2011 with members from the nonprofit community and government agencies, released their report on February 16, 2012 covering topics to reduce the burdens on nonprofits and enhancing governance and maintaining the public trust.
One key component of the report is the review and oversight of executive compensation and to prohibit chief executives and other compensated employees from serving as a Board Chairperson. Currently, nonprofit organizations are required to disclose the organization's review process of compensation for top management officials in Schedule J of the IRS Form 990. The proposed legislation would require Boards to review top management salaries and benefits to verify that they are reasonable, justified and commensurate with services provided.
Recently, Governor Cuomo signed a law that would limit the amount that is reimbursable to a nonprofit agency for executive compensation to no more $199,000.
Executive compensation for New York State charities is under heavy scrutiny. Nonprofits should document their reasons for executive compensation and all benefits, by considering the following:
- Relevant comparability data;
- Qualifications and Performance;
- Payment from related entities;
- And other issues affecting the nonprofits overall financial position.
Another significant item of the review committee's report was the importance of reducing burdens on nonprofits by streamlining state contract payments, improving renewal processes, increased use of multi-year contracts, as well as standardizing state contracts.
A full copy of the report can be found at:
http://www.ag.ny.gov/media_center/2012/feb/NP%20Leadership%20Committee%20Report%20(2-16-12).pdf |
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NYS Focuses on Local Audits
Marianne Van Duyne, CPA was featured in the March 1, 2012 issue of the NYSSCPA E-zine discussing the New York State Comptrollers audits. The full article can be found at: http://www.nysscpa.org/ezine/index.htm |
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2013 Moms Who Kick Calendar
R.S. Abrams & Co., LLP would like to formally congratulate Alexandia Battaglia, CPA for being chosen as a Model Mom to be featured in the 2013 Moms Who Kick calendar fundraiser.
Moms Who Kick is a public charity whose mission is to inspire, motivate, and empower women to choose a healthy lifestyle through physical fitness and proper nutrition. |
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New Addition to the Firm
R.S. Abrams & Co., LLP welcomes Nicholas Giangrande, CPA to the firm!!!
Mr. Giangrande is a supervisor at R.S. Abrams & Co., LLP. He has a Bachelors of Science in Accounting from Bentley College and is a member of the New York State Society of CPA's as well as the Society of Financial Service Professionals. He has more than twenty years of audit and tax experience within the Public Accounting profession. Mr. Giangrande specializes in audits of a variety of not-for-profits including medical, social services and charitable organizations and audits of real estate and commercial entities. |
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R.S. Abrams & Co. is an accounting firm with extensive experience auditing school districts, boards of cooperative educational services, not-for-profits, and state & local governments. We also provide tax and accounting services to individuals, partnerships and corporations across the country. Our firm has been in business for over 75 years and provides auditing services in Nassau, Suffolk, Westchester, and Rockland counties. | | |
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Disclaimer
The information contained in this newsletter is provided for informational purposes only, and should not be construed as accounting, audit, or tax advice on any subject matter. The Firm provides accounting, audit, and tax advice only to persons or entities with which it has established a client relationship. No recipients of information from this newsletter, clients or otherwise, should act or refrain from acting on the basis of any information included in this newsletter without seeking appropriate accounting, audit, tax or other professional advice on the particular facts and circumstances at issue from a public accounting firm licensed in the recipient's state. The content of this newsletter contains general information and may not reflect current accounting, audit, or tax developments. The Firm disclaims all liability in respect to actions taken or not taken based on any or all of the contents of this newsletter. |
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Our firm has two locations in Islandia and White Plains, New York and the single most important factor in our firm's success over the past 75 years has been our uncompromising commitment to the highest standards of quality and professionalism. Should you have any questions for us, please don't hesitate to contact us at (631) 234-4444.
Sincerely,
R.S. Abrams & Co., LLP |
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