[PPT]DOAA Official Presentation Layout - GA Department of … · Web viewAnnual Reporting of SPLOST Each Approved Project: Original estimated cost, current estimated cost, amount

05/09/2023 REPORTING ISSUES: INCLUDING SPLOST AND UCOA

GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS

05/09/2023 2

Reporting Issues Session

• Reminder: DOAA cannot provide legal advice or legal assistance

• Points discussed today will be reporting in nature

• O.C.G.A. Code Sections will be referenced where appropriate

05/09/2023 3

Reporting Issues Session

• Discussion points:• Issues identified in the input survey

• Issues identified as part of our reviews

• Issues identified in contacts whether emails or telephone calls

Reporting Issues Session

• Discussion points to be covered include:

• Components of SPLOST Schedule

• Interfund balances reported by SPLOST Funds (specifically interfund receivables)

• Transfers reported by SPLOST Funds

05/09/2023

05/09/2023 5

Reporting Issues Session

• Amendments to SPLOST projects

• Intergovernmental agreements

• Multiple resources for SPLOST projects

• Completion of SPLOST projects (issues for cities and counties)

05/09/2023 6

Reporting Issues Session

• Priority of SPLOST projects

• Grant agreements with state and federal agencies

• Grant purposes and requirements

• CFDA #: should be identified by grantor agency

05/09/2023 7

Reporting Issues Session

• Hotel/motel tax expenditures

• Seized property/confiscated assets

• Special funds held by sheriffs and police chiefs

• Audit of elected officials

Reporting Issues Session

• Reporting entity

• Receiving donations

• Property transfers

05/09/2023

05/09/2023 9

SPLOST Schedule Components• O.C.G.A. §48-8-121: Required elements of Schedule

of SPLOST Projects

• Original estimated cost • Current estimated cost• Amounts expended in prior years• Amounts expended in the current year

05/09/2023 10

SPLOST Schedule Components• Original estimated cost

• Original estimated cost amounts should remain the same throughout the life of the SPLOST. • This column of the schedule should reflect the

original estimated cost amounts included on the referendum• The amounts approved by voters

05/09/2023 11

SPLOST Schedule Components• Current estimated cost

• Revisions to original estimated cost amounts

• Grants and other revenue sources can be added

• Column often referred to as the “budget”

05/09/2023 12

SPLOST Schedule Components

• Amounts expended in prior years

• Amounts for individual project expenditures and total expenditures should agree with the schedule submitted and accepted from the prior fiscal year

05/09/2023 13

SPLOST Schedule Components

• Amounts expended in the current year

• Total amount of expenditures should agree with the amount of expenditures and transfers out to debt service funds or enterprise funds reported in the fund financial statements

• Differences should be explained on schedule

05/09/2023

SPLOST Projects – Funding Sources• The Uniform Chart of Accounts (UCOA) specifies

that if SPLOST projects are financed from multiple funding sources, the SPLOST fund must be used for the total financing of the project• If expending these tax proceeds in an Enterprise

fund, the revenue should be reported in the SPLOST fund first and then record the transfer • Multiple funding sources (other than SPLOST

revenues) include: LMIG, DOT grants, GEFA loans, issuance of bonds, etc.

SPLOST Projects – Funding Sources

• The amounts of expenditures on specific SPLOST projects reported on the SPLOST Schedule should include expenditures paid from other revenue sources

• Notes may be shown at the bottom of the SPLOST Schedule to indicate the revised estimated cost amounts and expenditure amounts include other revenue sources

05/09/2023

Reporting Reminders

• Transfers from SPLOST Funds• Allowed to Enterprise Funds for approved

SPLOST projects• Allowed to Debt Service Fund to service debt

authorized by voters• Transfers to General Fund or E-911 Fund Not

Allowed• State law compliance – all expenditures related

to SPLOST project reported in SPLOST Fund

05/09/2023

Reporting Reminders

• Transfers between funds recap:• Transfers to the SPLOST Fund can be reported

• Transfers out of the SPLOST Fund should not be reported except to an Enterprise Fund or Debt Service Fund if for approved SPLOST projects

• Allowable transfers should be included in the expenditure amounts on SPLOST Schedule

05/09/2023

Reporting Reminders

• Interfund balances reported by SPLOST Fund

• Interfund receivable should not be reported by SPLOST Funds• State law compliance – commingling of SPLOST

funds• All expenditures of a SPLOST project should be

reported in the SPLOST Fund• Interfund payables are appropriate

05/09/2023

Reporting Reminders

• SPLOST Proceeds: General Revenue or Program Revenue• Government-Wide Statement of Activities

• Counties report as SPLOST taxes (general revenue)

• Cities report as program revenue-capital grants and contributions

05/09/2023

Reporting Reminders

• SPLOST proceeds: Taxes or Intergovernmental Revenue• Governmental fund financial statements:

• Counties report as taxes

• Cities report as intergovernmental revenue

05/09/2023

Reporting Reminders

• SPLOST payments to cities

• Government-Wide Statement of Activities• Reported by functional level according to

referendum and intergovernmental agreement

• Governmental Fund Financial Statement• Intergovernmental character of expenditures

05/09/2023

Reporting Reminders

• Interest earned on SPLOST funds

• Reported as program revenue capital grants and contributions

• Includes interest earned by SPLOST Funds reported as non-major funds

05/09/2023

SPLOST Schedule Reminders• Debt service payments:• If amount of debt issued included as a project

expenditure on SPLOST Schedule when issued, then principal payments should not be reported

• Amounts should not be duplicated on schedule

• Debt included either as a total at first or when principal payments made but not both

05/09/2023

SPLOST Schedule Reminders• Types of debt service payments:• Included on SPLOST Schedule as mentioned on

previous slide for all payments whether bond payments, loan payments or capital lease payments

Interest Payments:Included on SPLOST Schedule when payments are made

05/09/2023

SPLOST- General Obligation Debt

• Approved by voters in conjunction with SPLOST levy

• Resolution must include:• Principal amount• Purpose

05/09/2023

SPLOST – General Obligation Debt

• Government issuing the debt

• Maximum interest rate

• Principal to be paid each year

05/09/2023

Infeasible Projects

• Project becomes:• Impractical • Unserviceable• Unrealistic• Not in the Best Interest of the County or

Municipality

• Judgement of Governing Authority

05/09/2023

Infeasible Projects

• Governing authority determines whether projects are feasible

• Determination of infeasibility provided in an ordinance or resolution

05/09/2023

Infeasible Projects

• Resolution includes the modified purpose of the SPLOST proceeds • and

• Estimate of the amounts of proceeds available

• Only allowable modified purposes are reducing debt or ad valorem taxes or both

05/09/2023

Infeasible Projects

• Before redirection of SPLOST proceeds to modified purpose:

• Separate referendum question regarding modification conducted with the next SPLOST election

• (same ballot as SPLOST approval referendum but separate question)

05/09/2023

Infeasible Projects

• Reallocation to stated modified purpose upon voter approval

• If debt incurred or financing entered into for an infeasible project:• Infeasible ordinance or resolution prohibited

until debt obligation is discharged in full • OCGA §48-8-123

05/09/2023

Capital Projects for Non-Public Entities• SPLOST funds can not be used for local charities or

other non-profit organizations

• Gratuities clause of the Georgia Constitution prohibits local governments from using SPLOST revenues or any other public funds to fund capital outlay projects for non-public entities

• Restriction applies to for-profit and non-profit organizations (including charitable organizations)

05/09/2023

SPLOST Revenues Between Projects• Voter Approved Projects• Acceptable to move revenue to accommodate

greater costs in one or more of the projects• Project costs are estimates • May shift funds between approved projects• As long as all projects are completed

• Exception: Specific dollar amounts for each project rather than total in ballot language

05/09/2023

Methods of Distribution

• Two methods of determining how and whether SPLOST revenues will be shared with municipalities:

• 1) By intergovernmental agreement

• 2) According to a population-based formula in absence of an intergovernmental agreement

05/09/2023

Intergovernmental Agreements• Method 1: Intergovernmental agreements

• Minimum requirements in OCGA §48-8-115

• Includes:• Identification of capital outlay projects• Estimated dollar amounts for each project

05/09/2023

Intergovernmental Agreements

• Distribution procedures

• Schedule of distributions including priority of projects

05/09/2023

Intergovernmental Agreements

• Statement that all projects will be funded

• Statement that proceeds will be kept in separate accounts and used exclusively for the stated purpose

05/09/2023

Intergovernmental Agreements

• Record-keeping and audit procedures

• Other provisions the county and participating municipalities choose to address

05/09/2023

05/09/2023

Population-Based Distributions

• Board of Commissioners may allocate proceeds for the construction of county-wide projects first

• Then remaining proceeds allocations divided among county and municipalities based on population

Population-Based Distributions• Level One County-Wide Projects

• Level One projects:Are capital projects for the use and benefit of the citizens of the entire county needed to implement state-mandated county responsibilities

05/09/2023

Population-Based Distributions• Level One projects specifically limited to:• Courthouse• Administrative building for elected officials or

constitutional officers• County or regional jail, correctional institution,

or detention facility• County health department facility• Or any combination of above

05/09/2023

Population-Based Distributions• If no Level One projects selected, then Level Two

County-Wide projects may be selected

• Level Two County-Wide Projects:• Capital projects benefiting the citizens of the

entire county, other than Level One projects• Building and renovating existing facilities• Repaying debt on existing facilities• Equipping and furnishing facilities

05/09/2023

Population-Based Distributions

• After the allocations for Level One and Level Two projects, remaining SPLOST proceeds allocated between the county and the municipalities

05/09/2023

Termination of SPLOST

• Intergovernmental agreement: terminates at the end of time period stated on ballot, not to exceed six years

• No intergovernmental agreement and Level One project consumes less than 24 months of estimated revenues: terminates at the end of 5 years

05/09/2023

Termination of SPLOST

• No intergovernmental agreement and Level One project consumes more than 24 months of estimated revenues: terminates at the end of 6 years

• No intergovernmental agreement and no Level One project: terminates at the end of stated term, not to exceed 5 years, or when estimated proceeds collected, whichever comes first

05/09/2023

05/09/2023

Termination of SPLOST

• Consolidated government issues general obligation bonds in conjunction with SPLOST referendum:

• Terminates when the estimated amount of proceeds collected

Excess Proceeds

• Disposition of Excess Proceeds

• Excess proceeds: those proceeds of a SPLOST that remain after completion of all approved SPLOST projects listed on ballot

• Excess proceeds: defined as proceeds in excess of the actual cost of the projects

05/09/2023

Excess Proceeds

• All projects listed in the referendum should be completed before SPLOST can be deemed “excess” and available for use in reducing debt or property taxes

• Intergovernmental agreement: excess proceeds allocated and used according to agreement

• No Intergovernmental agreement: excess proceeds from municipalities must be paid to the county

05/09/2023

Excess Proceeds

• Reduce or pay off existing county debt

• Not used to reduce general obligation debt approved on the SPLOST ballot

• No existing county debt, any excess proceeds must be paid into the general fund of the county to reduce property taxes

05/09/2023

Annual Reporting of SPLOST• Prior to December 31 each year

• Publish a non-technical report

• Local newspaper of general circulation and

• In a prominent location on website (if one maintained)

05/09/2023

Annual Reporting of SPLOST• Each Approved Project:• Original estimated cost, current estimated cost,

amount expended in prior years, and amount expended in the current year• Any excess proceeds not expended for a project

(including all unexpended SPLOST funds held from a prior SPLOST)• Estimated completion date• Actual completion cost of each project

completed during the current year05/09/2023

Annual Reporting of SPLOST• Include statement of corrective action for each

project underfunded or behind schedule

• Include statement of any surplus funds not expended for a project

• County not responsible for reporting information on municipal projects

05/09/2023

Grant Agreements

• Grant agreements with state and/or federal agencies

• Should include:• Grant purposes• Grant requirements• CFDA # of the federal program• Grant period

05/09/2023

Grant Agreements

• Funds should be expended for the purposes stated in the agreement for program

• Gifts cards should not be purchased just to expend the funds before grant period ends

• Expenditures should meet the requirements or for purposes of grant

05/09/2023

Definition of Local Government• Unit of local government, unit or local government

• Means a municipality, county, consolidated city-county government or other political subdivision

• Terms do not include local school districts or boards of education

05/09/2023

Definition of Local Government

• Term county includes:• Any county officer who is paid in whole or in

part on a salary basis and over whom the county governing authority exercises budgetary authority

05/09/2023

Budgets

• Board of commissioners is responsible for approving the annual budget for all operations of the county – including the constitutional officers

• Budget must be balanced and account for each unit

• Legal level of control – minimum level must be at a department level

05/09/2023

Budgets

• If reallocates funds at the legal level of control

• Budget amendments subject to approval by board or council through adoption of a local ordinance or resolution

05/09/2023

Budgets

• Budget violations should be disclosed

• Budget violations include• Not adopting budgets• Overspending by legal level of control

05/09/2023

Budgets

• Applies to each debt service fund and each special revenue fund

• Corrective action plan required for violations

05/09/2023

Audits of Local Government• OCGA §36-81-7 requires an annual audit

• Financial affairs and transactions of• All funds and activities of the local government

• Includes all offices and departments

05/09/2023

Audits of Local Governments

• All offices and departments included in the audits and budgets

• Budgets approved by governing authority

• Some funds may have restrictions on the spending of those funds

05/09/2023

Restrictions

• Reminder: Restrictions are either

• Externally imposed by creditors, grantors, or laws or regulations of other governments

• Imposed by law through constitutional provisions or enabling legislation

05/09/2023

Restrictions

• Restrictions on net position

• Restricted fund balance

05/09/2023

05/09/2023

Local Maintenance Improvement Grant• Local Maintenance Improvement Grant (LMIG)

• LMIG is a formula grant• LMIG funds are purpose restricted• Purpose restrictions do not affect revenue

recognition• Fund balance/net position is restricted for

unexpended portion• Should not be reported as unearned revenue

Forfeited Assets

• UCOA requires a separate special revenue fund to be used to account for confiscated assets

• Expenditures restricted for specified purposes

• Required annual reporting to Prosecuting Attorney’s Council

05/09/2023

Hotel/Motel Taxes

• Separate special revenue fund

• Tax revenue reported in the separate special revenue fund first

• Restricted portion of tax accounted for in this fund

05/09/2023

Hotel/Motel Taxes

• Several different authorizing provisions

• Very important to be aware of the expenditure requirements of the specific provision authorizing the levy

• OCGA §48-13-51

05/09/2023

Hotel/Motel Taxes

• At least some of the proceeds must be spent for promoting tourism

• Annual report to DCA

• Prominently reflected in the audit required by OCGA §36-81-7 – submitted to DOAA

05/09/2023

Hotel/Motel Taxes

• Disclosed in audit:• Amount of funds expended or contractually

committed for expenditure during fiscal year• Amount of tax receipts during fiscal year• Expenditures as a percentage of tax receipts

05/09/2023

Hotel/Motel Taxes

• Noncompliance reported in audit

• Corrective action plan submitted

05/09/2023

DOAA Contact Information• Contact information for Financial Audits, the

Nonprofit and Local Government Audit Section

• Manager: Jacqueline Neubert • Email: [email protected]• Telephone number: 404-651-8938

• Section email address: [email protected]• Section telephone number: 404-656-9145

05/09/2023