Management Report and Recommendations 12/31/1995

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City of Lino Lakes, Minnesota Management Report, Page 45 CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING The City plans to submit the 1995 Comprehensive Annual Financial Report (CAFR) to the Government Finance Officers Association of the United States and Canada for a comprehensive review. The CAFR is reviewed by two individuals and graded in ten different categories. The CAFR must receive a unanimous approval of both reviewers. There are 855 cities in Minnesota of which 75 cities participated in this program and received the award. GOVERNMENTAL ACCOUNTING STANDARDS UPDATE The Governmental Accounting Standards Board (GASB) has issued its Preliminary Views document on major issues related to the Governmental Financial Reporting Model: Core Financial Statements. This document proposes significant changes in governmental accounting which will impact internal financial accounting and external financial reporting of the City. A summary of the key provisions of the preliminary views document is presented below: • Fund Perspective Financial Statements. These financial statements would be similar to current financial statements with modified accrual basis of accounting for governmental funds, accrual basis of accounting for business type activities (formerly enterprise and internal service funds). However, the GASB proposes a new definition for fiduciary funds and the elimination of the account groups. Entity -wide Perspective Financial Statements. These financial statements include full accrual accounting for all activities. The income statement will be replaced by a statement of activities using the net program cost format. Additionally, capital use charges (depreciation) on general fixed assets and infrastructure assets will be required to be reported in the financial statements.