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31 <br /> Honorable Mayor and Members of the City Council <br /> • City of St. Anthony, Minnesota <br /> Government Accounting Standards Board (GASB) Statement No. 34 <br /> GASB Statement No. 34 is the most significant change.in the governmental financial <br /> reporting model in over twenty years. This Statement establishes financial reporting <br /> standards for state and local governments. It establishes the basic financial <br /> statements and the required supplementary information to be included. The following <br /> are some of the major concepts of the Statement. <br /> - A section titled `management's discussion and analysis' must be added to the <br /> financial report and statements. This section is to be written by the City's <br /> management. The discussion should introduce the basic financial statements <br /> and provide an overview of the financial activities and an analysis of the <br /> City's financial performance for the fiscal year being reported on. <br /> - Government-wide financial statements will replace the current general purpose <br /> financial statements as they are referred to. The government-wide financial <br /> statements will group funds into either governmental type activities or business <br /> type activities; both will report on the accrual basis of accounting. Using <br /> the economic resources measurement focus, these statements should report <br /> all assets, liabilities, revenues and expenses of the City. These government- <br /> wide statements will report all capital assets and long-term liabilities within <br /> the funds, rather than in separate account groups. For example, debt issued <br /> by the City will be reported as a .liability of .a_fund rather than in the general <br /> long-term debt. account group. Debt payments will.be applied against the <br /> • liability rather than being reported as a current expenditure. Similarly all <br /> property and equipment will be capitalized and depreciated rather than being <br /> expensed at the time of acquisition. <br /> - Individual fund financial statements will also be included in the financial <br /> report. These statements retain the focus of matching funding with the costs <br /> of providing programs and services. These statements will be similar to your <br /> current financial statements. Governmental funds should be prepared on the <br /> modified accrual basis of accounting and proprietary funds on the accrual <br /> basis of accounting using the economic resources measurement focus. Although <br /> separate funds will be used, the emphasis in the reporting presentation will <br /> be providing information on the major or most important funds, with aggregate <br /> reporting the rest of the funds, rather than the current method of combining <br /> funds by fund types. <br /> - Required supplementary information must include: <br /> - budgetary comparisons in the financial statements and must include both <br /> the original budgets as well as amended budgets, <br /> - a reconciliation between the fund-basis and the governmental-wide financial <br /> statements, and <br /> - other types of financial data required by previous GASB pronouncements. <br /> The requirements of this statement are effective in three phases based on a govern- <br /> ment's total annual revenues (excluding extraordinary items) in the first fiscal <br /> • year ending after June 15, 1999 (i.e. December 31, 1999). <br />