Attention Required ... STAT!(ACCOUNTING)

• Author: Levine, Michele Mark

As most readers know, annual comprehensive financial reports (ACFRs) are composed of at least three sections: an introductory section, a financial section, and a statistical section, often referred to (affectionately, of course) as the "stat" section. The requirements for a statistical section are found in the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting Standards Section 2800, "Statistical Section." (1) The codification identifies the objectives of a statistical section as providing "... additional historical perspective, context, and detail to assist in using the information in the financial statements, notes to financial statements, and required supplementary information to understand and assess a government's economic condition." (2) Codification Section 2800 is interesting in that it constitutes generally accepted accounting principles (GAAP) that must be followed by governments "... that prepare a statistical section that accompanies the basic financial statements," even governments that don't prepare a full ACFR--although GAAP don't require governments to prepare a statistical section in the first place!

Independent auditors generally disclaim an opinion on a government's statistical section, which may lead some to treat it as a low, or at least lower, priority. (3) Also, as many of the section's tables include information extracted from the basic financial statements (BFS), they cannot be finalized before those statements are finalized, perhaps resulting in less-than-thorough reviews. If last-minute adjustments are made to BFS, governments may forget to make the corresponding changes in the statistical section. Whatever the reasons, there are at least a half dozen errors that we see fairly frequently in the statistical section of ACFRs, many of which GFOA has been seeing since the implementation of the current financial reporting model more than 20 years ago!4 So, let's take the opportunity to refresh our memories on these old topics, and--so we're not always going to be playing catch-up--let's also plan for the effects that some recent GASB pronouncements will have on amounts reported in statistical sections in the very near future.

The statistical section includes information on the reporting government's:

* Financial trends--how financial position has changed over time.

* Revenue capacity--ability to generate own-source revenue.

* Debt capacity--level of debt burden on taxpayers and the...