FAQs

Financial Reporting

What are the accounting-related State Reporting Requirements for Agencies?

Agencies that administer State funds, such as the Highway Fund, Risk Management Fund, Board of Accountancy Fund, etc. should research the enabling statutes that established the fund to determine the type and frequency of reporting requirements. Also, the statutes may require that the reports be audited prior to submission. Annually, the ADOA-GAO prepares two reports: 1) The cash basis Annual Financial Report (AFR) (A.R.S. § 35-131, F.); and 2) the Comprehensive Annual Financial Report (CAFR) on the Generally Accepted Accounting Principles (GAAP) basis of accounting. The CAFR is audited by the Office of the Auditor General. Agencies not required to have audited reports must complete the GAO Closing Package annually after fiscal year end to assist the ADOA-GAO in completing the CAFR. The Closing Package forms and instructions can be found in the "Publications" section of the GAO’s web site. The ADOA-GAO is available to assist agencies in researching the statutes and in preparing procedures to fulfill these requirements.

Financial Reporting

What are the accounting-related Federal Reporting Requirements for Agencies?

Agencies that receive Federal Financial Assistance are generally required to report to the Federal Grantor Agency on the activity of the grant. These reports usually include a quarterly financial report on receipts, disbursements and obligations (SF269). In addition, the Department of Administration, in conjunction with the Statewide Single Audit, is required to prepare an Annual Statewide Schedule of Expenditures of Federal Awards (SEFA). This Schedule includes the Catalog of Federal Domestic Assistance (CFDA) Number and total disbursements. This Schedule is subject to audit and is included in the Single Audit Reporting Package that is prepared by ADOA-GAO and audited by the Auditor General.

Funds

What is a Non-Appropriated Fund?

A non-appropriated fund is controlled by statute or other law rather than by the Legislature through the general or special appropriation process. A non-appropriated fund is controlled by the amount of cash that is in the fund and has continuous spending authority in that it does not require further legislative action. However, any disbursements from this fund must be for a valid public purpose and are subject to audit. Therefore, non-appropriated funds must be accounted for in the State Accounting System (AFIS). Non-appropriated funds include, but are not limited to, Federal Grants and Land Endowment Funds.

Funds

What is a Non-Reverting Fund?

A non-reverting fund is one in which its monies do not revert back to its original source.

Funds

What are the key Imprest Account Policies I should be aware of?

* Agency imprest accounts shall not exceed the amount authorized by ADOA-GAO. * An imprest account may only be established with the approval of the Department of Administration, General Accounting Office. * No disbursement may exceed $500. * Travel advances, expenses and reimbursements must not be paid from the imprest accounts. * The imprest account must be reconciled monthly by the agency. Additionally, annually, a copy of the June 30 bank and revolving fund reconciliations must be submitted to the ADOA-GAO Revolving Fund Coordinator for review; * The imprest account should never be used for making loans or any other unauthorized purpose. All imprest accounts are subject to audit by the Department of Administration who has the authority to request the return of the funds at any time. It is very important to review all other policies and procedures in section II., C., of the State of Arizona Accounting Manual to obtain a complete understanding of responsibilities related to imprest accounts.

Funds

What is a Reverting Fund?

A “Reverting Fund” is one that is usually appropriated and returns the unspent monies to its original source, often at the end of each fiscal year. A reverting fund may also return monies exceeding a particular cap in a fund as determined by the fund’s governing statute. This transfer is called a “revertment”. In most cases, the revertment is made to the General Fund but it can be to another fund providing that fund is the original source of the monies. In order to determine if a fund is reverting fund, either contact the ADOA-GAO or refer to the governing Arizona Revised Statutes.

Funds

How can I establish a new fund for my agency?

New funds are usually established through the legislative process by addition or amendment to the Arizona Revised Statutes. The Department of Administration is also given the authority to establish funds that are needed to carry out the requirements of the statutes. Periodically, an agency may also find it necessary to request that a new fund be created for accounting necessity or convenience. In order to create a new accounting fund, the agency must submit an application for the new fund to the ADOA-GAO giving the reason for the new fund along with the appropriate statutory reference. See the State of Arizona Accounting Manual for instructions on requesting establishment of funds.

Funds

What if my agency’s revolving fund (imprest account) custodian changes?

The fund custodian is the individual who applied for the revolving fund. The fund custodian is responsible for the fund’s money, accuracy, use and timely reconciliation of the revolving fund. If there is a change of fund custodian, the “Request for Revolving Fund” form, GAO-33 must be revised and submitted to the GAO. If GAO is not notified of a fund custodian change, any activity, including improper activity occurring in the revolving fund after the fund custodian has departed the agency is the responsibility of the agency director.

Funds

What is a Fund?

The State provides its citizens with a variety of services. In order to account for resources, obligations, revenues and disbursements the State uses the Fund Accounting method. A Fund is defined as a separate accounting entity with its own self-balancing set of accounts. Typically the largest fund in any governmental unit is the General Fund. Each budget unit is responsible for all of the activities of the funds assigned to them.

Funds

What are the common funds of which I should be aware?

Although not inclusive of all funds in the State, following are the more common funds you should be aware of for an agency your size: * The General Fund is used to account for all General Taxes and other Revenues that are not dedicated to be used for another purpose. * Special Revenue Funds are those that receive financing from a specific source that is to be used for a specific purpose. An example of a special revenue fund would be a 90/10 board. “90/10” is a term that is usually applied to a regulatory board such as the Board of Accountancy, Board of Medical Examiners, etc. The term “90/10” is used because the Fund is allowed to keep 90% of its revenue to carry out its regulatory responsibilities and the remaining 10% is deposited in the General Fund. “90/10 Funds” are considered to be “revolving” in nature because its expenses are financed 100% by its revenues. * Revolving Funds (imprest accounts) are used to account for resources in which a State Agency provides a service to another State Agency (e.g., Motor Pool) or to the general public (e.g., Arizona Highways Magazine). A revolving fund is a fund in which the amount of the cash receipts is normally equal to the amount of cash disbursements. In Arizona, there are five types of revolving funds: 1) internal service funds; 2) enterprise funds; 3) 90/10 funds; 4) statutorily mandated funds such as Public Assistance and Administration Revolving Fund; and 5) imprest funds. Specific accounting, reporting and reversion requirements of all types of revolving funds are established by statute. Please contact ADOA-GAO for more information. For the purpose of this document, we will focus on the application of the imprest funds.

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