Preparing your cash basis annual report package? Check out SAO’s updated checklist 

A new year has begun, which means it's time for cash-basis governments to close out the last year and begin preparing their annual financial reports.

We know that preparing your annual report takes a lot of time and effort, especially when there are significant BARS changes. That's why we created a Checklist for Preparing and Reviewing Cash Basis Financial Statements. It can help you detect steps that you might have missed before you submit your annual report to our Office by the May 30 deadline. 

We've updated the checklist for 2022 reporting, and it's now available in SAO's Resource Library. Before you download it, we want to highlight a few things and share some advice.

Leases are now on the checklist

The checklist has a new section for the most significant change for 2022 reporting: lease accounting. We've included five questions to help you double-check several aspects of your implementation. You should also refer to the Budgeting, Accounting and Reporting System (BARS) Manual for additional guidance on this important change.

New checklist items for other significant changes

We've added a checklist question for those that have conduit debt or financial guarantees, as there may be a circumstance that could cause you to report a liability on your Schedule of Liabilities. Conduit debt obligations are those that are in your government's name, but the debt proceeds and obligation to repay belong to a third party. However, in some of these debt instruments, the government may be required to make payments if the third party cannot. If it is more likely than not that you will have to make payments on behalf of the third party, then you must report a liability.

Our tool also has an added question for the newly required telecommunications note disclosure for counties, cities, ports, and public utility districts that provide any telecommunication services under RCW 54.16.330.

Pay extra attention when consolidating funds

The checklist has several questions about when you must combine funds for reporting purposes, and also reminds you to eliminate certain intrafund activity. For example, if you combine two managerial funds—and those funds had transfers between the two of them—then those transfers must be eliminated to avoid overstating financial activity. Make sure that you pay attention to these questions (15, 16, 21 and especially 28) and related requirements, as this is an area that frequently results in audit issues.

Other new questions added this year

We've also added new questions about allocating shared costs and accounting for loan forgiveness, based on our review of audit issues affecting cash-basis governments.

Consider using this tool before you file your annual report with our Office, to help you identify changes that need to be made to your annual report. Also, be sure to read the BARS update and alert page. This checklist only covers some of the more significant and commonly applicable changes from the prior year. You are still responsible for implementing all applicable updates.

For help

Remember, we are here to help. If you have specific technical accounting questions about leases or other topics, please submit them using our HelpDesk in the client portal.

We also have financial management specialists at SAO's Center for Government Innovation available to talk with you about best practices, resources or internal controls. For assistance, reach out to us at Center@sao.wa.gov.