During May 2020, the Governmental Accounting Standards Board (GASB) issued Statement No. 95: Postponement of the Effective Dates of Certain Authoritative Guidance. This Statement provides temporary relief to governments and other stakeholders by postponing the effective dates of certain provisions in recent Statements and Implementation Guides. The postponement includes GASB Statement No. 84: Fiduciary Activities, which is now postponed by one year. GASB 84 was originally in effect for the current fiscal year ending June 30, 2020.
This postponement is an option for schools, but not a requirement. Schools can decide if they would like to continue and implement it in the current year. Schools have prepared for implementation for over a year and have approved budgets as required for their new special revenue fund. Schools have also set up new funds and new account numbers to prepare for the changes this Statement requires. To continue to implement it in the current year or postpone it is a choice each school must make. Michigan Department of Education (MDE) issued guidance in its May 2020 “State School Aid Update,” encouraging schools to work closely with their auditors to determine whether the postponement will result in any changes to planned 2019-20 financial reporting.
Yeo & Yeo agrees and stresses how important it is to plan. We recommend you discuss it with your auditor during the planning phase of the audit. To implement or not will significantly change your financial statements and affect many pieces of the audit. We do not recommend one way or another for implementing now or next year. This is each school’s decision based on what works best for them.
Additional Guidance
- MDE issued guidance in Section II (E.18) of the Michigan Public School Accounting Manual issued by the 1022 Committee.
- GASB states the objective of GASB No. 84 is to “improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported.” GASB published the GASB 84 Implementation Guide for Fiduciary Activities in June 2019.
- Yeo & Yeo issued various guidance including a webinar and a whitepaper, GASB 84: Understanding the Statement to Implement Efficiently in Your School District
Contact your Yeo & Yeo professional for assistance.