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Arapahoe County Finance Department Financial Reporting Policy I. Policy No.: 5.2 Version: 1.0 Resolution No.: 17XXXX Effective Date: Owner – Finance, Accounting Division Authority: The Local Government Audit Law (Section 29-1-601 et seq., C.R.S.) requires Colorado local governments to have an annual audit of their financial statements. The law states that the audit must be performed by an independent Certified Public Accountant (CPA) and be in accordance with generally accepted auditing standards (GAAS). The Board of County Commissioners has exclusive power to adopt the financial reporting policies to help support the county government, including all offices, departments, boards, and commissions. This includes the approval of the financial reporting practices of Arapahoe County. The Finance Department is responsible for and hereby authorized to carry out the policy directives of the Board of County Commissioners and establish the necessary procedures to do so. II. Purpose and Scope: There are numerous beneficial reasons for establishing financial reporting policies along with federal regulations, SEC regulations, statutory and other third party reporting requirements. A. The establishment of a financial reporting policy for the County provides for: 1. Fulfilling government’s duty to be publicly accountable and should enable users to assess that accountability 2. Assist users in evaluating the operating results of the governmental entity for the year and in assessing the level of services that can be provided by the governmental entity, the entity’s ability to meet obligations, and its financial condition. B. The establishment of an external audit policy for the County provides for: 1. Assurance for citizens, legislators and others that government funds are accounted for properly and that the County is in substantial compliance with laws and regulations 2. Provide an additional review by an external entity of the County’s internal controls over financial reporting C. The establishment of an external reporting policy for the County provides for: 1. Compliance with federal, state and other regulatory reporting requirements 2. Compliance with continuing disclosures for the debt that has been issued by the County 3. Maintaining the County’s history of receiving the GFOA Certificate of Achievement for Excellence in Financial Reporting Page 1 of 3 | Financial Policy 5.2 - Financial Reporting Policy III. Definitions: A. B. C. D. CAFR: Comprehensive Annual Financial Report C.R.S.: Colorado Revised Statutes EMMA: Electronic Municipal Market Access GAAP: Generally Accepted Accounting Principles are uniform minimum standards of and guidelines to financial accounting and reporting. GAAP establishes appropriate measurement and classification criteria for financial reporting. Adherence to GAAP provides a reasonable degree of comparability among the financial reports of state and local governmental units. E. GAAS: Generally Accepted Auditing Standards; are sets of standards against which the quality of audit are performed and may be judged. F. GASB: Governmental Accounting Standards Board, is an independent organization that establishes accounting and financial reporting standards for U.S. state and local governments that follow GAAP. G. GFOA: Government Finance Officers Association; The Government Finance Officers Association (GFOA), represents public finance officials throughout the United States and Canada with the mission of enhancing and promoting the professional management of governmental financial resources by identifying, developing, and advancing fiscal strategies, policies, and practices for the public benefit. IV. Policy: It shall be the policy of Arapahoe County to maintain a proper level of financial reporting in order to meet all regulatory, statutory and external third party reporting requirements, as well as to adhere to recognized government finance best practices wherever appropriate. A. Financial Reporting Standards 1. The Finance Department shall apply generally accepted accounting principles (GAAP) (see Basis of Accounting Policy, 5.1) as the basis for financial reporting. 2. The Finance Department shall apply the Governmental Accounting Standards Board (GASB) financial reporting principles as the primary authoritative guidance for governmental financial reporting. 3. The County will issue a CAFR annually and make it available for general public viewing as soon as it is available. B. External Audit Requirements 1. The County shall engage a qualified external auditing firm annually and cause the financial audit to be conducted in accordance with the Local Government Audit Law (Section 29-1-601 et seq., C.R.S.). The County shall engage the same qualified auditing firm and cause the single audit to be conducted annual in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Uniform Grant Guidance, establishes standards for obtaining consistency and uniformity for audits of states, local governments, and nonprofit organizations expending federal funds. C. External Reporting 1. Federal Reporting Requirements Page 2 of 3 | Financial Policy 5.2 – Financial Reporting a) The County shall comply with Title 2 CFR Part 200, §200.512 Report submission requiring the single audit to be completed and the data collection form in a timely manner annually. 2. State Reporting Requirements a) The County shall comply with the Colorado Local Government Audit Law and file its financial statements annually with the Office of the State Auditor on a timely basis. 3. Securities and Exchange Commission a) The County shall comply with all SEC regulations, and in particular, Rule 15c2-12 (the Rule) to provide certain information concerning its tax exempt and taxable debt issuance on a continuing and timely basis. 4. GFOA Reporting Requirements a) The County will continue to pursue the GFOA’s Award for Excellence by preparing its CAFR in accordance with GFOA recommendations as appropriate and submitting its CAFR in a timely manner each year. V. Responsibility It is the responsibility of the Finance Department to ensure that all of the aforementioned financial reporting is conducted in compliance with all applicable federal, state and other regulatory requirements and filed timely. I. Related Documents and Procedures: A. Colorado Revised Statutes – Title 29, , Article 1, Part 6 Local Government Audit Law B. Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements—and Management's Discussion and Analysis—for State and Local Governments C. Title 2 CFR Part 200 (Uniform Grant Guidance) D. SEC Filings – Rule 15c2-12 Page 3 of 3 | Financial Policy 5.2 – Financial Reporting