September 2002

It is the Newsletter Committee’s goal to provide timely, educational and relevant information to the VGFOA members. Participation of the VGFOA members in providing feedback, writing relevant articles and/or providing other information to further the goals of the Newsletter Committee is strongly encouraged. Please visit the VGFOA website at www.vgfoa.org; contact VGFOA Board members or contact Newsletter Committee members for additional information and/or feedback. Newsletter Issues: March, June, September and December.

President’s Message – Bill Johnson

As the conclusion of the Association’s 35^th year approaches, we find ourselves in a statewide drought (weather and financial), implementing GASB 34, and dealing with diverse financial conditions. What an ideal time to mark your calendar on October 23-25 for the Annual Fall Conference in Richmond. Take time to stop and recharge your batteries with the exceptional educational, fellowship and networking opportunities that will be available.

The Board and its committees have been actively following current financial developments and preparing for upcoming educational opportunities. I extend a personal invitation to take ownership in your organization and become involved in a standing committee. Take this advantage to put your mark on the organization by bringing new energies and outlooks as we expand our educational and program offerings.

It is a pleasure to serve as your President, and as always, let us know how we can be of greater service to you.

CALENDAR OF UPCOMING EVENTS

October 23-25, 2002	VGFOA – Fall Conference	Richmond
October 28-29, 2002	Introductory Accounting	Hampton, VA

VGFOA Executive Board October 2001 - October 2002

The Executive Board generally meets quarterly in November, March, May and September.

Officers:

President: William E. Johnson, Director of Finance, City of Colonial Heights.

Tele#: (804) 520-9261. Email: johnsonw@colonial-heights.com

President-Elect: Joseph P. Casey, Director of Finance and Management Services, County of Hanover.

Tele#: (804) 365-6015. Email: jcasey@co.hanover.va.us

Vice President: Larry D. Clark, Director of Finance, County of Prince George.

Tele#: (804) 733-2610. Email: ldclark@princegeorgeva.org

Executive Secretary-Treasurer: Judy Gough

Tele#: (434) 973-3842. E-mail: rgough@hoos.net

Directors/ Chairpersons:

Awards and Membership Committee: Jeanne Colvin, Finance Director, City of Staunton.

Tele#: (540) 332-3822. Email: colvinjr@ci.staunton.va.us

Education Committee: Phil Grant, Director of Finance, Town of Vienna.

Tele#: (703) 255-6320. Email: finance@ci.vienna.va.us

Rebecca Owens, Finance Manager, County of Roanoke.

Tele#: (540) 772-2020, Ext. 327. Email: rowens@co.roanoke.va.us

Newsletter Committee: Terry S. Adams, Utility Controller, County of Hanover. Tele#: (804) 365-6016. Email: tsadams@co.hanover.va.us

Govt. Finance Research Committee: Mary E. Lechner, City Controller, City of Portsmouth. Tele#: (757) 393-5082. Email: lechnerm@ci.portsmouth.va.us

Technology Committee: Raoul James Kister, Finance Director, Albemarle County Service Authority. Tele#: (434) 977-4511, Ext. 107. Email: rjkister@acsanet.com

Past President: Shelley Carmichael, Assistant Director of Finance, County of Stafford.

Tele#: (540) 658-8692. Email: scarmichael@co.stafford.va.us

State Representative: Clarence C. Daniel, Jr., Accounting Division Director, County of Henrico.

Tele#: (804) 501-4557. Email: dan@co.henrico.va.us

Need the legislative information?

www.vaco.org – Virginia Association of Counties

www.vml.org – Virginia Municipal League

www.state.va.us – Commonwealth of Virginia

http://www.vipnet.org/portal/government/index.htm – Code of Virginia

Fall Conference Update – Joe Casey:

Annual Fall Conference

October 23-25, 2002

It is that rare time of year where we have an opportunity as an organization to come together for an educational and fellowship experience. You and hopefully other interested parties that you can forward this newsletter to are cordially invited to the VGFOA’s Annual Fall Conference in Richmond. As many of our membership will be implementing GASB 34 this year, we recognize the devotion and efforts that these members have to their workplace, but we also greatly encourage these same members to continue with their educational training, fellowship and opportunity to learn from the sessions offered and each other about manners in which we can even better enhance our organizations and enrich our job skills. Also, if you are still implementing GASB 34 by the time this conference arrives; you would want to have a break from this daunting project. In addition, we also recognize that during tighter fiscal times that budget capacity for educational training are often under-funded, therefore with the assistance of our sponsors, we have provided this conference at the same low registration fee of $190. If it were not for their support of the VGFOA, conference fees would rise sharply and/or the opportunity for such events to occur would be limited; therefore, please take the time to thank such sponsors when you see them at the conference.

Sessions have also been organized to best utilize your time for professional development and scheduled to appear are the following noteworthy individuals:

· John Bennett (Our goal is for Secretary Bennett to address the impact of State budget cuts upon local government);

· Nigel Morris, President of Capital One has been invited to speak (also Vice-Chair of Governor’s Commission on Efficiency and Effectiveness);

· State Senator Bill Bolling;

· Virginia’s Chief Economist John Layman and Federal Reserve Board’s Economist Ray Owens;

· All Three Bond Rating Agencies: Amy Laskey, Fitch Ratings; Julie Beglin, Moody’s Investors Services and Ken Gear, Standard and Poor’s;

· Many other sessions (over 20 in total) in hopefully what will be a balanced educational environment for the finance, budget, accounting and other fiscally related staff and management positions.

In addition to the opportunity for great educational and fellowship sessions, there are many entertainment and recreational opportunities available in Richmond for further fellowship. For those seeking further information about such activities, please call the hotel directly and/or visit www.richmond.com or DailyUpdate@Richmond.com. For those always looking for continuing professional education hours (CPE), this year’s conference will have a record 15 hours as we our having for the first time conference sessions starting Wednesday afternoon as part of the regular conference. In another “first”, we are providing a unique entertainment event after the Wednesday reception – a reenactment of Patrick Henry’s “Give Me Liberty or Give Me Death” speech at the place he gave such speech – St. John’s Church. With transportation provided to/from this event. The Thursday banquet will feature a nationally touring comedian and the traditional golf, tennis and Accounting Olympics will occur. We look forward to you attending this year’s conference and would be glad to try and accommodate any further interest or inquiry of the VGFOA that you may have.

If you have any questions, please contact Joseph Casey, President-elect and Conference Chair. Hanover County Director of Finance and Management Services. Telephone: 804-365-6012. E-mail: jcasey@co.hanover.va.us

GFOA Distinguished Budget Awards Program Winners - 2001:

The June 2002 edition of the VGFOA Newsletter did not include a complete list of the 2001 GFOA Distinguished Budget Awards. A corrected list is below.

Albemarle County Metropolitan Washington Airport Authority

Alexandria Newport News

Arlington County Norfolk

Blacksburg Poquoson

Chesapeake Portsmouth

Chesterfield County Prince William County

Culpeper County Prince William County Schools

Fairfax City Richmond City

Fairfax County Roanoke

Fairfax County Public Schools Roanoke County

Fauquier County Spotsylvania County

Frederick County Stafford County

Front Royal Vienna

Hampton Virginia Beach

Hanover County Virginia Beach Schools

Henrico County Warrenton

Herndon Williamsburg

Leesburg York County School Division

Loudoun County

VGFOA COMMITTEE REPORTS

AWARDS & MEMBERSHIP COMMITTEE:

Congratulations to Ari Sky, Assistant Budget Director, of Loudoun County as the first recipient of the VGFOA AGFI Scholarship. The Scholarship was in the amount of $1,500 and covered the registration cost for the GFOA Advanced Government Finance Institute that was held August 11-17^th in Madison, Wisconsin.

EDUCATION COMMITTEE – Phil Grant & Rebecca Owens:

Member Survey

Thanks to all members who completed the survey for the VGFOA Proposed Certification Program. The purpose of this survey was to determine the level of interest in government finance officer’s certification programs. The results of the survey indicated a strong interest in certification programs. The Board discussed the results of the survey at its August meeting. Stay tuned for more information.

The winner of the drawing for the free registration to the Fall Conference is Lisa W. Greer, Financial Analyst, County of Roanoke. Congratulations and thanks for your participation.

Summer Education Calendar

The VGFOA Education Committee and Radford University hosted many educational programs over the past several months. Educational offerings were Intermediate Accounting and MD&A Workshops. Thanks to all committee members that made these classes/seminars such a great success. Please contact Rebecca Owens or Phil Grant with suggestions for future educational offerings.

We appreciate your interest in the Virginia Government Finance Officers Association (VGFOA) Education offerings.

GOVERNMENT FINANCE & RESEARCH COMMITTEE – Mary Lechner:

In the National News…

Unfortunately, one of the most newsworthy notes of late falls under the caption of “a few bad apples”. Our profession, particularly those in the private sector and public accounting fields, are facing tarnished reputations, increasing public mistrust, and increased oversight and scrutiny - due to alleged corporate fraud by some major executives, which went undetected by their audit firms. For public sector finance professionals – given who are customers are - ACCOUNTABILITY should have always been our number one priority. But now more than ever - our actions must demonstrate the highest ethical standards.

As a result of recent events, President Bush signed into law the Public Company Accounting Reform and Investor Protection Act of 2002 (H.R 3763) on July 30, 2002. In general, this Act establishes a new accounting oversight board; creates a mandatory funding source from public companies for the board and the standard-setting body; imposes restrictions on auditors' provision of consulting services; and provides more severe penalties for corporate fraud.

From Norwalk, CT …

On July 1, 2002, the Governmental Accounting Standards Board (GASB) has published an Exposure Draft, Deposit and Investment Risk Disclosures that is intended to provide the public with better information about the risks that could potentially impact a government’s ability to provide services and pay its debts. The Exposure Draft would amend GASB Statement No. 3, Deposits with Financial Institutions, Investments (including Repurchase Agreements), and Reverse Repurchase Agreements. The comment period concludes on September 27, 2002.

In reflecting on the impact of the proposed accounting Statement, GASB Project Manager, Randal J. Finden, stated, "All investments carry some form of risk and those risks must be communicated to the public in financial statements. Deposit and investment resources often represent the largest assets of governmental and fiduciary funds. Proprietary funds also report significant deposit and investment balances. These resources are critical to delivering governmental services and programs."

Financial statement disclosures would cover deposit and investment risks. Credit risk disclosures would include credit quality information issued by rating agencies. Interest rate disclosures would include investment maturity information, such as weighted average maturities or specification identification of the securities. For investments that are highly sensitive to changes in interest rates—for example, inverse floaters, enhanced variable-rate investments and certain asset-backed securities—disclosures would indicate the basis for their sensitivity. Foreign investment disclosures would indicate the foreign investment’s denomination. Deposit and investment policies related to risks also would be disclosed.

The GASB has begun a comprehensive review of existing accounting standards. Its first project in this effort is the reconsideration of the existing requirements in Statement 3, evaluating the ongoing usefulness of current requirements by taking into consideration recent Federal banking reforms. The custodial credit risk disclosures of Statement 3 are being modified to limit required disclosures to deposits and investments exposed to significant custodial credit risk. For example, this includes deposits that are uninsured and uncollateralized and investments that are held by the counterparty—or holder of a deposit or seller of an investment—such as a bank in which the deposit is made.

The GFR Committee will be reviewing and commenting on the exposure draft. The effective date of the standard would be for fiscal years beginning after June 15, 2004. The Exposure Draft may be ordered by telephoning the GASB Order Department at 800-748-0659.

Statement No. 39 issued …

In May 2002, the GASB issued Statement No. 39, Determining Whether Certain Organizations Are Component Units—an amendment of GASB Statement No. 14. An objective of Statement No. 14, The Financial Reporting Entity, is that all entities associated with a primary government are potential component units and should be evaluated for inclusion in the financial reporting entity. This Statement amends Statement 14 to provide additional guidance to determine whether certain organizations for which the primary government is not financially accountable should be reported as component units based on the nature and significance of their relationship with the primary government. Generally, it requires reporting, as a component unit, an organization that raises and holds economic resources for the direct benefit of a governmental unit.

Organizations that are legally separate, tax-exempt entities and that meet all of the following criteria should be discretely presented as component units. These criteria are:

1. The economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the primary government, its component units, or its constituents.
2. The primary government, or its component units, is entitled to, or has the ability to otherwise access, a majority of the economic resources received or held by the separate organization.
3. The economic resources received or held by an individual organization that the specific primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to that primary government.

This Statement continues the requirement in Statement 14 to apply professional judgment in determining whether the relationship between a primary government and other organizations for which the primary government is not financially accountable and that do not meet these criteria is such that exclusion of the organization would render the financial statements of the reporting entity misleading or incomplete. Those component units should be reported based on the existing blending and discrete presentation display requirements of Statement 14.

The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2003. Earlier application is encouraged.

On GASB’s Calendar …

Tentatively scheduled for discussion at the GASB’s August meeting (we will update in the next newsletter):

Asset Impairment: The Board will continue deliberations on asset impairment measurement alternatives.

Environmental Liabilities: The Board will continue its discussion of project scope and measurement issues associated with the environmental liabilities project.

Economic Condition: The Board will continue its discussion of Phase II of this project. The discussion will center on the usefulness of the current statistical section schedules.

Budgetary Comparison—Perspective Differences: The Board will discuss the effects that perspective differences have on budgetary reporting requirements under Statement No. 34, Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments.

Financial Instruments: The Board will review a draft project prospectus of the financial instruments projects.

Other Post employment Benefits (OPEB): The Board will review the results of a preliminary field test of the alternative method for measuring OPEB costs and obligations and will consider the approach that is scheduled to be field-tested with small OPEB plans.

From Chicago, IL …

As we reported in our last issue – the VGFOA Executive Board voted to take an official position on GASB’s involvement in performance measurement, following the lead of other state GFOA organizations. Our concerns were shared by the national membership, resulting in the adoption of a new public policy statement, which strongly opposes the efforts of the Governmental Accounting Standards Board (GASB) to play a role in the development of performance measurement in the public sector. As stated in the policy statement, “GASB's involvement with SEA (Service Efforts and Accomplishments) is fundamentally incompatible with the understanding of performance measurement just described for several reasons:

· Performance measures are inherently budgetary and managerial in character and clearly fall outside the purview of accounting and financial reporting, as those disciplines have traditionally and commonly been understood. The GFOA emphatically rejects GASB's attempt to assert its own self-imposed and ill-defined concept of "accountability" to justify the extension of its jurisdiction to virtually all aspects of public finance.

· In the public sector, goals and objectives are the concrete realization and reflection of public policy. In a democracy, it is the unique prerogative of elected and appointed officials to set public policy. If GASB were to mandate the reporting of specific performance measures it would effectively be usurping this prerogative.

· There is no such thing as a "neutral" performance measure. The selection of what to measure will inevitably drive performance. Therefore, it is unrealistic to believe that performance measures mandated by GASB would remain purely informational and somehow not have an effect on how governments manage their programs. Even were GASB to establish completely "voluntary" measures of performance for those governments that wish to use them, the very existence of benchmarks established by a national standard-setting body would put pressure on governments to conform their own performance measures to GASB's model measures.

· GASB standards or recommendations would inevitably involve generic measures, which would break the crucial link between performance measurement and a government's specific goals and objectives.

· The inclusion of performance measures as part of financial reporting inevitably would require at least some degree of involvement on the part of the government's independent auditor, resulting in additional audit costs. While we freely admit that data verification is essential if performance measurement is to be credible, we do not believe it should be necessary to involve independent auditors for this purpose. Internal auditing procedures should suffice.

· GASB's expertise is limited to accounting and financial reporting. Expertise in accounting and financial reporting, while invaluable in many aspects of public finance, does not provide a sufficient basis for making decisions regarding how to measure the quality of services. Even if subject-matter experts were consulted, as the GASB promises, the fact remains that the ultimate decision would still be GASB's.

GASB's efforts ultimately will not succeed in helping the cause of performance measurement. Real progress must come from governments themselves and the organizations that serve them. GASB's efforts, however, could succeed at diverting scarce resources from the board's proper mission of improving accounting and financial reporting. GFOA believes that both performance measurement and accounting will best be served by the GASB returning to its proper role as an accounting and financial reporting standard-setting body.”

The full public policy statement can be found at www.GFOA.org.

From Richmond, VA …

The Auditor of Public Accounts has rescinded Chapter 6 of the Uniform Financial Reporting Manual effective for fiscal year 2002 reporting. Local governments should follow the accounting and financial reporting standards of the Governmental Accounting Standards Board.

This change in reporting includes the Treasurer's Accountability Statements. Local governments are not required to prepare or include the Treasurer's Accountability Statements in their annual financial report. This update will be included with the annual local government guidelines.

The APA has also revised the Specifications for Audits of Counties, Cities, and Towns. The attached 2002 revision completely supersedes the prior revision and is effective for the fiscal year 2002 audits. The manual is available from the APA web site at www.apa.state.va.us.

The Compensation Board recently issued new requirements for audit of Sheriff inmate funds, requiring that an audited statement of revenues and expenditures for each category of funds be provided to the APA by November 30.

GASB 34 IMPLEMENTATION HINT …

Be careful of the GFOA “blue book” illustrative examples – they are examples, not necessarily minimum requirements. Those detailed fixed asset schedules located in the illustrative other supplementary information (OSI) are NOT REQUIRED disclosure for a CAFR or for the certificate (confirmed by the GFOA). So unless you run out of things to do implementing GASB 34 …

Final Notes …

The next meeting of the VGFOA Government Finance and Research committee is tentatively scheduled to occur during the fall conference in Richmond – the specific date and time to be determined. I will be in touch with current committee members, but would also like to hear from anyone interested in participating. Please e-mail me at lechnerm@ci.portsmouth.va.us.

SOME GASB 34 RESOURCE LINKS

www.apa.state.va.us - APA GASB 34 Web site: Focus Group activities, links, revenue guidance, GASB 33 etc.

www.vgfoa.org – VGFOA official web site: Training calendar, GASB 34 and other training links

www.gfoa.org – GFOA official web site: Links to GASB 34 training, publications, etc.

www.vdot.state.va.us/info/gasb34 –VDOT policies and values

TECHNOLOGY COMMITTEE – Jim Kister:

The VGFOA website has survived a physical relocation on the Radford University server, and the tedium of re-design and platform transfer continues.

The mail list (vgfoa@acsanet.com) has been used several times to disseminate announcements and registration materials, and the addresses have been corrected to the point that a Street of Lost Addresses is no longer necessary on the web page. One final test before it is opened for general use is necessary, and will be performed at the beginning of September. Any newsletter recipient who did not get a test e-mail by September 5 should e-mail me at rjkister@acsanet.com, so that I can add or correct his/her address.

One of my recently assigned duties as a member of GFOA's Technology Resource Group is to study state finance association websites; I'll be using that information to improve and streamline ours as time and materials permit.

“BACK- PAGE”

This section represents a collection of various items submitted by the members that may be of general interest to all members. Included in this would be job opportunities; accomplishments and awards to members or their entities; general comments or viewpoints that you are willing to share; GFOA news; and updates on former members. Please feel free to e-mail any short narrative that you would like to include.

EMPLOYMENT OPPORTUNITIES:

KING GEORGE COUNTY

DIRECTOR OF FINANCE

This position performs highly responsible managerial work to direct all activities of the Finance Department as well as information technology and insurance activities. Duties include, but are not limited to, directing financial activities including purchasing, budgeting, accounting and payroll; directing staff and activities in area of information technology and insurance; preparing and reviewing financial reports; coordinating the annual audit; supervising, evaluating and disciplining subordinate staff; and planning and implementing department policies and procedures; employee will perform similar duties related to the King George Service Authority, including tracking of expenditures and preparation of reports for Rural Development loan. Requirements include possession of a bachelor’s degree in accounting, public administration or related field, municipal government experience and five (5) years of progressively responsible experience in the financial field, two (2) years of which must have been in a supervisory capacity. CPA is desired.

Applications will be accepted until the position is filled. Submit resume, cover letter and County application to Dennis W. Kerns, County Administrator at 10459 Courthouse Drive, Suite 200, King George, VA 22485 or by e.mail at admin@co.kinggeorge.state.va.us. Applications may be obtained from the County Administrator’s office, (540) 775-9181, 10459 Courthouse Drive, Suite 200, King George, VA 22485. King George is an Equal Opportunity Employer.

MANAGER OF ACCOUNTING SERVICES

CITY OF ROANOKE

Oversees the City's accounting and payroll systems. Supervises staff of the accounting, accounts payable and payroll functions. Establishes and oversees financial and accounting policies. Serves as Deputy Director and/or Director of Finance in their absence. Responsible for selection, installation, and oversight of accounting and payroll systems and procedures. Bachelor's degree from four-year college or university with a major in accounting; five to ten years related experience and/or training in accounting, a governmental operation and supervisory experience. CPA preferred. Starting salary $56,200 - 70,000 DOQ. EOE. Apply on the Internet - www.roanokegov.com, City of Roanoke, Department of Human Resources, 215 Church Ave. SW, Room 207, Roanoke, VA 24011.

Terry S. Adams, Newsletter Chairperson

Virginia Government Finance Officers Association

P. O. Box 470

Hanover, Virginia 23069