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Ch10 Fiduciary

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on private citizen or other govt agency. What if gift given to City ... Pension depends on promises made regardless of stock market ... employer risk ... – PowerPoint PPT presentation

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Title: Ch10 Fiduciary


1
Ch10 Fiduciary Permanent Funds
2
Fund Type Review
  • Govt Funds
  • (Expendable type?)
  • GF, SRF, CPF, DSF, PERMANENT
  • Proprietary Type (NonExpendable?)
  • EF, ISF (ISF Elim in GWide)
  • Fiduciary
  • Pension, Investment, Agency, Priv. Purp
  • NO FIDUCIARY Funds in Govt Wide B/Sheet

3
Permanent vs. Private Purpose
  • Permanent Hold Prin Intact spend earnings on
    a GOVT purpose
  • Priv. Purpose
  • May/may not hold Prin Intact Usually do
  • Spending earnings and/or princ. on private
    citizen or other govt agency
  • What if gift given to City can spend principal
    AND interest on parks
  • Perm vs. Priv Purpose has to do with GovtWide
    B/S

4
Permanent Fund
  • Holds Principal
  • As soon as the interest is earned move it to the
    fund it is intended to support

5
Agency vs. Full Fiduciary/Trust relationship
  • Degree of responsibility
  • Agency fewer responsibilities
  • Holding just short term dont have to invest
    for interest revenue
  • Pension TRUST/Investment TRUST/Priv. Purpose
  • May expect quality portfolio mgmt .. Risk vs.
    return

6
AGENCY FUNDS
  • Accts Assets Liabilities ONLY
  • Common uses
  • Special Assmt Debt collections where govt not
    liable
  • Tax Collection for other govts
  • Pass through without Administrative
    Responsibility
  • Suspense fund Holding bin
  • Cash dr cr Liab to unknown?

7
Agency fund p. 41 supp.
  • Notice No allowance for B.Debts in agency fund
  • GF records revenues as usual
  • NO revenue or expenditure in Agency fund, but
    collects fee incr or decr liab
  • Fee Expenditure/Fee Revenue showing up in
    participating fund not AF

8
Pass through Issues p. 41 supp.
  • Is the money coming in and going back out a
    Revenue and Expenditure or not
  • Depends on Administrative Involvement
  • If no Admin Involv. then an agency fund is used.

9
Investment Pools
  • Similar to ISF to handle money but invest for
    good returns etc more like a fiduciary function
  • Pool often holds INTERNAL and EXTERNAL govt money
  • Only External money shows up in Fiduciary fund
    level statements.
  • Think about double counting .. cont

10
Investment Pools Cont1
  • GF Investment in Pool 1M
  • Cash 1M
  • Invest Cash 1M
  • Due to GF/Equity? 1M
  • Same money double counted if Internal money not
    eliminated in external statements

11
Investment Pools Cont2
  • Rules for all SLG Fund
  • Carry investments at Fair Value(MV)
  • Revalue at yr end and anytime a pool participant
    adds or withdraws money
  • Like MUTUAL FUND keep continuously at market

12
Investment Pools Cont3
  • What is the cr. Side of the entry
  • Cash 1M
  • Due to GF/Equity??? 1M
  • Not clear
  • See stmts p. 381
  • 1. Stmt of Fund Net Assets
  • 2. Stmt of Changes in Fund Net Assets
  • Additions/ Deductions vs. Rev/Expend.

13
Private Purpose Funds
  • Scholarship funds
  • Escheat funds
  • IF no owner/heir found asset becomes property
    of State ..
  • Possibly shared with lower govts.
  • Cash XX
  • Probable Liability ??? XX
  • Net Assets XX

14
Pension Trust Fund
  • Holds the assets that will be used to pay pension
    in future
  • Terms
  • Defined contribution fund
  • Pension depends on stock market performance
    employee risk
  • Defined benefit fund
  • Pension depends on promises made regardless of
    stock market employer risk

15
Pension Trust Stmts. P. 381
  • Stmt of Fiduciary Net Assets
  • Major Criticism No real measure of true PV of
    LIABILITY for defined benefit plans
  • Stmt of Changes in Fid. Net Assets
  • Note additions deductions
  • SUPPLEMENTAL DATA
  • Schedule of Funding Progress 381
  • Schedule of Employer Contributions
  • APC contributed
  • Also other info on assumptions, return etc.

16
IRS Section 457 Deferred Compensation Plans
  • Salary of 50,000
  • Can deduct some .. 10?? and set aside as
    deferred comp. not taxed until drawn out at
    retirement
  • Is it a Pension FUND in SLG Stmts?
  • Depends on whether govt participates in
    investment decisions
  • No participation then, separate set of books

17
OPEBs Other Post Employment Benefits
  • Fund similar to Pension fund IF funded
  • Not funded note disclosure
  • May cause expense/liability in Gwide stmts

18
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