MAJOR FUNDS DETERMINATION

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MAJ0R FUNDS CONCEPT

• A COMPROMISE BETWEEN THE MINIMUM SCOPE AUDIT AND THE FULL SCOPE AUDIT!

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MAJOR FUNDS CONCEPT
• MAJOR FUNDS MUST BE REPORTED
SEPARATELY • NONMAJOR FUNDS REPORTED IN THE AGGREGATE IN A SINGLE COLUMN • A BALANCE SHEET TEST OR AN OPERATING STATEMENT TEST
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IDENTIFYING MAJOR FUNDS
•THE GENERAL FUND
•THIS FUND IS ALWAYS MAJOR

•OTHER FUNDS (BALANCE SHEET OTHER TEST OR OPERATING STATEMENT TEST):

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IDENTIFYING MAJOR FUNDS – CON’T.
• A FUND NEED ONLY EXCEED 10% OF ASSETS OR LIABILITIES OR 10% REVENUES OR EXPENDITURE/EXPENSES A FUND MUST PASS THE 10% TEST BEFORE THE 5% TEST IS NECESSARY A FUND IS MAJOR IF THE 10% AND 5% CRITERIA ARE MET FOR A SINGLE ELEMENT
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• •

IDENTIFYING MAJOR FUNDS – CON’T.
IF ONLY GOVERNMENTAL OR ENTERPRISE FUNDS EXIST, THE 5% TEST IS NOT USED AND THE ENTITY NEED ONLY APPLY THE 10% TEST DATA TO BE USED FOR THE TESTS ARE THE GAAP AMOUNTS REPORTED IN THE FUND FINANCIAL STATEMENTS AFTER AUDIT ADJUSTMENTS
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IDENTIFYING MAJOR FUNDS – CON’T.
A GOVERNMENT MAY OPT TO REPORT A NON-MAJOR FUND AS A MAJOR FUND IF THE GOVERNMENT BELIEVES THE FUND IS OF PARTICULAR IMPORTANCE TO THE FINANCIAL STATEMENT USERS USERS. • • PUBLIC INTEREST LONG TERM DEBT
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IDENTIFYING MAJOR FUNDS – CON’T.
TOTAL REVENUES MEANS ALL REVENUES NET OF ALLOWANCES, (BOTH OPERATING AND NONOPERATING OR ENTERPRISE) EXCLUDING OTHER FINANCING SOURCES, TRANSFERS IN, AND GAINS FROM EXTRAORDINARY ITEMS (GOVERNMENTAL FUNDS)

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IDENTIFYING MAJOR FUNDS – CON’T.
TOTAL EXPENDITURES/EXPENSES MEANS ALL EXPENDITURES OR EXPENSES (BOTH OPERATING AND NON-OPERATING FOR ENTERPRISE) EXCLUDING OTHER FINANCING USES, TRANSFERS OUT AND LOSES ARISING FROM EXTRAORDINARY ITEMS (GOVERNMENTAL FUNDS)

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IDENTIFYING MAJOR FUNDS – CON’T CON T.
BALANCE SHEET TEST:
ASSETS OR LIABILITIES OF A FUND = 10% OR MORE OF