Fire Relief Association Audit Requirements – Part II
Two important documents which fire relief associations with assets or liabilities of at least $500,000 must annually submit to the Office of the State Auditor are: 1) audited financial statements and 2) a separate financial reporting form, countersigned by the municipal clerk or clerk-treasurer. The financial reporting form must also be presented to the city council and maintained in the relief association’s office for public inspection. The relevant statute is Minn. Stat. § 424A.014.
The audited financial statement must comply with generally accepted accounting principles (GAAP), which require that a Management’s Discussion and Analysis (MD&A) be included in a relief association’s audited financial statement. If the MD&A is not included in the audited financial statement, the omission should be noted in the Independent Auditor’s Report.
To meet the requirements of GAAP, the General Fund is reported in the financial statements with adjustments from modified to full accrual basis of accounting. The Special Fund is reported as a fiduciary fund with a statement of fiduciary net position and a statement of changes in fiduciary net position.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions includes a legal compliance checklist for auditors of fire relief association financial statements. Fire relief associations should also comply with the Governmental Accounting Standards Board (GASB) Statement No. 67. The Legal Compliance Audit Guide is available here.
Date this Avoiding Pitfall was most recently published: 11/1/2019