Liabilities (Schedule 09)

4 Reporting

4.14 Supplementary and Other Information

4.14.13 Liabilities (Schedule 09)

4.14.13.10 The purpose of this schedule is to provide information about the liabilities of the local government. This schedule is required to be included as supplementary information with any audited financial statements.

4.14.13.30 Local governments are required to update the incorrect financial data submitted on this schedule. The requirement applies to all errors found prior or during an audit.

4.14.13.40 The schedule should be prepared on the same basis of accounting, for the same period and reporting entity, and using the same underlying accounting records as the Schedule 01 and financial statements. The schedule should include current and noncurrent liabilities. Local governments should report short-term liabilities even if they are both incurred and fully redeemed during the reporting period.

4.14.13.50 The schedule should exclude the following:

• Payments due to vendors or employees that are expected to be paid normally as part of the disbursement cycle, such as any accounts payable and payroll accruals that may not have been resolved during the open period.
• Operating leases or other contracts or commitments for future purchase of goods or services that have not yet been realized.
• Interfund payables and loans (for details regarding interfund loans see Loans).
• Liabilities of fiduciary funds.
• Assessment debt without commitments.

4.14.13.60 Governments should not report liabilities of fiduciary funds for which the government is not itself obligated. For example, a county would not report liabilities of special purpose districts.

4.14.13.71 Proper classification of grant and loan transactions require the analysis of the underlying documentation. The criteria for determining if a funding source is a grant (revenue) or loan (other financing source) is the existence of a note payable or loan contract. For annual report purposes, Schedule 09 should report all loans. Schedule 16 should report all federal grants, including grant loans – that is, loans from federal granting agencies that have continuing compliance requirements as described in the Schedule 16 instructions. For this reason, federal grant loans will be reported on both the Schedule 09 and 16.

4.14.13.90 All debt should be listed on Schedule 09, regardless if it is for operating, capital or refunding purposes. Debt should be reported at face value (that is, only the principal amounts of debt should be reported and not any anticipated interest). Provide total amounts of beginning balance, additions, reductions and ending balance. For reporting the LOCAL program related liabilities see 3.4.11.50.

Refunding transactions (including advance refunding through legal or in-substance defeasance) should be reported on the schedule as reduction of the refunded debt and addition of the new debt.

4.14.13.100 All the following types of liabilities should be included in the schedule using the most appropriate identifying number.

General obligation debt/liabilities

A general obligation debt or liability is one that is secured by a pledge of the full faith and credit of the government and its taxing power. This means that the government would be obligated to repay the debt using all available means, including raising taxes to the extent allowable by law. General obligation debt and liabilities are subject to constitutional and, for certain government types, statutory debt limits.

Revenue and other (non G.O.) debt/liabilities

Include in this category all obligations that do not have a specific general obligation pledge debt regardless of the fund type that is reporting this debt or liability. This category should include revenue debt, other secured debt (e.g., mortgages, etc.) and unsecured debt (e.g., compensated absences, etc.). Exclude the assessment debt. Revenue debt is secured by a pledge of revenue from a particular activity, such as a water utility. Unsecured debt and liabilities are those that do not specifically pledge an asset as collateral or revenue source for repayment. In cases where a debt or liability is secured by either a revenue or asset as well as a specific pledge of the government’s full faith and credit, the debt should be classified as general obligation using the codes listed above.

Assessment debt/liabilities (with commitments)

An assessment debt or liability is issued by the government but secured only by revenue from taxes on a certain area, such as a Local Improvement District. Only assessment debt with commitments should be reported on the Schedule 09. If the government is obligated in some manner to assume payments on special assessment debt in the event of default by the property owners, it is assumed the government has a commitment. In cases where the debt or liability is also secured by the government’s full faith and credit, the debt should be classified as general obligation using the codes listed above.

4.14.13.110 Instructions for preparer

List each obligation separately.

Identifying Number: Include appropriate number (see the listing on the previous page).

Description: Include the identifying name, number and/or description of the debt or liability. For bonds, notes, and other loans, list each debt issue separately providing date of original issuance.

Due Date: Use this column if there is a fixed date for final payment of the liability. If there is a payable or liability in which the final payment/due date is amended or re-evaluated annually via a contract or agreement (example: DSHS advances), the beginning contract date of the new contract should be used for the due date. If there is no fixed date for final payment, this column should be left blank.

This column is not required for the following I.D. Numbers:

239.70 Registered Warrants

259.12 Compensated absences

263.12 Claims and judgments

263.22 Liabilities for landfills closure and postclosure

263.51 Installment purchases (formally known as capital leases), installment-purchase agreements (e.g. rent to own), conditional sales and COPS

263.52 Installment purchases (formally known as capital leases), installment-purchase agreements (e.g. rent to own), conditional sales and COPS

263.56 Leases, for leases that the government is not purchasing the asset at the end of the lease

263.57 Leases, for leases that the government is not purchasing the asset at the end of the lease

263.93 Environmental liabilities (e.g. pollution remediation, certain assets retirement, etc.)

263.94 Lines of credit with a general obligation pledge

263.95 Lines of credit

263.98 Miscellaneous Liabilities

263.99 Miscellaneous Liabilities

264.30 Pension liabilities

264.40 OPEB liabilities

A due date is required for all Identifying Numbers not listed above.

Beginning Balance: This column should include the amount that was owed at the beginning of this period. The amount shown should equal the last year ending balance. If there is a discrepancy, please attach an explanation. Amounts should be rounded to the nearest dollar.

Additions: In this column report the entire amount of any new debt, any additional debt issued (or borrowed) and any increase in liabilities during the current period. For example, if a G.O. bond was authorized in the previous year at $5,000,000, with $4,000,000 issued that year and an additional $500,000 issued in the report year, this column should show $500,000.

Reductions: In this column, report the amount of debt that was paid or reduction of liabilities during reported period. Do NOT include interest paid on the redeemed debt. The total amount of redeemed debt should equal payments reported on Schedule 01 (object code 70). Include here decreases due to triggering a forgiveness clause or otherwise having debt forgiven.

BARS Code for Redemption: Applies to debt only. The code is optional except for cities and counties which are required to use 59195 for all debt related to streets and roads. This column is not presented in the final version of the schedule.

Ending Balance: In this column, report the amount of debt and other liabilities that were owed at the end of reported period.

Ending balance is calculated by adding Beginning Balance and Additions and subtracting Reductions.

4.14.13.120 The template for Online Filing is available on SAO’s website page at BARS Reporting Templates. When using the Online Filing option, the system will create the schedule based on data provided by the local government on the template. Governments can manually enter the information or upload an Excel file that adheres to the prescribed record layout. The prescribed record layout is shown in the template provided on the website. The following is an example of a completed schedule.