Categorized in: Financial management GASB Local governments

Tags: reporting

Last fall, we posted an article strongly encouraging governments to start evaluating activities that might be classified as fiduciary activities under the Governmental Accounting Standards Board’s (GASB) recently issued Statement No. 84. The changes to fiduciary activity reporting are right around the corner – effective for reporting periods beginning after December 15, 2018 – and affect not only governments that report under generally accepted accounting principles, but those that report using the cash-basis accounting model as well.

It might be tempting to put off consideration of this new standard until all the guidance and examples are issued, especially for cash-basis governments that follow the Budgeting, Accounting and Reporting System (BARS) Manual. However, dedicating the time now to understand where fiduciary activities exist within your organization will put you in the best position to effectively implement these changes.

To help in your evaluation, we recommend using our Best Practices for Implementing New GASB Standards along with the specific suggestions below for getting started.


Staff with financial reporting responsibilities should start by reading GASB 84 itself, which is found at the GASB website. While the statement contains only 28 paragraphs, this pronouncement covers a lot of ground that accounting staff must consider, such as component units, pension and OPEB arrangements, and other activities that are fiduciary in nature, as well as how to report these activities in the financial statements. Paragraphs 11 through 13 require special consideration, as we believe this is where most governments might mistakenly interpret the criteria and incorrectly identify fiduciary activities.


Brainstorm about potential operations that may fit the definition of fiduciary activities, whether currently reported in an agency fund or not. Don’t rely solely on accounting and finance staff; rather, actively seek input from across organizational lines, involving department heads and midlevel management to gain a solid understanding the nature of potential fiduciary activities. You might need to involve third party service providers such as your OPEB plan administrator.


A member of the accounting staff should review general ledger accounts for fiduciary activities that might not be obvious. Special attention should be paid to liability accounts, revenue accounts with frequent or significant debit transactions, and miscellaneous accounts. If you identify potential fiduciary activities, you should evaluate further with those most knowledgeable about the activity. Also, review the activities already reported as agency funds to determine if they will remain in fiduciary funds or if the activities will need to be reported elsewhere.


Once your research is complete, you most likely will need to make some changes. Establish a plan to modify your agency fund structure to align with the four types of fiduciary funds as defined by GASB 84, including formal action by your governing body if required. Adjust accounting procedures to ensure fiduciary transactions are reported according to the specific guidance found in GASB 84. For example, you might need to change your procedures so that a liability to beneficiaries is only reported once an event has occurred to require a disbursement of assets.

Consider broader implications

Beyond just preparing for accurate annual financial reporting, spend some time considering other aspects of financial operations that may need attention. For example, monthly reporting to department heads and the governing body might need adjustment and could require additional explanation about the changes to those impacted. Budgeting processes might be affected, because resources and transactions might no longer be accounted for in their traditional funds. In certain circumstances, organizational changes might be needed for officials with responsibility for fiduciary activity to maintain that responsibility regardless of where the activity is reported.

Further guidance

Taking these steps now will allow you to identify questions or concerns in time for them to be addressed formally in GASB’s implementation guidance or the BARS Manual. We will update the BARS Manual with the new definitions for fiduciary fund types and new financial statement examples in January 2019, and will include guidance for governments that report under the cash basis of accounting at that time.

GASB has started drafting implementation guidance to answer common questions about the standard. As one of the nation’s leading auditors of state and local governments, GASB asked our Office to serve as part of a consulting group to provide feedback on the implementation guide throughout the standard-setting process. This gives us additional opportunities to advocate for clarifications needed to address situations in Washington. We encourage governments to use our HelpDesk to share any questions or concerns they identify with the new standard during their research.

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Categorized in: Financial management GASB Local governments

Tags: reporting