Categorized in: Financial management Local governments


After observing that governments were reporting fiduciary activities inconsistently, in January 2017 the Governmental Accounting Standards Board (GASB) released Statement No. 84, Fiduciary Activities. The statement clarifies what constitutes fiduciary activity and how to report it. While the standard provides important guidance, the State Auditor’s Office is concerned that lack of practical examples may lead government agencies to overlook or misunderstand the new requirements. For some governments, the audit implications of incorrect implementation may be significant.

What is a fiduciary activity?

GASB 84 defines fiduciary activities as those activities in which the related assets are:

  • Controlled by the government, and
  • Not derived from the government’s own-source revenues, government-mandated non-exchange transactions or most voluntary non-exchange transactions, and
  • Either administered through a trust to provide benefits according to benefit terms, or held by the government for the benefit of individuals or other organizations where the government does not have administrative or direct financial involvement.

The above is a summary, so as always please review the details of Statement 84 for specific criteria.

How do I report fiduciary activities?

Statement 84 requires governments to report activities that meet the criteria above in fiduciary financial statements as one of four types of fiduciary funds:

  • Pension and OPEB trust funds (for plans administered through a trust that meets criteria found in Statements 67 and 74, respectively)
  • Investment trust funds
  • Private-purpose trust funds
  • Custodial funds

The GASB allows business-type activities and enterprise funds to report fiduciary activities as a restricted asset and a corresponding liability in the Statement of Net Position of the business-type activity if the government normally holds those assets for three months or less. This treatment does not apply to governmental funds.

What potential implementation challenges has the State Auditor’s Office identified?

Despite providing important definitions, Statement 84 does not provide examples of the classifications for common situations using the criteria. As a result, governments may have difficulty interpreting or applying these concepts to their operations, possibly resulting in incorrect fiduciary reporting.

General-purpose governments such as cities and counties already report fiduciary fund statements. However, many governments – such as hospitals, ports and water districts – report their financial activity in a single enterprise fund. For these governments, fiduciary fund reporting may be new or unfamiliar, or may not seem significant for minimal amounts of financial activity. These factors could cause entities to inadvertently omit fiduciary fund statements in their financial reporting and not receive an additional required audit opinion, which could be significant.

What is the State Auditor’s Office doing about these concerns?

Our Office has consulted with GASB staff to confirm application for common situations, such as performance bonds, construction project retainage, tenant security deposits, state-mandated fees and donations. In addition, our Office has urged that GASB provide examples and additional clarification in implementation guidance before governments are required to report fiduciary activities under Statement 84.

Fiduciary activity reporting is effective for reporting periods beginning after
December 15, 2018. However, the State Auditor’s Office strongly encourages governments to begin evaluating potential fiduciary activities now to allow sufficient time for research and confirmation with GASB for uncommon situations before the statement’s effective date. Resources to assist with research and implementation of new GASB statements can be found in the “Financial Management” section of our Performance Center Resource Database at

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Categorized in: Financial management Local governments