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Introduction
to Governmental Accounting Standards Board Statement No. 34 (GASB No. 34)
for New Jersey School Districts and the Users of their Financial Reports
What does GASB 34 mean to my New Jersey school district?
GASB 34 may be the largest transformation ever
in school district financial reporting. Ideally, all New Jersey districts
should have already made significant progress developing their district’s
unique GASB 34 implementation plan. Feedback to the Department of Education
indicates that, while many districts have developed their implementation
plans for the new reporting requirements, some districts may be unaware
of the need to develop such a plan. Consider that GASB 34 requirements
will be met on a timely basis only with significant advance planning.
Are all New Jersey school districts required to implement GASB 34?
Yes. GASB is the acronym for the Governmental
Accounting Standards Board. The board issued statement No. 34 in June
of 1999. Statement No. 34 is in accordance with GASB’s mission
to "establish and improve standards of state and local government
accounting and financial reporting that will result in useful information
for users of financial reports and guide and educate the public, including
issuers, auditors, and users of those financial reports." www.GASB.org
Why is GASB 34 important to my school district?
GASB No. 34 is a required financial reporting
model for all New Jersey school districts. Financial reporting under
GASB 34 will more closely resemble traditional commercial business financial
reporting. The result is that potential users of your district’s
financial statements will find your Comprehensive Annual Financial Report
(CAFR) more meaningful. GASB No. 34 includes a requirement that district
finance personnel prepare a Management’s Discussion and Analysis
(MD&A) as part of the newly designed CAFR. This requirement presents
the district with an opportunity to formally disclose important commentary
about the district’s financial status to the users of the CAFR.
When should my district begin to plan for GASB No. 34?
If your district has not yet started to plan,
begin now. The initial step is to determine whether your district possesses
the human resource capacity to properly develop its own unique implementation
plan. It is important to note that each district operates under a unique
set of circumstances. Reporting areas that are key elements for your
district may not be present in another district. Help may be necessary
in the form of consultants and other independent parties, including
the school district auditors. The district and its consultants will
need to first determine where the district fits into the implementation
schedule set forth in GASB No. 34.
The finance staff in my district is already burdened. Where can we turn
for help?
You should recognize that GASB No. 34 won’t
materially affect your district’s day-to-day accounting procedures
or the records generated by those procedures. GASB No. 34 is a required
financial reporting model, not a change in accounting method. However,
GASB No. 34 is a major undertaking and your district may require some
level of assistance to achieve proper implementation. Your district’s
independent auditor or consultant might be a valued source of guidance
during the implementation period. Your district may choose to ask your
auditor or consultant for guidance in designing your unique implementation
plan that focuses on the statement provisions that will directly impact
your financial reports. Many training references and programs are available.
While the Department of Education does not specifically endorse any
particular resources or programs, some recently
published materials are referenced within our site.
What other recently released GASB statements should my district be aware
of?
GASB released statements number 33, 36, 37
and 38 that your district must also currently consider. You may choose
to order copies of the statements directly from GASB’s order department
at 1-800-748-0659.
What is the role of the Department of Education with regard to GASB No.
34 implementation?
The New Jersey Department of Education (DOE)
has acted to advise New Jersey school districts of the need to implement
GASB No. 34 and the new financial reporting requirements through direct
correspondence and the development of our Web site content. The sample
financial statements presented on our Web site are intended to display
the DOE-preferred statement format under GASB No. 34. The Department
of Education will continue to facilitate awareness of the required changes
to the Comprehensive Annual Financial Report (CAFR).
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