GASB 67/68 FOR MN FIRE RELIEF ASSOCIATIONS:
WHAT DO WE KNOW?
There has been some misinformation about what Minnesota cities and FRA’s are required to do in light of GASB 67 and 68. Here is what we know:
- The Office of the State Auditor (OSA) has informally indicated that non-compliance with GASB 67 would not affect a relief association’s eligibility for State aid. For FRA’s, the OSA is more concerned with statutory funding than financial reporting compliance.
- If a plan or employer fails to adopt GASB 67/68 reporting on their financial statements, it may trigger a qualified audit opinion. A qualified opinion will make it difficult for a city to receive the GFOA Certificate of Achievement for Excellence in Financial Reporting.
- It will be up to the city and relief association to assess the value of a clean audit opinion in deciding whether to comply with GASB 67/68.
- There were some hopes that lump sum plans could perhaps use their SC form as a basis for calculating GASB 67/68 results. However, there is no basis for assuming that the SC liability estimate would be close to a GASB actuarial calculation. Some auditors have stated that a true actuarial measurement is the only way to be sure that you’re complying with GASB and to determine the materiality of the liability.