YEAR-END PROCEDURES AND FINANCIAL REPORTING
1.0 Statutory References
CGS Section 3-115 4-89
2.0 Year-End Closing Overview
The purpose of year-end closing is to determine the final balances of
appropriations, revenues, expenditures, assets, liabilities and fund
balances needed to prepare financial statements and other reports on the
results of operations and the financial condition of the State's funds.
3.0 Basis of Accounting
The basis of accounting refers to when revenues and expenditures,
expenses and transfers - and the related assets and liabilities - are
recognized in the accounts and reported in the financial statements.
3.1 Modified Accrual
The Modified Accrual basis of accounting is applicable in the
governmental fund types and expendable trust and agency funds. Under the
modified accrual basis of accounting, revenues are recorded when they are
susceptible to accrual. In order for revenue to be considered susceptible to
accrual it must be both measurable and available to finance current
expenditures of the fund. Revenue is considered available when it is
collectible during the current period and the actual collection will occur
either during the current period or after the end of the period but in time
to pay current year-end liabilities.
Expenditures under the modified accrual basis of accounting are
recognized when the related fund liability is incurred. Exceptions to this
(1) principal and interest on general long-term debt which is recognized
(2) obligations of an employee's vested annual leave and sick leave are
recorded as expenditures when paid and
(3) inventories which may be considered expenditures when purchased.
3.2 Accrual Accounting
The Accrual basis of accounting recognizes revenue when earned and
expenses are recognized when incurred. This accounting basis is utilized in
the proprietary funds, non- expandable trust funds, pension trust funds and
the higher education and university hospital fund. Exceptions to this rule
occur in the higher education and university hospital funds, as follows:
depreciation expense related to plant fund assets and accrued vacation and
sick leave are not recorded.
3.3 Statutory (Budget) Basis
Connecticut uses a "Modified Cash" basis for budgetary enactments and
legally required financial reporting. It is important in governmental
accounting to report the results of operations and other financial
information on a basis consistent with that used in budgeting in order to
demonstrate legal compliance and to disclose the effectiveness of the
3.4 GAAP Basis
GAAP financial reporting uses accounting and disclosure conventions
established by a national standards setting body (the Governmental
Accounting Standards Board, GASB). GAAP financial reporting provides
legislative and oversight officials, creditors and the citizenry with
comprehensive financial reporting in a manner directly comparable with other
The Comptroller is committed to the preparation of a Comprehensive Annual
Financial Report (CAFR) on a basis consistent with Generally Accepted
Accounting Principles (GAAP).
4.0 Reporting Differences
4.1 Reporting Entity
The GAAP report includes organizations and funds not currently reported
such as Treasurer's Trust Funds, Special Local Funds and Public Benefit
Corporations which come under the State Reporting Entity.
4.2 Basis of Accounting and Assets and Liabilities
The GAAP report utilizes modified accrual and accrual accounting for
revenue and expenditure items as well as incorporating many assets and
liabilities not currently accounted for in the statutory financial
4.3 Format and Disclosure
Footnotes and statistical tables provide users with needed information
for interpreting the financial statements and assessing the overall economic
condition of the State. The format of the GAAP report differs from statutory
reporting due to the unique reporting for Higher Education and other
4.4 Agency Accounting and Reporting
GAAP reporting supplements rather than replaces statutory accounting and
budgetary requirements; and GAAP reports are only generated annually.
Therefore, it is not required that day-to-day accounting activities be on a
GAAP basis as this would interfere with statutory appropriation and revenue
compliance and/or internal management accounting needs.
Agencies are required, however, to maintain their financial records in a
manner which will enable them to provide the required adjustments to legal
balances and other information necessary for the Comptroller to prepare a
GAAP annual report. This information must be in the format required by the
Comptroller, in a timely manner consistent with the statewide closing
schedule, and susceptible to audit and verification by the Auditors of
5.0 Statutory (Legal) Closing and Reporting
5.1 General Information
Statutory (legal) closing refers to the recording of final balances of
revenues, expenditures and appropriations on the budget basis.
General information is contained in each section of SAM for fiscal
year-end procedures relating to its topic. Extensive supplementary
information and exact cut-off dates are also published annually as Fiscal
5.2 Schedule of Events and Reporting
1. May 1st - Fiscal Year-End Instructions Issued
2. June 1st - Notification to OPM by agencies of budgeted appropriations
which qualify and are needed for continuance.
3. June (3rd week) - Cut-off for submission of commitments, expenditures
and transfers. Exact dates will be published in the fiscal year-end
4. June 30th - Fiscal Year-End Final Deposits for Trust Funds
5. July 5th - Noon of - Deadline for submission of State Deposit Slips
(CO-39) for all monies deposited in bank depositories on or before June
30th. Deadline for deposit of all monies received by agencies on or before
June 30th. These monies are still subject to the 24 hour deposit
requirements for amounts over $500 according to CGS Section 4-32. Deposit
Slips (CO-39) should be immediately prepared and submitted to the Treasurer.
6. July 25th - Submission of Cash Held by Agencies - Reduced Expenditure
Report. See the Reporting Section of SAM.
7. July 4th Week - Deadline for submission of agency corrections for old
year expenditures and receipts.
Other reports which may be required of some or all agencies are described
in the Reporting Section of SAM or agencies will be notified by the
6.0 GAAP Closing and Reporting
6.1 General Information
A GAAP closing is the process of gathering the information needed to make
adjustments and additions to the statutory accounting records required to
produce a CAFR in conformance with GAAP. There are significant accounting
policies governing the information that must be collected. The State has a
detailed process that must be followed annually for compiling and auditing
6.2 GAAP Closing Schedule
The following is a general outline of the scheduled events necessary for
a successful GAAP closing.
1. May - Distribution of Closing Package forms and instructions
2. May - June - GAAP Training for Agency Personnel
3. June 30th - End of Fiscal Year
4. September - Submission of closing packages by all agencies
Adherence to this schedule by all concerned is critical to a successful
closing. Once closing packages are received, substantial effort on the part
of the Bureau of Financial Analysis staff and the Auditors of Public
Accounts will remain as packages must be analyzed, questions resolved,
journal entries and footnotes prepared, preparation of the CAFR and audit of
all information contained therein.
6.3 Annual GAAP Training for Agencies
A single non-mandatory training session in May or June will be made
available to any agency that has new personnel to train or who has personnel
who would like to refresh their knowledge. Additionally, certain key
agencies will receive on-site training and assistance to ensure successful
completion of their closing packages.
The purpose of the general training session is as follows:
- To review GAAP and the general process of GAAP reporting
- To explain any changes to GAAP since the preceding year and their
impact on closing practices and forms
- To review in detail the closing packages and the manner in which they
are to be completed
6.4 GAAP Closing Packages and Procedures
The link below will display the actual general closing package and
instructions for all agencies which were used for the FY 2010 closing.
Packages and instructions are updated annually for improvements in the forms
and instructions and to incorporate any changes to GAAP effective for the
year being reported on.
In addition to the general packages, special supplemental forms and
instructions will be provided to those agencies with unique information
The current forms include a GAAP Forms Control Sheet and the following
1. Cash in Bank
3b. Due from Other Governments
4. Deferred Revenue
5. Contractual Commitments and Retainages
6. Leases - State as Lessor
7. Compensated Absences
8. Other Financial Information
9. Other Assets or Liabilities
6.5 Comptroller GAAP Reports
The OSC Bureau of Financial Analysis staff generate several reports in
Core-CT to facilitate the GAAP closing and minimize the amount of
information to be provided by agencies. These reports are based on the
assumption that the agency-entered information in Core-CT is accurate. For
example, Accounts Payable staff must enter the correct Receipt Date to
ensure that the Accounts Payable amounts as of June 30th are accurate.
Purchasing and Contracting staff must ensure that the dates on contracts,
obligated amounts, and contract periods are accurate. Core-CT is an ERP
system that can create many of the needed reports to reduce the reporting
burden on the agencies, however, it is critical that the information is
6.6 Statewide Audit
The information submitted by agencies for the GAAP closing will be
subject to audit by the Auditors of Public Accounts in order that they may
certify the resulting financial statements.
Agencies must therefore prepare and retain for audit the necessary
worksheets and other documentation necessary to provide an audit trail for
any information submitted as part of the GAAP closing.
7.0 The Comprehensive Annual Financial Report (CAFR)
7.1 General Information
The GASB, in their Statement of Principle for Annual Financial Reporting,
recommends that every governmental unit prepare and publish a CAFR. The CAFR
is the governmental unit's official annual report which, in addition to
financial statements, also contains introductory and statistical
information. The financial, introductory, and statistical sections are
intended to satisfy the information requirements of the many users of the
7.2 CAFR Sections
7.2.1 Introductory Section
State Comptroller Letter of Transmittal
Connecticut State Organization Chart
Selected State Officials
7.2.2 Financial Section
Independent Auditor's Report
Management's Discussion and Analysis
7.2.3 Basic Financial Statements
State of Net Assets
Statement of Activities
Governmental Fund Financial Statements
Proprietary Fund Fund Financial Statements
Fiduciary Fund Financial Statements
Component Units Financial Statements
Notes to Financial Statements
7.2.4 Combining Funds Statements and Schedules - NonMajor Funds
7.2.5 Statistical Section
Completed CAFRs can be seen at:
7.2.6 Connecticut GAAP Accounting Policies
7.3 Reporting Entity
In conformance with Generally Accepted Accounting Principles, the
Comprehensive Annual Financial Report (CAFR) of the State of Connecticut
includes all departments, agencies and other organizational units over which
the State exercises oversight responsibility.
The ability of the State to exercise oversight responsibility over
agencies and other legal governments is determined after applying the
A. Financial interdependency
B. Selection of governing authority
C. Designation of management
D. Ability to significantly influence operation
E. Accountability for fiscal matters
F. Source of revenues
G. Scope of public services.
8.0 Fund Accounting
The financial activities of the State are accounted for on a fund basis.
The operations of each fund are accounted for with a self-balancing set of
accounts comprised of assets, liabilities, fund equity, revenues and
expenditures or expenses. Government resources are allocated to and
accounted for in individual funds based upon the purpose for which they are
to be spent and the means by which spending activities are controlled. These
funds are classified into three broad categories: governmental funds,
proprietary funds and fiduciary funds.
In addition to the fund types used in statutory accounting and reporting,
a "fund type" has been established for GAAP financial reporting purposes
only to account for Higher Education and University Hospital activities.