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 67/68. 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.