State Auditor's E-Update - 6/10/2022

1. Message from Auditor Blaha

2. Relief Associations: Reporting Deadline

3. TIF: Reporting Out-District Expenditures

4. Avoiding Pitfall: Collateralization

1. Message from Auditor Blaha

For the first time, Juneteenth is a paid holiday for many Minnesota state employees. Since Juneteenth is on a Sunday this year, the day off is Monday, June 20th. However, the Legislature did not include Juneteenth as a legal holiday for the purposes of transacting public business.

So, you may want to check in with the state offices or agencies you need to connect with on June 20th to see how they will be conducting business. In the case of the OSA, most of our staff will be off on Monday, June 20th. Give us a call if we need to make arrangements to meet your specific needs that day.

Want more information on the history of Juneteenth? Visit the Minnesota Historical Society’s resource page.

2. Relief Associations: Reporting Deadline

The 2021 reporting-year forms for volunteer fire relief associations with assets or liabilities of at least $500,000 are due to the Office of the State Auditor (OSA) by June 30. Relief associations with the June 30 reporting deadline are required to submit audited financial statements in addition to the reporting forms.

The reporting forms can be accessed through the State Auditor’s Form Entry System (SAFES).

Helpful hints for completing, submitting, and electronically signing the reporting forms can be found on the OSA website.

3. TIF: Reporting Out-District Expenditures

The TIF Act requires that authorities annually report the amount of any payments for activities and improvements located outside the district that are paid for or financed with tax increment. This includes activities both physically located outside of the TIF district, as well as costs defined as out-district costs under the pooling limitations. For example, authority administrative costs are defined as out-district costs. The TIF Annual Reporting Form includes a line item on the Project Costs tab where these costs should be reported. When preparing 2021 reporting forms, which are due by August 1, make sure that reporting on this line includes all payments made with tax increments for costs defined as out-district costs.

If you have any questions, please contact us at TIF@osa.state.mn.us.

4. Avoiding Pitfall: Collateralization

State law requires public entities to maintain proper collateralization of their accounts. Collateral provides protection for public funds in the event of a bank failure.

All public funds on deposit in a bank or credit union must be protected by deposit insurance, corporate surety bond or pledged collateral. Most financial institutions choose to pledge collateral for amounts not covered by federal deposit insurance. If the institution should fail, the governmental entity can then take the pledged securities to make up for any loss to its deposited funds.

For more information about the required collateral for public funds, see our Statement of Position entitled Deposits of Public Funds.

The risk addressed by pledged collateral is identified by the Government Accounting Standards Board (GASB) as “custodial credit risk”. Information on how custodial credit risk can be addressed in your investment policy is provided in our Statement of Position, Custodial Credit Risk: Investment Policy Considerations.

This Avoiding Pitfall is available on our website.