Tennessee government accounting principles

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Tennessee's Comptroller of the Treasury Audit Division is responsible for state and local audits in Tennessee and is divided into the following divisions:[1]
  • County Audit - The division is responsible for annual audits of all 95 counties in the state. The division establishes standards for county audits conducted by public accounting firms. The division assists local governments with financial administration questions.
  • Municipal Audit - This division ensures that municipalities, designated school system funds, utility districts and government-funded, non-profit agencies are audited as required by state statute. The division investigates and issues reports on allegations of misconduct, fraud or waste in local government, often referring findings to other agencies for appropriate action.
  • State Audit - The Division of State Audit conducts financial and compliance and performance audits, conducts investigations, and performs special studies to provide the General Assembly, the Governor, and the citizens of Tennessee with objective information about the state's financial condition and the performance of the state's many agencies and programs.

Tennessee's audit reports are posted online. The Comptroller of the Treasury is a constitutional officer elected by a joint vote of both Houses of the General Assembly for a two-year term. Justin P. Wilson the current Comptroller.[2]

In a report published in May 2012, The Institute for Truth in Accounting (IFTA) rated Tennessee “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 23 states timely, 24 states tardy, and 3 states excessively tardy. IFTA does not consider the state's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[3] Tennessee's CAFRs are annual publications of the Tennessee Department of Finance and Administration. Dave Goetz is Commissioner of the Department of Finance and Administration, the governor's chief financial officer for Tennessee state government and manages over a $21.5 billion budget.[4]

Accounting transparency checklist

Truth 3.png

Comprehensive Y
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Balanced budget Y
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Timeliness Y
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Usability P

The good

  • The website has Comprehensive Annual Financial Reports (CAFR) dating back to 1997.[5]
  • An independent auditor’s report is published on page 10 of the document.[6]
  • It provides supplements to the budget workup, starting on page 111.
  • The budget is posted using organized and consistent methods of financial reporting.
  • Tennessee law requires a balanced budget and a deficit is forbidden.[7]
  • It includes all costs incurred by the government, including long-term liabilities, starting on page 30 of the document.[6]
  • The CAFR compares estimated and actual budgetary numbers, such as on page 114 of the document.[6]
  • The Tennessee office was timely in submitting the budget.

The bad

  • The CAFR is posted in a PDF format, so it’s not searchable online.

External links