ANNUAL FINANCIAL REPORT FOR CITIES State of Iowa

Auditor of State & Department of Management

Revised September 2019

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Table of Contents INSTRUCTIONS FOR ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30 .............................................................................. 3

384.22 ANNUAL REPORT ......................................................................................................................................................... 3

362.3 PUBLICATION OF NOTICES ........................................................................................................................................ 3

ANNUAL FINANCIAL REPORT SYSTEM LOGIN ......................................................................................................................... 4

NAVIGATING THE ONLINE AFR SYSTEM .................................................................................................................................. 6

NAVIGATING INSIDE THE FORMS ........................................................................................................................................ 7

ENTERING DATA INTO THE AFR .......................................................................................................................................... 8

COMPLETING DATA ENTRY AND SUBMITTING THE AFR ......................................................................................................... 9

SPECIFIC TIPS BY PAGE .......................................................................................................................................................... 13

GENERAL – ALL PAGES ...................................................................................................................................................... 13

REVENUES PAGES .............................................................................................................................................................. 14

EXPENDITURES PAGES ...................................................................................................................................................... 15

OTHER P10 ........................................................................................................................................................................ 16

QUESTIONS? .......................................................................................................................................................................... 16

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INSTRUCTIONS FOR ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30

The Office of Auditor of State, in partnership with the Iowa Department of Management, has developed this financial reporting form for use by Iowa cities. In accordance with Chapter 384.22 of the Code of Iowa, all cities are required to electronically file the annual financial report with the Auditor of State by December 1 each year. This report is to contain the actual revenues, expenditures and cash balances for the previous year ended on June 30. In addition, the city is required to mail or upload a signed copy of page one of the Annual Financial Report (“AFR”) and the proof of publication to the Auditor of State.

The AFR reflects the revised Uniform Chart of Accounts for City Governments in Iowa that was in effect for the fiscal year being reported. Below are instructions for completing the AFR through the online system provided at https://dom-localgov.iowa.gov.

384.22 ANNUAL REPORT Not later than December 1 of each year, a city shall publish an annual report as provided in section 362.3 (see below) containing a summary for the preceding fiscal year of all collections and receipts, all accounts due the city, and all expenditures, the current public debt of the city, and the legal debt limit of the city for the current fiscal year. The report shall be prepared on forms and pursuant to instructions prescribed by the auditor of state. A copy of this report must be electronically filed with the auditor of state not later than December 1 of each year. A signed copy of the All Funds P1 page must also be submitted by mail or upload to the Auditor of State's office along with the proof of publication or posting affidavit not later than December 1 of each year. Chapter 384.16 of the Code of Iowa requires certain information included in the AFR be used in preparing the annual certified budget. Property taxes will not be levied for the next fiscal year if a city fails to comply with statutory budgeting requirements and all state funds will be withheld (Chapter 384.16(7) of the Code of Iowa) until the city complies with these statutory requirements.

362.3 PUBLICATION OF NOTICES Unless otherwise provided by State law:

1. If notice of an election, hearing, or other official action is required by the city code, the notice must be published at least once, not less than four nor more than twenty days before the date of the election, hearing, or other action.

2. A publication required by the city code must be in a newspaper published at least once weekly and having general circulation in the city. However, if the city has a population of two hundred or less, or in the case of ordinances and amendments to be published in a city in which no newspaper is published, a publication may be made by posting in three public places in the city which have been permanently designated by ordinance.

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In the case of notices of elections, a city with a population of two hundred or less meets the publication requirement of this section by posting notices of elections in three public places which have been designated by ordinance.

Please note: this online application will work best if you use the most recent versions of Google Chrome or Mozilla Firefox. If you must use Internet Explorer, for best functionality we highly recommend using Edge or at least Internet Explorer 10. Please check your browser version and update accordingly prior to using this application.

ANNUAL FINANCIAL REPORT SYSTEM LOGIN The online AFR system can be accessed only via login at https://dom-localgov.iowa.gov. Login credentials can be obtained from the State of Iowa through the “Create An Account” link at the top of the AFR login page.

Once the link is clicked, the user will be required to enter their first and last name. Once the first and last name of the new user has been entered, click the green “Register” button.

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The next page will generate an account id, which is generally the first name and last name of the potential user separated by a period. This auto-generated account id can be changed to the user’s desire, as long as the account id is not already being used. A valid email address needs to also be entered. This email address should be an official city email address if possible. Once a valid email has been entered, click on “Save Account Details” to move forward.

An email will now be sent to the email address that the user has entered. There will be a link in this email that is required to click on to verify the supplied email address. Once the email has been verified, the next step in the process will be to create baseline identity questions. These questions come from dropdowns with preset options. Three questions must be selected and the answer to each question must be provided twice as confirmation that the answer has been correctly typed. Please be sure to type correctly. Once all required fields have been filled in, click on “Save Identity Baseline” to complete setting up the new account.

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Once an account has been set up, you will need to contact Ted Nellesen at DOM (ted.nellesen@iowa.gov) to get your account connected to your city. If the user already has a current A&A account, this account should already be linked to the correct City.

NAVIGATING THE ONLINE AFR SYSTEM Once the user has an A&A login and has had their username associated with a city in the online system, the user may login by going to https:\\dom-localgov.iowa.gov and entering their username and password.

Once logged into the system, the user will find a mostly blank screen. To the left of the screen will be a navigation pane. On the navigation pane there are options allowing the user to access the AFR and the budgets for the city. To access a user is assigned to, click on the “Annual Financial Reports (AFR)” option.

Clicking this option will reveal the city AFRs that are associated with the logged in user in the center of the screen. If the user is associated with more than one city, all of the cities the user is associated with will

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display. Most users will only be associated with one city. To access an AFR, click on the blue pencil on paper

icon that is on a line with the desired city to the right side of the screen.

Once the blue edit icon has been clicked, the AFR form will appear at the center of the screen. The navigation pane will still be available on the left side of the screen. In order to get more of the AFR form visible on the

screen at one time, click on the gray double arrows at the top left of the navigation pane. Clicking this icon will minimize the navigation pane and will fill the vacated screen with more of the AFR form.

NAVIGATING INSIDE THE FORMS Once inside the AFR form, new navigation links appear at the top of the page. Links to each page of the AFR are located at the top of the page. This links are named the same as the worksheet tabs in the Excel-based AFR forms that were used previously. Clicking on any of these links will change the form below to that corresponding page.

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The page of the form that you are currently on will appear with gray lettering, while the pages that you can navigate to will appear as blue links.

Also at the top of online form will be a series of buttons. Each of these buttons will be helpful at different times in the AFR process. Below is a breakdown of these buttons and what they do:

1. Instructions – clicking on the instructions bottom will bring up a copy of the written AFR instructions. These instructions will be in the form of a PDF and can be saved or printed.

2. Document Upload – clicking on this button will navigate the user to an upload app that allows for the signed AFR and proof of publication file to be uploaded rather than mailed.

3. Publish/Posting – clicking on the Publish/Posting button can only be done once the AFR forms is completely filled out and free of errors. This button will allow the city to enter the date that the AFR will be published or posted and will generate the AFR notice for publication.

4. Check Errors – this button can be clicked at any time to view errors that remain in the report. These errors must be cleared before the report will be allowed to be submitted by the city.

5. Save – clicking this button will save the report in its current form. The save button should be used frequently to guard against the loss of entered data due to technological hiccups.

6. Print – this button comes with a dropdown menu that will allow the city to print on paper or generate a PDF copy of the full report or publication page.

After 55 minutes signed in to the online AFR system, an orange notice ribbon will appear at the top of the screen. This notice ribbon is a warning that you will be signed out of the system in the next five minutes unless the session is renewed. To renew the session, simply click on the orange ribbon where it says “Renew”. Clicking on the ribbon before the countdown timer reaches zero will renew your session for another hour.

ENTERING DATA INTO THE AFR The online AFR system contains a color-coded system to show where data may be entered by the user. All cells where a user may enter data are colored light blue. Any cell in the form that is white is a cell that is automatically filled in by the system or by summing up the light blue cells.

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The city AFR contains ten pages where data can be entered. The pages are broken down into a summary page (All Funds P1), pages for logging revenues (Revenue P2 – P5), pages for logging expenditures (Expenditures P6 – P9), and fund balance & debt reporting (Other P10). These pages are discussed in more detail below.

COMPLETING DATA ENTRY AND SUBMITTING THE AFR Users may check the amount of errors remaining in the AFR form at any time during the entering of data by clicking on the “Check Errors” button at the top right of the entry screen. Clicking this button will create a pop-up window in the center of the screen that will list the remaining errors that need to be cleared prior to an AFR being allowed to be submitted to the State. This button may be clicked as many times as necessary during the completing of the form.

Once all errors have been addressed and the budget is ready to be submitted, the notice below stating, “Congratulations! No errors found” will be generated when the “Check Errors” button is clicked.

When the AFR form has no further errors, and is ready to be published or posted by the city, the “Publish/Posting” button at the top center of the page can be clicked.

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Clicking this button will run another error check to verify that the AFR form is ready for submission. If the AFR form is clear of errors, the message box that pops up will have a green “Proceed” button. Clicking this button will allow the user to move forward to submit the AFR.

After clicking on the green “Proceed” button, the user will be prompted to enter a date of publication or posting. The publication date entered should match the date the notice will appear in the paper or be posted at three locations within the city. Cities with 200 or less population as of the last census are required to post in three locations within the city. These three locations should be the same as the ones used for the budget public notices and should be adopted via ordinance. Cities with 201 or more in population as of the last census must publish the AFR notice in a newspaper of general circulation in the city.

Once the date of publication has been entered, push the blue “Submit” button to generate your publication notice. This notice will be a PDF that can be emailed to your publishing newspaper or printed. For posting cities of 200 in population or less, the All Funds P1 page can be printed as part of the full file and posted at the three locations.

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Once the publication/posting date has been entered, your AFR will be considered submitted in the online system. You will be able to print or save a full copy of the AFR by going to the “Print” icon in the top right of the report. This copy will be printable anytime until June 30 by logging back into the system and going to “Print”.

In order to have an AFR that is considered complete and submitted ahead of the December 1st deadline, a city will need to submit a signed All Funds P1 and proof of publication / signed Posting Affidavit. For cities 200 and under in population a Posting Affidavit will be included as a page of the online AFR. This should be filled out prior to entering the posting date and submitting the AFR. A signed copy of the Posting Affidavit will be required to be submitted with the signed All Funds P1.

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The online AFR system includes the option to upload your signed documents and proof of publication. When ready to upload the required signed documents and proof of publication, click on the “Document Upload” button at the top left of the AFR form.

Once the “Document Upload” button is clicked, a new tab will open. This new tab will redirect the user to a Google App titled “City Annual Financial Report Document Submission”. This app allows the user to send the signed All Funds P1, proof of publication, or signed Posting Affidavit to the State of Iowa electronically.

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The user will need to enter their name, email address and the name of the city for which documents are being provided in the top half of the app. The bottom half of the app contains a button allowing the user to select the file that they want to upload. The file being uploaded should be a PDF that contains both the signed All Funds P1 and the proof of publication/signed Posting Affidavit.

Once the user has entered the necessary information and selected the appropriate file for upload, the “Submit” button should be pressed. Clicking the “Submit” button will begin the upload process. This process may take up to a minute. Once the process is complete, the user will see a message stating that the upload has been completed. Once this message displays, close the tab to get back to the online AFR system.

If the user is unable to get these documents into one PDF, the “Document Upload” link may be clicked additional times to complete the necessary number of uploads.

Additional to the on screen message stating that the upload has been completed, an email will arrive in the inbox of the email that was provided in the upload app letting the user know that the upload has been completed. Once this message has been received, the AFR form and submission are complete.

SPECIFIC TIPS BY PAGE

GENERAL – ALL PAGES A. The financial activity of all city operations or departments, including departments with separately

maintained records and/or utilities that budget separately from the city, should be included in the Annual Financial Report. Also, include the financial transactions of the following agencies if they are

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operative in your city: airport commissions (single-city); housing authorities with ex officio boards; revitalization areas; urban renewal agencies; library board and telecommunications utilities.

B. Cities are required to use the online AFR submission system provided by the Office of Auditor of State & the Iowa Department of Management. This system can be accessed at https://dom-localgov.iowa.gov. Please be sure to complete all sections of the AFR (Part I through Part VII). All cells where data may be entered (input cells) are highlighted in light blue. Non-highlighted cells contain formulas and are protected. These cells cannot be changed. If you have an item that is not already identified on the form, include the item in the applicable area of each section.

C. If different funds or sections of the report are developed on a different basis of accounting or different reporting period, this should be disclosed in the report. It is not necessary to convert data to the same basis of accounting or to the same reporting period. Identify funds or sections and differences in reporting in the “Remarks” section of Other P10.

REVENUES PAGES A. If you budgeted on the basis of U.S. generally accepted accounting principles (GAAP), the Annual

Financial Report should be completed on that basis. If you budgeted on a NON-GAAP basis, usually on the basis of cash receipts and disbursements, the Annual Financial Report should be prepared on that basis. The applicable box has been marked for you based on your prior submissions. If the box marked is not correct, please mark the correct box on Revenue P2.

B. Investment activity, such as purchase and redemption of CDs or transfers between checking and savings accounts, should not be reported as receipts, disbursements, or transfers. These types of transactions merely exchange one type of asset for another and do not affect the city’s fund balances. These amounts should already be accounted for as part of the fund balance.

C. All Tax Increment Financing revenue should be reported in the "Special Revenue Fund, Urban Renewal Tax Revenue Account" (SRF-URTR) in accordance with Chapter 403.19(2) of the Code of Iowa. Disbursements for previously certified debt obligations should be recorded in the SRF-URTR account, including payment of principal and interest on TIF revenue debt issued in accordance with Chapter 403.9 of the Code of Iowa. If the City has general obligation debt which is payable from TIF collections, the City should record the revenue in the SRF-URTR account and transfer to the Debt Service Fund in accordance with Chapter 384.4 of the Code of Iowa for payment of the debt. TIF revenue debt should be recorded separately from other revenue debt and should include developer agreements and interfund loans. "TIF special revenue" activity should be reported in column (c) on Revenue P2- Expenditures P9 consistent with the certified budget.

D. Part I, Utility Franchise Tax — if the city imposes a tax on the gross receipts of private utility companies, report the proceeds of that tax here. These fees, established in accordance with Chapter 364.2 of the Code of Iowa, include systems for electric light and power, heating, telephone, telegraph, cable television, district telegraph and alarm, motor bus, trolley bus, street railway or other public transit, waterworks, and gasworks. Do not include the proceeds of the State sales tax on the receipts

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of the city-owned public utilities that your city collects and remits to the State on this line. State sales tax receipts should be included with the other receipts of the utility on Revenue P3 or P4.

E. Road use tax receipts and disbursements should be budgeted and reported in the City’s records and AFR in the Special Revenue Fund (not the General Fund) consistent with the City Finance Committee’s recommended chart of accounts for Iowa cities.

EXPENDITURES PAGES A. Part II, Section E, Community and Economic Development — all disbursements for economic

development should be reported in the Community and Economic Development function, regardless of the purpose of the economic development.

B. Part II and Part V, Debt service — Governmental fund disbursements for debt service should be reported at the appropriate line in part II. Report at the debt service line your disbursements for debt principal retired, interest paid, paying agent’s fees, and other costs of administering your city’s debt. Debt includes bonds, notes, pledge orders, anticipatory and stamped warrants, etc. In part V of the form, entitled Debt Outstanding, Issued, and Retired, repeat from part II the amount of principal retired for the various types of debt issued and the amounts of interest paid for the various types of debt issued. Enterprise fund disbursements for debt service should be reported as Business type activities, under "Proprietary," Column (h) of the AFR form.

C. Part II, Section I — Internal Service Funds — Budgeted and non-budgeted service funds (ISF). In accordance with the Chapter 384.20 of the Code of Iowa, all expenditures must be budgeted in one of the nine budgetary functions. A transfer from an operating fund to an Internal Service Fund does not satisfy this statutory requirement. Cities that budget ISF transactions in the ISF should include the receipts/revenues, disbursements/expenses and balances under "Proprietary," Column (h) of the AFR form. Cities that budget the contributions from operating funds (as expenditures/disbursements at the time of the contribution to the ISF), should not include the Internal Service Fund transactions under "Proprietary," Column (h) of the AFR form. However, the balance, remaining, if any, in the non-budgeted ISF, will be reported on the publication page in the appropriate section.

D. Part II, Section J — Other Financing Uses category is limited in its use to transfers out, the amounts paid to bondholders or placed in escrow in connection with advance refundings resulting in the redemption or defeasance of debt which use proceeds of the refunding debt, or the redemption of anticipatory debt or project warrants when one type of debt replaces another type of debt. Payments to debt holders or an escrow agent made from sources other than refunding proceeds should be reported as debt service disbursements.

E. All city pension payments should be included as direct expenditures. Where possible these payments should be included with the function being reported i.e., police, fire, etc. Exclude any payments to city administered and operated retirement systems.

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F. Consistent with GASB Statement 54, the breakdown of the ending fund balance at June 30 should be reported on Expenditures P9 in the five components of fund balance, as applicable, in columns a-g (governmental funds only) on lines 140-144 and totaled on line 147. The ending fund balance at June 30 for Proprietary funds should be reported in total only on line 146. The total governmental and proprietary ending fund balance is reported on line 147.

OTHER P10 A. Part V, Section B, Short Term Debt — Includes anticipatory warrants, pledge orders, and construction

warrants. This would include SRF planning and design loans. It does not include stamped warrants.

B. Part VI, Debt Limitation for General Obligation Debt — the city’s debt limitation is 5% multiplied by the assessed value of the taxable property. The appropriate valuation will automatically be entered on Other P10. The debt to be applied against the constitutional debt limitation includes all obligations payable from some component of the tax structure, including TIF, Hotel-Motel taxes, LOST, etc. Current year maturities are generally excluded from the debt limitation. The debt excludes interest unless there is not a distinction between principal and interest. Then the entire obligation is applied against the limit. Also, include capital lease purchase and rebate agreements which are subject to the debt limit.

C. Part VII, Cash and Investment Assets — 1. Bond and interest funds are reserves held specifically for the redemption of long-term debt. 2. Bond construction funds are funds that are used to account for the unexpended proceeds of long-

term debt, pending the disbursement of these funds. 3. Include the total cash on hand and in bank and investments in all funds. 4. For cash basis (non-GAAP) reporting, the total "cash and investments" in Par VII, column (e) on

page 10, should equal the amount reported as "Total actual" in column (c) as "ending fund balance June 30, 2018", plus amounts held in non-budgeted ISF, pension trust, private purpose trust and agency funds on the publication page [All Funds P1].

QUESTIONS? Auditor of State’s Office Iowa Department of Management

515-281-5834 515-281-3705 info@aos.iowa.gov ted.nellesen@iowa.gov