Streamlining Tennessee’s Finances with Uniform Chart of Accounts

Streamlining Financial Data: Tennessee’s Uniform Chart of Accounts Makeover

Embarking on an exciting financial journey, specific to Tennessee, starting from the audit year ending June 30, 2023, municipalities are required to join the party and convert their audited financial data to a uniform chart of accounts. Not only will this conversion lighten the load of pesky public records requests for statewide municipal financial data, but it will also set a standard format for data analysis. Talk about killing two birds with one stone!

Now, don’t panic just yet. Let’s make it crystal clear: this mandate doesn’t mean your municipality is forced to adopt the uniform chart of accounts. It’s more of a “take it or leave it” situation. The audited financial information that needs a makeover includes data from the fund financial statements, alongside all those fancy governmental and enterprise funds. And hey, let’s not forget to spruce up those Balance Sheets and Statements of Operations. Each line-item expenditure account should also be dressed to impress with its very own object code.

But wait, there are a few exceptions to this conversion party. Fiduciary fund types and the Government-wide financial statements get a free pass—they’re not invited. Discretely presented component units, except for the school department, will have to sit this one out. Sorry, blended component units, you’re still on the guest list. Now, don’t get all huffy—entities like emergency communications districts or airports won’t be part of the fun unless they’re considered part of the municipality’s funds.

Let’s dig a bit deeper, shall we? Those discreetly presented component units might be a bit shy, so they don’t show up in the financial statements themselves. Instead, they make a grand entrance in a separate column of the government-wide financial statements.

Last but not least to the party, we can’t forget about Internal School Funds (ISF). Don’t worry, their audits won’t be affected by this chart of accounts conversion. However, the ISF-special revenue fund  in the municipality’s financial statements should definitely be included in the municipality’s chart of accounts crosswalk. Now, our chart of accounts for ISF doesn’t need all those intricate line items, but it better reflect the line items reported in the municipality’s financial statements. Let’s keep it consistent!

As we wrap up, here’s a sneak peak—Utility Districts will be joining the party in the future, but for now, they’re sitting this one out.

Talk with your auditor or reach out to Fran McKinney, our Associate Director of Business Development to inquire about services to support this transition. Remember, a crosswalk conversion isn’t an audit, so there’ll be no formal opinion delivered.

For those municipalities who want to take matters into their own hands, we’ve got a little parting gift for you. The Local Government Audit Office of the Tennessee Comptroller Department has created an Excel crosswalk tool to help you with the transition. You’ll need your external auditors to give it a stamp of approval. And your CPA firm should be familiar with the chart of accounts you’ve been flaunting in your audited financial statements.

Once you’re all buttoned up and ready to go, just upload that converted data to the Comptroller’s CARS system, along with your audit report. It’s all about transparency!

If you need more details, head on over to the Municipal Chart of Accounts page on Comptroller.tn.gov

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Chazin and Company

With over a decade of experience working with local governments, we pride ourselves in having a unique understanding of local government accounting needs. Our dedicated accountants are constantly trained and updated on best practices and the changes to GAAP and GASB requirements that impact organizations. We offer proven processes, leading technology, unparalleled expertise and maximum transparency to help organizations succeed.

Hey there,

I'm Fran McKinney, the Associate Director of Business Development here at Chazin & Company. If you're a local government entity seeking reliable and efficient accounting services, you've come to the right place. We are dedicated to supporting your financial needs and helping you overcome the unique challenges that local governments face.

If you're ready to take control of your local government accounting needs, I invite you to schedule a call with me. Together, we can discuss your specific requirements and how Chazin & Company can provide the tailored solutions you need. Let's work towards achieving financial excellence for your local government.

Warm regards,
Fran McKinney

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