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GASB 84 Fiduciary Activities

Posted by Admin Posted on May 13 2021

Implementing GASB 84 Fiduciary Activities in School District Financial Statements has arrived.  Are you ready?

Let’s look at some characteristics of activity that would qualify as fiduciary activities

For purposes of this discussion, we will intentionally be ignoring any fiduciary funds that are Pension or OPEB related and focus on other fiduciary activities, more specifically those club and athletic activities.

Activities are fiduciary activities if they meet all the following:

1. The School District holds the asset or has the ability to expend or consume the asset or exchange the asset in a manner that benefits the intended recipient.

2. The assets associated with the activity are not derived from revenues generated by the School District or by the School District’s assets.

3. The assets associated with the activity have one or more of the following:

  3a. The assets are legally protected from the School District’s creditors,

  3b. The School District does not have administrative involvement with the assets or direct financial involvement with the assets.  Nor are the assets derived from the entities provision of goods or services to those individuals.

When considering the characteristics noted above, a School District should read the policies and procedures for those club and athletic activities.  Activity that may be fiduciary activity for one may not be for another. 

In most cases, the School District does hold the asset in a district owned bank account and the assets are not derived from School District’s generated revenues or assets.  The last characteristics are, for school activity accounts, where the real questions come into play. 

Are those assets legally protected from the School District’s creditors?  Unless specifically set up as a legally separate entity, they are probably not.

Does the School District have some form of administrative involvement?  This can vary from club to club, school to school, and district to district.  However, simply put, if the club has a faculty advisor or faculty sponsor who approves the disbursements, then there is administrative involvement meaning the activity would not be considered a fiduciary fund but rather would be included in the School District’s governmental funds.