public colleges and universities are treated as component units of their respective primary governments (cities or states).what is the criteria under GASB Statement No. 14 for a public college or university to be excluded
Will someone please explain this, I do not understand what is being asked.
Thank you
There are accounting standards that apply to state and local governments. Public colleges and universities are branches of (controlled by) state and (sometimes) local governents, or are separate governmental units, a in a community college district. The GASB Statement 14 exempts colleges and universities from some of those accounting standards. You are to explain the criteria for such exemptions.
http://www.gasb.org/st/summary/gstsm14.html
According to GASB Statement No. 14, the criteria for a public college or university to be excluded as a component unit of their respective primary governments can be summarized as follows:
1. Financial Accountability: The public college or university must have a separate legal identity from its primary government and operate in a manner that allows it to be financially accountable on its own. This means that it has its own governing board, has control over its own financial resources, and is able to issue and service its own debt.
2. Financial Benefit/Burden: The public college or university should not impose a significant financial benefit or burden on its primary government. This is determined by assessing the financial relationship between the institution and its primary government, including any financial support or subsidies provided by the primary government.
3. Financial Accountability Requirements: The public college or university must meet certain criteria related to its financial accountability. It must prepare separate financial statements that are audited or subject to an audit oversight, and these financial statements must be made available to the public. Additionally, the institution should be subject to external financial reporting requirements that are applicable to government entities.
It is important to note that these criteria are not exhaustive and may vary depending on the specific circumstances and regulations of each state or municipality. It is advisable to consult the specific rules and regulations of the relevant government entity to determine the criteria for exclusion in a particular jurisdiction.