Evaluate Major and Non Major-Fund Classifications against GASB 34 Thresholds

Select a section of the article below to navigate directly to it. 

• Step 1: Review Fund Placements in Major and Non-Major Funds
• Step 2: Review Account Categories on Statement Folders in MDFM Dimensions
• Step 3: Assign Categories to Non-Operating Revenue Line Items
• Step 4: Review the Major and Non-Major Fund Classifications Report
  • Access the Report
  • Navigate the Report
  • Review Test Results
  • Review Totals
  • Review Thresholds
• Frequently Asked Questions (FAQs)

Step 1: Review Fund Placements in Major and Non-Major Funds

Walkthrough

Select Next to move through the guide. You can also zoom in and out of the image by selecting the Magnifying Glass in the bottom right-hand corner. You can view the full guide by selecting the External Link icon. 

Step-by-Step Instructions

1. Under Admin in the MDFM, select Dimensions.
2. Under Statement, select the Edit (pencil) icon to open the Reporting Funds dimension.
   • Note: You will do this for both the Reporting Funds - Governmental Funds and Reporting Funds - Proprietary Funds.
3. Open the Fund Category.
4. Expand the Fund Types and review the funds listed. 
5. Continue expanding as needed to ensure you have all funds in the appropriate categories.

If any changes are needed, please contact your Implementation Manager if you are in the implementation process or our Support team if you have completed implementation.

Step 2: Review Account Categories on Statement Folders in MDFM Dimensions 

Walkthrough

Select Next to move through the guide. You can also zoom in and out of the image by selecting the Magnifying Glass in the bottom right-hand corner. You can view the full guide by selecting the External Link icon. 

Step-by-Step Instructions

1. From the MDFM, select Admin and select Dimensions.
2. Expand Statements.
3. Select the Edit icon to open a statement. You will need to review the Governmental Funds and Proprietary Funds statements.
4. Select the carrot next to the Statements to expand them.
5. To review the Account Categories on a statement folder, click on the row of that folder and review the Category in the side modal under the Account Category tab.
   • Confirm Assets, Deferred Outflows of Resources (DOR), Liabilities, Deferred Inflows of Resources (DIR), Revenues and Expenses folders each carry the right category. If it is not correct, select the drop down to change it.

Step 3: Assign Categories to Non-Operating Revenue Line Items 

GFOA specifically points out that nonoperating revenues/expenses can appear in different sections of the proprietary fund statement and need to be appropriately aggregated.

In the system, the Non-Operating Revenues (Expenses) folder holds both revenues and expenses. In order to make sure each line item is in the appropriate category, assign the category to each individual line item.

Walkthrough

Select Next to move through the guide. You can also zoom in and out of the image by selecting the Magnifying Glass in the bottom right-hand corner. You can view the full guide by selecting the External Link icon. 

Step-by-Step Instructions

1. Under Admin in the MDFM, select Dimensions.
2. Under Statements, select the Statement Structure - Proprietary Funds.
3. Expand Statement of Revenues, Expenses, and Changes in Net Position.
4. Expand Non-operating revenues (expenses).
5. For each line item, assign a Revenue or Expense account category. To get started, select the line item.
6. In the modal on the right, under Account Category, select either Revenue or Expenditure as appropriate for the line item.

Step 4: Review the Major and Non-Major Fund Classifications Report 

Note: If your report is “disabled” please reach out to our support team to assist you. If you are in the implementation process, your Implementation Manager can assist you. 

Walkthrough

Select Next to move through the guide. You can also zoom in and out of the image by selecting the Magnifying Glass in the bottom right-hand corner. You can view the full guide by selecting the External Link icon. 

Key Actions to Know

Access the Report

From the MDFM, select Reporting & Control.

1. Click on the Major / Non-Major Funds Report to open it.
   1. Note: You can also select the Period to review before entering the report. Select the drop down for Period to select the appropriate year.
2. If you did not select the appropriate period before entering the report, change the period as necessary to ensure you're reviewing the appropriate year.

Navigate the Report

• At the top you'll see a small dashboard with summary data: the total number of funds, how many are major, how many are non-major, and whether any funds need attention. This is your quick health check. If the "needs attention" number is above zero, those are the funds to look at first.
  • Note: Governmental and Enterprise funds are picked up automatically and grouped by their placement in MDFM dimensions. Internal Service and Fiduciary funds are excluded by default.
• Click either Review Button to open the funds that need review.
  • Once you've clicked Review, the report will be filtered for only the funds that need review.; however, you can change the filtering at any time to review other funds or specific review tags.
• You will see yellow tags that provide context about why the fund is under review. Borderline Funds are close to the thresholds.
  • Note: Borderline doesn't mean the fund should be reclassified. It means it's worth keeping an eye on, because a small change in balances could move it across the line.
  • The mapping change needed tag calls out the more immediate needs based on the report's finding.
• The rest of the report will provide you with the calculations. These include both the 10% and 5% test results, the totals for the assets, liabilities, expenditures and revenues as well as the 10% and 5% baselines under Thresholds.

Review Test Results

• The test results are listed in the Tests column. You will see 4 groups, Assets (A), Liabilities (L), Expenses (E), Revenues (R). Hover over each icon to see the percentage calculation. The green check means it passes, the red X means it failed.
  • Within the test results section:
    • A stands for Assets plus Deferred Outflows of Resources,
    • L is Liabilities plus Deferred Inflows of Resources,
    • E is Expenses
    • R is Revenues.
  • Note: For Enterprise funds, revenues and expenses include both operating and non-operating items.

Review Totals

• Review the Assets, Liabilities, Expenditures, and Revenue totals for the individual funds as well as the totals for the Major and Non-Major funds to understand the breakdown.

Review Thresholds

• Select Thresholds to view a baseline of the 10% test and the 5% test by Fund Category (Governmental or Proprietary/Enterprise Funds) and a combined total (Governmental + Enterprise).

Now that you have the data, decide on final major/non-major classifications. Note any fund you plan to report differently from the calculated result and why.

If you are in the implementation process, your implementation manager will work with you to make the changes.

If you are not in implementations, please reach out to Support to reclassify the funds.

Frequently Asked Questions (FAQs)

Q: I need to reclassify funds. How do I do this?

A: If you are still in the implementation process, your implementation manager can assist you. If you are out of the implementation process, please contact our Customer Support team at support@onegravity.com to help you reclassify. 

Q: When does the report update with new data?

A: Since all of the data is interconnected, whenever you make a change to the reporting-such as uploading the final trial balance or making an adjustment-the Major/Non-Major calculation will update automatically and reflect the changes in real time. You need only refresh the browser.

Q: Why are the Internal Service Funds and Fiduciary Funds excluded?

A: Since GASB 34 major fund reporting applies to governmental and enterprise funds only, we do not include the Internal Service Funds and Fiduciary Funds.

Q: What data is used to calculate the amounts? 

A: All amounts are calculated directly from the Trial Balance data, not from the rounded amounts shown in your statements. As a result, you will see revenues and liabilities as negative amounts, and assets and expenses as positive amounts. This allows us to combine operating and non-operating revenues and expenses correctly.

Q: What are the 10% and 5% criteria used for testing?

The 10% test: the fund's amount for that group is at least 10% of the corresponding total for all funds in the same category, meaning all governmental funds or all enterprise funds. 

The 5% test: that same group is also at least 5% of the corresponding total for all governmental and enterprise funds combined.

For example, a fund cannot meet the 10% test based on revenues and the 5% test based on expenditures and be considered major based on those two results. The tests need to be evaluated for the same element.

Q: What should I use the Thresholds for? 

Use Thresholds to check the calculation base. Here you'll see the baseline totals used for the 10% and 5% tests. If you want to verify any result, you can take the fund amount from the amount columns and divide it by the baseline here.

Another important GFOA emphasis of the calculation is making sure the correct denominator is used for the 10% test.

By default, ClearGov handles this automatically:

• For governmental funds, the 10% test is calculated using totals for all governmental funds.
• For enterprise funds, the 10% test is calculated using totals for all enterprise funds.

This means you don't have to manually determine which funds should be included in the denominator. ClearGov applies the appropriate fund type to the calculation by default, helping ensure the test is performed against the correct population.