The Governmental Accounting Standards Board (GASB) accounting standards No. 67 and No. 68 change the accounting and financial reporting requirements for public pension systems, requiring substantially more financial disclosure and generating additional audit work related to pension benefits.
In addition, GASB is proposing new standards for other post-employment benefits (OPEB), such as group life and the retiree health insurance credit.
Because of the new standards, the Auditor of Public Accounts (APA) for the Commonwealth of Virginia has issued specific guidance to all accounting firms that audit the state’s public entities (e.g., state agencies, school divisions, political subdivisions).
The APA guidance specifies audit steps necessary to ensure that the financial statements submitted by VRS-covered employers comply with GASB standards.
As instructed by the APA, auditors will be:
- Looking at VRS contributions paid by employers.
- Asking for more information about your employees’ enrollment in the VRS pension plan and other post-employment benefits, such as group life and the retiree health insurance credit.
- Looking at underlying census data of active employees (e.g., date of birth, gender, compensation, covered service) for the purpose of evaluating actual pension expenses and projecting future pension benefit needs.
VRS has created a new website section to centrally locate materials and links to assist you with financial reporting related to VRS-administered benefit plans. For more information, read New Financial Reporting Webpage Resource Created for Employers from the VRS August issue of Employer Update.
Source: VRS October Employer Update
VACo Contact: Erik Johnston