GAAP WAIVER PROCEDURES
K.S.A. 75-1120a(a) requires municipalities to use generally accepted accounting
principles (GAAP) in the preparation of their financial statements and reports.
Except for community colleges, the governing body of any municipality may waive
this statutory GAAP requirement.
Before requesting a waiver, consider the following:
- Review the provisions of the municipality's revenue bond ordinances or resolutions
and other ordinances or resolutions to determine if they require financial statements and
financial reports to be prepared in conformity with GAAP. If they do, you may
not waive the GAAP requirement.
- If the municipality waives the GAAP requirement, K.S.A. 75-1120a(c)(1) requires
that the municipality present financial statements and reports prepared on the
basis of cash receipts and disbursements as adjusted to show compliance with
the cash basis and budget laws of Kansas.
Governing Body Must Pass a Resolution Annually. To waive the GAAP
requirement, the governing body must pass a resolution. A mere motion in not sufficient.
The resolution must:
- Be adopted each year. This is a matter to be decided
each fiscal year.
- Clearly identify the fiscal year to be waived.
- Contain wording substantially similar to that specified in K.S.A. 75-1120a(c)(1).
Here is a sample resolution:
WHEREAS the (Name of Municipality), Kansas, has determined that the financial
statements and financial reports for the year ended _______________ to be prepared in
conformity with the requirements of K.S.A. 75-1120a(a) are not relevant to the
requirements of the cash basis and budget laws of this state and are of no significant
value to the (Governing Body) or the members of the general public of the (Name of
Municipality) and
WHEREAS there are no revenue bond ordinances or resolutions or other ordinances
or resolutions of the municipality which require financial statements and financial
reports to be prepared in conformity with. K.S.A. 75-1120a(a) for the year ended
_________.
NOW, THEREFORE BE IT RESOLVED, by the (Governing Body) of (Name of Municipality),
Kansas, in regular meeting duly assembled this _________ day of _____________,
20_____ that the (Governing Body) waives the requirements of K.S.A. 75-1120a(a)
as they apply to the (Name of Municipality) for the year ended __________________.
BE IT FURTHER RESOLVED that the (Governing Body) shall cause the financial statements
and financial reports of the (Name of Municipality) to be prepared on the basis of cash
receipts and disbursements as adjusted to show compliance with the cash basis and budget
laws of this State.
Waiver Letter Request to Director of Accounts and Reports Is Not Required.
A formal letter to the Director of Accounts and Reports requesting a waiver from
the statutory GAAP requirement is not required. As required by K.S.A. 75-1120a(c)(1)
the Director of Accounts and Reports automatically grants a GAAP waiver for the
year the annual resolution stipulates provided that the resolution contains wording
substantially similar to that provided in K.S.A. 75-1120a(c)(1).
