Two important documents which fire relief associations with assets or liabilities of at least $500,000 must annually submit to the Office of the State Auditor are: 1) audited financial statements and 2) a separate financial reporting form, countersigned by the municipal clerk or clerk-treasurer. The financial reporting form must also be presented to the city council and maintained in the relief association’s office for public inspection. The relevant statute is Minn. Stat. § 69.051.
The audited financial statement must comply with generally accepted accounting principles (GAAP), which require that a Management’s Discussion and Analysis (MD&A) be included in a relief association’s audited financial statement. If the MD&A is not included in the audited financial statement, the omission should be noted in the Independent Auditor’s Report. To meet the requirements of GAAP, there are three options for presenting the General Fund:1) Consolidate the General Fund with the Special Fund, depending upon its materiality; 2) Show the General Fund separately with the adjustments from modified to full accrual basis financial statements; or 3) Show the General Fund separately as a fiduciary fund, in the same manner as the Special Fund.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions includes a legal compliance checklist for auditors of fire relief association financial statements. Fire relief associations should also comply with the Governmental Accounting Standards Board (GASB) Statement No. 67. The Legal Compliance Audit Guide is available at:
Date this Avoiding Pitfall was most recently published: 03/04/2016