Since this web site deals so much with the District’s finances and their financial reporting, we believe it is important for you the reader to understand the latter. Hence this attempt.

In Nevada a local government’s¹ financial practices are regulated by NRS 345.470, et seq. which is known as the LGBFA. The purposes of the LGBFA are to: “(a)…establish standard methods and procedures for the preparation, presentation, adoption and administration of budgets (for) all local governments; (b)…enable local governments to make financial plans for programs of both current and capital expenditures, and to formulate fiscal policies to accomplish these programs; (c)…provide for estimation and determination of revenues, expenditures and tax levies; (d)…provide for the control of revenues, expenditures and expenses in order to promote prudence and efficiency in the expenditure of public money; (and,) (e)…provide specific methods enabling the public, taxpayers and investors to be apprised of the financial preparations, plans, policies and administration of all local governments.”²

Potential Reporting Funds: Thus NRS 354.604(1) and (2) instruct that “each local government shall maintain, according to its own needs, the following kinds of: Governmental Funds³: (a) General fund; (b) Special revenue fund; (c) Capital projects fund; (d) Debt service fund; (e) Permanent fund;” and, “Proprietary⁴ Funds: (a) Enterprise…and, (b) Internal Service(s).” Although NRS 354.604(3) instructs that a local government may maintain certain kinds of additional fiduciary funds, they are not discussed here given the District maintains no such funds.

The District’s Funds Actual Reporting Fund Structure: For some number of years IVGID staff would truthfully disclose the mechanics of how they report the District’s finances. They did this not because it was the right thing to do. But rather, because they knew no one was listening (not even Board members) so why not share the truth? These disclosures would typically be made through a fund structure described in the District’s yearly budget book; a book which was a complete fabrication of staff and never formally approved by the Board. But that was before members of the public started reading what staff was writing, asking questions about what was being disclosed, and raising flags (generally the “red” kind) insofar as what was actually disclosed. The last such budget book we are aware of where many of the disclosures we point to were made, was the one associated with the District’s 2014-15 budget⁵. So let’s recite the District’s “Fund(s) Structure” using staff’s own words⁶:

“The accounts of the District are organized on the basis of funds and account groups, each of which is considered a separate set of self-balancing accounts³…(Revenues called) ‘resources’ (and expenses called ‘sources’)…are allocated to and accounted for in individual funds based on the (alleged) purposes for which they are to be spent…The various funds are grouped into Governmental…and Proprietary…(The District’s) Governmental Funds include…the General Fund⁷ which is the…District(‘s)…general administration operating fund…(The District’s) Proprietary Funds include Enterprise⁸…and Internal Services⁹…Enterprise Funds are used to account for revenue earned, expense(s) incurred, and net income for business-type funds…Included in the (District’s) Enterprise Funds (are its) Utility[, Community Services (i.e., recreation other than the beaches), and Beach] Fund(s). Although major fund reporting (see discussion below) is applied only to governmental and enterprise funds¹⁰, the District reports revenues and expenses assigned to its Internal Services Fund¹¹.

The District’s Sub-Funds: There are sub-funds included within some of the District’s major funds to the extent they represent “a separate set of self-balancing accounts.”³ Therefore water, sewer, solid waste and Tahoe Water Suppliers’ Association (“TWSA”) are all sub-funds within the District’s Utility Fund. And champ golf, mountain golf, facilities, ski, parks and recreation, tennis and other recreation are all sub-funds within the District’s Community Services Fund. There are three (3) sub-funds within the District’s Internal Services Fund; engineering, fleet and buildings. And there are no sub-funds within the District’s Beach Fund. Although for 2023-24 the Board has moved the Parks sub-fund to the District’s General Fund given the services it furnishes are available to the general public as a whole without payment of user fees.

GASB And GAAP: GASB was “established in 1984…(It) is the independent, private-sector organization…that establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles (‘GAAP’)…(As such) GASB standards are recognized as authoritative by state and local governments, state Boards of Accountancy, and the American Institute of CPAs (‘AICPA’).”¹² Given the LGBFA incorporates GAAP, is it any wonder then that audits must be performed “in conformity with GAAP?”¹³ Annual “report(s) concerning…capital improvements owned, leased or operated by (a) local government… must be prepared in such detail as is required by GAAP.”¹⁴ “Financial statements and other schedules required for funds…must be prepared in accordance with GAAP.”¹⁵ “Financial audits…must be…conducted in accordance with GAAP.”¹⁶ And associated “management letters…(must be) administered in accordance with GAAP.”¹⁷

GASB No. 34: Just like the LGBFA is applicable to IVGID¹⁸, GASB statements are equally applicable to all local governments which adhere to GAAP. Statement No. 34‘s purpose is to simplify the presentation of fund information and to focus attention on the major activities of reporting entities. Rather than requiring each type of fund to be individually presented, Statement No. 34 requires the individual presentation of only major funds. This reduces the number of funds presented on the face of the financial statement and directs the focus to only the significant funds of the reporting entity. But the other side of the disclosure coin instructs that when fund information is reported in the aggregate by fund type, (it) often makes it difficult for users to assess accountability. So the focus of Statement No. 34 has been sharpened in recent years by defining what is and is not a “major fund.”

So What is a “Major Fund?” GASB Statement No. 34 defines major funds as those meeting the following criteria: “1)…total assets plus deferred outflows, liabilities plus deferred inflows, revenues, or expenditures/expenses of the individual governmental or enterprise fund are at least 10 percent of the corresponding total (assets, liabilities, etc.) for all funds in that category (governmental funds) or of that type (enterprise funds). 2)…total assets plus deferred outflows, liabilities plus deferred inflows, revenues, or expenditures/expenses of the individual governmental or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined.”¹⁹ Both criteria must be met in the same element (assets, liabilities, etc.) for a fund to be defined as “major.“

Why is The District’s Beach Fund Separately Reported as if it Were a “Major Fund?” If the reader examines the District’s 2022-23 Budget filed with the Department of Taxation (“NDOT”), he/she will see that insofar as recreation functions are concerned, it only reports the Community Services²⁰ and Beach²¹ Funds. Why the Beach Fund given it is not a “major fund?” Because GASB Statement No. 34 permits a government to designate a particular fund that is of interest to users as a major fund, and to individually particulate its information in basic financial statements, even if it does not meet the criteria. Apparently the District must feel that the Beach Fund is of interest to users.

Why Aren’t The District’s Ski, Champ Golf And Possibly Mountain Golf Funds Separately Reported Given They Are All “Major,“ And The District Has No Option Not Report¹⁹: So why not the District’s other recreation funds/sub-funds? All three (3) are enterprise funds. And at least two (2) meet the criteria above recited²², and the financial transactions of both are evidenced by a “fiscal and accounting entity having a self-balancing set of accounts, recording cash and other financial resources together with all related liabilities and residual equities or balances, or changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with specific regulations, restrictions or limitations.”³ Yet their information has been combined with that of all other recreation sub-funds under the name “Community Services.” So Why not schedules for the District’s other recreation funds/sub-funds? The reader is directed to our Is The District in Violation of The LGBFA discussion.

The District’s Budgets: So now that you know the District’s funds structure, you are equipped to see how it fits into its various budgets.

The District’s ACFRs: And now that you know the District’s funds structure, you are equipped to see how it fits into its various ACFRs fka Comprehensive Annual Financial Reports (“CAFRs”).

Conclusion: So insofar as the District’s funds structure is concerned, now you know!

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1. General Improvement Districts (“GIDs”) are considered local governments for purposes of the Local Government Budget and Finance Act (“LGBFA”) [see NRS 354.474(1)(a) given they are “political subdivision(s)…which ha(ve) the right to levy or receive money from ad valorem or other taxes or any mandatory assessments, and (expressly) includes…districts organized pursuant to chapters…318…of NRS”].
2. See NRS 345.472(1).
3. A fund is defined as “a fiscal and accounting entity having a self-balancing set of accounts, recording cash and other financial resources together with all related liabilities and residual equities or balances, or changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with specific regulations, restrictions or limitations” (see NRS 354.530).
4. According to NRS 354.553 “Proprietary Fund means an internal service…or enterprise fund.”
5. Which thankfully is still online for all to examine.
6. See pages 15-16 of the 2014-15 budget. Pages 16-17 include a graphic of this structure which may make it a bit clearer to visualize.
7. According to NRS 354.534, “General Fund means the fund used to account for all financial resources except those required to be accounted for in another fund.”
8. According to NRS 354.517 “Enterprise fund” means a fund established to account for operations: 1. Which are financed and conducted in a manner similar to the operations of private business enterprises, where the intent of the governing body is to have the expenses (including depreciation) of providing goods or services on a continuing basis to the general public, financed or recovered primarily through charges to the users; or, 2. For which the governing body has decided that a periodic determination of revenues earned, expenses incurred and net income is consistent with public policy and is appropriate for capital maintenance, management control, accountability or other purposes.”
9. According to NRS 354.543 “Internal Service(s) fund means a fund used to account for the financing of goods or services furnished by a designated department or agency to governmental units within its own organization or to other departments or agencies on the basis of reimbursement for costs.”
10. “Nonmajor funds (like Internal Services are)…reported in the aggregate in a separate column on the proprietary fund statements.”¹³
11. See page 58 of the 2022 Annual Comprehensive Financial Report (“ACFR”).
12. See https://gasb.org/aboutgasb.
13. See NRS 354.486(1), (3) and (7)].
14. See NRS 354.5947(2).
15. See NRS 354.612(2).
16. See NRS 354.624(4).
17. See NRS 354.624(6) and 354.6241(1)(b).
18. See NRS 354.474(1)(a).
19. Go to https://nces.ed.gov/pubs2015/fin_acct/chapter4_3.asp#:~:text=GASB%20defines%20major%20funds%20as,assets%2C%20liabilities%2C%20etc.
20. See Schedules B-12 and B-13 at pages 10-11 of the 2022-23 Budget.
21. See Schedule B-14 at page 12 of the 2022-23 Budget.
22. Compare the 2022-23 budgeted summary of revenues and expenses for both the Ski [see pages 150-151 of the packet of materials prepared by staff in anticipation of the Board’s May 26, 2022 Board packet (“the 5/26/2022 Board packet“)] and Champ Golf (see page 134 of the 5/26/2022 Board packet) sub-funds to the Community Services Fund (see pages 130-131 of the 5/26/2022 Board packet). In fact, the District’s Mountain Golf sub-fund may very well meet those criteria (see pages 138-139 of the 5/26/2022 Board packet) as well.