Reporting Entity
Criteria
The agency or enterprise
is part of the State's financial reporting entity if one or both
of the following criteria are met:
Criteria One: Agency
or enterprise meets the definition for a State entity in G.S. 147-64.4:
State agency
- Any department, institution, board, commission, committee, division,
bureau, officer, official or any other entity for which the State has oversight
responsibility, including but not limited to, any university, mental or
specialty hospital, community college, or clerk of court.
Criteria Two: Agency
or enterprise is included in the North Carolina Financial Reporting Entity
as defined by GAAP as prescribed by the GASB.
The State of North Carolina
financial reporting entity includes:
-
Primary government,
-
Organizations for which the
primary government is financially accountable, and
-
Organizations for which the
nature and significance of their relationship with the primary government
are such that exclusion would cause the primary government's financial
state-ments to be misleading or incomplete.
The State of North Carolina’s
primary government consists of all organizations that make up its legal
entity. All funds, organi-zations, agencies, boards, commissions,
and authorities that are not legally separate are, for financial reporting
purposes, part of the primary government. The primary government
has a separately elected governing body (the General Assembly) and the
primary government must be both legally separate and fiscally independent.
Component units are legally separate entities for which the State is financially
accountable. Accountability is defined as the State's substantive
appoint-ment of a majority of the component unit's governing board.
Furthermore, the State must be able to impose its will upon the component
unit or there must be a possibility that the component unit may provide
specific benefits to, or impose specific financial burdens on, the State.
The State has applied the criteria outlined in GASB Statement 14 in determining
financial accountability. As required by GAAP, these financial statements
represent the State (the primary government) and its component units.
The component units are included in the financial reporting entity because
of the significance of their operational or financial relationships with
the State.
Please refer to Appendix
A for a complete list of the organizations included in the North Carolina
financial reporting entity.