What is the Appropriate Level of Cash Reserves?

That is a question that management of many governmental entities asks.  Governmental entities also have another layer of complexity in determining appropriate levels of cash reserves due to the fact that there are many different funds within a governmental entity.  For example, a governmental entity may have General, Special Revenue, Debt Service, Capital Improvement and …

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Should You Take A Loan from Your 401(k)?

In August 2011, Rex talked about reasons to take a loan from your 401(k) plan. Hopefully you also noticed the caveat at the bottom that all financial situations are different, so here are a few things to consider for why you shouldn’t take a loan from your 401(k) plan (or similar plan) even if the …

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Improving the Financial Reporting Timeliness

The purpose of financial reports is to report an entities financial performance for a period and the financial status at a given point in time. In order for the information to be useful, it needs to reach the user in a timely manner. For many, the year process is a task that requires a lot of …

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Business Combinations 101

Over the past year, there seems to be some increase in activity related to mergers and acquisitions (“M&A”).  When times are tough you typically see an increase in M&A activity as strong companies will act to buy other companies to create a more competitive, cost-efficient company.  M&A’s can come in various forms.  They can be …

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Integrating Excel and Access – Responding to Clients’ Needs for Data Analysis

At Henry & Horne we often deal with requests that involve a heavy data analysis component.  Most of these requests can be handled with Microsoft Excel.  The multifaceted spreadsheets, in addition to the formulas and macros, allow for complete data articulation.  However, Excel does have its limitations.  In one recent project we had for a …

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Requesting Original or Corrected Determination Letters from the IRS

As a plan fiduciary, there is a very important letter that should be on file with your plan documents.  This letter is known as the determination letter.  The determination letter is a letter the IRS sends to you letting you know the tax status of your 401k plan.  This letter lets you as the plan …

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Auditor General Fraud Alert – Billing Schemes

The Office of the Auditor General for the State of Arizona recently issued a fraud alert regarding common billing schemes. The Alert cites a 2010 study done by the Association of Certified Fraud Examiners that indicated most misappropriation schemes involve the theft of cash receipts or involve fraudulent disbursements of cash. The study also indicated …

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There’s A Pocket Guide for That?

While trying to research something both useful and interesting for government clients, I came across a “Pocket Guide for Government Employees” entitled:  “Protecting Federal Tax Information. While the guide was primarily addressing the need for state tax agencies which receive federal tax returns and return information, it reminded me that now many cities, towns and …

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IRS Employee Plans Examination Process

In my previous blog, I discussed the oversight responsibilities of the IRS and Department of Labor over 401(k) plans, and what to expect if your plan is selected for an audit. One type of audit you may encounter is an IRS Employee Plan Examination, which is essentially designed to identify areas of noncompliance, develop corrective …

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Governments and Business Entities

Can governments apply the accounting and financial reporting standards that business entities use? The simple answer is no.  Governments and for-profit entities are different in a variety of ways.  One of the biggest differences is the stakeholders, and how separate accounting and financial reporting standards are in place to provide the appropriate information to meet …

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