Montana Arts Council : Report On Examination of Financial Statements .. 1983

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Under the method prescribed by the Accounting Division, the asset should have been recorded at the inception of the lease in the amount to be paid (excluding interest) over the entire lease term. A liability should be recorded for the entire amount payable under the lease and subsequently reduced with each lease payment.
Assets in the General Fixed Asset Account Group were under- stated by $6,341. Liabilities in the General Long Term Debt Account Group were understated $3,900, which represents
...the principal amount to be paid in subsequent fiscal years.
RECOMMENDATION #3 WE RECOMMEND THE MONTANA ARTS COUNCIL RECORD CAPITAL LEASES IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND STATE ACCOUNT- ING POLICY.
FEDERAL COMPLIANCE The Council receives a portion of its funding from federal sources. Office of Management and Budget (OMB) "Circular A-102, Attachment P," establishes audit requirements for state and local governments receiving federal assistance. Attachment P provides for independent audits of financial operations, including compliance with certain federal laws and regulations.


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