PCU = Potential component unit PG = Primary government CU = Component unit JV = Joint venture
Question #10a No
Yes
No
AFFILIATED ORGANIZATIONS
The Governmental Accounting Standards Board’s (GASB’s) Statement No. 14, The Financial Reporting Entity (1) establishes the standards for determining when affiliated organizations must be included within the financial statements of a public university or other governmental entity.
The following criteria are used to determine when affiliated organizations must be included and the flowchart should help you to determine if other organizations should be reported:
Regardless of its separate legal standing, an affiliated organization must be included within the UW System’s Financial Report if we are financially accountable for that organization or if the nature and significance of the relationship is such that its exclusion would cause the financial report to be misleading or incomplete.
Financial accountability is evidenced by the ability to impose our will upon the organization (such as by the ability to appoint a voting majority of the affiliated organization’s governing board) or by any one of the following tests of financial benefit and/or burden:
1) We are legally entitled to or can otherwise access the organization’s resources.
2) We are legally obligated or have otherwise assumed the obligation to finance the deficits of, or provide financial support to, the organization.
3) We are obligated in some manner for the debt of the organization.
The nature and significance of the relationship, including the ongoing financial support, warrants inclusion if all of the following criteria are met:
4) The economic resources received or held by the separate organization are entirely or almost entirely for our direct benefit.
5) We are entitled to, or have the ability to otherwise access, a majority of the economic resources received or held by the separate organization.
6) The economic resources received or held by the separate organization, in which we are entitled to or have the ability to otherwise access, are significant to our financial statements.
Annually, UW System will use GuideStar to view the organization’s Form 990 submission to determine their Total Net Assets. Inclusion of these organizations in UW System’s Financial Report is dependent upon individual materiality to the primary unit, UW System. Based on discussions with the Legislative Audit Bureau and peer institutions, it was determined that materiality would be calculated using 5% of Total Net Assets. Based on the 2017 UW System Financial Report, 5% of Total Net Assets of $6,558,455,818 equals $327,922,791. Therefore, any organization with Total Net Assets greater than or equal to this amount may be required to be included as a component unit of UW System.
We have included a list of foundations and other separately legal, tax-exempt organizations, by business unit, that were included in the initial application of GASB 39. If, based on the above mentioned criteria, you are aware of any additional organizations from which your campus, departments, divisions, or programs are entitled to or has the ability to access economic resources of those organizations and should be examined for potential inclusion, please list them below. UW System will send you a copy of DOA’s questionnaire if the organization has Total Net Assets greater than or equal to the materiality level.
(1) As amended by GASB Statement No. 39, Determining Whether Certain Organizations Are Component Units
AFFILIATED ORGANIZATIONS, continued
Please sign and return the following statement:
UW - ______
Based on the above mentioned criteria and the list provided, this UW institution does not have any additional affiliated organizations that we are financially accountable for or the nature and significance of the relationship is such that its exclusion would cause UW System’s Financial Report, dated as of June 30, 2017, to be misleading or incomplete, except for the following organizations:
Organization’s Name
______
______
______
Contact Person:
Name: ______
Phone No.: ______
Email: ______