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Numbered Letter 2021-01

Numbered Letter 2021-01

Security Reports

Effective Date: March 1, 2021 (Revised September 23, 2025)

Summary

Numbered Letter 2021-1 revision creates a single source of information by incorporating Bulletin 3 (last revised 2003) and also provides clarification about Treasury’s post-issuance debt review process. Our goals with this revision include improving the overall user experience and improving internal efficiencies.

The Revised Municipal Finance Act, Public Act 34 of 2001, Section 319, and the Agency Financing Reporting Act, Public Act 470 of 2002, Section 7, require municipalities issuing securities under most conditions to file a Security Report with the Department of Treasury within 15 business days of completing the issuance of any municipal security. 

  1. Electronic Filing
    1. Our goal is to provide a secure environment for users and allow flexibility in maintaining a municipality’s account. The Security Report is a fillable form that is completed and then uploaded online. To obtain a Security Report form, go to Michigan.gov/MunicipalFinance, click on “Forms and Instructions” followed by “3892.”
    2. Security Reports and supporting documentation are to be uploaded online and shall be submitted together as a single .pdf file. The name of the file should be the six-digit MuniCode followed by “3892SecRpt.” For example: 3320203892SecRpt.pdf. Security Reports will not be accepted through the U.S. Postal Service, by email, by hand delivery, or in any other manner. We will not accept Security Reports that are missing supporting documentation or do not provide an explanation as to why the supporting documentation was not included. Those deemed incomplete may not count towards the 15-business day requirement and may result in a subsequent year denial of the municipality’s Qualifying Statement. Municipalities can review their online record of all forms that have been filed, the date they were filed, and can print or save that information.
  2. Login Page and Instructions
    1. Visit Michigan.gov/LAFD.
    2. Click on “File and Search Reports.”
    3. Click on “File Online Reports.”
    4.  For the first visit, users will be required to click on “Request Access New User.” You will need to create a new user profile.
    5.  Complete all required fields. You will be asked to indicate what type of user you are from a selection on the drop-down list for User Type. If you are an attorney, certified public accountant, financial consultant, or employee of any of these filing on behalf of a municipality, select the type that pertains to you as the filer. If you are a county, road commission, city, township, village, drain district, authority, library, hospital finance authority employee or elected official, select Local Unit. If you are an employee of a school district, public school academy, intermediate school district or community college, select School. An “Instruction” link is available as you complete the new user request should you need it.
    6. Once you have submitted the request for access, you will receive an email with a temporary password. Enter your UserID and temporary password into the login page. You will then be required to immediately change passwords from the temporary one to one you choose.
    7. If, in the future, you forget your password, click the “Forgot Password” link to receive a temporary password and follow the instructions on the page.
    8. If you have forgotten both your UserID and your Password, email Treasury at TreasLocalGov@michigan.gov with the subject “Forgot User ID and Password.”
    9. Once you login, you will be prompted to reset your password.
  3. How to file a Security Report
    1. Treasury highly recommends the use of a municipal advisor (MSRB Series 50) and bond counsel for all municipal security issuances, including but not limited to the preparation of Prior Approval Applications (Forms 1428, 1432, and 1435) and Security Reports (Form 3892).
    2. Providing false information on a Security Report is a misdemeanor pursuant to the Michigan Penal Code (MCL 750.489).
    3. To upload a Security Report and supporting documentation, go to Michigan.gov/MunicipalFinance, and click on “Municipal Finance” and then “Security Report Upload.” Once you have successfully logged in and are on the form submission page, from the dropdown menus select your County, Municipality Type, Municipality, and for Form select Security Report. Click on “Create Form.” On the next page click on “Browse,” select your single .pdf to upload, and then click on “Certify and Submit.” On the subsequent page, check box to certify that the Chief Administrative Officer is aware of the information included in the filing and has asserted to the user that the filing is complete and accurate in all respects. Click on “Submit.”  On the final page, click on “OK.”
    4. To upload a Security Report for the State of Michigan, 84-0-000, under County select “State Agency” and under Municipality Type select “County and Road Commission.” For all other state agencies such as the Michigan Finance Authority, 84-7-532, instead of “County and Road Commission” select “Authority Drain District.”
    5. A payment voucher for filing fees is included on the final page of the Security Report. Only Security Reports filed under Public Act 34 of 2001, Section 319(1) owe a filing fee. The voucher and payment are the only part of the application that will be accepted via the United States Postal Service.
    6. The Security Report will be made available on Treasury’s document search website. To view the website, go to Michigan.gov/LAFD, click on “File and Search Reports,” and then “Document Search.” The single .pdf submitted will be posted on the website without changes. Do not include a copy of the check, banking information, or other confidential information as part of the submission.
  4. Security Report Reviews
    1. To uphold the integrity of the Security Report process and the issuance of municipal securities, Treasury conducts random reviews of Security Report submissions.
    2. As part of this review process, the municipality may receive an additional information request letter from Treasury requesting information for which they will have 30 days to respond. Correspondence will be sent via email to the Chief Administrative Officer and will cc the municipal advisor and bond counsel.
    3. Should Treasury determine the Security Report submission was not in statutory compliance, the municipality will receive a “Subsequent Year Denial” letter for its subsequent year Qualifying Statement which will be automatically denied for Question #12/Section 303(3)(o).
  5. Debt Compliance Reviews
    1. To further support the overall integrity of the borrowing process, Treasury conducts random reviews of audited financial statements in search of but not limited to the following:
      1. Was debt issued in the past year?
      2. Was a Qualifying Statement submitted?  Was it approved or denied?
      3. Was a Prior Approval Application needed?
      4. Was a Security Report and supporting documentation submitted?  Was it submitted within 15 business days?
      5. Is there an unrestricted deficit in any fund that was not reported on the Auditing Procedures Report?
    2. As part of this review process, the municipality may receive an additional information request letter from Treasury requesting information for which they will have 30 days to respond.
      1. Example 1: The audited financial statements show a debt issuance in the past year, but Treasury does not have a Security Report on file. Was it not subject to either Public Act 34 of 2001 or Public Act 470 of 2002?  What Act was it authorized under? Is the debt unauthorized?
      2. Example 2: The Auditing Procedures Report indicated the municipality did not have any funds with an unrestricted deficit; however, a review of the audited financial statements shows two funds with an unrestricted deficit. The municipality will now receive a Deficit Elimination Plan request letter from Treasury. See Numbered Letter 2016-1. If the Qualifying Statement Question #10/Section 303(m) regarding deficits was not answered correctly, the municipality will receive a “Subsequent Year Denial” letter for its subsequent year Qualifying Statement which will be automatically denied for Question #8/Section 303(3)(k). See Numbered Letter 2022-1.
  6. Interest Rate Exchange, Swap, Hedge, or Similar Agreements
    1. All municipalities must meet the conditions enumerated in Public Act 34 of 2001, Section 317(7) to enter into an interest rate exchange, swap, hedge, or similar agreement as authorized in Section 317(1). 
    2. As part of the Security Report submission, in addition to providing supporting documentation as required under Section 319, the municipality shall also provide documentation indicating compliance with Section 317(7).
  7. Resources
    1. Treasury has an online video library which includes videos on the borrowing process, including Security Reports. Visit Michigan.gov/MunicipalFinance, in the middle of the page click on “Municipal Finance,” then click on “Municipal Finance Video Library.” At the bottom of the page, click on “Municipal Finance – Borrowing in the State of Michigan.”
    2. A borrowing process flowchart is available at Michigan.gov/MunicipalFinance. In the middle of the page click on “Municipal Finance” then “Borrowing Process Flowchart.”
    3. For those looking for more information on municipal securities terminology, the Municipal Securities Rulemaking Board (MSRB) has a Glossary of Municipal Securities Terms at MSRB.org/glossary.

If you have any questions, please email our office at Treas_MunicipalFinance@michigan.gov.