School District Accounting Advisory Committee (SDAAC) Meeting Minutes October 10th, 2014 Highline School District

Transcription

1 School District Accounting Advisory Committee (SDAAC) Meeting Minutes October 10th, 2014 Highline School District Members present (21): Brian Aiken, Cindy Coleman, Mike Dooley, Harvey Erickson, Ralph Fortunato, Ramona Garner, Jody Hockaday, Chuck Hole, T.J. Kelly, Doug Matson, Ryan Montgomery, Bang Parkinson, Kevin Plambeck, Amber Porter, Sean Schaeffer, Kim Scott, Marilyn Sollers, Paul Stone, Kathie Technow, Cheryl Thresher, Angela Watts, Members absent (5): Michael Christianson, Patty Luat, Bill Tilton, Tom Fleming, Becky Montgomery. Guests present (10): Cory Plager, ESD101; Denise Wolff, ESD 113; Dave Arp, ESD 171; Lori McLeod, ESD 189; Jennifer Hall, Bellevue SD; Daniel Lunghofer, Eatonville SD; Jodi Valentino, Northshore SD; Rose Hertzog, Northshore SD; Marianne Bigelow, Tacoma SD; Donna Morey, White River SD. Meeting called to order at 9:00 AM. Introductions and Announcements: After the introductions of those present, T.J. shared information regarding the Washington Fall Counselor Meeting: Formula for counseling staff was shared and the counselors now are looking for the additional staffing. It doesn t take into account the fact that salaries are not fully funded nor are all positions funded. A guest remarked on a topic they are involved in, Medicaid Admin match Issues with finalizing claims for Issues with student name not matching the medical records name JTech 2 districts did not get funding. Others comment on similar issues involving the program and that the issues the district was dealing with are not unique. 4 districts describe having with issues on S-275 reporting. SAO Update: Upcoming school district considerations: Ryan and Cheryl explained various new elements and procedures. Deferred out flows of resources must be added to the F-196 even if there is not a balance for Will not be an issue for Will be an addendum to the Accounting Manual Small accountability audits (Assessment Audits): Starting FY : Expected roll out date of January. SAO will have those districts completing assessment audits to do so through an online process. Additional information about the process will be sent out in a reminder this winter. Federal procurement changes What happens for audit 250 students or less. Just came out and what does it mean for this year. Guidance did not go out until now so cannot see it being a significant issue. Would expect to see quotes for over $3000 from this point forward. Local audit teams have said that it will be an issue for this year as this is what the rules should have been all along. Need to start internal conversations at SAO School District Accounting Advisory Committee; October 10, 2014 Page 1

2 Paul presented an update on changes to the ABFR Notes to the Financial Statements. SAO and OSPI are updating terminology in the ABFR Notes to the Financial Statements. We anticipate revised notes to be available in early in 2015 and available for the F-196. A complete schedule of changes will be made available before posting to the SAFS website. Note 3: Risk pool note for ESD 113 is now more generic. Note 7: Title Change to the Note Note 11: A new Table for interfund balances and transfers is being added. Note 5, Pensions: An extensive revision to Note 5 is being prepared to conform to new GASB 68 regulations. This will be an addendum to the Accounting Manual. o Some of the potential changes to Note 5 are presented here. o Pressing DRS to figure out what is going to be required in the note. Was supposed to be boilerplate added to our notes. o Info should come directly from DRS o DRS website says that they will produce tables and they strongly recommend that we get our own actuary o Will not be based on our specific employees but rather costs are based on all enrollment in the plan o SAO working with DRS for BARS trying to communicate. Frustrating for all. o GASB 68 required for fiscal years starting after June 14 Paul presented new changes to Chapter 8, Financial Reporting. On page 8-5, the reference to FASB 16 should be GASB 62 now and the reference to GAAFR 2001 should be On page 8-12, the audit frequency table is not correct. SAO would prefer this not be included in the manual since SAO policy is broader than what is currently included and includes a number of exceptions. On page 8-13, the SEFA section should be edited OMB Circular A-133 [not: The SAO] prescribes the form and content of the schedule. SAO recommends the following be incorporated somewhere in Chapter 8: For audit purposes, the financial statements are comprised of the following F196 elements: Balance Sheet (for modified accrual Districts only) Statement of Revenues, Expenditures, and Changes in Fund Balance, All Funds-For the Year Ended August 31, XXXX Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position Schedule of Long-Term Liabilities The Schedule of Long Term Liabilities is required to be included with audited financial statements as supplementary information. If the District is subject to a single audit, the Schedule of Expenditures of Federal Awards is also required by OMB Circular A-133 subpart E, section 500(b) to be included as supplementary information with the audited financial statements. SAO recommends general guidance for note disclosures be included in either the Accounting Manual Chapter 8, Appendix B or the ABFR instructions following the notes. There were no objections to these new elements. A discussion ensued regarding the presentation and reporting of Prior Period Adjustments. Some of the current challenges when recording a prior period adjustments include Issues with the manual adjusting entry for school district accounting: The monthly F-198 budget status reports Fund Balance detail does not align with ending fund balance. School District Accounting Advisory Committee; October 10, 2014 Page 2

3 At year-end, in order for the school district balance sheet to import into the EDS F-196, GL898 must be closed to GL890. Closing GL898 means the final year end F-198 is not accurate if it is run after amounts have been imported to the EDS F-196. Reprograming accounting systems were discussed. What are outcomes to programming school district accounting systems to automatically close GL898 to GL890 (similar to closing revenues and expenditures to GL890) (General Fund accounting used in this example.) District balance sheets would import correct values into the EDS F-196. GL898 would continue to be reported in the proper section on the F-196 Statement of Rev, Expd & Changes in FB. At the district level, GL898 would zero out when the system changed fiscal years (the same as what happens to revenue and expense accounts.) Challenges to programming GL898 to automatically close to GL890. Is GL898 the proper GL CODE for Prior Period Adjustments in the Chart of Accounts? Is Q or Equity the proper designation for GL898? o A Prior Period Adjustment is not a balance sheet account; it is not a revenue or expense account. o It is an account denoting a change in the beginning fund balance. o It is temporary in nature. It needs to be an active open account through the closing process. If GL898 is described as an Equity Account in the Accounting System, you cannot have a balance in that account, and also post the amount in GL890. The issue will continue to be reviewed. Compensated Absences Update Addendum to : Page 4-30, GL 831 Restricted for Employee Compensated Absence: o The account has been closed. The nature of constraints to amounts held in reserve for employee compensated absences does not meet the externally imposed restricted threshold. Must classify the fund balance as Committed or Assigned not Restricted. Only recognize when event happens. Cashout can only record as a liability when you have a qualifying event. Prior Period Adjustment for compensated absence charges from prior year. May affect grant claims and over reporting. Interest over $100 must be refunded. If claim monthly then it is unlikely that there is a cash management issue other than in August Feds are reviewing A87 and COFAR sent out a Q&A at the end of August Will COFAR consider deleting the requirement that fringe benefits be charged as indirect. Will issue a technical correction. Fringe benefit rate process can be used. Termination leave costs could be included as part of the fringe benefit rate. Can be used for unused leave, workers, comp, unemployment, severance pay and similar employee benefit. Described new accounting procedures for Compensated Absences. Residual Equity Transfers discussed and guidance revised. On Page 3-37 in the Accounting Manual, the following narrative is deleted: Closing the Debt Service Fund to the General Fund after all bonds, interest, and transfer fees have been paid. Subsequent tax collections in either example should be credited to the General Fund. Adding bullet-points into the SDAM: All restrictions imposed on the use of resources remaining as residual equity within a fund must be resolved before the authority to make the equity transfer is executed. School District Accounting Advisory Committee; October 10, 2014 Page 3

4 Closing the Debt Service Fund to the Capital Projects Fund after all bonds, interest, and transfer fees have been paid and no related tax levy remains outstanding. (RCW 28A (3)). The Debt Service Fund should remain open for the established purpose of subsequent tax collections. (RCW 28A (3)) (RCW ). Legal opinions and sources cited for the changes made to Residual Equity Transfers. Procurement with Federal Funds: The narrative in Chapter 10, page 7 has been revised. This is an addendum to the SDAM: Purchase of books exempt per state law. Need to use federal guidance for any textbooks purchased with federal funds. Small Purchase Procedures The purchasing of books has been exempted from any form of competitive purchase procedure, including small purchase procedures, under state law. o DELETING: According to the State Auditor s Office, this exclusion has been applied to purchases involving federal money as well. o INCLUDING: This exemption does not apply to purchases of books using federal funds which must follow the same requirements that apply to Furniture, Equipment, and Supplies. School Facility Grants were discussed. Most districts record expenditures and awards in the CPF. But, not every district has a CPF and some of the work is maintenance work. The igrants platform does not include a CPF expenditure matrix. While transfers are allowed in this area, accounting is not uniform. Should we consider a new program 96 for Special and Pilot grants. Idea was not well received. And while the current procedures are not ideal, the system functions. Additional business information was relayed to committee members: P223 doubling or tripling of enrollment Used for forecast the enrollment projections for all models for legislative session. Taking the system down this weekend to make sure the numbers are accurate Restatement of CTE report from last June part of budget request Better align allocations with allowable expenditures MSOC fully funded in for basic ed not in original report Disconnect between purpose of funds and formula CTE and SC should be enhancement Students are a basic ed student first Students not deducted from HS and MS enrollment for CIS, Act 23 basic appn CTE director allocation 1 per 432 Big costs MSOC and class size Original MSOC was a multiplier not increasing CTE and MSOC only by inflation Recommend utilities, facilities maintenance, and district wide support in 9700 should be funded by the 15% indirect Recommend - Allocations for technology curriculum, library and other supplies and PD should be in CTE Reduce the indirect rate from 15% to 4% School District Accounting Advisory Committee; October 10, 2014 Page 4

5 Comments and questions from meeting participants. Questions about new schedule of LT Debt New column for current year activity Current portion is an estimate Overpayments as a result of the Compensated Absence pool. How is the repayment processed? Repay by warrant Under claim September Fund balance worksheet program 22 doesn t total. Initial worksheet has been fixed. To/from transportation long form is on two separate worksheet tabs. A source of confusion to some. Subgroup will meet about strategic road map for a new accounting structure- stakeholders and needs. The meeting is TBD. The next School District Accounting Advisory Meeting is scheduled for November 7, at Highline School District. The Agenda is the First Reading of the changes to the manual. Future SDAAC meeting dates are proposed: Meeting Dates for 2015: March 6 June 5 ADJOURN There being no more business, the meeting adjourned at 2:00 PM School District Accounting Advisory Committee; October 10, 2014 Page 5