Fiscal Affairs Accounting and Reporting Update

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1 Fiscal Affairs Accounting and Reporting Update September 16, 2015 Claire Arnold, CPA 1Creating A More Educated Georgia

2 FY 2015 Financial Engagement Cycle Where are we now? Budgetary Basis Compliance Reports (BCRs) submitted and reviewed Annual Financial Reports (AFRs) submitted and reviewed DOAA currently is working on completing your fiscal year 2015 engagements 2Creating A More Educated Georgia

3 FY 2015 Financial Engagement Cycle BCRs Please provide auditor adjustments to USO ( and Consolidation Process Institution confirmation of Surplus and BCR information to be sent September 25: Surplus by Institution (Excel File) BCR Reports (Excel Files) Balance Sheet by Institution Teaching State Approp by Institution Parts 1 & 2 Teaching Other by Institution Parts 1 & 2 SFI by Institution Parts 1 & 2 Research Consortium Parts 1 & 2 3Creating A More Educated Georgia

4 FY 2015 Financial Engagement Cycle BCRs Submission to State Accounting Office on October 8, 2015 AFRs Please provide auditor adjustments to USO ( and Brad Submit updated AFRs to MoveIT application 4Creating A More Educated Georgia

5 FY 2015 Financial Engagement Cycle AFRs Example of AFR changes submission: Section of Report & Description of Change Per Original AFR Per Updated AFR Change Page Date sent to BOR/Auditors Statement of Net Position Current Liabilities - Lease Purchase Obligations $16,273,398 $16,328,967 $55, Non Current Liabilities - Lease Purchase Obligations $448,903,974 $448,693,429 ($210,545) 17 Net Position - Net Investment in Capital Assets $1,356,356,683 $1,356,511,659 $154, Net Position - Total Net Position $1,289,189,712 $1,289,344,688 $154, Statement of Revenues, Expenses, and Changes in Net Position Nonoperating Revenues (Expenses) - Interest Expense (capital assets) ($25,843,264) ($25,688,288) $154, Net Position - End of Year $1,289,189,712 $1,289,344,688 $154, Statement of Cash Flows CF from Capital and Related Financing Activities - Principal on Capital Debt/Leases ($18,581,012) ($18,735,987) ($154,975) 20 CF from Capital and Related Financing Activities - Interest on Capital Debt/Leases ($25,955,874) ($25,800,899) $154, Reconciliation of Operating Loss to Net Cash - Other Assets ($37,501,287) $0 $37,501, Reconciliation of Operating Loss to Net Cash - Advances (note 7) $33,619,098 ($2,634,081) ($36,253,179) 21 Reconciliation of Operating Loss to Net Cash -Deferred Inflows of Resources $0 $105,674,412 $105,674, Reconciliation of Operating Loss to Net Cash - Deferred Outflows of Resources $0 ($37,501,287) ($37,501,287) 21 Reconciliation of Operating Loss to Net Cash - Net Pension Liability $0 ($69,421,233) ($69,421,233) 21 5Creating A More Educated Georgia

6 FY 2015 Financial Engagement Cycle AFRs Example of AFR changes submission: Note 6 - Capital Assets Updated Text for GSFIC transferred capital additions.. GSFIC $93,059,262 $59,288, Insitutional $0 $31,752, Allottments on Reimbursement Basis $0 $2,017, Note 8 - Long Term Liabilities (Restated) Lease Purchase Obligations - Reductions ($18,581,012) ($18,735,988) ($154,976) 33 Lease Purchase Obligations - Ending Balance $465,177,372 $465,022,396 ($154,976) 33 Lease Purchase Obligations - Current Portion $16,273,398 $16,328,967 $55, Net Pension Liability - Restated Beginning Balance $0 $372,212,506 $372,212, Net Pension Liability - Additions $275,455,423 $0 ($275,455,423) 33 Net Pension Liability - Reductions $0 ($96,757,083) ($96,757,083) 33 Total Long Term Obligations - Reductions ($50,822,986) ($147,735,045) ($96,912,059) 33 Total Long Term Obligations - Ending Balance $784,449,669 $784,294,693 ($154,976) 33 Total Long Term Obligations - Current Portion $44,030,037 $44,085,606 $55, Creating A More Educated Georgia

7 FY 2015 Financial Engagement Cycle AFRs Consolidation Process Institution confirmation: to be sent October 5: Statement of Net Position (SNP) Statement of Rev, Exp & Changes in Net Position (SRECNP) Cash Flow Statement Confirmation of Information or changes must be ed to and by October 12 7Creating A More Educated Georgia

8 FY 2015 Financial Engagement Cycle DOAA is currently conducting fieldwork on the audits and FDMR engagements Exit Conference Include USO Accounting and Reporting Agreed Upon Procedures (AUP) engagements postponed until January 2016 Modifications to the AUP engagements Reduce testing to areas of importance Balance Sheet Support; Bank Reconciliations, Subsidiary Module reconciliations, SEFA, AFR reflects accounting records activity, etc. 8Creating A More Educated Georgia

9 FY 2015 Financial Reporting Changes DOAA and USO have identified a few items that need to be adjusted in the AFR. DOAA has agreed to make the following changes: Note 1: Net Position Unrestricted: Add final sentence: Included in the net deficit reported is the College/University s Net Pension liability of $ which will be funded by appropriating resources each year as payments come due, rather than accumulating resources in advance. 9Creating A More Educated Georgia

10 FY 2015 Financial Reporting Changes Retirement Plan Note Disclosure Change (Per AFR 9/1/2015) Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6.00 % of their annual pay during fiscal year The College/University s contractually required contribution rate for the year ended June 30, 2015 was % of annual College/University payroll. College/University contributions to TRS were $ for the reporting period (fiscal year ended June 30, 2015) and $xx,xxx for the measurement period (fiscal year ended June 30, 2014). 10

11 FY 2015 Financial Reporting Changes Retirement Plan Required Supplementary Information Schedule of Contributions will include data for FY 2015, 2014 and ABC School District Required Supplementary Information Schedule of Contributions Teachers Retirement System of Georgia For the Year Ended June 30 (Dollar amounts in thousands) Contractually required contribution $ Contributions in relation to the contractually required contribution Contribution deficiency (excess) $ District s covered-employee payroll $ Contributions as a percentage of covered-employee payroll X.XX% X.XX% X.XX% X.XX% X.XX% X.XX% X.XX% X.XX% X.XX% X.XX% 11

12 FY 2015 Financial Reporting Changes Additional Items Identified that were communicated during the USO Review process: Related party footnote to Capital Lease Liability Table in Capital Lease note disclosure Gain/Loss on Debt Refunding footnote to the Capital Lease Liability Table in the Capital Lease note disclosure MD&A additional verbiage related to Net Pension Restatement of Net Position Special Item Transfer note disclosure additional verbiage for P3 assets and capital lease liability transferred to USO 12

13 FY 2015 Financial Engagement Cycle Reporting to DOAA TIGA Payments and Obligations due October 15 Immigration Reform Act due December 31 SEFA Changes Confirmation Response to Current Year Findings Submit Response with Closure Letter documents Submit to Findings Management System 13

14 FY 2015 Financial Engagement Cycle Response to Current Year Findings 14

15 FY 2015 Financial Engagement Cycle 15

16 Financial Reporting For FY 2016 What worked? What didn t work? How can we improve? 16

17 Standardized Chart of Accounts Standardized Chart of Accounts verses SHARE Accounts Revisions to Chart of Accounts: Goals: Consistency Information Institutional Functionality Chart of Accounts Committee Committee Members: Bruce Spratt, Nick Henry, Julie Peterson, Ruth Berger, Kim Brown, Jeff Hall, Michelle Hamm, budget representatives, and ITS representatives Submit Suggestions to by October 16 Timeframe December 2 and 3 17

18 December Workshop Dates: December 1 and 2 Location: Middle Georgia Math Auditorium Time: Day 1-9:30 am to 5:00 pm Day 2-8:30 am to 4:00 pm Preliminary Topics: New Federal Expenditure Requirements/State Purchasing New Retiree Health Insurance Accounting Process Standardized Chart of Accounts Reviewing Audit Results oneusg Update Joint Staffing/TRS Eligible Salaries GSFIC/MRR/PPV/Capital Improvements Allowable/Unallowable and Accounting AFR/BCR Improvement Discussion 18

19 Uniform Federal Grant Guidance Eight different OMB guidance streamlined into one. Eliminates overlapping duplicative and conflicting guidance. A-21 A-50 A-87 Title 2 of CFR, Subtitle A, Chapter II, Part 200 A-89 A-102 AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS A-110 SUPER CIRCULAR A-122 A-133 UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, 19

20 Uniform Federal Grant Guidance Intended Outcomes Stronger Oversight Improved Business Processes Well Trained Workforce Targets Risk and Minimize Burden 20

21 Uniform Federal Grant Guidance Effective Dates section All awards or funding increments made on or after December 26, 2014 must adhere to the Uniform Guidance. Audit requirements are effective for fiscal years beginning on or after December 26,

22 Procurement Claw 22

23 Procurement Claw 23

24 Methods of Procurement Micro Purchases: New term for supplies and services purchased, where the aggregate dollar amount is under $3,000. To the extent practical, must be distributed equitably among qualified suppliers. If your college/university considers the price reasonable after price analysis, the micro-purchase may be awarded without soliciting competitive quotes. Many college/university have procurement policies with a minimum of $5,000 and will need to lower this minimum to $3,000 to ensure they meet the requirement. 24

25 Methods of Procurement Small Purchases: Existing term for supplies and services purchases, where the aggregate dollar amount is under $150,000. The amount will be adjusted for inflation using the Simplified Acquisition Threshold. Price or rate quotations must be obtained from an adequate number of qualified sources. Must obtain quotes from more than one vendor. Quotes can be written, verbal, or internet searches but must be documented. 25

26 Methods of Procurement Sealed Bids: (Formal Advertising)Existing term for supplies and services purchases, where the aggregate dollar amount is over $150,000. Bids are publicly solicited and a firm-fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. Preferred method for construction projects funded with federal grant funds. 26

27 Methods of Procurement Competitive Proposals: Existing term for supplies and services purchases, where the aggregate dollar amount is over $150,000. Used when conditions are not appropriate for the use of sealed bids. Conducted when there is more than one source submitting an offer and either a fixed-price or cost-reimbursement type contract is awarded. New requirement: Non-Federal entities must have a written method for conducting technical evaluations of the proposals received and for selecting recipients. 27

28 Methods of Procurement Non-Competitive Bids: (Sole Source) Existing term for supplies and services purchased, of any dollar amount Can only be used if (one or more, are applicable): The item is only available from a single source. The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation. The federal awarding agency expressly authorizes non-competitive proposals in response to a written request. Competition is deemed inadequate after solicitation from multiple sources. 28

29 Other Procurement Items to Note : Contains language that prevents contractors who develop or draft specifications, requirements, statements of work, and invitations for bids or requests for proposals from competing for such procurements c: Written procedures for procurement transactions are still required. August 2014 FAQ Clarifies that the Federal procurement standards are not required to apply to procurements made (charges to) the indirect cost pool and apply only to goods or services that are directly charged to a Federal award The non-federal entity must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of the contract or purchase order. 29

30 Other Procurement Items to Note All non-federal entities will need to update their internal procurement policies to reflect the changes described in the Uniform Guidance. Important that a recipient s procurement policies identify the five allowable methods outlined in Section ( the claw ). Ensure your institution s current employee conflict of interest policies include the required language. Ensure the mandatory organizational conflict of interest policy is written, if applicable. Review Appendix II to ensure your institution s contracts include the required specifications. 30

CALIFORNIA AREA SCHOOL DISTRICT

No. 150.3 CALIFORNIA AREA SCHOOL DISTRICT SECTION: TITLE: PROGRAMS FEDERAL PROGRAMS PROCUREMENT ADOPTED: September 21, 2016 REVISED: 150.3 FEDERAL PROGRAMS PROCUREMENT The District maintains the following