OSC Year-end Update. Pam Fowler Helen Vozzo NC Office of the State Controller

Transcription

1 OSC Year-end Update Pam Fowler Helen Vozzo NC Office of the State Controller

2 Session Etiquette Please turn off all cell phones. Please keep side conversations to a minimum. If you must leave during the presentation, please do so as quietly as possible. 2

3 OSC Year-end Update Agenda Important year-end dates and changes for 2013 CAFR package changes for GASB 63 GASB Statements 60, 61, and 62 overviews Summary list of other new GASB statements with effective dates Questions and discussion 3

4 2013 Year-end Due Dates August 26 - CAFR package workbook, narratives, and letter of certification August 26 Single Audit Reporting Package September 10 - Foundation template for nongovernmental (FASB) discretely presented Foundations September 13 Accounts Receivable Report September 20 Formal notes 4

5 2013 Year-end changes- Accruals for A/P and A/R Changed accrual cut-off for A/P and A/R to July 23. For example, for agencies using NCAS, this is the last date for agencies to enter and flag invoices to programmatically inject as A/P. Similarly, July 23 is the last date to enter and flag journal entries for revenue accruals to programmatically inject as A/R. Old date was July 31. Earlier accrual cut-off for A/P and A/R is to promote more timely completion of CAFR package. This is part of Checklist on first page of CAFR package instructions. The July 23 cut-off should allow sufficient time to determine material A/P and A/R accruals. However, use professional judgment to see if additional material A/P and A/R accruals would need to be recorded. Each agency/university should determine materiality for their entity. 5

6 GASB 63 Effective for FY 2013 In June 2011, the Governmental Accounting Standards Board (GASB) issued Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position (GASB 63). GASB 63 standardizes the presentation of deferred outflows and deferred inflows explaining GASB 63 changes for 2013 sent to universities on 3/1/13 from Terri Noblin. Refer to for more info. Also refer to the OSC GASB Resources webpage for additional info and link to the GASB.org website. Pronouncements are available for download from the GASB website. 6

7 GASB 63 Changes for 2013 CAFR Net assets are being replaced with Net position Statement of Net Assets (SNA) Statement of Net Position (SNP) The Statement of Net Assets is being converted to the Statement of Net Position by adding two new sections: Deferred outflows of resources and Deferred inflows of resources and changing the Net assets section to Net Position. The distinction between current/noncurrent is not applicable to deferred outflows of resources and deferred inflows of resources. Therefore, deferred outflows of resources and deferred inflows of resources are reported in separate sections following assets and liabilities, respectively. The format for the SNP is: Current Assets Noncurrent Assets Deferred Outflows of Resources Current Liabilities Noncurrent Liabilities Deferred Inflows of Resources Net Position Continued 7

8 GASB 63 Changes for 2013 CAFR, continued The new equation is: Assets + Deferred Outflows of Resources Liabilities Deferred Inflows of Resources = Net Position A + DOR L DIR = NP The Investment in capital assets, net of related debt is renamed Net investment in capital assets The operating statement has been updated accordingly with net position in place of net assets: the Statement of Revenues, Expenses,& Changes in Net Assets (SRECNA) becomes the SRECNP The 905 template has been updated for all these changes and the university pro-formas will be updated as well 8

9 GASB 63 Changes in the 905, page 1 of 3 Office of the State Controller 2013 CAFR Worksheets Offline Proprietary Proforma - Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position Updated for FY2013 for GASB63 new sections for Def outflows and Def inflows, Net Position & new formulas DRAFT as of 2/22/13 Agency No: U20 Preparer/Phone: Agency Name: UNC at Chapel Hill - GASB Fund No: 4XXX Instructions: Key to Column F, except for shaded cells w here the w orksheet must be completed first for the amount to link to the 905. Column F Statement of Net Position Prior Year -To Compare ASSETS June 30,2013 June 30,2012 Current Assets: 100 Cash and cash equivalents... $ $ 21,420, Pooled cash ,339, Investments ,573, Accounts receivable, net... 90,820, Intergovernmental receivables... 67,698, Interest receivable... 2,462, Other receivables, net... 18,374, Due from State of NC component units (w s 525)... 25,089, Inventories... 21,834, Prepaid items , Notes receivable... 4,311, Restricted/designated cash and cash equivalents... 12,810, Restricted pooled cash ,821, Restricted investments ,714, Total Current assets... 1,469,735, Noncurrent Assets: 110 Investments... 27,573, Other receivables, net... 28,572, Notes receivable... 34,960, Investment in joint venture... 8,318, Restricted/designated cash and cash equivalents... 10,099, Restricted/designated pooled cash... 38,503, Restricted investments... 2,805,087, Restricted due from primary government (w s 515)... 1,504, Capital assets, nondepreciable: Total capital assets - nondepreciable... Capital assets, depreciable: Total capital assets - depreciable, (net)... Total Noncurrent assets ,483, ,483, ,633,208, ,633,208, ,022,692, ,977,312, Total assets... 3,022,692, ,447,047, DEFERRED OUTFLOWS OF RESOURCES Accumulated decrease in fair value of hedging derivative... Total deferred outflow s of resources ,894, ,894,

10 GASB 63 Changes in the 905, page 2 of 3 LIABILITIES Current Liabilities: 204 Accounts payable... 91,066, Accrued payroll... 41,218, Interest payable... 11,943, Commercial paper payable (w s 310) ,650, ,650, Due to State of NC component units (w s 530)... 14,472, Due to primary government (w s 520)... 3, Unearned revenue... 41,778, Deposits payable... 6,676, Funds held for others... 1,179, Notes payable-current (w s 310) , Capital leases payable-current (w s 310)... 54, Bonds and similar debt payable, net-current (w s 310)... 86,833, Annuity and life income payable-current (w s 310)... 1,620, Accrued vacation leave-current (w s 310)... 7,289, Total current liabilities ,650, ,747, Noncurrent Liabilities: 204 Intergovernmental payables... 31,066, Funds held for others... 1,455,472, Hedging derivatives liability ,894, Notes payable (w s 310)... 45,940, ,979, Bonds and similar debt payable, net (w s 310)... 1,198,088, ,111,255, Annuity and life income payable (w s 310)... 15,285, ,664, Accrued vacation leave (w s 310) ,505, ,216, Total noncurrent liabilities... 1,385,873, ,898,549, Total liabilities... DEFERRED INFLOWS OF RESOURCES Accumulated increase in fair value of hedging derivative... Serv concess arrangmt revenue applicable to future yrs... Total deferred inflow s of resources... 1,518,523, ,336,296, Net position: 300 Net invested in capital assets... 1,645,958, Restricted Nonexpendable: Need to calculate and key in cell F135 In 301 Higher education ,687, Restricted Expendable: 305 Higher education ,908, Unrestricted ,091, Total net position... $ $ 4,233,646, Verification: Assets + Def. Outflow s - Liab. - Def. Inflow s = Net Position Out of Bal. In Bal. 10

11 GASB 63 Changes in the 905, page 3 of 3 Statement of Revenues, Expenses and Changes in Net Position FYE June 30,2013 FYE June 30,2012 Operating Revenues 500 Sales and services, net... $ $ 400,479, Student tuition and fees, net ,535, Patient services, net ,670, Federal grants and contracts ,701, State and local grants and contracts... 40,723, Nongovernmental grants and contracts ,191, Interest earnings on loans , Fees, licenses and fines... 1,016, Miscellaneous... 7,131, Total operating revenues... 1,735,299, Operating Expenses 600 Personal services... 1,375,757, Supplies and materials (beginning FY2013, includes capital outlay/noncap equip) ,489, Services ,719, Cost of goods sold... 22,409, Claims and benefits , Depreciation ,529, Insurance and bonding... 4,788, Scholarships and fellow ships... 96,870, Other fixed charges... 14,846, Other expenses... 22,924, Total operating expenses... 2,449,478, Operating income (loss)... (714,179,693.60) Nonoperating Revenues (Expenses): 509 State appropriations ,492, Noncapital grant revenue... 95,379, Noncapital gifts, net... 99,445, Interest and fees expense... (64,321,547.38) 512 Investment earnings... 33,133, Federal interest subsidy on debt... 2,273, Miscellaneous nonoperating revenue , Miscellaneous nonoperating expense... (6,628,355.84) Total nonoperating revenues (expenses) ,350, Income before other revenues expenses gains and losses... (67,829,360.23) 511 State capital aid... 78,133, Capital gifts, net... 5,630, Additions to endow ments... 25,980, University transfers (w s 565)... 88,773, Increase (decrease) in net position ,687, Net position - beginning of year... 4,233,646, ,102,958, Restatements... Net position - end of year... $ 4,233,646, $ 4,233,646, Net position betw een Stmt of Net Position and O/S verification Error OK 11

12 Account Changes for 2013 resulting from GASB 63 NC Office of the State Controller Chart of Accounts changes to implement GASB 63 Deferred Outflows, Deferred Inflows & Net Postion for the FYE 6/30/13 as of 3/4/13 GASB 63 Attachment 1 - revised 3/4/13 (revised for typo for acct in sent 3/1/13) NCAS New Acct Title and/or Explanation of Account # Old Account Title Change in Acct for CAFR and F/S reports Deferred outflow of resources - current changed to invalid - see acct Changed to invalid. GASBS No. 65, paragraphs , indicate that the GASB views the concepts of liquidity and current vs noncurrent classification not applicable to deferred outflows of resources and defered inflows of resources. Therefore, only one account is needed - see acct below acct renamed and roll-up changed Deferred outflow of resources - noncurrent Accumulated decrease in fair value of hedging derivatives. This account and caption will roll to the new f/s element section: DEFERRED OUTFLOWS OF RESOURCES. This section comes after noncurrent assets and before current liabilities Deferred inflow of resources - current changed to invalid-see acct Changed to invalid. GASBS No. 65, paragraphs , indicate that the GASB views the concepts of liquidity and current vs noncurrent classification not applicable to deferred outflows of resources and defered inflows of resources. Therefore, only one account is needed - see acct below acct renamed and roll-up changed Deferred inflow of resources - noncurrent Accumulated increase in fair value of hedging derivatives. This account and caption will roll to the new f/s element section: DEFERRED INFLOWS OF RESOURCES. This section comes after noncurrent liabilities and before Net position acct renamed and new definition Net assets Net position with the following updated definition.(see underline for 3/4/13 revision) The residual of assets plus deferred out flows less liabilities less deferred in flows for proprietary and fiduciary funds. This account is also where the revenue/expense summaries for proprietary and fiduciary funds are closed Restatement-Net assets acct renamed and updated definition Restatement-Net position with the following updated definition. To record prior year adjustments and other restatements to net position for proprietary and fiduciary funds. 12

13 Other account changes Noncapitalized equipment (NCAS acct 534XXX) accounts starting FY 2013 are rolling to Supplies and materials for year-end reporting instead of to Other exp. NCAS acct Student/Patient entertainment exp starting FY 2013 rolling to Other services instead of Employee benefits (brought to our attention by UNC- Charlotte - thanks!) Please check the New Accounts & Changes(2013) file on the OSC website for the most up-to-date info on new accounts and changes for the year. Elements.html 13

14 GASB 60 - Accounting and Financial Reporting for Service Concession Arrangements Effective fiscal year ending June 30, 2013 Potential restatement. Survey sent to all universities: No SCAs reported. OSC contact Ann Anderson ; ann.anderson@osc.nc.gov All (4) criteria must be met to qualify as an SCA: The transferor conveys to the operator the right and related obligation to provide public services through the use of a capital asset in exchange for significant consideration. The operator collects and compensated by fees from third parties. The transferor determines or has the ability to modify or approve what services are provided, to whom the services are provided and the prices and rates that can be charged. The transferor is entitled to significant residual interest in the service utility of the facility at the end of the arrangement. 14

15 GASB 60 (cont.) Accounting: not all entries necessary; case by case Transferor (always the government) Asset (debit) Liability (credit) Deferred inflow (credit) CAFR Reporting new for 2013 New worksheet 110 (similar to survey) New Narrative for disclosure General description: The arrangement and management s objective. The nature and amounts of related assets, liabilities and deferred inflows reported in the financials. The nature and extent of rights retained by the transferor or rights granted to the governmental operator. Provisions for guarantees and commitments. Multiple arrangements may be reported in aggregate if similar facilities and risk. 15

16 GASB 61 Changes The Financial Reporting Entity: Omnibus, an amendment of GASB Statements No. 14 and No. 34. Effective Fiscal Year-End Objective is to improve financial reporting for a governmental financial reporting entity to better meet user needs and to address reporting entity issues that have arisen since the issuance of Statements 14 and 34. Clarifies the misleading to exclude criterion. This Statement emphasizes that the determination should normally be based on financial relationships, such as a significant financial benefit/burden relationship with the PG. Modifies requirements for including CU s based on fiscal dependency; a financial benefit/burden relationship must also be present. 16

17 GASB 61 Changes GASB 61 adds criteria for blending. A CU's governing body being substantively the same as the governing body of the PG is no longer enough to require blending; there must also be a financial benefit/burden relationship or management of the PG has operational responsibility of the CU. A provision was also added to blend CU's whose total debt outstanding, including leases, is expected to be repaid entirely or almost entirely with resources of the PG. Several Universities have certain "financing" foundations that issue debt for the construction of student housing and this debt is repaid by the Univ. Re-evaluate these foundations to determine if they meet the blending criteria in GASB 61 or if they meet the discretely presented criteria in GASB 39, paragraph 40a. Refer to the OSC related to GASB 61 for guidance. 17

18 GASB 61 changes Provides guidance on how blended CU s should be reported. Governments engaged only in business-type activities that use a single column for financial statement presentation have to also present condensed combining information in the notes to the financial statements. The university pro-formas will be revised. Clarifies the reporting of equity interests in legally separate organizations. It requires a PG to report an asset for its equity interest in a discretely presented CU. Changed the reporting classification of minority interests. When a CU is included in the majority participant's financial reporting entity, the CU should report any equity interests of the minority participants as restricted net assets, nonexpendable. The OSC Net Assets policy will be revised. 18

19 GASB 61 changes Clarifications were made to note disclosures requirements. The rationale for including each CU and the manner in which it is included should be disclosed. Refer to the OSC related to GASB 61 for further information and more details. Questions - contact Joy Darden (919) or joy.darden@osc.nc.gov 19

20 GASB 62 - Codification of Pre-1989 FASB and AICPA Pronouncements Effective for FY 2013 GASB 62 incorporates into the GASB s authoritative literature certain FASB and AICPA pronouncements issued on or before November 30, 1989, which do not conflict with or contradict GASB pronouncements. The guidance generally has been taken as-is from the original FASB and AICPA pronouncements, except a few provisions that have been modified where necessary to relate specifically to the governmental environment. GASB 62 should have minimal impact on universities. 20

21 New GASB Statements - Summary Effective FY 2013 GASB 60 Service Concession Arrangements GASB 61 The Financial Reporting Entity Omnibus GASB 62 Codification of Pre-1989 FASB and AICPA Pronouncements GASB 63 Reporting Deferred Outflows, Deferred Inflows and Net Position Note: GASB 64 - Derivative Instruments: Application of Hedge Accounting Termination Provisions an amendment of GASB Statement No. 53 was implemented for FY

22 New GASB Statements - Summary (cont.) Effective FY 2014 GASB 65 - Items Previously Reported as Assets and Liabilities GASB 66 Technical Corrections 2012 an amendment of GASB Statements No. 10 and No. 62 GASB 67 Financial Reporting of Pension Plans an amendment of GASB Statement 25 (applies to pension plans) Effective FY 2015 GASB 68 Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27 (applies to employers) GASB 69 Government Combinations and Disposals of Government Operations OSC GASB Update seminar on May 17, 2013 at McKimmon Center will cover new GASB standards 22

23 Contact information Pam Fowler (919) Helen Vozzo (919) Thanks for your attention! 23