AGENDA DISCUSSION/TOPIC ACTION/STATUS

Transcription

1 Attendance Call to Order Review of Minutes from April 4, 2013 Estimated Increase for Use of Money and Property from FY14 Executive Request MPC Tax Credit Chris Budasi (OFB) Bertha Duenas (OFB) Ricky Hernandez (OFB) Selina Onedera-Salas (OFB) Ariana Villaverde (OFB) Christian Cristobal (OFB) Albert Perez (BSP) John Pangelinan (BBMR) Elaine Ayuyu (DOA) Tom Paulino (DOA) Goody Rosario (DOA) The meeting was called to order at 2:30 pm. The date of the Minutes was corrected to reflect April 5 and not April 4. On Page 8, the Point of Sale system referenced under the Agenda column should be reformatted about two lines down in reference to the Point of Sale System and not the TEFF. John Pangelinan/Elaine Ayuyu/moved to approve the Minutes as presented, subject to corrections. Tabled till next meeting Tabled till next meeting John Pangelinan (BBMR) to present at next meeting John Pangelinan (BBMR) to 1 sos

2 inclusion on the budget Section 2718 Fund TEFF The Minutes shows discussion that the FY14 projects $27.2 million, and Chris asked if this number is close to BBMR s tracking for FY13? John explained that the TEFF is about $30 million, with an overage of $197,734 for current tracking as of March 2013 the $10.9 million is the projected revenue enhancement but will verify with BBMR staff. Based on actual versus projected, tracking is at $30 million for April, but John will review the projected revenue enhancement. Goody explained that DOA is trying to isolate the TEFF, but no one can provide explanation. The new billings include the Chamorro Land Trust properties, and collection is very minimal less than $100,000. With the new billing in place, payments are being collected, but there is question on where the payments are getting booked. The DRT has not worked with DOA to identify where the revenues should be recorded; if the billings for these types are available, DOA can check the system to identify the payments and where they re booked. Chris pointed out that the statute may require DRT to provide the same report for CLTC lessees which should show where the liability is. John and Goody discussed whether or not a listing is available, and Goody advised the group that no listing is available to them. Chris said that the old system had everything listed as government of Guam property and that the new system may differentiate the properties. (Chris suggested for the group to have a later meeting at DRT for DRT staff to give a tour where the group can see the system being used and how it works.) Chris asked about the TEFF revenues showing collections at about $30.6 million and asked where the revenues are coming from. Chris advised that the AS400 is not present at next meeting 2 sos

3 tracking TEFF at $30.6 million. Chris asked if a special billing between April and September for additional collections is going to take place. Goody said DRT reported that by September, the re-assessment would be completed and that if collections can be made between October to December, the revenues can be recorded for FY 13 under GASB. Chris said that by law, he believes the tax bills have to be done by September for the next fiscal year but that he ll verify and report back to the group with his findings. Chris to verify tax laws for booking of collections John explained that at the time the projections were made, the reassessment was supposed to take place between FYs 13 and 14 but that as of right now, the report provided was the final report as of March 31, Chris asked about the DOE TEFF reconciliation, because DOE would come up short if the $10.9 million doesn t materialize. The issue has been discussed with the EFSC, and reconciliation was supposed to take place between DOE and BBMR for a possible adjustment to reclassify the disbursements of the TEFF allotments/cash collected. DOE has already received about $15 million from the TEFF but that amount has not been collected. Goody said that the allotments recorded for the month show that this is the cash released to DOE including the tax offsets which were prorated based on the allotment releases from BBMR. Goody requested for DOE to provide actual expenditures so DOA may follow that data for a possible adjustment to be made later. 3 sos

4 Chris asked that if only $20 million is collected from the TEFF, and that $30 million was appropriated, if the intent is to cover the difference in TEFF appropriations from the General Fund. Goody will verify with BBMR and said that if the adjustments are made, then DOA will follow the budget adjustments. John explained that BBMR is not in the process of changing budgets midstream or making adjustments until further advised but will verify with BBMR for further discussion with the group. Goody said that in the next allotment reconciliation, he will look further into the TEFF collections versus appropriations and pose the question with BBMR. Goody and John to verify and report back to the group OLD BUSINESS Payment Schedule of Make Work Pay Credit Point of Sale System John explained that the reported number falls in line with the reserve request. His review of the allotments for DOE shows that DOE still has $17 million in reserves that were released and have yet to be drawn down. This includes the TEFF as well as the DOE operating funds from the General Fund, but there is still an issue with the allotments. Discussion between Chris, Goody, and John regarding providing the report of actual expenditures from DOE since these reports are usually provided for the EFSC. John requested this information be provided to him for his projections. Tabled till next meeting. (Paul Terlaje not in attendance to discuss with group.) Goody reported that the POS system at DOA still meets the needs of the department, John to report back on MPC tax credit inclusion in budget; TEFF projections; and increases in Use of Money and Property 4 sos

5 Update although there are some challenges. NEW BUSINESS Special Funds Tracking for FY 13 John said that his understanding is that the POS must be working at DRT for the TEFF, because BBMR has included it as part of the report. BBMR is looking at trying to maintain the report consistently. The four main items of focus for reporting requirements are the Guam Highway Fund, the Solid Waste Operations Fund, the TEFF, and the Tourist Attraction Fund. These funds are all based on actuals for the month with the forecast added. The Guam Highway Funds is tracking above forecast. Chris asked if BBMR could provide tracking of all the (other) funds, but John explained that tracking is only provided for these four funds. John said BBMR does not have the resources to provide tracking for the other funds. Chris asked how BBMR will detect if the other special funds are overdrawn, and John explained that every time they do the tracking of the Special Funds, they look at the current GSA (AS400) account. An ODBC report is generated, and a financial statement of the fund balance surplus is produced. The total revenues are reviewed when documents are reviewed, but this process is done on a case-by-case basis. If the group wishes for tracking similar to what has been done for the four major accounts, BBMR does not have the resources to provide that. Again, Chris asked how BBMR will know when something goes wrong with one of 5 sos

6 the other funds if BBMR is not tracking them? John explained that the tracking is based on the AS400 revenues received versus the appropriation. BBMR does their own financials, and in some cases, up to mid-year. He explained that they call DOA to ask if they have financials as well. If there is a major expenditure, BBMR reviews the fund balance for that period of time. BBMR produces its own full-scale financial statements, unaudited. Chris requested for these unaudited financial statements to be provided to the group, but John said that they re unaudited and are done by project on a needs basis. He said there are a lot of financial statements for the Special Funds and that DOA does not do this on a regular basis. Tourist Attraction Fund Chris asked if there is a problem with January and February numbers, and John explained that this was based on the AS400, deferring to actual cash collections. Elaine said these numbers could be based on the rise in tourists as a possible reason, but Chris said that he doesn t think that it s possible to collect $8 million since there aren t enough hotel rooms on Guam to collection $8 million in Hotel Occupancy Taxes. Goody said DOA is still reviewing the postings, because there s a new transaction posting of JGTPs (Journal GuamTax Payments) where there might be some incorrect postings from DRT. Goody explained that the JGTP transactions were not programmed as FY 12 transactions and that these transactions were posted as January 6 for those related to FY 12. Goody said these transactions were just cleared recently, depending on the 6 sos

7 timing. He said the numbers are overstated for FY 13, and FY 12 is reclassified, because they re coming from the suspense account. John said it will take another year to balance these numbers (understated for FY 12 and overstated FY 13). Goody said that his entry for FY 13 is to totally reverse the transactions. Chris asked who generates these reports, and John said BBMR does based on the data provided to them. Goody said this issue should be cleared up for the April report. Chris asked if this change would increase the GRT, and Goody said it would not. Goody explained that what would happen in FY 13 is that all FY 12 transactions will be reversed out. Goody said that the TAF is not the only account affected and that there is about $38 million that has to be reversed. Goody explained that when a taxpayer files GRT through guamtax.com, the debit accounts receivable credits revenues. That entry is supposed to be interfaced by the JGTP, but that did not happen. When these taxpayers made payments under the old POS, the payments were booked as debit cash and credit A/R, because there should be the interface clearing the suspense and crediting the correct line items. Under the new POS, when GRTs are filed through guamtax.com, there are two options: print out the forms and go to GRT collections to make the payment or go online under the new POS through payguam.gov, but payguam.gov is a line item. He said that DOA knows where the problem is and how to fix it. DOA has a post-closing for FY 12. A look at the GRT suspense account in FY 12 before the post-closing shows $33 million. Goody says he doesn t think these adjustments will affect the recently released TAF audit since the audited numbers are based on the actual forms but that the TAF and the GHF in the government audit will be adjusted before release. Chris requested the lead sheets from Goody, and Goody agreed to provide them. Goody to provide lead sheets with adjustments 7 sos

8 Goody explained that this problem was in effect between January 2012 through FY 13 and that when DOA notified DRT of the problem it was then when DRT realized the system wasn t functioning properly. Goody explained that taxpayers confirmed payments (actuals). The payments may be showing on John s report, but they have to be cleared. He has to verify if the actuals are already accounted for in the audit for reversal and reconciliation. John says he thinks the numbers are reasonable except for January and February, and Chris said that would be the case, assuming that October, November, and December TAF are correct for FY 13. Goody still has to generate a summary of the JGTP transactions by month to see what is posted. The switch of the online service from guamtax.com to payguam.gov occurred around February or March During the initial phases, the programmer mirrored the old system, with listings for GRT 1, GRT 2, and GRT 3 there is no way to capture line items on revenue reports at DOA. A change was made so that instead of GRT 1, 2, and 3, BPTs were created such as BPT 1 DOA can now capture when taxpayers make payments to the payguam.gov system. The issue is if the payer files online, if there was a JGPT that would reverse the suspense, the assumption is there is a duplication. When the new BPT kicks in, DOA will have to reverse the BPTs. Goody further explained that when DMR posted all the JGTPs, they posted everything in FY 13 so because the books were closed, those numbers are affected. When those were posted, DOA already closed the first quarter of FY 13 so DOA had no choice but to post it in January. Goody has to research how DRT posted October 8 sos

9 through December. Goody says that moving forward, this should not happen again. Chris asked if this will reduce the current tracking for GRT, and Goody said that what is booked for FY 13 is going to be reversed to take out all FY 12-related transactions since they re not actual collection sin FY 13. Goody said that if the online filings were from guamtax.com and are transacted, it should be part of the program that DRT would only transact the ones where a payment can be traced. A taxpayer can file online but not make a payment. He said that those shouldn t be interfaced since a payment was not made. John asked if a payment is made with a credit card if that payment would be filed in the same batch, and Goody explained that when a payment is received, it should only be debit cash and credit A/R if what is paid is filed online. Goody said that these transactions were paid in 2012 and that s why there is a big GRT suspense in 2012 of about $33M. Goody said that this problem was discovered, because there was a big amount of suspense that was not being cleared. DOA did not know about the JGTPs until the auditor said they might give DOA qualification on the $33M. The data was collected, and then they looked at why there was no JGTP transaction reference starting from this month. John said that if these are just bathes that are consistent in the posting, the reversal 9 sos

10 can be done and posted to FY 12. Goody agreed and said that this is trackable. Bertha said that the GRT reported in the CRER showed a deviation of about $10M (reduction) between January and February from what the AS400 is showing at the end of March as opposed to the end of February. She asked if this has anything to do with the suspense if someone can confirm that the $114M showing in the CRER for GRT for purposes of making sure the OFB tracking is accurate. Bertha asked if DOA could help explain the deviation and the fact that the CRER is not recognizing the AS400 GRT collections for January and February. She added that the February CRER reported an aggregate of $114M tracking but that March reported $114M collections to date from October to March. When she verified the year-to-date number, the AS400 showed $104M. A month-to-month analysis showed discrepancies in January and February to include the TAF. Tom said they re all interrelated and that he ll look into it. Chris asked if it is possible that the GRT was already fixed, and Goody said that when he extracted the FY 12-related transactions, he couldn t take it out from the January 6 postings since the second quarter was already closed. Goody will have to do this on April 7 to view the FY 12-related transactions posted in FY 13. He said that once everything is fixed, a year-to-date report for April will show a better number. Goody told John that the transactions were posted before BBMR finalized their report. Chris asked if the approximate $19M in reversals will come from GRT. Goody said he s not done with the report yet, but the report he s working on right now is the 10 sos

11 same report but includes the GRT account number of all taxpayers. When isolating the FY 12-related (based on the date of filing), the report shows $46M. If these are all paid, then the other report will show about $46M as well, but it s showing $38M. Goody still has to review all the data. DOA is still clearing the suspense account, but the GRT filers online payments are being fixed. Everything should be reflected in the April 7 report. Chris said that for mid-year revenue collections, OFB will just run all the transactions as of April 7 and use that in the revenue accounts. Everything prior to that date will be disregarded. Compliance with financial reporting requirements Chris said that all the reporting requirements ask for reports to be filed with the Speaker of the Legislature as well as an Excel file but that the OFB is not receiving the files or reports. He asked if DOA and BBMR are sending the files and reports to the Speaker s office and if the files aren t being passed on to the OFB or if the reports are not being sent to the Legislature at all. John said that the mandatory reports are being sent but may be in PDF form (whether in Word or Excel format). John will verify with BBMR staff concerning Excel files. Chris asked that if the files are available, the agencies may Cc OFB. He explained the specificity of the requirements in the Budget Act and offered to provide the citations from the Budget Act. He said that the Excel files make it easier to aggregate data without having to re-key everything. John to follow-up with BBMR regarding Excel files for compliance with reporting requirements 11 sos

12 Additional Child Tax Credit Additional Child Tax Credit Reimbursements Against Provision for Refunds Follow-up Discussion on DRT Oversight Hearing Tabled till next meeting (Paul Terlaje not in attendance to discuss with group.) Chris said this data is no longer being classified under Income Tax and is being offset against the provision the payments from Treasury. The $39M in ACTC reimbursements are being posted in the provision account, bringing the provision down and asked for clarification. Tom affirmed that this was the case, explaining that the provision for tax refunds is already supposed to incorporate the ACTC so from an accounting perspective or for GAP reporting, the ACTC should be a reduction of provision. For fiscal years when the reimbursements were received, they were recorded in revenues to show on the tracking but adjustments have been made at year-end for audit purposes. Chris explained that at the Oversight Hearing with Senator San Nicolas, the senator questioned DRT about tax receivables (estimated to be about $100M), and the audit shows around $30M in tax receivables at the end of the fiscal year. Chris asked if anyone had any insight about the difference between the $30M and the $100M. Goody said that DOA s A/R is based on the GASB within 90-day collections. Chris asked if these are fiscal year collections due within 90 days of the end of the fiscal year versus people who are not paying, and Goody said DRT receivable are since inception, including assessments. SAS Membership Composition Review & Recommendations Chris asked for feedback from the group as to who should be attending SAS meetings. He pointed out the seat for the Chief Information Officer of the Bureau of Information Technology saying that the person in this position has attended only one 12 sos

13 meeting. Chris said that a recommendation could be made to for the Committee to amend the OFB enabling legislation based on the feedback from the group. Albert said that he thinks the Chief Economist from BSP could be switched with the BSP Chief Planner, thus changing the membership between the SAS and the SES. He recommended that the Department of Labor Chief Economist could speak for the administration in the SES and feels that the BSP Chief Economist is not really privy to fiscal policy decisions like the DOL Chef Economist is. Chris asked that from a policy level if Albert thinks his input is valuable to the SES, but Albert says he usually just comments at the SES to supplement what Gary Hiles says at those meetings. Albert says that BSP does not plan to recruit a Chief Planner at BSP. Chris asked if Albert had any recommendations for replacing his seat on the SES, and Albert feels that the SES is well-represented. John said that the CIO of the BIT could have contributed to the discussion on the POS, and Goody confirmed that the CIO attends all the POS meetings. Chris explained that the BIT representative would only be able to tell the group about the technical aspects of their work and that the accounting information is what s really important in SAS meetings. He said that BIT hasn t been participating. Discussion took place about notices being sent to all SAS members and how other members make the commitment to attend SAS meetings. A formal request can be made from the Appropriations Chair to specifically call for the CIO s participation in SAS. No motion was made for further action. 13 sos

14 Legislative Bill Review Chris asked if the group would be interested in doing legislative bill reviews on bills specific to financials and policies related to the financial system. John said that this is already being done with the fiscal notes released by BBMR and that BBMR tries to determine the fiscal impact of certain policies. Chris asked John if it would be helpful to have a section of the SAS meetings for discussion on fiscal notes and to provide assistance to get whatever BBMR needs. Discussion took place on timing of fiscal notes requested and released. John asked what the format would be, and Chris offered that BBMR would be responsible for the product based on their legislative review with the assistance of the SAS. John said that he and Goody are already working together on some fiscal notes and talking to the appropriate departments and agencies. Adjournment Meeting was adjourned at 3:51 pm. 14 sos