University of Maine System

Transcription

1 University f Maine System Nvember 6, 2014 EXECUTIVE SUMMARY AUDIT RESULTS JUNE 30, 2014

2 COMMON TERMS GASB Gvernmental Accunting Standards Bard. This bard is respnsible fr establishing standards f accunting and financial reprting fr U.S. state and lcal gvernments. FASB Financial Accunting Standards Bard. This bard is respnsible fr establishing standards f accunting and financial reprting fr U.S. nngvernmental rganizatins, including frprfit and nt-fr-prfit rganizatins. AICPA American Institute f Certified Public Accuntants. The AICPA sets ethical standards fr the CPA prfessin and sets U.S. auditing standards fr private cmpanies, nnprfit rganizatins, federal, state and lcal gvernments. 1

3 DISCUSSION AGENDA Review f required cmmunicatins letter Review f financial statement audit plan and results GASB statements t be implemented in the next tw years Emerging issues - GASB s technical plan 2

4 REQUIRED COMMUNICATIONS Our respnsibility Supplementary infrmatin Expressin f an pinin n the financial statements; clean (unmdified pinin). Nt audited - we applied certain limited prcedures. Accunting estimates Liabilities fr certain emplyee benefits; allwances fr uncllectible receivables. Accunting practices Implementatin f GASB 65. Crrected and uncrrected misstatements Representatins Disagreements Cnsultatin with ther accuntants Difficulties Other issues Nne nted. Included with package. Nne. Nne, t the best f ur knwledge. Nne, excellent cperatin thrughut the audit. Nrmal discussins. 3

5 AUDIT PLAN AND RESULTS SIGNIFICANT AUDIT AREAS Cash and investments Receivables and service and grant revenues Capital assets/facilities, bnds payable and related expenses Payrll liabilities and related expenses Accunts payable and related expenses 4

6 AUDIT PLAN AND RESULTS CASH AND INVESTMENTS Significant Internal Cntrl Prcedures Review f investment and cash management plicies. Review f Investment Cmmittee minutes fr infrmatin n investment activity and perfrmance. Observed and reviewed recnciliatins f cash and investment accunts. Cntrls ver physical access. Internal Cntrl Reprts frm selected investment custdians SSAE 16. Significant Substantive Prcedures Cnfirmatin f cash accunts and investment market value. Review f selected bank recnciliatins. Valuatin testing. Obtaining investment manager reprts and cmparing t investment return results. Test f allcatin f return. Test f spending draws t apprved plicy. Test f unitizatin. 5

7 AUDIT PLAN AND RESULTS RECEIVABLES AND REVENUE Significant Internal Cntrl Prcedures Tested cntrls ver delinquent balances in student accunts receivable. Obtained and reviewed Internal Cntrl Reprt fr 3 rd party lan administratr. Observed and tested grant revenue draws dne by System ffice. Significant Substantive Prcedures Predictive tests f E&G revenue. Analysis f aging and allwance fr reasnableness and cnsistency with established plicies. Test f cntributins. Cnfirmatin f State apprpriatins. Tests f grant revenue and receivables t award dcuments and supprt fr expenditures if n reimbursement basis. Analytical prcedures. 6

8 AUDIT PLAN AND RESULTS CAPITAL ASSETS AND BONDS PAYABLE Significant Internal Cntrl Prcedures Tested Bard f Trustees advance apprval fr large prjects. Significant Substantive Prcedures Tests f capital additins t supprting invices and apprvals. Tests f detail supprting capital prjects in prcess. Review f related financial cmmitments. Cnfirmatin f indebtedness. Depreciatin reasnableness and recalculatin fr selected assets. Review f interest expense/capitalized interest and required bnd reprting. Review f entries and financial statement changes frm GASB 65 implementatin. Analytical prcedures. 7

9 AUDIT PLAN AND RESULTS PAYROLL AND RELATED ACCRUED EXPENSES Significant Internal Cntrl Prcedures Tested a sample f apprvals fr change in status f emplyees. Tested requirement that hurly emplyees hurs are apprved electrnically by supervisr prir t payment. Budget vs. actual review persnnel csts by psitin. Significant Substantive Prcedures Review f prir year actuarial reprts and cmparisn f underlying data fr pensin plans. Review f current year actuarial reprt fr ther pstemplyment benefits (OPEB) and testing f census data. Review f reprt prvided by insurance cmpany that calculated the liability fr health insurance claims that had been incurred but nt yet paid. Review f calculatin fr special retirement incentive accrual. Varius analytical prcedures. 8

10 AUDIT PLAN AND RESULTS ACCOUNTS PAYABLE AND ACCRUED EXPENSES Significant Internal Cntrl Prcedures Observed exceptin reprt displaying checks larger than $25,000 which is given t the Financial Analyst, Assistant Directr f Budget and Financial Analysis r Directr f Accunting fr at least tw t review. Observed that purchases f $125 r mre generally require a purchase rder. Tested new vendrs t ensure that there were n duplicate addresses r addresses f key prcurement persnnel. Tested a sample f PCard transactins fr varius internal cntrls based n the System s updated Administrative Practice Letter (APL). Significant Substantive Prcedures Perfrmed a search fr unrecrded liabilities. Tested a sample f PCard transactins fr allwability. Analytical prcedures. 9

11 GASB PRONOUNCEMENTS ADOPTED The System adpted ne new GASB Prnuncement during 2014: GASB 65 - Items Previusly Reprted as Assets and Liabilities Requires certain items that were previusly treated as assets and liabilities t nw be treated as deferred inflws and deferred utflws f resurces. In additin, requires sme items previusly treated as assets t be expensed in the perid incurred. Fr UMS, the primary changes were: Deferred amunts frm bnd refundings are nw reprted as deferred items. In the past, they were typically netted against bnds payable. Bnd issuance csts are nw expensed as incurred. Initial applicatin required a restatement t beginning net psitin as f July 1, 2012 f $2,052,

12 NEW GASB PRONOUNCEMENTS TO BE IMPLEMENTED IN NEXT TWO YEARS GASB 68, Accunting and Financial Reprting fr Pensins GASB 71, Pensin Transitin fr Cntributins Made Subsequent t the Measurement Date (FY15) These new standards attempt t align the recgnitin f pensin expense with the perid in which the related benefits are earned. Cnsequently, the measurement prcess invlves three essential steps: 1) Prject future benefit payments fr current and frmer emplyees and their beneficiaries. 2) Discunt thse payments t their present value. Will require use f a blended discunt rate if it is nt expected that plan assets will fully fund pensin bligatins. 3) Allcate the present value ver past, present, and future perids f emplyee service. 4) Cntributins made subsequent t the measurement date will be treated as a deferred utflw f resurces. 11

13 EMERGING ISSUES-GASB TECHNICAL WORK PLAN Fair Value Measurement and Applicatin Further develpment f definitin, measurement and disclsure f accunts currently reprted at fair value. Accunting fr Other Pstemplyment Benefits (OPEB) Establishes standards fr measuring varius cmpnents f System pensin plans and increases disclsures f such plans. Fiduciary Respnsibilities Leases Will clarify whether business-type activity engaging in fiduciary activities shuld present fiduciary fund financial statements. Reexamine issues assciated with lease accunting, and cnsider aligning GASB lease accunting with FASB. Other smaller prjects Asset retirement bligatins Blending requirements fr certain business-type activities Irrevcable charitable trusts 12

14 FEDERAL FUNDS COMPLIANCE AUDIT STATUS UPDATE Cmpleted fieldwrk n varius campuses: Visited UM, USM, UMA Tested the fllwing as majr prgrams: Student Financial Assistance Cluster Research and Develpment Cluster Reslutin f items requiring fllw-up. Expect t receive the schedule f expenditures f federal awards in December. Final reprts expected t be issued in January. 13

15 CONTACT INFORMATION AND DISCLAIMER Renee Bishp Principal (207) Emily Parker Manager (207) Amanda Butterfield Senir Manager (207) This infrmatin is intended slely fr the infrmatin and use f the Bard f Trustees, Audit Cmmittee and management and is nt intended t be, and shuld nt be, used by anyne ther than these specified parties. 14