May 2014 BAR MEETING
Columbia Basin College
May 29th and 30th, 2014
Thursday, May 29th
Welcome
Chair Jennifer Strother called the meeting to order at 10am
Welcome and logistics by Brett Riley, Columbia Basin College
SAO Financial Statement Audits
Jennifer Myers, SAO. Jennifer has electronic presentation materials.
Troy Kelley is our current State Auditor. He is elected to a 3 year term.
Beginning in Fiscal Year 2014, they are switching back to the model of individual agency accountability
audits.
State of WA CAFR Audit does include higher education data. They may select large financial transactions
(cash, assets, etc) that they need to review on our sites. This is normally just for our larger colleges that
have a material impact.
The statewide single audit included higher education. Student Financial aid has been selected for
testing at community colleges for fiscal year 2014.
Financial Statement Audits for 2013. 9 colleges will be audited as pilots for 2013, 2 audits are currently
underway so far. Jennifer is coordinating but local audit teams do the onsite testing.
Accountability Audits will be starting again. They are risked based and agency specific. Audits will be
conducted by local audit teams. Previously, community colleges were audited on a 2 year audit cycle.
They will continue to cycle us based on prior audit issues and risk assessment based on strategic audit
planning.
How to prepare for Financial Statement Audits:
- Good documentation
- Segregation of duties
- Risk assessments that are required by OFM – in SAAM. Making sure we have done these. They may
even ask the President about these and management.
- They will review our minutes and do analytical procedures to identify risks
- To identify material account balances they will use qualitative and quantitative indicators, material
systems, and internal controls over monitoring items (i.e. internal controls over cash)
- They will invite our Board Members to the entrance conference
- They are trying to obtain assurance that the financial statements are free of material misstatement
- They will keep track of how many errors they are finding and it could be a problem if they find a lot
of errors.
- They do not need access to FMS during the review. They may just ask us for reports.
- Run any reports that support our financial statement balances and reconciling documents (bank
reconciliations) are good things to prepare for the auditors.
Purchasing Commission Hot Topics
Rod Ramer, Community Colleges of Spokane. Rod has a power point presentation.
Mandatory Training. DES still hasn’t set this training up yet. Rumor is that they are going to mirror the
training after a training program Oregon has set up. Their goal is to have all of this complete by July 1.
Purchasing Managers on campuses are concerned about the certification process and are hoping that
those who have been around and taken prior purchasing training can be grandfathered in.
Risk Assessment. RCW 39.26.090 requires that DES develops a risk assessment for each agency before
delegating any procurement authority. There was a pilot of UW, Evergreen and Olympic to develop the
assessment tool. They look at how our agency manages its procurement function. This has been a
moving project with change in project leadership at DES. Our authority is based on 28B.10.029, so our
question is whether or not we really have to participate in the Risk Assessment process. We aren’t sure
if this exemption will continue for Higher Ed or not.
Contract Reporting. RCW 39.26.210 (1).
Exemptions include interagency agreements, interlocal agreements, grant contracts, and others.
DES wants us to include $50 guest speaker agreement because there is a scope of work. They also want
us to include PO’s used in place of contracts in these situations, even though purchase orders are
supposed to be exempt. There hasn’t been clear guidance from DES and we don’t expect to receive it,
so colleges will make their own decisions on what to include.
Spokane is saying that they will include any contract signed by two parties and Purchase Orders for
object codes for services – ER, EE, ED, Cx, NB
ctcLink is building a report in to their system for this. But for the next few years, we need to identify the
data ourselves.
DES says they are not auditing what we submit and are simply just complying with the RCW to host this
information and post it publicly.
Working Lunch – OMB Omni-Circular Higher Education Grant Changes
Audio Conference (recording)
There is a power point presentation on this
The reason for the change is consistency – no matter what kind of agency we are there will be one set of
rules.
Final regulations will be published December 2014. New rules will apply to all new money received after
December 26, 2014. So for most of our grants that start July 1, this will be the rules for grants that begin
July 1, 2015.
If there is inconsistency between our particular grant statutes and regulations and the omni-circular,
then we have to follow the grant statute. The grant always governs over the omni-circular.
Time & Effort is the number 1 finding in federal audits. The rules change in the omni-circular, but they
are not simpler, just more consistent. All employees paid with federal funds, whether full time or parttime.
- Budget estimates do not qualify as support for charges
-
If documentation meets the time and effort standards/requirements, no additional documentation
is required.
If documentation does not meet the standards, we may be required to provide PARs. But PARs
have not been defined, so we aren’t sure what that will be.
Advice moving forward is to use systems we currently have in place under A-121, etc. until we hear
further.
3 major systems in Grant Management. Financial management, Procurement and Property Standards.
New written procedures to implement Cash Management Improvement Act and written procedures to
determine allowability.
- We must now have written procedures for determining allowability of costs in accordance with the
omni-circular. Easy finding to avoid if we just draft our procedures and then train staff on them.
CTC Link – Where are we to Date
Cindy Shaffer, CTC Link. Power point presentation used.
General Ledger and Cash Management Update
- Completed configuration guides
- Elena Horton is collecting cash management/bank information from each college including
statements, bank accounts, p cards and travel cards
Lisa Wolcott provided update on Budget Development
- Functional design documents have been completed as well as testing
- Test scripts completed
- Configuration of people soft is complete – control will be at the fund, department activity.
Sherry update on Student Financials
- Working on training documentation
- Validating configuration
- If using one Merchant ID number for all campuses, they can set up one main account for cashiering.
OR, they can have a separate Merchant ID for each branch campus.
- They are consolidating the list of 3rd party sponsors with the first link colleges
Emmett update on purchasing, AP, asset management and supplier contracts
Spokane reported that they still haven’t seen much of the system. They also said that to prepare our
schools just make sure we do data clean up.
Tacoma reported that training for ctcLink is going to take a lot of time. Maryanne signed up for
trainings, not all of them, just those that apply to someone in a Director position, and it equaled 26 days
of 8 hour trainings. So be prepared that training will take time!
Hot Topics
Meals with Meetings Question. How do colleges handle Meals with Meetings and the Prior Approval of
the meals/food? Most colleges have a form/process in place where departments must submit for
approval prior to purchasing the food and holding the meeting. Meeting must meet guidance in the
SAAM Manual for Meals with Meetings.
ctcLink - Change Manager from Columbia Basin. We have not heard that any assistance will be
provided for backfill when staff is tied up with the project. The need will be different for every college.
We can observe how the process goes for the pilot colleges and the other colleges will be able to plan
accordingly.
Governmental Fund Accounting
Stuart Trippel. Stuart used a power point for his presentation.
The difference between for profit organizations (businesses) vs governmental entities. How much
money did we make vs how did we spend the money?
Fund accounting is primarily used in governmental reporting, but also still used by some not-for-profits.
Governmental Accounting Standards Board (GASB) provided accounting rules source of authority, law
RCW 43.88, and SAAM by OFM.
The accounting entity for community and technical colleges is the Sate of WA. The State prepares a
CAFR annually and this includes financial statements by fund as well as government-wide financial
statements. Balances of accounts used by most CTCs are usually not material to the CAFR.
A fund is a self-contained accounting entity. Each fund has its own set of accounts – assets, liabilities,
revenues, etc. Each fund must balance individually. Categories of funds include governmental funds,
proprietary funds, fiduciary (agency) funds. Governmental funds include the General Fund (001), Special
Revenue funds (145, 147, 148, 149, 846, and 860), Capital Project funds (057 and 060), and Permanent
Funds (843 and 859). Proprietary funds include Internal Service Funds (443, 448, and 460), Enterprise
Funds (522, 524, 528, and 570). Fiduciary funds include Agency funds (790 and 840)
Fund Reference Manual by OFM. This is on OFM’s website and allows you to look up definitions for
each fund, description of what it is used for, appropriate sources of revenues for that fund, etc. This can
sometimes be useful.
Measurement Focus and Basis.
- Modified Accrual
- Accrual
- Governmental funds use modified accrual basis of accounting
- Proprietary funds use the accrual basis
Expenditures vs Expenses. Under modified accrual we speak of expenditures, in the accrual basis they
are called expenses. But they are the same thing.
Our new Financial Statements are reported as a single enterprise fund business-type activity. Therefore,
we account one way and report another way.
BAR Nomination & Vote
Kim Cook was re-elected as Secretary for BAR
Karen Mottner was re-elected as Treasurer for BAR
Charlene Rios was nominated and elected as Chair-Elect for BAR
Dawn Vinberg was chosen as the BAR Steering Committee Chair
Dues for next year? Our current balance is 5,820, not including expenses from today’s meeting. The last
time we collected dues was FYR0910 and we were charging $100 per school. After that FY10 year, we
had approx. 14,000. Instead of charging dues, we have been charging for attendance to cover the costs
of light refreshments and lunch. If we had a larger account balances we could do more professional
development and pay for speakers, we could pay for our BAC representative’s travel, etc.
- One opinion is it may be more fair to pay as you attend. Some colleges bring more people than
others. As long as we can cover host colleges costs through fees, that seems to be a good model.
- Another proposal was suggested for a hybrid model. Each college pays $40 for the year as a fee,
and then each person also continues to pay a fee for attendance.
Voted and approved on the Hybrid Model for Dues.
Agreed to provide a small gift to BAR Members who retire after 10 years of service. BAR leadership will
need to be notified so they are aware.
Locations for FYR1415 Meetings.
- Fall - Wenatchee
- January – ctcLink meeting – SBCTC IT Bellevue
- March – Everett Community College
- May – Walla Walla
Friday, March 28th
BAC Report
Stuart Trippel
There is an issue with how to count enrollments that are supported by both state and grant funds. The
issue has not been resolved.
Audits of fund 148 and 149 are continuing by SAO. It was authorized in law to be all 4 year colleges and
2 community colleges. But, SAO is realizing they don’t have sufficient budget to do that many. So now,
they are only doing UW this year. They may audit other colleges next year.
Tacoma has set aside money in their operating budget to prepare for ctcLink. So far though, they have
only spent funds on project managers so far.
Minutes & Treasurer’s Report
Minutes from the March BAR meeting were approved as is, no amendments
Joann Wiszmann Updates from SBCTC
Financial Statement workshops in August will be August 13th in Yakima and August 19th at Edmonds (still
trying to find a room) and August 25th at SBCTC. You will need a laptop for this training. Training will be
from approx. 9am-4pm. Joann recommends that those in the pilot attend the training again to give
feedback.
Program Codes. Some of the program code changes are still causing errors for State Board reporting. A
few colleges will be hearing from Joann on changes to be made to their program codes. There are
specific codes for IT and we decided to leave it at 2 – one for instruction and one for admin. There were
some additional IT codes in 1xx and those will be deleted and we can no longer use – only a couple
colleges are using them.
Program Code 279 is used for 3.5% financial aid. All but 3 colleges are using this program code. It was
taken out of FAM, but now they are adding it back in and we can continue to use it.
Big Data Tools for Higher Education
Ken Eisner & Jon Heppner, AWS (Amazon Web Services)
Power point presentation used
Public Private Partnerships
Bill Saraceno, Sr. VP Admin Columbia Basin
As a state agency, we are not allowed to rent our facilities to entities that will earn a profit. There is an
RCW that says we cannot allow a private or public business to come on campus and make money off a
state agency. But, if you have a Quid Pro Quo in place, you can do it. A Quid Pro Quo shows the college
is getting more out of the relationship than the private/Non-profit entity.
Columbia Basin does not allow student groups to bring in vendors to sell items on their campus. They
have a policy and took the RCW and made it more clear.
A hospital that hires most of Columbia Basin’s nursing graduates wanted Columbia Basin to move their
nursing program over to the hospital and build a new building there. The hospital wanted a floor on the
building. So they entered in to a Quid Pro Quo, and the foundation borrowed money from the
Washington State Housing Authority to pay for the construction of the building.
Columbia Basin also has a partnership starting with City of Richland and the hospital. The city needs to
build a new Fire Station. So the college is obtaining the property and constructing the building and the
fire program and other students will have internships and classes in this building.
A quid pro quo is an agreement about what you will do, what they will do and what the outcome is.
Colleges also need to monitor the quid pro quo and make sure we are getting what we are supposed to
out of the agreement. One college received a finding for an agreement where they were not monitoring
and did not receive what they were supposed to.
Financial Statement Construction Panel
The pilot colleges gave tips and suggestions for the other colleges on completing their financial
statements
- Use the tool provided by SBCTC – its very helpful
- Reconcile your capital assets to CR2128
- Get a head start on the checklist items and if possible, correct things on the checklist on your
statements prior to the year-end close so you don’t have as many adjustments to your financials.
- It takes a lot of time, so be prepared for that.
- Contact any of the pilots for help in determining what reports/data to use to tie down numbers.
- Remember on the Scholarship Tool that “Refunds” actually means financial aid disbursements.
- When you complete your statements, have someone else look at them and check your balances and
read your Notes to make sure everything flows and makes sense and balances.
From Walla Walla who is currently receiving their audit - Prepare for the Audit by knowing who all at
your college has access to what screens in FMS. Also, be able to show the auditors how you verify
tuition received and know that students are being charged correctly for tuition. So far, the auditors
have asked for all of their Minutes from the year in review.
State Board Updates
Jason has notes for his updates that he will send out.
Closing dates
- July 15th OBIS billings are due
- July 23rd interagency billings
- July 24 – FMS Closes
- August 15th disclosure forms are due
A couple months ago Jason asked for concerns on Travel that he took to a meeting with OFM.
Something under consideration is the 3 hour rule and they are trying to make that easier to understand.
The feds have a 12 hour rule. They are sending an update out in July. There may also be something
about emailed receipts being considered as originals.
OFM wants agencies to have reconciliation processes in place for the GL. They are offering training on
this and Jason said its very basic about why we need to reconcile each of our GLs. GLs that must be
reconciled are petty cash, receivables, etc.
State Audit update that they are going back to individual college accountability audits. They will be
cycled 1-4 years depending on size of our colleges and risks.
Due to and Due froms. OFM said materiality is $100, so we will be making adjustments.
There will be changes to the financial statement certification form this year. There will be SOC reports
and they want to make sure we are reviewing those if we have them (higher one).
Joann’s Update:
Have a workgroup for 1098ts and coming up with best practices so we have consistencies in the system.
Financial statement workshops and training. State agency version of BAR is bringing GASB in for an
annual update on new pronouncements. This meeting is September 19th and we are welcome to attend
and Joann will be sending out info on meeting location.
Joann is planning to retire in December. They are having internal discussions on what is needed for that
position. The hope is to put out the job announcement so there is overlap with Joann – hopefully two
months overlap – so she can transfer over knowledge gained. The job is only about 60% accounting.
Procurement Reform. We already heard most of this update from Rod Ramer. But, Joann did add that
she has had conversations with DES about our authority during the legislative sessions. We could do our
own training since we have our own authority, but we would like to go through DES if possible.
Omni-Circular. There is a question outstanding on whether we can follow our own state purchasing
rules on buying limits and bid limits. We believe we are able to follow our own state laws, but this is
being researched.
Joann did a training yesterday to the pilot college Presidents and Vice Presidents. She said it went well.
She did emphasize to them that the VP needs to be involved in preparing the MD&A. The ultimate
audience for the financials is our administration and our Board of Trustees. Keep that in mind that is
who we are telling our financial story to.
Accreditation Reports and timing. 7 of the financial statement pilots already had letters from the
accrediting body. This February, 9 more colleges received the letter saying they are not in compliance
with the standards. We all have a report due in early September that says where we are at with the
project. SBCTC is going to give us a starting point template to use to put together this response. They
will share this with BAC and BAR.
Presentation of Carol Pettainen Award
Presented by Janell to Joann Wiszmann. This has been a tough year – financial statements, ctcLink, etc.
and through all of it Joann has been extremely helpful and providing us support.
Wrap Up & Adjourn
Meeting adjourned at 12:20.
Tacoma is advertising for an Assistant Director of Financial Services. There will also be a Director
position open shortly.