Meeting Minutes
Department of Financial Services
Charts of Account Project
Meeting Name:
Meeting Group:
Date:
Time:
Location:
Requestor:
DFS Chart of Accounts Project
Chart of Accounts Advisory Work Group
January 9-10, 2013
9:30 am
Fletcher Building, Tallahassee, Florida
Attendees:
Elwood McElhaney – Department of Financial Services
Justin Young – Department of Financial Services
Joe Garofalo – Finance Director, Sarasota County Tax Collector
Michael Williams – Controller, Florida State University
Rob Garner – Representing the Florida League of Cities
Jeff Smith – Clerk of Circuit Courts, Indian River County
Jean Whitten – Northwest Florida Water Management District ( January 9 only)
Richard Becker – VP for Administration and Business Services – Palm Beach State College
Merrill Wimberly – Chief Financial Officer – Leon District Schools
Discussion
The meeting began at approximately 9:30 am on Wednesday, January 9, 2013.
The representative from the Colleges opened the meeting with a statement that the Work
Group was an inefficient and unproductive exercise and recommended that it be disbanded. Elwood
McElhaney stated that the work of the Group was required by law and that participation was 100%
voluntary. DFS has solicited assistance from the Work Group members in order to improve the user
friendliness of the recommended Chart of Accounts. All members of the Group remained and
participated in the meeting.
The group discussed the minutes of the October 15, 2012 meeting. A motion was made to
delete the second and third sentences of the Level of Reporting language – “We will also want to report
at some organizational levels below the agency head. Two levels below the agency head has been
suggested, but no final recommendation has been determined,” The group felt that this language
implied that a level of reporting had been decided when that recommendation had not yet been
discussed with or considered by the work group. The minutes were approved with that change.
The Group was provided with a draft Project Charter at the October 2012 meeting. Justin Young
of DFS was concerned that the last bullet on page 4, which stated “The final chart of accounts that is
recommended will replace the chart of accounts that is required by the Department of Financial Services
for use by units of local government for annual financial reporting in accordance with Section 218.32,
Florida Statutes.” Mr. Young’s concerns were the legality of replacing a chart of accounts that is
specified in law with one that is not so specified. Elwood McElhaney stated that this provision was
written by the Director of Accounting and Auditing, and it appeared that her goal was to keep local
governments from having to report the same information to DFS twice in different formats. McElhaney
will clarify the intent of the Director and see if this provision can be modified. After discussions of this
issue and one minor typographical error, the Draft Project Charter was approved. NOTE: Subsequent to
the meeting, this issue was discussed with the Director of Accounting and Auditing, and she confirmed
that the bullet accurately states her position on this issue. It will remain in the charter as written.
The Group next discussed the draft Chart of Accounts for Real accounts that was developed at
the October 15, 2012 meeting. One additional account – Other Non-Depreciable Fixed Assets – was
added to the chart of accounts.
Elwood McElhaney told the Group about a meeting that was held on January 4, 2013, to discuss
the chart of accounts project with representatives of the Office of the Auditor General. The history and
current status of the project was discussed, and questions were answered. DFS does not intend for this
information to be considered GAAP, but instead, to be unaudited operational data that is taken monthly
or quarterly. It will be clearly marked in this manner when it is disclosed to the public. DFS will keep the
Office of the Auditor General informed of all meetings and decisions that are made.
The Group next developed a chart of accounts for Revenues and Other Financing Sources. There
was discussion over the unique reporting of immaterial amounts vs. classifying them as Miscellaneous or
Other. Elwood McElhaney said that one of the uses of a uniform chart of accounts is to be able to
compare balances across agencies. If we recommend the use of an account, agencies should report
amounts that are assigned to that account regardless of the amount. There were discussions over the
duplicate reporting of some revenues that will be collected by one agency and then transferred to
another outside entity. While this could certainly result in some duplicate reporting of revenue, please
remember that this exercise is not designed to promote GAAP reporting, but instead, to provide
balances for inquiry and comparisons across entities by the public.
Guidance that has been provided by DFS Executives and Legislative Staff requires that
expenditures be reported by fund, object (or what the funds were spent to acquire), and some level of
organizational structure that is under the entity level. We do not want to capture costs by function, as is
required for GAAP reporting. The Group reviewed the object classifications in use for the represented
entities and developed a recommendation. The proposal was developed to provide information
regarding the types of goods and services (object classification) that were acquired by allowing agencies
to summarize their existing data without modifying their existing chart of accounts. This would provide
data while minimizing costs for modifying systems to add new accounts. There were proposals to report
expenditures using the existing Bureau of Local Government chart of accounts and for using high-level
expenditure classifications that coincide with budget classifications. Both of those recommendations
were rejected by Elwood McElhaney because they did not comply with the guidance that had been
provided. In the end, a recommendation for capturing costs by type and object code was completed
and added to the draft chart of accounts.
The Group developed a recommendation for Other Sources/Uses, and that recommendation
was added to the draft chart of accounts.
There was substantial discussion on defining an organizational level under the entity level for
reporting of expenditures. This was included in the guidelines that were provided by the DFS Executives
and Legislative Staff. After much discussion, representatives of the Colleges, Universities, and Cities
recommended that expenditures be reported by fund and object code at the entity level only, and
declined to support a recommendation for reporting at a lower level of the organization. Their reason
for this is the vast differences in organizational structure between governmental units within the same
classification (cities, counties, school boards) as well as across classifications. Their feeling was that such
reporting would vastly increase the implementation costs of implementing this reporting model, and
that they did not want to be held responsible for it by their constituency. If DFS or the Legislature wants
reporting at a lower level, they should decree it and take responsibility for it.
Elwood McElhaney reviewed the future plans for the Chart of Accounts project. They include an
internal review of the draft that has been developed, a potential review with Legislative Staff, and a
series of public workshops to be held in the Spring of 2013. The group recommended that Legislative
Staff and DFS Executives attend these workshops to witness what they believe will be vast opposition to
this process.
There being no additional business, the meeting adjourned at approximately 11:45 pm on
Thursday, January 10, 2013.