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
Agenda:
I.
Welcome
II.
Old Business
A. Approval of October 15, 2012 minutes.
B. Acceptance of Group Charter.
C. Discussion of Real Accounts Draft
III.
New Business
A. Status Update
1. Meeting with Office of the Auditor General
B. Development of Draft Revenue Accounts
C. Development of Draft Expenditure Accounts
D. Development of Draft Other Sources/Uses Accounts
IV.
Future Plans
A. Public workshops
B. Next Meeting
Minutes:
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.