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
June 19, 2013
1.00 pm to 3.25 pm
Conference Call/Webinar – 524K Fletcher Building
Christina Smith
Agenda:
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Welcome and Introductions
Activities to Date
Review of Draft Chart of Accounts (COA)
Discussion on Specific Items
o Level of detail
o Frequency
o Basis of Reporting
o Other Sources and Uses
Next Steps
o July 1st - Publish draft COA
o August 1st – Award contract for collection of cost estimates
o Sept/Oct - Conduct webinar on cost estimate process
o Nov 1st – Cost estimates are due
Attendees:
Mr. Joe Garofalo – Finance Director, Sarasota County Tax Collector
Mr. Michael Williams – Controller, Florida State University
Ms. Amber Hughes – Representing the Florida League of Cities
Ms. Jean Whitten – Northwest Florida Water Management District (NFWMD)
Ms. Melissa Lowe – Water Management District
Mr. Chris Flierl – South Florida Water Management District (SFWMD)
Mr. Richard Becker – VP for Administration and Business Services – Palm Beach State
College
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Brendan Jones – DFS – Local Government section
Mari-Carmen Colon - Medina - DFS – Statewide Financial Reporting Section
Christina Smith – DFS – Division of Accounting and Auditing Director
Danielle Kosberg – DFS – Project Manager
Asheema Vemuri DFS – DFS –COA Project – Functional Lead
Meeting Notes:
Christina opened the meeting and thanked the group for participating. She mentioned that after
Elwood’s departure, the new team has been working on the document and trying to fill in gaps in
the document. Christina mentioned that since the last Advisory meeting in January 2013, we
have met with the Legislature and Auditor General’s staff to discuss the COA.
Christina introduced the new team to the group.
Discussion of the Chart of Accounts Manual:
Christina acknowledged the receipt of comments from several group members and mentioned
that we have reviewed the comments. She stated that the meeting discussion will focus mainly
on the two groups of accounts for the Project – Assets, Liabilities, and Equities, and Revenues
and Expenditures (pages 5, 6, and 7 of the COA document).
There was general discussion about the account groups, level of reporting, frequency, and the
purpose of this project.
Chris Flierl from the SWFMD stated that they do not intend to produce financial statements or
adopt the new COA. Christina acknowledged that there is no anticipation of entities producing
financial statements for Transparency or adopting the new COA. A crosswalk is developed to
map their current accounts to the Uniform COA.
The group discussed the level of reporting for the two groups of accounts. Christina said that the
Legislature agreed that Assets, Liabilities and Equities can be reported annually and Revenues
and Expenditures on monthly a basis. She stated that because the level of reporting differs across
entities, each reporting should report at the lowest level at which they currently report at.
The group mentioned that at previous meetings they had recommended quarterly reporting for
revenues and expenditures to which Christina replied that the Legislature prefers monthly
reporting.
Christina also mentioned that the comments from the members on the accounts and the
definitions will be discussed in Appendix A of the final COA report. She requested that the
members submit their comments to us by June 21st. Christina then began discussion on specific
items on the Agenda.
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Level of Detail:
Assets, Liabilities, and Equities:
The level of reporting was discussed for this group of accounts. Christina indicated that there are
2 levels of reporting – entity level (which is the highest level) and organization, or fund level.
Members continued the discussion on the levels of reporting showing considerable concern
regarding the organization level. City, college, county and university representatives said that
they report at the highest level and asked if reporting at lower levels is necessary. Members also
stated their concerns on reporting at the entity level, organization level, or fund level and said
that it was confusing.
Michael Williams (Universities) mentioned that the statute does not mention reporting on Assets,
Liabilities, and Equities. Christina stated that the DFS legal team had reviewed the statute and
approved that, by including Assets, Liabilities, and Equities group, the Project is complying with
the law. Christina asked each representative how they would be impacted if Assets, Liabilities,
and Equities were reported at the entity level.
Decision - Everyone agreed that this group can be reported at the entity level. Colleges and
universities shall report at the university level in compliance with GAAFR standards. Christina
mentioned that we will add the verbiage to the document.
Revenues and Expenditures:
Christina explained that DFS views reporting Revenues and Expenditures as a “checkbook”
activity, therefore, reporting should be at the lowest level as reported in daily operations. Since
all entities differ in their reporting requirements, they should report at the lowest level to which
they post daily transactions.
Members expressed a great deal of concern over the organization, program, or function level.
Christina mentioned that the legislature wants to see the reporting at a lower level.
Several members expressed concerns that monthly reporting will not allow them time to have
reconciled or audited their accounts. To address the major concern of level of detail, Christina
asked each representative in the group at what level of detail they report monthly.
Universities – Mr. Williams stated that they report in a single column. Some universities
may report differently. He stated that during the year they use the modified accrual basis
of accounting and at year end the full accrual basis. He asked Christina to clarify if the
monthly data will be ‘as of’ and she said the data will be just for the month with no
balancing of the accounts.
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Mr. Williams stated that they report expenditures by organization unit/campus as “Air
Conditioning”, “Apprenticeship” etc. Christina stated that there will be a uniform
structure to merge the data.
Colleges – Mr. Becker stated that they use the modified accrual during the year and full
accrual at year end. He stated that reporting raw data on a monthly basis concerns him.
He asked how credit card student fees will be reported if on cash basis? Christina stated
that they should report at the same level as in their daily operations.
Florida’s Tax Collector’s Association – Mr. Garofalo also stated that reporting raw data
each month can be misleading because there will be huge fluctuations in numbers. He
said that it is a real problem putting out raw data that does not tell the real story even
though it is transparent. He also mentioned that they already report to the Board each
month on what is spent and what checks are written. He further stated that this data is
highly volatile and does not really say anything about the entity. Christina asked for his
recommendation. He said that he will accrue what needs to be accrued on a monthly basis
and not give raw data.
Mr. Garofalo stated that they have agency funds and a General Fund and asked if it
should be rolled up to one Agency fund or remain separate. Christina asked that it be
reported at the level as it is reported in the entity. She said that if Revenues and
Expenditures are reported by program or function, it should be submitted in the same
format and not be rolled up to a higher level.
Florida League of Cities – Ms. Amber Hughes stated that they report by program. For
example “Utilities”, “Waste” etc..
Water Management Districts (WMD) – Ms. Melissa said that they report monthly to
comply with the budgets. Ms. Jean stated that they use cash basis of accounting on a
monthly basis to report to the Board. Ms. Jean also mentioned that they have 6 funds and
a General Fund and reporting at different funds may be difficult. Christina said that
reporting should be done in the fund where it is first recorded.
Christina asked which reporting entities actually do monthly close outs and all entities except
WMD said that they do not have monthly closings. WMD stated that they close on a cash basis.
Christina asked the members what data the entities can provide on a monthly basis for Revenues
and Expenditures. This led to a discussion on the usefulness of the data.
Mr. Becker said that they can provide a Trial Balance dump which will be on a modified accrual
basis.
Mr. Garofalo stated that this data is misleading and highly fluctuating. However Christina noted
that this is transparency.
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Mr. Williams said that it is hard for him to visualize what the public will see in six months worth
of data. Christina stated that they will be able to pick an entity, by month or a type of account
group or reporting entity and view the data. She also mentioned that the website will provide
capability to filter the data by use of a radio button to view it.
Mr. Williams mentioned storage issues for DFS and Christina stated that storage is not an issue.
Mr. Williams asked if universities that cannot report for the month can submit the activity as of
the date. Christina said yes.
Michael Williams and Mr. Becker representing universities and state colleges respectively, were
not sure about the Component Units and Direct Support Organizations (DSOs) who may have
their own reporting requirements. Again, Christina mentioned that all entities will have an
opportunity to submit cost estimates on impacts.
Decision: After discussing everyone’s concerns, Christina stated that because all entities are
reporting differently, Revenues and Expenditures shall be reported for the month without any
balancing. She also mentioned that we will add verbiage that these are not audited Financial
Statements.
Frequency:
Assets, Liabilities, Equities:
Mr. Becker stated that for DSOs with a December 31 year end will have sufficient time to be
audited and still meet the April 1 deadline; however, others that have a later year end than
December 31 may not be able to meet the deadline. Christina said that all reporting entities will
have an opportunity to submit their concerns through the cost estimates.
Decision: After discussing everyone’s year end closing dates, it was determined that all entities
would report annually on April 1st of each year. Christina finalized the date, reiterating that if
any groups have concerns, they should capture it in the cost estimates.
Revenues and Expenditures:
The group started out by stating their concerns that they cannot report within five days after the
month is closed. Christina reminded the group that they are looking at Revenues and
Expenditures at the “check book” level and therefore, the expectation is at a lower level of detail.
Decision: The group reached a compromise to report Revenues and Expenditures on a monthly
basis on the last day of the following month.
Basis of Reporting:
Chris Fleirl asked what the basis of reporting should be. Christina mentioned that the draft COA
document did not include the basis of reporting, but it would be incorporated into a section after
“Frequency”.
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Decision: As agreed in the meeting, reporting entities will report Assets, Liabilities, and
Equities on the same reporting basis as their annual financial statements using either the full
accrual or modified accrual basis of accounting. Revenues, Expenditures, and Other Sources and
Uses will be reported using the basis of accounting their accounting system is currently
supporting.
Other Sources and Uses:
Christina said that she does not remember what was decided in the previous meetings however
she does not believe that this group of accounts is needed for Transparency. She asked the
members for feedback.
Mr. Garofalo said that for them any remaining balance goes to Other Financing Sources and
Uses and not in the Fund Balance.
Ms. Jean said that these are basically transfers in and out.
Christina asked everyone to review this section and provide feedback because she may consider
excluding this from the draft COA.
Appendix A – Review on Account Groups:
The Advisory Group had the following comments and recommendations on the Account Groups:
1. Classify Restricted, Unrestricted, and Permanently Restricted Assets separately. Christina
stated that DFS was selecting definitions at higher levels and asked the benefit of breaking it
out. She said that for Transparency purposes, the public will not know what the buckets are
and can get confusing.
2. Add Library Resources as a separate asset group. All agreed to this account.
3. Add Net Assets –Unrestricted as committed or unreserved. Christina said that we will break
it down to mirror what the accounts should be for all entities.
4. Classify Construction in Progress as a separate account. All agreed to that classification and
the document will be updated.
5. Eliminate Non Capital Assets. Christina explained that it is needed for state agencies to track
these assets separately.
6. Provide further breakdown of the Infrastructure account. Christina mentioned that it is
purposefully made into a large bucket to accommodate all entities.
7. Add Easements and Land Rights to the Land account and was approved.
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8. Add Vendor Contracts as part of the Federal Contracts and Grants Revenues. Christina
agreed to include Vendor Contracts in the definition.
9. Christina said that the State requires Travel to be reported at a low level. She tried to
persuade the Legislature to accept the reporting at a high level however they want it reported
at a lower level. Therefore, there are 3 types of travel groups to report – In- State, Foreign,
Out-of-State.
Several members stated that this is such a small percentage of their budget and it would cost
more to report. Christina asked them to add it to their cost estimate.
It was recommended that Car rental and mileage be added to Travel and that subsistence be
added as part of per diem. Christina said DFS will update the document with these buckets.
She added that if entities do not report travel at a lower level, they should include the impact
in the cost estimates.
10. Revise Pension Receivable Contributions definition to include other entities that are not
reported in the Florida Retirement System. Christina said that we will update the definition.
11. Add Natural Gas tax and Revenue Sharing categories. Christina said that we will research on
these revenue categories.
12. Net Assets should be changed to Net Position. Everyone agreed because of implementation
of GASB 63. The document will be updated.
Discussion on other feedback/comments in the meeting:
Florida League of Cities:
Mr. Rob Garner had submitted his comments and he had questioned if all funds should be
reported and Christina answered that yes all funds should be included. He had asked if nonGAAP funds should also be reported. Christina asked the representative Ms. Amber Hughes to
provide examples of the funds he was referring to.
Universities:
Mr. Williams mentioned that most of their activities are Business-Type-Activities (BTAs) in
accordance with GAAFR. Christina said that universities may report Revenues and
Expenditures at the organizational level that is recorded in their accounting systems.
Some colleges and universities and universities may report at the individual school level and
others may report at program or BTAs.
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Mr. Williams expressed concerns that the monthly dump will not include accruals.
Mr. Williams again mentioned the law and stated that the statute does not call for lower level
reporting for Revenues and Expenditures. Christina mentioned that the Legislature has requested
that level of reporting.
Mr. Williams referred to page 6 – Level of Reporting. He stated that they have thousands of
reports split by programs or departments and not organizational level. Christina stated that they
should report at the same level of detail as they report now. She mentioned that ERP systems
dump data at a granular level and the transparency groups are eating it up.
Colleges
Mr. Becker mentioned that DSOs’ financial statements are included however they have a
separate COA. Christina said that DSOs can report separately at the level recorded in their
accounting system.
Water Management Districts
Mr. Flierl asked at which level the Assets, Liabilities and Equity accounts should be reported.
Christina said at the entity level.
Mr. Flierl expressed concerns on Receivable and Accrued liabilities being reported monthly.
Christina pointed out that this account is not required to be reported monthly.
Another WMD representative commented on Fund Balance accounts. They said it was
confusing and noted that they report as Net Assets and not Fund Balance. Christina said that
DFS is trying to give classifications to all reporting entities and is trying to pick buckets that are
meaningful to public. DFS will review the equity accounts in detail and classify the accounts to
accommodate all reporting entities.
Christina noted that DFS will classify the Equity accounts to mirror what the reporting entities
require and will have the list reviewed by the Auditor General’s office.
Ms. Jean mentioned that since WMDs report by program and have separate reporting laws, they
should be they should be separately mentioned in the draft COA. Christina said that DFS will
add WMD in the document separately.
Ms. Jean asked who in the Legislature is working on this Project. DFS will post the minutes of
the Legislature and other meetings on the website that will include their names.
Action Items:
Advisory workgroup members
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1. Report any additional comments or feedback before June 21st.
2. Review the Other Sources and Uses accounts and provide feedback.
Florida League of Cities
1. Provide examples of non-GAAP funds that were mentioned by Mr. Garner so that DFS can
respond to the question.
DFS
1. Research Natural Gas Tax (Natural Gas Tax is included in Utility Tax) and Revenue Sharing
accounts.
2. Make all agreed upon updates to the document.
3. Request Auditor General’s office to review the Equity accounts
4. Post the Legislature minutes on the website.
Next Steps
1. Christina asked that everyone provide their comments by June 21st. She would like to have
all areas covered and a solid document to publish on July 1 so may be used for cost
estimates.
2. She stated that DFS needed help collecting the data so a vendor is being hired to collect,
validate, and report cost estimates by reporting entity. The vendor is expected to be on board
in August.
3. The vendor will conduct webinars on the process of collecting and reporting cost estimates.
These webinars will include details on the cost drivers, level of reporting, organization levels,
timing, etc.
4. Mr. Williams stated that universities need time to amend, adjust and allow time to include
changes. He asked if the timeline will allow them to make updates through November.
Christina stated that the narrative will include a process to include new updates since this is a
living document through November.
5. Christina stated that a lot of what they are seeing now needs clarifying. Project staff is trying
to get as much as possible into the document by July 1; however, entities should not feel that
this is their last chance. Entities will use the shared email to submit cost estimates later in
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September and October. Submissions will be collected, summarized and presented in a final
document in January 2014.
6. Christina mentioned that they still have time to review the classification of the account
groups. She stated that they are trying to focus on the level of detail, frequency, and basis of
accounting before July 1st, so that it will not change later.
7. Mr. Williams asked how DFS plans to reach the DSOs, Component Units etc. for the cost
estimates. Christina stated that DFS is expecting DSOs to provide cost estimates to see if
they want to be taken out of the reporting. The webinars may carve off for DSOs separately.
8. Christina stated that we are planning a two month window for webinars so everyone can be
reached in time to provide the cost estimates.
9. Christina stated that the notification will be posted on the website when the document is
published on July 1.
10. In August the vendor will be on board and we may reach back via a conference call for
feedback.
Christina emphasized the urgency for the members to provide comments on the draft COA by
June 21st in order to incorporate any recommendations in the draft COA to be published on July
1. Christina asked if there are any further questions. There were none and she thanked everyone
for participating and ended the conference.
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