Fiscal Officer Meeting
Thursday, May 21, 2009
Accounting Updates
Ernie Cornford
New GASB’s
• FY 2009
– GASB 49 – Pollution Remediation Obligations
– GASB 52 – Land & other real estate held as investments by
endowments
– GASB 55 – GAAP Hierarchy (Incorporates AICPA definitions to
GASB literature)
• FY 2010
– GASB 51 – Intangible Assets
– GASB 53 – Derivatives
• FY 2011
– GASB 54 – Fund Balance
FY 2009
GASB 49 – Pollution Remediation
Obligations
• Requires accounting & disclosures for
University’s existing pollution remediation
obligations
• Excludes pollution prevention & control
obligations and future pollution
remediation required when retiring assets
(e.g., nuclear power plant decommissioning)
FY 2009 – GASB 49 continued
• Obligating events that cause a need for
accounting/disclosure:
– Being compelled to take pollution remediation
action due to immediate endangerment
– Violating a pollution prevention-related permit or
license
– Being named or expecting to be named as
Responsible or Potentially Responsible Party
– Being named or expecting to be named in
lawsuit to compel pollution remediation
– Commencing or legally obligating itself to
commence pollution remediation
FY 2009 – GASB 49 continued
• Components of the Liability
– Legal services
– Site investigation
– Remediation design & implementation
– Required postremediation monitoring
• Recognized as costs become reasonably
estimable
– Measurement is based on current value of
expected outlays
FY 2009 – GASB 49 continued
• Expected recoveries from third parties or
insurance
• Pollution remediation outlays are
capitalized in certain circumstances
• Information gathered to date:
– Currently known obligations are minor, but
results of a couple assessments are now
pending
FY 2009 continued
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GASB 52 – Land & Other Real Estate
Held as Investments by Endowments
Requires endowments to report land & other real
estate investments at fair value
Changes in fair value are reported as investment
income
Disclosure of methods & significant assumptions
required
Affects Columbia campus
GASB 55 – GAAP Hierarchy
• Incorporates the Generally Accepted Accounting
Principles hierarchy into GASB’s literature (previously
existed only in AICPA literature)
• No changes to hierarchy, therefore immediately
applicable
FY 2010
GASB 51 – Intangible Assets
• 3 required characteristics:
– Lack physical substance
– Nonfinancial in nature
– Initial useful life beyond a single fiscal year
• Includes such things as patents, trademarks,
computer software, land use rights, etc.
– Has to be identifiable, separable (can be sold,
rented or otherwise transferred to another party) OR arise
from contractual or other legal rights
FY 2010 – GASB 51 continued
• Accounting –
– If held as assets, treated as Capital Assets
– If acquired or created for income production or profit,
treated as Investments
• If internally-generated, 3 required criteria to be
capitalized:
– A specific objective and service capacity has been
determined
– Feasibility of completing the project has been
demonstrated
– The intent to complete or continue development has been
demonstrated
• One known challenge –
– Identifying the University’s patents
FY 2010
GASB 53 – Derivatives
• Agreements that transfer risk from one
party to another
– The value is based on changes in market
prices of item being hedged
– Can be used to hedge (reduce) financial risk,
lower borrowing costs, generate income, or
manage cash flows.
FY 2010 – GASB 53 continued
• Required to measure derivatives at fair
value as assets or liabilities
– Fair value at June 30 reported in SNA
– Change in fair value of a investment
derivative is reported in SRECNA as
investment gains or losses
– Change in a hedging derivative is deferred
until agreement is terminated or hedge
ceases to be effective
FY 2010 – GASB 53 continued
• Do you really want to know more?
• Note disclosures include:
– Financial objective for the agreement,
significant terms, net cash flows of those that
hedge debt (e.g., interest rate swaps),
termination risk, credit risk, interest rate risk,
basis risk, rollover risk, market-access risk,
and foreign currency risk
FY 2011
GASB 54 – Fund Balances
• Establishes fund balance hierarchy based
on extent to which government is bound to
observe spending constraints on its
resources
– Nonspendable
– Restricted
– Committed
– Assigned
– Unassigned
Update on Strategic Initiatives
• Scrub Accounts
• CRR/ARR Redesign
• Online Managerial Review/Checklist Audit
Trail
Scrub Accounts
•
Objective: To ensure our Accounts are relevant,
useful, streamlined and meet our business needs
•
1.
Goals
Users can easily determine the appropriate Account to
use (eliminate overlapping descriptions)
Smart numbering is improved
Elimination of immaterial Accounts
Elimination of Accounts no longer relevant to current
business needs
Elimination of duplicate/ambiguous Accounts
2.
3.
4.
5.
ARR/CRR Rewrite
• Objective
– To provide end users with a web-based
interface to efficiently enter cash receipts with
enhanced business features.
ARR/CRR Rewrite cont’d
Goals
•
Accurate accounting records:
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•
Allows limited posting to prior periods for wires
Elimination of posting errors
Real-time save and validation in production system (but nightly
posting to GL)
Streamlined user interface
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•
User can enter ChartFields on Receipts
Can enter both negative and positive amounts
Better handling of Letter of Credit across multiple Business Units
Enhanced Internal Controls
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Security is enhanced to provide data accuracy and ease of entry,
different access rights (add, update, correct, delete & view
Improved ability to segregate duties
Managerial Review/Checklist Audit
Trail
• Objective: To provide managers the ability to
indicate their review online and provide ablility to
review history of checklist online
• Goals
– Provide online an efficient way for users to indicate
managerial review and their comments
– Reduce paper documentation
– Provide monitoring too for management
Fiscal Officers Meeting
Errol Benson
• Time & Labor Update
– Schedule Change
• Complete by Thanksgiving 2009
– Training Requirements
• Train the Trainer Concept
• Talx the Work Number
– Employment verification system
– Implementing Jun 1
– Mass communication coming
• ASIA (Annual Salary Increase Application)
– Will be used to update appointment end dates
for contracts
– Non-contracts with no increase
• Will update JOB with action/reason (DTA/RPT)
– JED Updates
– Salary Increases if any
• Employee contributions to UM Retirement Plan 1%/2%
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July 1, 2009 Implementation
Monthly: 7/1-7/31 for 7/31/2009 pay date
Biweekly: 7/12-7/25 for 8/5/2009 pay date
New “T” Earn Code developed to identify earning that should not
contribute to retirement
– For Summer Session 2/9s for Research
• Must us “T” to identify periods in excess of 2/9s
– We currently distinguish excess 2/9s for Teaching
• Payroll Reconciliation
– Please insure you complete them
Senior Fiscal Officer Meeting
Randall Vogan
May 21, 2009
FY 2009 Closing Schedule
• No access to Finance Production instance
between 7/1/09 and 7/3/09. This includes:
– Non-PO Voucher Create, Requisitioning,
Approving, Receiving, and eProcurement
– Budget entry, AR/BI, GL Journal Import, and
Grants Module
• Web applications that will be available
include:
– Web JE, MoCode Create, PS Financial
Reports, CRR
FY 2009 Closing Schedule
• Last day to enter non-PO vouchers in FY
09 is 6/30/09
– Verify that the ChartFields entered on each
voucher are appropriate and budgeted
• Vouchers (non-PO and PO) entered
between 7/4/09 and 7/9/09 with invoice
dates before 7/1/09 will be accrued in the
old FY
– First day to enter vouchers in FY 10 is 7/4/09
– Check invoice dates entered during this
FY 2009 Closing Schedule
• Last day for departments to edit
Purchasing Card transactions in
PaymentNet is 7/1/09, Noon
– Departments have until 7/10/09 to get signed
Statement of Accounts to Procurement
Services
FY 2009 Closing Schedule
• Last day to enter web JE’s in FY 09 is
7/16/09
– Between 7/1/09 and 7/16/09, if FY 09 entry,
enter 6/30/09 journal date
• Last day to import FY 09 data into GL is
7/7/09
– Between 7/4/09 and 7/7/09 use 6/30/09 date
• Last day to enter FY 09 CRR’s is 6/30/09
– Accounting will review CRR’s prepared
between 7/1/09 and 7/9/09 for cash in transit
FY 2009 Closing Schedule
• Last day to enter FY 09 AR/BI invoices is
6/30/09
– Invoices entered between 7/4/09 and 7/9/09
with June date will be posted back to FY 09
• Last day to enter FY 09 ARR’s is 6/30/09
Prepaid Expenses
• Expenses vouchered in the current fiscal
year for goods or services that will not be
received until next fiscal year are
considered prepaid expenses
– Accounting will check for prepaid expenses
greater than $5,000 (excluding grants) and
transfer the expense to new FY as
appropriate
– Accounting will transfer prepaid expenses
less than $5,000 to new FY at fiscal officer’s
request
Accrued Expenses
• Expenses vouchered in FY 10 for goods or
services that were received before 7/1/09
are considered accrued expenses
– If voucher processed between 7/4/09 and
7/9/09 with old year invoice date, expense will
be transferred to old year using original
ChartFields
– If voucher processed between 7/10/09 and
8/8/09 with old year invoice date, expense will
be transferred to old year using high level
ChartFields
Deferred and Accrued Revenue
• Revenue that is recorded in the current FY
for a good or service that will be provided
by the department in the next FY is
considered a deferred revenue
• Revenue should be accrued in the current
FY if a good or service was provided this
year and the payment will not be recorded
until next FY
• Use a revenue threshold of $5,000
Expense or Revenue
• Check for year to year consistency and the
dollar amount when considering whether
an expense or revenue item should be
recorded in the old or new fiscal year
Summer Session
Expenses/Revenues
• Accounting will transfer summer session
payroll charges from the lower department
DeptID level to the higher campus DeptID
level as of 6/30/09. Entry will be reversed in
FY 10
• Finance will record 50% of summer session
revenue and scholarships as
deferred/prepaid and 50% as
revenue/expense at higher campus DeptID
level as of 6/30/09. Entries will be reversed
in FY 10
Reduction of Expense
• Refunds, discounts, or rebates received by
the University from a vendor for goods or
services purchased from the vendor
• Reimbursement of insignificant and
incidental usage of University resources
when the resources are not typically used
to provide services on a fee for service
basis
Budget Stuff
Joann Wilkinson
Segregation of Duties
Ernie Cornford
Segregation of Duties
• Campus events
• Steve Stanley willing/wants to meet with
units
– Tuesday, Wednesday or Thursday
– About 1 ½ to 2 hours
– May/June timeframe
– Unit Heads