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Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International.
Prepared by Client (PBC) List - Part 2
Chapter 9
Presented by KPMG LLP and CSU
KPMG LLP
May 2008
GAAP Reporting Workshop
The List – Capital Assets
– Capital Asset Rollforward

KPMG will test at interim if campus can complete the
rollforward – see #75 below

Interim testing is optional, but encouraged

Rollforward from interim to final is required if tested at
interim – see exhibit

Depreciation expense not required to be recorded at
interim
 #75

– Detail of Capital Asset Additions
Two options

Provide by project, then further detail will be requested

Provide all detail initially
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 #74
2
May 2008
GAAP Reporting Workshop
The List – Capital Assets
– Detail of Capital Asset Additions
(continued)
 #75
List of additions will be required at final if tested at
interim – see #74
 #81
– Sales (disposals) of Capital Assets

Identify where proceeds of sales (if any) are recorded in
legal – may need a GAAP adjustment

NBV of disposed capital assets should agree to Note 5
 #82

– CWIP Rollforward
Accrue retention, if any – GAAP adjustment to DR
Capital Assets and CR A/P (also, search for unrecorded
liabilities)
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
3
May 2008
GAAP Reporting Workshop
The List – Capital Assets
 #82
Accrue A/P in CSU Funds that will ultimately pay for the
cost (affects your unrestricted vs. restricted net assets)
 #83
– Capitalized Interest

Separate Training Required on SFAS 62

If an entry is required, must wait for debt passdown
entries from Chancellor’s Office – record as a GAAP
adjustment
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
– CWIP Rollforward (continued)
4
May 2008
GAAP Reporting Workshop
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The List – Other Noncurrent Assets
 #85

May 2008
– Documentation of Realizability
Reference GASB Concept Statement No. 4 to ensure
you have a valid and realizable asset
GAAP Reporting Workshop
5
The List – A/P, ASW and Compensated Absences
 #86
Provide one month as selected by KPMG at interim and
June 2008 at final
 #87

May be worthwhile to provide list to local KPMG team
prior to arrival if convenient for campus and KPMG
 #88

– A/P Leadsheet
Ensure you can reconcile between your campus A/P
and the A/R of your auxiliaries
 #90

– Detail of Employees Using Timecards
– ASW
PIMS H43 or the Chancellor’s Office query may be
used
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
– State Payroll File Reconciliation
6
May 2008
GAAP Reporting Workshop
The List – A/P, ASW and Compensated Absences
– ASW (continued)

SCO Reports like H43 may no longer be available if
your campus has implemented Absence Management

Ensure you accrue for Benefits in Faculty Salary
Accrual

Accrue for Faculty Pay for Summer Session earned
prior to June 30th
 #92

– Compensated Absences
Again, SCO Reports may no longer be available –
check with your campus HR personnel
© 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved.
Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International.
 #90
7
May 2008
GAAP Reporting Workshop
The List – A/P, ASW and Compensated Absences
 #93

Revised format of leadsheet for 07/08 – see Exhibit
 #94
– Commitments and Contingencies
Should NOT include items already accrued in A/P
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
– Salary and Benefit Leadsheet
8
May 2008
GAAP Reporting Workshop
The List – Deferred Revenue
through #97 – Deferred Revenue
Reasonableness Test and Schedules
 #95

Lily covered at FOA
Separate Task Force addressed issues of KPMG’s
difficulty in testing this liability balance



Issue primarily stemmed from the variability in the ways
that deferred revenue and summer revenue are recorded
from campus to campus
Two standardized schedules created by Steve DeVetter
that will support KPMG testing and GAAP adjustment
Review Schedules

Think about this from a revenue standpoint

Discuss three inputs
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
9
May 2008
GAAP Reporting Workshop
The List – Deferred Revenue
Review Schedules (continued)




Review the formulas on your own
Schedule details what A/R, Deferred Revenue, and
Revenue Recognized in the current fiscal year should be
Use for any revenues earned over time (example:
housing, parking, etc.)
Ensure large fluctuations are explainable (for example,
increase in Fall SUF resulting from bills going out one
week earlier than prior year)
© 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved.
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
10
May 2008
GAAP Reporting Workshop
The List – Deferred Revenue
Replace w ith revised schedule that accompanies Chapter 4 section
CSU
Deferred Fees Calculation/ Reasonableness Test (Required Form at)
6/30/20CY
Output (Calculated)
Registration (B)
Revenue to
Collected (C) Recognize (D)
Tuition/Fall Term (undergraduate) < 6
$
4,000,000
$
2,000,000
0%
$
2,000,000
$
4,000,000
$
(2,000,000) $
2,000,000
$
-
$
-
Tuition/Fall Term (undergraduate) > 6
$
4,000,000
$
1,400,000
0%
$
2,600,000
$
4,000,000
$
(2,600,000) $
1,400,000
$
-
$
-
Tuition/Fall Term (post-graduate) < 6
$
400,000
$
300,000
0%
$
100,000
$
400,000
$
(100,000) $
300,000
$
-
$
-
Tuition/Fall Term (post-graduate) > 6
$
400,000
$
200,000
0%
$
200,000
$
400,000
$
(200,000) $
200,000
$
-
$
-
Tuition/Fall Term (teaching credential)
$
300,000
$
140,000
0%
$
160,000
$
300,000
$
(160,000) $
140,000
$
-
$
-
Tuition/Fall Term (non resident) < 6
$
200,000
$
100,000
0%
$
100,000
$
200,000
$
(100,000) $
100,000
$
-
$
-
Tuition/Fall Term (non resident) > 6
$
200,000
$
100,000
0%
$
100,000
$
200,000
$
(100,000) $
100,000
$
-
$
-
Student Union/Fall Term
$
250,000
$
120,000
0%
$
130,000
$
250,000
$
(130,000) $
120,000
$
-
$
-
Health Facilities/Fall Term
$
23,000
$
10,000
0%
$
13,000
$
23,000
$
(13,000) $
10,000
$
-
$
-
Health Services/Fall Term
$
100,000
$
45,000
0%
$
55,000
$
100,000
$
(55,000) $
45,000
$
-
$
-
Total Fall
$
9,873,000
$
4,415,000
0%
$
5,458,000
$
9,873,000
$
(5,458,000) $
4,415,000
$
-
$
-
CERF
$
1,000,000
$
800,000
80%
$
200,000
$
200,000
$
(40,000) $
160,000
$
160,000
$
800,000
Summer Session 1
$
1,000,000
$
800,000
100%
$
200,000
$
-
$
-
$
-
$
200,000
$
1,000,000
Summer Session 2
$
1,000,000
$
700,000
100%
$
300,000
$
-
$
-
$
-
$
300,000
$
1,000,000
Summer Session 3
$
1,000,000
$
600,000
75%
$
400,000
$
250,000
$
(100,000) $
150,000
$
300,000
$
750,000
Summer Session 4
$
1,000,000
$
500,000
75%
$
500,000
$
250,000
$
(125,000) $
125,000
$
375,000
$
750,000
Summer Session 5
$
1,000,000
$
100,000
0%
$
900,000
$
1,000,000
$
(900,000) $
100,000
$
Total Summer Session
$
5,000,000
$
2,700,000
70%
$
2,300,000
$
1,500,000
$
(1,125,000) $
375,000
$
1,175,000
$
3,500,000
Total Student Tuition and Fees
$
15,873,000
$
7,915,000
27%
$
7,958,000
$
11,573,000
$
(6,623,000) $
4,950,000
$
1,335,000
$
4,300,000
Housing
$
400,000
$
200,000
0%
$
200,000
$
400,000
$
(200,000) $
200,000
$
-
$
-
Parking
$
300,000
$
140,000
0%
$
160,000
$
300,000
$
(160,000) $
140,000
$
-
$
-
$
700,000
$
340,000
0%
$
360,000
$
700,000
$
(360,000) $
340,000
$
-
$
-
Housing
$
600,000
$
500,000
85%
$
100,000
$
90,000
$
(15,000) $
75,000
$
85,000
$
510,000
Parking
$
500,000
$
400,000
85%
$
100,000
$
75,000
$
(15,000) $
60,000
$
85,000
$
425,000
Total Summer Session
$
1,100,000
$
900,000
85%
$
200,000
$
165,000
$
(30,000) $
135,000
$
170,000
$
935,000
Total Sales & Srvs of Aux Enterprieses
$
1,800,000
$
1,240,000
52%
$
560,000
$
865,000
$
(390,000) $
475,000
$
170,000
$
935,000
Total Fall
Gross AR
Gross Deferred
Revenue
Net Deferred
Revenue
Reclass
Revenue
Recognized
Net AR
-
$
-
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Input (A)
(A) Whatever the method used by the campus to determine the inputs, campus must provide the basis to the KPMG, and KPMG must be able to follow the logic.
(B) Campus needs to methodically determine the registration for each term. In the absence of information by term, campus may use the aggregate (e.g. Total Summer).
(C) Campus needs to methodically determine the cash collected for each term. In the absence of information by term, campus may use the aggregate.
May 2008 (D)
GAAP Reporting Workshop
Campus needs to methodically determine w hat percentage of the revenue w as earned as of 6/30/CY. In the absence of information by term, campus may use the aggregate.
11
The List – Deferred Revenue
CSU
Sample Deferred Revenue Leadsheet
6/30/20CY
Current:
(A)
GAAP Acct
Description
(A)
6/30/20CY
6/30/20PY
$
%
Balance
Balance
Change
Change
Deferred income - tuition fees
4,950,000

4,500,000
450,000
10.00%
475,000

450,000
25,000
5.56%
(Fall, Summer & CERF)
Deferred income - sales & srvs of aux entrp
(Fall, Summer)
Deferred income - graduation fees
712105
1,430
1,277
Deferred income - grants and contracts
297,054
398,065
(101,011)
-25.38%
Operating revenue collected in advance
797,654
576,092
221,562
38.46%
595,704
10.05%
Total Deferred Revenue
6,521,138
y
5,925,434 r
153
11.98%
y Amounts must agree to the amounts included on the statement of net assets.

Agrees to net deferred revenue total from Exhibit 12
Noncurrent:
GAAP Acct
(A)
Description
6/30/20PY
$
%
Balance
Balance
Change
Change
Deferred income - grants and contracts
712202
(A)
6/30/20CY
5,234,091
Total Deferred Revenue
5,234,091
5,542,198
y
5,542,198 r
(308,107)
-5.56%
-
#DIV/0!
-
#DIV/0!
-
#DIV/0!
-
#DIV/0!
-
#DIV/0!
(308,107)
r Prior year balance must agree to issued prior year financial statements.
y Amounts must agree to the amounts included on the statement of net assets.
-5.56%
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r Prior year balance must agree to issued prior year financial statements.
(A) If significant fluctuation between years, campus needs to be able to explain why and be prepared to provide supporting documentation, if necessary.
Therefore, it is important that campus takes a snap shot of its student subsystem as of 6/30/CY.
12
May 2008
GAAP Reporting Workshop
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The List – A Break
 Start
May 2008
Your PBC’s Early!!!
GAAP Reporting Workshop
13
The List – Leases and Long-Term Debt
 #104

SRB, Senior Debt, and BAN’s excluded
Some campuses continue to have some campusoriginated debt (for example, Energy Efficiency Loans)
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
and #105 – Campus Originated Debt
14
May 2008
GAAP Reporting Workshop
The List – Self-Insurance Claims Liability
 #108
– Passdown Entry
Should not be prepaying premium under RMP
guidelines

Likely will not have a prepaid balance

Discuss CSURMA dividend
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
15
May 2008
GAAP Reporting Workshop
May 2008

Reasonableness Test

Trend Analysis

Specific Items Detail Testing

Other
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The List – Revenues
 KPMG
– Various Means of Testing Revenue and
Likely Audit Approach
GAAP Reporting Workshop
16
The List – Revenues
 #117
If possible, work with KPMG to select prior to interim
 #120
– Tuition and Fee Reasonableness Test

No change from prior year

Items #121 – 124 are supporting documentation
 #125
– Grants and Contracts Revenue

Pell

Cal Grant
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
– Cash Receipts Control Testing
17
May 2008
GAAP Reporting Workshop
The List – Revenues
– Sales and Service of Auxiliary Enterprises

Reasonableness test is more efficient for KPMG and
the campus (in the long run)

Similar to tuition and fees reasonableness test or
exhibit



Challenges to reasonableness test – student using
housing like a hotel room
May want to break-out nonroutine items (ex.
conference revenue)
KPMG – Other testing techniques

Include CSU Fund for SRB Audit
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 #126
18
May 2008
GAAP Reporting Workshop
The List – Revenues
 #127


Other operating revenues vs. other nonoperating
revenues

GASB #9 – Cash Flows

Certain Object Codes Remapped – RMP

Nonexchange vs. Exchange
Reasonableness test probably not efficient –
nonroutine transactions
If one object code is a large portion of total revenue,
may consider going another level down for leadsheet
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
– Other Operating Revenues
19
May 2008
GAAP Reporting Workshop
The List – Revenues
 #128
See discussion above in other operating revenues
 #129
- Other Revenues Other Than Other

If material, a leadsheet must be provided to KPMG

KPMG is required to test every material SRECNA
balance

Sales and services of educational activities – if Athletics
is not self-supporting, revenue should be classified
here with expenses in student services
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
– Other Nonoperating Revenues
20
May 2008
GAAP Reporting Workshop
The List – Expenses
#130A and 130B

Goal – Reduce Sample Size

How It Works
 Item


Take out capital asset expenses

Reconciliation of total expenses
#131 – Auxiliary Enterprise Expense
Show variances and have explanation prepared for
material variances
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Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International.
 Items
21
May 2008
GAAP Reporting Workshop