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and Reporting UpdateSeptember 16, 2015Claire Arnold, CPA

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FY 2015 Financial Engagement Cycle

Where are we now?

• Budgetary Basis Compliance Reports (BCRs) submitted and reviewed

• Annual Financial Reports (AFRs) submitted and reviewed

• DOAA currently is working on completing your fiscal year 2015 engagements

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FY 2015 Financial Engagement CycleBCRs• Please provide auditor adjustments to USO (Email

Claire.Arnold@usg.edu and Bruce.Jackson@usg.edu)• Consolidation Process• Institution confirmation of Surplus and BCR information

Email to be sent September 25:

Surplus by Institution (Excel File)

BCR Reports (Excel Files)

Balance Sheet by Institution

Teaching State Approp by Institution – Parts 1 & 2

Teaching Other by Institution – Parts 1 & 2

SFI by Institution – Parts 1 & 2

Research Consortium – Parts 1 & 2

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FY 2015 Financial Engagement CycleBCRsSubmission to State Accounting Office on October 8, 2015

AFRs• Please provide auditor adjustments to USO (Email

Claire.Arnold@usg.edu, Ben.riden@usg.edu, Theresa.Jackson@usg.edu and Brad Freeman@usg.edu)• Submit updated AFRs to MoveIT application

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FY 2015 Financial Engagement CycleAFRs• Example of AFR changes submission:

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Statement of Net PositionCurrent Liabilities - Lease Purchase Obligations $16,273,398 $16,328,967 $55,569 17Non Current Liabilities - Lease Purchase Obligations $448,903,974 $448,693,429 ($210,545) 17Net Position - Net Investment in Capital Assets $1,356,356,683 $1,356,511,659 $154,976 17Net Position - Total Net Position $1,289,189,712 $1,289,344,688 $154,976 17

Statement of Revenues, Expenses, and Changes in Net PositionNonoperating Revenues (Expenses) - Interest Expense (capital assets) ($25,843,264) ($25,688,288) $154,976 19Net Position - End of Year $1,289,189,712 $1,289,344,688 $154,976 19

Statement of Cash FlowsCF from Capital and Related Financing Activities - Principal on Capital Debt/Leases ($18,581,012) ($18,735,987) ($154,975) 20CF from Capital and Related Financing Activities - Interest on Capital Debt/Leases ($25,955,874) ($25,800,899) $154,975 20Reconciliation of Operating Loss to Net Cash - Other Assets ($37,501,287) $0 $37,501,287 21Reconciliation of Operating Loss to Net Cash - Advances (note 7) $33,619,098 ($2,634,081) ($36,253,179) 21Reconciliation of Operating Loss to Net Cash -Deferred Inflows of Resources $0 $105,674,412 $105,674,412 21Reconciliation of Operating Loss to Net Cash - Deferred Outflows of Resources $0 ($37,501,287) ($37,501,287) 21Reconciliation of Operating Loss to Net Cash - Net Pension Liability $0 ($69,421,233) ($69,421,233) 21

Date sent to BOR/Auditors

Section of Report & Description of Change Per Updated AFR Per Original AFR Change Page

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FY 2015 Financial Engagement CycleAFRs• Example of AFR changes submission:

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Note 6 - Capital AssetsUpdated Text for GSFIC transferred capital additions…..

GSFIC $93,059,262 $59,288,598 32Insitutional $0 $31,752,785 32Allottments on Reimbursement Basis $0 $2,017,879 32

Note 8 - Long Term Liabilities (Restated) Lease Purchase Obligations - Reductions ($18,581,012) ($18,735,988) ($154,976) 33Lease Purchase Obligations - Ending Balance $465,177,372 $465,022,396 ($154,976) 33Lease Purchase Obligations - Current Portion $16,273,398 $16,328,967 $55,569 33Net Pension Liability - Restated Beginning Balance $0 $372,212,506 $372,212,506 33Net Pension Liability - Additions $275,455,423 $0 ($275,455,423) 33Net Pension Liability - Reductions $0 ($96,757,083) ($96,757,083) 33Total Long Term Obligations - Reductions ($50,822,986) ($147,735,045) ($96,912,059) 33Total Long Term Obligations - Ending Balance $784,449,669 $784,294,693 ($154,976) 33Total Long Term Obligations - Current Portion $44,030,037 $44,085,606 $55,569 33

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FY 2015 Financial Engagement CycleAFRs

• Consolidation Process• Institution confirmation:

Email to be sent October 5:

Statement of Net Position (SNP)

Statement of Rev, Exp & Changes in Net Position (SRECNP)

Cash Flow Statement

Confirmation of Information or changes must be emailed to Theresa.Jackson@usg.edu and ben.riden@usg.edu by October 12 7

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FY 2015 Financial Engagement Cycle

• DOAA is currently conducting fieldwork on the audits and FDMR engagements• Exit Conference – Include USO Accounting and

Reporting• Agreed Upon Procedures (AUP) engagements

postponed until January 2016• Modifications to the AUP engagements

• Reduce testing to areas of importance – Balance Sheet Support; Bank Reconciliations, Subsidiary Module reconciliations, SEFA, AFR reflects accounting records activity, etc.

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FY 2015 Financial Reporting Changes

DOAA and USO have identified a few items that need to be adjusted in the AFR. DOAA has agreed to make the following changes:

Note 1: Net Position – Unrestricted:Add final sentence:

Included in the net deficit reported is the College/University’s Net Pension liability of $__________ which will be funded by appropriating resources each year as payments come due, rather than accumulating resources in advance.

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FY 2015 Financial Reporting ChangesRetirement Plan Note Disclosure Change

(Per AFR email 9/1/2015)

Contributions:  Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6.00 % of their annual pay during fiscal year 2015. The College/University’s contractually required contribution rate for the year ended June 30, 2015 was 13.15 % of annual College/University payroll. College/University contributions to TRS were $XX,XXX for the reporting period (fiscal year ended June 30, 2015) and $xx,xxx for the measurement period (fiscal year ended June 30, 2014).

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FY 2015 Financial Reporting ChangesRetirement Plan Required Supplementary InformationSchedule of Contributions will include data for FY 2015, 2014 and 2013.

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ABC School District

Required Supplementary Information

Schedule of Contributions

Teachers Retirement System of Georgia

For the Year Ended June 30

(Dollar amounts in thousands)

2006

XX,XXX

XX,XXX

XX,XXX

XX,XXX

X.XX%

2007

XX,XXX

XX,XXX

XX,XXX

XX,XXX

X.XX%

2008

XX,XXX

XX,XXX

XX,XXX

XX,XXX

X.XX%

2009

XX,XXX

XX,XXX

XX,XXX

XX,XXX

X.XX%

2010

XX,XXX

XX,XXX

XX,XXX

XX,XXX

X.XX%

2011

XX,XXX

XX,XXX

XX,XXX

XX,XXX

X.XX%

2012

XX,XXX

XX,XXX

XX,XXX

XX,XXX

X.XX%

2013

XX,XXX

XX,XXX

XX,XXX

XX,XXX

X.XX%

2014

XX,XXX

XX,XXX

XX,XXX

XX,XXX

X.XX%

2015

XX,XXX

XX,XXX

XX,XXX

XX,XXX

X.XX%

$

$

$

Contractually required contribution

Contributions in relation to the contractually required contribution

Contribution deficiency (excess)

District’s covered-employee payroll

Contributions as a percentage of covered-employee payroll

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FY 2015 Financial Reporting ChangesAdditional Items Identified that were communicated during the USO Review process:• Related party footnote to Capital Lease Liability Table in Capital Lease note

disclosure• Gain/Loss on Debt Refunding footnote to the Capital Lease Liability Table in the

Capital Lease note disclosure• MD&A additional verbiage related to Net Pension Restatement of Net Position• Special Item Transfer note disclosure additional verbiage for P3 assets and capital

lease liability transferred to USO

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FY 2015 Financial Engagement CycleReporting to DOAA

• TIGA

Payments and Obligations due October 15

Immigration Reform Act due December 31• SEFA – Changes Confirmation• Response to Current Year Findings

Submit Response with Closure Letter documents

Submit to Findings Management System

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FY 2015 Financial Engagement CycleResponse to Current Year Findings

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FY 2015 Financial Engagement Cycle

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Financial Reporting For FY 2016

What worked?

What didn’t work?

How can we improve?

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Standardized Chart of Accounts• Standardized Chart of Accounts verses SHARE Accounts• Revisions to Chart of Accounts:

Goals:

Consistency

Information

Institutional Functionality

• Chart of Accounts CommitteeCommittee Members: Bruce Spratt, Nick Henry, Julie Peterson, Ruth Berger, Kim Brown, Jeff Hall, Michelle Hamm, budget representatives, and ITS representatives

• Submit Suggestions to Claire.Arnold@usg.edu by October 16• Timeframe – December 2 and 3 17

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December WorkshopDates: December 1 and 2

Location: Middle Georgia Math Auditorium

Time: Day 1 - 9:30 am to 5:00 pm

Day 2 - 8:30 am to 4:00 pm

Preliminary Topics:• New Federal Expenditure Requirements/State Purchasing• New Retiree Health Insurance Accounting Process• Standardized Chart of Accounts• Reviewing Audit Results• oneUSG Update• Joint Staffing/TRS Eligible Salaries• GSFIC/MRR/PPV/Capital Improvements – Allowable/Unallowable and

Accounting• AFR/BCR Improvement Discussion

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Uniform Federal Grant GuidanceEight different OMB guidance streamlined into one. Eliminates overlapping duplicative and conflicting guidance.

• A-21• A-50• A-87 Title 2 of CFR, Subtitle A, Chapter II, Part 200• A-89 UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,

• A-102 AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS

• A-110 “SUPER CIRCULAR”• A-122• A-133

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Uniform Federal Grant Guidance

Intended Outcomes• Stronger Oversight• Improved Business Processes•Well Trained Workforce• Targets Risk and Minimize Burden

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Uniform Federal Grant Guidance

Effective Dates section 200.110

All awards or funding increments made on or after December 26, 2014 must adhere to the Uniform Guidance.

Audit requirements are effective for fiscal years beginning on or after December 26, 2014.

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Procurement Claw

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Procurement Claw

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Methods of ProcurementMicro Purchases: • New term for supplies and services purchased, where the aggregate

dollar amount is under $3,000.• To the extent practical, must be distributed equitably among

qualified suppliers.• If your college/university considers the price reasonable after price

analysis, the micro-purchase may be awarded without soliciting competitive quotes.• Many college/university have procurement policies with a minimum

of $5,000 and will need to lower this minimum to $3,000 to ensure they meet the requirement.

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Methods of ProcurementSmall Purchases: • Existing term for supplies and services purchases, where the

aggregate dollar amount is under $150,000.• The amount will be adjusted for inflation using the Simplified

Acquisition Threshold.• Price or rate quotations must be obtained from an adequate

number of qualified sources.• Must obtain quotes from more than one vendor.• Quotes can be written, verbal, or internet searches but must be

documented.

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Methods of ProcurementSealed Bids: (Formal Advertising)Existing term for supplies and services purchases, where the aggregate dollar amount is over $150,000.• Bids are publicly solicited and a firm-fixed-price contract (lump sum

or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price.• Preferred method for construction projects funded with federal

grant funds.

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Methods of ProcurementCompetitive Proposals: • Existing term for supplies and services purchases, where the

aggregate dollar amount is over $150,000.• Used when conditions are not appropriate for the use of sealed

bids. • Conducted when there is more than one source submitting an offer

and either a fixed-price or cost-reimbursement type contract is awarded.• New requirement: Non-Federal entities must have a written method

for conducting technical evaluations of the proposals received and for selecting recipients.

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Methods of ProcurementNon-Competitive Bids: (Sole Source)• Existing term for supplies and services purchased, of any dollar

amount• Can only be used if (one or more, are applicable):• The item is only available from a single source.• The public exigency or emergency for the requirement will not

permit a delay resulting from competitive solicitation.• The federal awarding agency expressly authorizes non-competitive

proposals in response to a written request.• Competition is deemed inadequate after solicitation from multiple

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Other Procurement Items to Note

• 200.319: Contains language that prevents contractors who develop or draft specifications, requirements, statements of work, and invitations for bids or requests for proposals from competing for such procurements.

• 200.319c: Written procedures for procurement transactions are still required.

• August 2014 FAQ 200.320-6 –Clarifies that the Federal procurement standards are not required to apply to procurements made (charges to) the indirect cost pool and apply only to goods or services that are directly charged to a Federal award

• The non-Federal entity must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of the contract or purchase order.

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Other Procurement Items to Note• All non-Federal entities will need to update their internal

procurement policies to reflect the changes described in the Uniform Guidance. • Important that a recipient’s procurement policies identify the five

allowable methods outlined in Section 200.320 (“the claw”).• Ensure your institution’s current employee conflict of interest

policies include the required language.• Ensure the mandatory organizational conflict of interest policy is

written, if applicable.• Review Appendix II to ensure your institution’s contracts include the

required specifications.30