Responses to 2008 GAAP Feedback

Presented by Sherry PickeringCSU

KPMG LLP

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Agenda

The Feedback Process

Review of the Top 5 Campus Comments

Highlights and Changes Resulting from Comments

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Feedback Process

At the end of the GAAP reporting cycle each year, the Chancellor’s Office requests feedback

The opportunity to participate in the process is extended to all of the campuses, the Chancellor’s Office reporting staff and KPMG.

It is your chance to communicate your experience during that year and to provide any information or insight that may be useful to others.

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Feedback Process

Responses are gathered and organized with like responses from others to assess the frequency of a comment.

The combined list is reviewed by Chancellor’s Office Systemwide staff along with the KPMG Systemwide team.

– In this way, the teams can agree to continue to incorporate items that went well and to make improvements where needed.

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Feedback Process

The feedback process is an important source of information

– Changes to PBC List

– Updates to Exhibits

– Changes to GAAP Manual Explanations or Literature Citations added for clarity

Reminders about upcoming changes

Cross referencing of linked Chapters and ideas

– Changes to the Reporting Package Changes to footnotes

Additional explanations or definitions added to the manual to clarify how the data should be reported

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Feedback Data

This year the feedback was used as the starting point for the edit of the GAAP manual.

The campus feedback was combined with the working notes from the Chancellor’s Office staff about needed changes in 2009.

The PBC taskforce entered a recommended approach to address each item noted.

– Some required no action as they had been addressed during the prior year reporting cycle.

– The majority of the comments provided sparked a change.

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2008 Top Five Comments

1. Weekly campus conference calls were helpful in keeping everyone informed.

There were some suggestions about format and content of these calls.

The weekly campus conference calls will begin August 7th and continue every Friday until November 20th.

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2008 Top Five Comments - Continued

2. Various positive feedback about the KPMG managers and teams and the way that they approached the audit in 2008.

Timely reviews and communication of open items by KPMG manager.

Sample selections provided at the beginning of the audit fieldwork

Campus requests for the same team

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2008 Top Five Comments - Continued

3. Numerous revisions to the stand-alone financial statement template was a challenge

The template delivery to campuses has been moved back by one week.– To allow for upper management to review prior to

hand off to KPMG for their acceptance And

– Resolve the conflict in the schedule experienced last year.

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2008 Top Five Comments - Continued

4. Interim fieldwork helped with audit workload and expedited the selections of samples for testing.

All but one campus has scheduled interim fieldwork for 2009

Requests for additional substantive testing to take place during interim rather than final fieldwork

Suggestion from a campus that took this approach in 2008 to tackle Higher Scope A-133 procedures during interim

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2008 Top Five Comments - Continued

5. Chancellor’s Office staff in the Reporting and Training groups were timely in responding to questions/issues.

We hope that such responsiveness can continue

The Training group, Lily and Sherry, are working on a project away from the office Monday – Thursday weekly.– However, that project is scheduled to end in August

2009 just in time for the start of final fieldwork.

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Highlights and Changes from Comments

The mapping matrices in Chapter 3 updated for:– Additional values allowed in CSU Fund 501, such as

interest expense

– Changes to functional classifications allowed in Lottery, Health Facilities and CSU fund 541

– The Systemwide Revenue Bond (SRB) CSU funds are clearly identified.

Pass down Entries for SRB Change– Reclassify the Accounts Receivable related to interest

income for the debt reserves in SCO fund 0578 to Unrestricted Net Assets.

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Highlights and Changes from Comments

Various changes and updates to Chapter 4– Data source reference updated to include queries

Compensated Absences and Accrued Salaries and Benefits due to implementation of HR Absence Management System

– Reference to NACUBO FARMS manual added in support of expensing library periodicals and subscriptions

– Reimbursement of Expense section has been rewritten for clarity

Ex. Faculty release time transactions with an Auxiliary should appear as expenses in the university column and in the applicable Auxiliary column on the face of the financial statements

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Highlights and Changes from Comments

There are several new requirements to facilitate the SRB audit

– Required Schedules

– Specific SRB section on the PBC list

– Updates to Chapter 3 Matrices to clearly indicate the SRB CSU funds

Other Exhibit and Lead Sheet Changes– Investment Income

– SEFA Reconciliation

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Highlights and Changes from Comments

Changes to Reporting Package– Notes 8 and 14 – Auxiliary and Campus notes for

Related Party Transactions Line item definitions are included in Chapters 8 & 9

– A-133 Perkins Loan Receivable formula adjusted

– Additional Line added to note 6.1 for carrying value of assets related to capital leases with the State Public Works Board

– New Lines added to Note 3.3 “"On behalf of auxiliary organizations (Auxiliary organizations as investments)" and "On behalf of auxiliary organizations (Auxiliary organizations as accounts receivable)”

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Highlights and Changes from Comments

Changes for New Pronouncements

GASB 49 – Accounting and Financial Reporting for Pollution Remediation Obligations

– GAAP manual update (chapter 4-12)

– Exhibit 21 update.

– A new section in note 12.3 in YES.

– A new PBC item.

– Adjust Beginning Net Assets and report in separate Excel file note 15.3.

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Highlights and Changes from Comments

Changes for New Pronouncements

GASB 45 - Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions

– GAAP manual update (chapter 5.6).

– A new note 19 in YES.

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Highlights and Changes from Comments

Changes for New Pronouncements

GASB 51 – Accounting and Financial Reporting for Intangible Assets

– KPMG led training January 2009 http://www.calstate.edu/sfo/documents/GASB_webcast.pdf

– Adjust Beginning Net Assets and report in separate Excel file note 15.3.

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Highlights and Changes from Comments

Changes for New Pronouncements

GASB 52 – Land and Other Real Estate Held as Investments by Endowments

– Applicable to 3 auxiliary. Record investment in fair value. GAAP manual update (chapter 8)

Uniform Prudent Management of Institutional Funds Act (UPMIFA)

– Underwater endowment - GAAP manual update (chapter 8). No change to YES and PBC.

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Feedback Reminder

Please participate in the feedback process– Take a few minutes to look at your notes and emails

from the GAAP Reporting cycle to jog your memory

– It is just as important to communicate what went well

– Don’t be shy about sending your comments

Frequently less than half of the campuses respond to the request.

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Q & A