1. CFO MEETING January 26, 2011

2. CFO MEETING Agenda Financial Reporting WCO – AP Transformation Travel Project 3% Rule PeopleSoft Update Agency Needs Questions

3. CFO MEETING Financial Reporting FY 2010 CAFR and BCR are done!  Thanks for your help.  See SAO website for copy Single Audit in progress and on schedule

4. CFO MEETING Financial Reporting A review of journal entries processed revealed the following: Type AJEBudget FundEW FundGen FundOther FundsGrand Total Entity Wide Conversion86 General Fund Conversion154 ISF Entries118 PCA12415130 Tie Out Beg FB2425193386 Other (Ending FB, Timing, Other Funds, etc.)653136204 Included/ Excluded/ Reclassifications15414192411771 Audit Entries91192 Grand Total6761004027631,941

5. CFO MEETING Faster CAFR  External parties are pushing for CAFR earlier than 12/31  Planning for FY 2011 reporting season Includes policy updates such as lease accounting GASB 54 implementation Fund Balance Account usage Fund Balance Account Reconciliations Fund Source Standardization

6. CFO MEETING Working Capital AP Transformation  New Executive Order for Prompt Payments Issued December 21, 2010 Replaced by policy to be issued by SAO Pay electronically Pay on time Take discounts if available  Vendor Conversion Process Check to ACH conversion  New Vendor Maintenance forms

7. CFO MEETING Progress Reporting CHK and EFT payments by vendor class  Allows SAO to show how well the state overall doing converting to ACH

8. CFO MEETING % of payments by type and BU  Will allow us to demonstrate how successful your agency has been in conversion process.

9. CFO MEETING Travel Project Travel Management Company Online booking and expense reporting tools Travel Policy revisions  Mileage rate change memo

10. CFO MEETING 3% Rule TAX INCREASE PREVENTION AND RECONCILIATION ACT OF 2005 - IRS SECTION 3402(t)  Generally requires 3% withholding on payments for property and services Invoice for $10,000 Vendor paid $9,700 by agency IRS paid $300 by agency Vendor paid in full  Applies to payments made after December 31, 2010 (revised to 12/31/2011)  Applies to all U.S. Government agencies, state governments, and all subdivisions or instrumentalities of state government

11. CFO MEETING 3% Rule EXCEPTIONS  Made by a political subdivision which makes less than $100 million in annual payments  Payments otherwise subject to withholding  For retirement benefits, unemployment compensation, or social security  For real property  Public assistance, made on the basis of need or income (but programs based on age (i.e. Medicare) are included)  To employees in connection with service, such as retirement plan contributions, fringe benefits, expense reimbursements

12. CFO MEETING 3% Rule PAYMENT THRESHOLD  Required to withhold on payments of less than $10,000. TRANSITION RULE  Payments under contracts in effect six months after final regulations issued and not materially altered are not subject to rules Proposed regulations will address contract renewals HOW TO REPORT  Withholding required at the time of payment  Withholding reported to Form 1099-MISC FAILURE TO WITHHOLD  Government becomes liable for the tax.

13. CFO MEETING PeopleSoft Update PeopleSoft Functional Team Reorganization  New leadership  New technology  Renewed focus on customer Customer Service Center Specialists UPK Survey

14. QUESTIONS