1. Gestring, SHEEO, 20031 SHEEO Professional Development Conference South Lake Tahoe, CA August 14 – 16, 2003

2. Gestring, SHEEO, 20032 SHEEO Professional Development Sheila K. Gestring, CPA Chief Financial Officer Flathead Valley Community College 777 Grandview Drive Kalispell, MT 59901 (406) 756-3808 www.fvcc.mt.cc.edu

3. Gestring, SHEEO, 20033 GASB 34/35, 39 Lost & Found “Opportunities”

4. Gestring, SHEEO, 20034 GASB 34/35 Issuance of GASB 34 represents the most significant change in governmental financial reporting in over a decade GASB 35 brought those changes to colleges and universities.

5. Gestring, SHEEO, 20035 NACUBO & Staff NACUBO and it’s staff have proven to be a fabulous resource They have been our leaders in providing training and guidance

6. Gestring, SHEEO, 20036 Governing Boards & Audit Committees Increased responsibilities in publicly traded companies Colleges and Universities can anticipate similar increased responsibilities

7. Gestring, SHEEO, 20037 Ultimate Oversight Governing Boards/Audit Committees have ultimate oversight of the financial reporting.  Management is responsible for any “abuses”  Boards/Audit Committees responsible for having a thorough understanding of the financial statements and related accounting policies.  Should be able to explain to stakeholders

8. Gestring, SHEEO, 20038 The Connection Governing Boards/Audit Committees have read the old format financial statements for several years Changes as a result of GASB 34/35 are complex and numerous Need to provide our Boards/Audit Committees with enough information about GASB 34/35 to be able to read the financial statements effectively and ask the tough questions

9. Gestring, SHEEO, 20039 What is Lost is Not Entirely Lost Fund sources are no longer displayed on the face of the financial statements Funds that are designated can be discussed in both the MD&A and the notes to the financial statements Plant Funds Appropriations (not operating revenues, but a large part of the funding used to support general operation expenses)

10. Gestring, SHEEO, 200310 Key Elements of the Financial Statements Management Discussion and Analysis (MD&A) Statement of Net Assets Statement of Revenues, Expenses, and Change in Net Assets Statement of Cash Flows Notes to the Financial Statements

11. Gestring, SHEEO, 200311 Management Discussion and Analysis (MD&A) GASB 34, paragraph 11 Analyze significant changes and assess reasons for changes (not just a % change) Overall financial position – improving?

12. Gestring, SHEEO, 200312 Management Discussion and Analysis (MD&A) – cont. Opportunity to explain the financial statements and the operations that affect the financial statements.  Objective (the good and bad)  Easy to read - Laymen’s terms, and charts and graphs  Known facts only  Not a transmittal letter

13. Gestring, SHEEO, 200313 Statement of Revenues, Expenses and Change in Net Assets Public colleges & universities will report operating losses Appropriations are non-operating revenues Tuition and fees revenue – net of scholarship discounts and allowances Defining operating and non-operating revenues

14. Gestring, SHEEO, 200314 Statement of Net Assets Current and Non-current Assets and Liabilities (some assets & liabilities will be both current and non-current) Accumulated depreciation could have a large impact on net assets category, “Invested in capital assets, net of related debt (what used to be fund balance) Infrastructure now capitalized

15. Gestring, SHEEO, 200315 Statement of Net Assets (cont.) 3 classes of net assets:  Invested in capital assets, net of related debt  Restricted Expendable Non-Expendable  Unrestricted

16. Gestring, SHEEO, 200316 Statement of Cash Flows Direct method Reconciles net operating income/(loss) to cash flows provided/(used) from operating activities 4 sections  Operating  Non-capital Financing  Capital and Related Financing  Investing

17. Gestring, SHEEO, 200317 Notes to the Financial Statements Capital Assets

18. Gestring, SHEEO, 200318 Notes to the Financial Statements (cont.) Long-Term Liabilities

19. Gestring, SHEEO, 200319 Notes to the Financial Statements (cont.) Functional to Natural Classification of Expenditures Matrix

20. Gestring, SHEEO, 200320 Notes to the Financial Statements (cont.) Segments Designated Funds

21. Gestring, SHEEO, 200321 Questions and Experience Sharing What are various organizations currently doing?

22. Gestring, SHEEO, 200322 Resources http://www.gasb.org/repmodel/index.html  Click on “Implementers of Statement 34”  Click on “Colleges & Universities” NACUBO http://www.fvcc.mt.cc.edu