DPI Update At the Skyward Conference April 8, 2013 Gene Fornecker and Michele Tessner

UPDATES: WUFAR OPEB Referendum Information

WUFAR Latest WUFAR document Accounting Issues and coding examples Allowable account classifications by fund Summary of changes per revision

WUFAR Balance Sheet Accounts—no changes Revenue Accounts ◦ Delete:  Source 956, Plan Member Contributions—HSA ◦ Add:  Source 959, Other Contributions  Fund 73, to account for other trust fund contributions including termination benefits such as the conversion of sick leave upon retirement

WUFAR Expenditure Accounts ◦ New Account:  Object 994, Trust Fund Disbursements—Implicit Rate Subsidy (used with Function )  To account for the payment of implicit rate subsidy from Fund 73  Allowable combinations:  80E  80E  To allow “Apparel” to be coded to Community Service Fund

WUFAR Allowable combinations: ◦ 73E  To account for legal expenses in Fund 73 ◦ 72E  To account for investment fees in Fund 72

WUFAR Other Changes/Clarifications: ◦ Source 971—include P-Card refunds even if relates to current fiscal year ◦ Source 972—includes any “Sharing of Non- Manufacturing Omitted Property Taxes” ◦ Object 290—Include any payments of ‘cash in lieu of health insurance’ (obj 296)

WUFAR Function , Other Support Svcs ◦ Include:  Private school training funded by Title 1  Family literacy services including child care costs during parent involvement activities  Title 1 Spotlight School payments to neighboring schools

WUFAR Clarification: ◦ Object 310, Personal Services  Includes stipend payments for both support and instructional activities ◦ Object 370, Payments to Non-Governmental Agencies and Individuals  Includes payments to individuals for purchased instructional services (used with /436000)

WUFAR Object 993, Trust Fund Disbursements-HRA ◦ Removed reference to HSA accounts Object 240, Health Insurance ◦ Includes contributions to an active employee current HRA/HSA benefit (Object 249)

WUFAR Source 951, District Contribution—OPEB and Supplemental Pension Type (Stipends) Benefits ◦ Expanded definition to include post retirement insurance, HRA/HSA, stipends and other benefits Source 953, District Contribution—Pension ◦ Added reference to an actuarial study Source 955, District Contribution—HRA ◦ Clarified that this is used for current active employee benefits and for pay as you go retiree benefits; removed reference to HSA

New Studies ◦ If a new study is due, GASB requires your auditor to have it by the completion of the audit. This is for all districts, not just those with Fund 73 OPEB Trust. ◦ Did you send DPI a copy of the new study (only if you have a Fund 73 Trust)? Fund 73 OPEB Trust - What might your auditor look for?

PHYSICAL CASH TRANSACTIONS ◦ The Contribution and Implicit Rate Subsidy payback must have cash movement. ◦ Did the Contribution physically leave the trust by July 30? ◦ NO BOOK ENTRIES, NO NETTING TRANSACTIONS

Budget for Trust Activity ◦ Contribution and Implicit Rate Subsidy payback should be in the districts budget. ◦ Was the budget amended if there was a change in plans? Fund 73 OPEB Trust - What might your auditor look for?

Payment of Retiree Benefits ◦ Once a district elects to establish and fund an OPEB trust, the retiree benefits that were funded must be paid out of the trust.  Exception may be termination benefits such as accumulated sick leave. Implicit Rate Subsidy for those benefits still applies if you use trust. ◦ Check to see, if you have it, are you using it? Fund 73 OPEB Trust - What might your auditor look for?

Were the Contributions and Implicit Rate Subsidy appropriately allocated? ◦ Contributions up to the ARC must be allocated to active employee plan members  By FTE or Salary ◦ Implicit Rate Subsidy is a credit to the active employee plan members healthcare costs, Object 241.  Allocated in the same manner as the Contribution Fund 73 OPEB Trust - What might your auditor look for?

Contributions exceeding the ARC ◦ Amount in excess of the ARC is coded to Function , Object 218. ◦ If a district exceeded the ARC, that amount should not be allocated to employee functions and should be in Fund 73 OPEB Trust - What might your auditor look for?

Implicit Rate Subsidy ◦ If a district has retirees on their health insurance plan, there will be an Implicit Rate Subsidy.  Exception: Some self funded plans may not have implicit rate subsidy payback if actual costs method is used. ◦ The Implicit Rate Subsidy needs to be paid from the Trust to the district.  Object 994 for implicit rate subsidy payment from trust (or 991)  Districts will credit active employee plan member health care costs, Object 241. ◦ Did the cash move from the trust to the district? Fund 73 OPEB Trust - What might your auditor look for?

Plan Member Contributions ◦ If the retirees pay a portion of their healthcare costs, these should be deposited directly into the Fund 73 trust. ◦ If that is not an option, district should record them in a Due to Fund 73 liability account. ◦ They should never be revenue or expenditures in the district funds. Fund 73 OPEB Trust - What might your auditor look for?

New Study due? Study date, number of employees and current ARC amounts are tracked. The ARC is needed to run edits. Fund 73 OPEB Trust - What does DPI look for?

If there was a beginning balance, were there trust fund disbursements? Are you using the Trust? If you have a Fund Balance in 73B , then the sum of Fund 73 objects must be greater than zero. Fund 73 OPEB Trust - What does DPI look for?

Did the Contribution exceed the ARC? ◦ Contribution is the sum of Object 218. If so, is there at least the amount of the different between the ARC and the Contribution in ? Fund 73 OPEB Trust - What does DPI look for?

Does the contribution to the trust equal the amount of revenue received into the trust? The amount in the district funds in Object 218 must equal the sum of Fund 73, Sources Fund 73 OPEB Trust - What does DPI look for?

Is there an amount coded to Fund 27, Object 218, Project 011? If yes, does the Contribution meet special education categorical aid eligibility? ◦ Contributing at least the ARC amount. ◦ Contributing at least 5% more than current year costs. ◦ Contributing at least 5% more than costs using a 3 year average. ◦ First year of the trust. Fund 73 OPEB Trust - What does DPI look for?

If retirees were on the district’s health insurance, was the implicit rate subsidy paid from the trust to the district? ◦ Is there an amount in the new Object 994 account? ◦ If not, the manual review will include a question to all districts with an OPEB trust who did not use Object 994 to verify the implicit rate subsidy was completed. Fund 73 OPEB Trust - What does DPI look for?

Referenda Reminders Within 10 days of the board adopting a resolution, the district must notify DPI. ◦ Entry on the School Finance Reporting portal  Instructions on SFS website ◦ Copy of initial board resolution sent to ◦

Referenda Reminders After elections ◦ Submit preliminary results to DPI  to  Update portal the morning following election  Results are compiled the morning following the election and forwarded to the State Superintendent. ◦ Submit Board of Canvassers within 10 days following election.

DPI SCHOOL FINANCE TEAM Please contact one of us if you have any questions:  Jerry Landmark, Director  Debbie Brown, Asst Director  Brad Adams, Consultant  Bruce Anderson, Consultant  Erin Fath, Consultant  Gene Fornecker, Auditor  Brian Kahl, Auditor  Michele Tessner, Auditor  Dan Bush, Consultant (Special Ed.)