discretely presented Component units (webcast)

discretely presented Component units (webcast)
YEAR-END GAAP TRAINING MAY 2017 discretely presented Component units (webcast) Hi everyone. I’m Criselle Vela from the Systemwide Financial Standards and Reporting department – Systemwide GAAP Reporting. In this presentation, I am going to cover the Year-End GAAP reporting applicable to discretely presented component units for fiscal year Criselle Vela, Financial Reporting Analyst, SFSR Chancellor’s Office

YEAR-END GAAP TRAINING
MAY 2017 YEAR-END GAAP TRAINING MAY 2017 LEARNING OBJECTIVES At the end of the session, participants will be able to: Understand the GAAP Accounting and Reporting Manual updates and key changes Know the key GAAP reporting deliverables and due dates Know the monitoring of corrective action plan Know the relevant resources available At the end of the session, participants will be able: Understand the GAAP Accounting and Reporting Manual updates and key changes Know the key GAAP reporting deliverables and due dates Know the monitoring of corrective action plan Know the relevant resources available

MAY 2017 YEAR-END GAAP TRAINING MAY 2017 GAAP MANUAL UPDATES I will start with the GAAP Manual Updates in fiscal year

MAY 2017 YEAR-END GAAP TRAINING MAY 2017 GAAP Manual FY Located in the CSU public website under Financial Services in the URL: The GAAP manual for fiscal year can be found in the CSU public website under the new CSU Financial Services link which is provided on this slide. It is under the GAAP Accounting Manual section. Please use this new link as the old link will no longer work.

MAY 2017 YEAR-END GAAP TRAINING MAY 2017 GAAP Manual FY To subscribe to legal and GAAP manual group or questions/feedback about the manual, In the GAAP manual webpage, at the top of the page, you will see two buttons for “Subscribe” and “Questions or Feedback.” You may click on the subscribe button if you wish to be added to the Legal and GAAP Manual Group. Please know that this subscription is both for legal and GAAP manual updates. You should be able to pay attention to the GAAP manuals updates specifically as they are more relevant in this case. The “Questions or Feedback” button can be used for you to address any questions, comments, or feedbacks about the chapters in both legal and GAAP manuals.

MAY 2017 YEAR-END GAAP TRAINING YEAR-END GAAP TRAINING MAY 2017 GAAP Manual Updates Added a discussion about GASB No. 80 Blending Requirements for Certain Component Units – an amendment of GASB Statement no. 14 Ch Presentation of Component Units Updated the template questionnaire to include the additional requirement of GASB No. 80 Ch Template: Component Unit Presentation: Blended vs. Discretely Presented Questionnaire Updated the template to reflect the changes in TM1 Noncurrent unrestricted endowment investments is now an input cell in table 2.1 Composition of investments at June 30, 2017 Ch Template: Supplementary Information Here is the summary of the updates made in Chapter 8 of the GAAP manual: In Chapter 8.00 Presentation of Component Units section, we added a discussion about GASB No. 80 Blending Requirements for Certain Component Units – an amendment of GASB Statement no. 14 In Chapter , we updated the template questionnaire to include the additional requirement of GASB No. 80. In Chapter , we updated the template to reflect the changes in TM1 and in FN2.1 Composition of investments at June 30, 2017 the noncurrent unrestricted endowment investments is now an input cell. The change is not currently live in TM1 but it will be available for input soon. As a reminder to all, please use the supplementary information template for FY16-17 and not prior year templates.

Component Unit – Supplemental Schedule
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING YEAR-END GAAP TRAINING MAY 2017 Component Unit – Supplemental Schedule Based on the requirement of GASB No. 72 for purposes of the systemwide consolidated financial statements, a look-through should be made, meaning, the disclosure should be made related to the underlying investments of the pool and not its position in the internal investment pool. If you are participating in the SWIFT investment pool, how should this be presented in the supplemental schedule? Finally, If you are participating in the SWIFT investment pool, based on the requirement of GASB No. 72 for purposes of the systemwide consolidated financial statements, a look-through should be made, meaning, the disclosure should be made related to the underlying investments of the pool and not its position in the internal investment pool.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Component Unit – Supplemental Schedule In SRECNP, we show “Other nonoperating revenues (expenses)” in two lines: There are clarification and reminders when completing the supplemental schedule. In TM1 SRECNP, we now show Other nonoperating revenues (expenses) in two lines as shown in the slide. The first line is for other nonoperating revenues (expenses) excluding interagency transfers and the second one is other nonoperating revenues (expenses) that are interagency transfers. Please note that other nonoperating revenues (expenses) for interagency transfers is not available as input cell to component units. You will enter your balances in other nonoperating revenues (expenses) excluding interagency transfers. In the supplemental schedule, it will remain as one line.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Component Unit – Supplemental Schedule In footnote 1, the header was updated to “Noncurrent restricted cash and cash equivalents at June 30, 20CY” For this footnote, please make sure to include only “noncurrent” restricted cash and cash equivalents. In accordance with CSU’s presentation, all restricted cash and cash equivalents are noncurrent.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Component Unit – Supplemental Schedule In footnote 2.1 Composition of investments at June 30, 2017, the noncurrent unrestricted endowment investments was updated to be an input cell. In footnote 2.1 Composition of investments at June 30, 2017 the noncurrent unrestricted endowment investments is now an input cell as mentioned earlier. All these changes will be reflected in TM1 and supplemental schedule soon. Please wait for further notification from the SFSR GAAP team.

Component Unit – Other Reminders
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING YEAR-END GAAP TRAINING MAY 2017 Component Unit – Other Reminders Supplementary Information of Audited F/S FIRMS IPEDS GAAP DATA TM1 YES As a reminder to all component units, please review that the balances agree in total and by account in all three schedules: TM1 YES, supplementary information template of the audited financial statements, and the FIRMS IPEDS GAAP data. It is important that all the reports agree.

Component Unit – Common Errors
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Component Unit – Common Errors Error in the investment type input in FN2.1 Composition of Investments vs. FN2.5 Fair Value Hierarchy in Investments Error in the financial line input In the process of reviewing the supplementary information of the audited financial statements with TM1 in fiscal year , we noticed the following common errors : Errors in the investment type input footnote 2.1 Composition of Investments and footnote 2.5 Fair Value Hierarchy in Investments. The total investment and by type of investment total must agree between the TM1 YES and supplementary information of the audited financial statements Error in the financial line input. All balances by financial line must agree in addition to the total balances. Please make sure that the balances are entered in the correct financial line.

MAY 2017 YEAR-END GAAP TRAINING MAY 2017 MASTER TIMELINE The next update is on the master timeline.

FY 2016-17 Master Audit and Reporting Timeline
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 FY Master Audit and Reporting Timeline Located in the CSU public website under Financial Services in the URL: The master audit and reporting timeline for fiscal year can be found in the CSU public website under the new CSU Financial Services link which is provided on this slide. It is under the Master Timelines section. Again, please use this new link as the old link will no longer work.

YE Reporting Timeline – Component Units
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 YE Reporting Timeline – Component Units July September October December Firms Legal Basis Data (L-033) Audited financial statements (G-097) GAAP financial reporting checklist (G-097) Hard copy of audited financial statements (G-108) Campus President’s Letter to CSU Chief Financial Officer (G-111) Single Audit Report (if required) (G-140) Auditor’s communications to management (G-140) FIRMS IPEDS Data (G-132) Corrective Action Plan and Evidence of Completion of Action Plan (G-146) Here is a summary of year-end reporting deadlines relevant to component units beginning in July through December. I will discuss each item in more detail in the following slides.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 YE Reporting Timeline – Component Units Firms Legal Basis Data (L-033) Deadline: July 31, 2017 (Monday) Reporting group: Component units  SFSR Method of submission: As prescribed in FIRMS submission guidelines July Component units FIRMS legal basis data need to be submitted to SFSR through the FIRMS database no later than July 31st. This data does not contain GAAP adjustments and balances are reported at program category level. The 2017 Legal Basis template for component units can be found in the CSU Financial Services website, under Other Resources. Please refer to the specific instructions provided in the template and refer to the “FIRMS Submission guidelines.”

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 YE Reporting Timeline – Component Units Audited financial statements (G-097) Deadline: September 18, 2017 (Monday) Reporting group: Component units  Campus  SFSR Method of submission: PBC SharePoint Site PBC reference number: PBC018 GAAP financial reporting checklist (G-097) PBC reference number: PBC018A NEW! September The deadline for component units to submit the electronic copy of audited financial statements and financial reporting checklists is on September 18th. Campus GAAP coordinators should upload them into the PBC SharePoint site using PBC reference number PBC018. Component units are also required to complete a GAAP financial reporting checklist. This checklist must be completed and signed by the preparer and reviewer and submitted to the campus GAAP coordinators along with the audited financial statements. The template for preparing GAAP financial Reporting checklist and the supplementary is provided in Chapter of the GAAP Manual. This year, please upload the checklist using the new PBC reference number PBC018A. Meeting the submission deadline is critical as there are several users of the audited financial statements. Similar to last year, we will be accepting “Final Draft” version of the financial statements pending required approval or presentation to governing body. There should be NO expected changes after final draft. The final approved copy should be uploaded to the PBC SharePoint site immediately after approval. The campus GAAP coordinators must monitor those component units with final drafts as any changes to it may impact the completion of your final reporting package submission.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 YE Reporting Timeline – Component Units Hard copy of audited financial statements (G-108) Deadline: October 06, 2017 (Monday) Reporting group: Component units  Campus  SFSR Method of submission: Via mail Attention: Sedong John CSU Chancellor's Office Golden Shore, Long Beach, CA 90802 October A hard copy of the audited financial statements must be mailed to Sedong John at the Chancellor’s Office by October 6th. The component units and the campus coordinators can work it out on who will be mailing the hard copy.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 YE Reporting Timeline – Component Units Campus President’s Letter to CSU Chief Financial Officer (G-111) Deadline: October 06, 2017 (Monday) Reporting group: Component units  Campus  SFSR Method of submission: Via mail and PBC SharePoint Site Mail original letter to: Steven Relyea Executive Vice Chancellor and Chief Financial Officer CSU Chancellor's Office Golden Shore, Long Beach, CA 90802 PBC reference number: PBC018B NEW! October In addition to the submission of hard copy of the audited financial statements, October 6th is also the deadline for campus GAAP coordinators to submit the original signed letter from its campus President's to CSU's Executive Vice Chancellor and Chief Finance Officer signifying the completion of the review of component units' audited financial statements. The original letter must be mailed to Steven Relyea, our Executive Vice Chancellor and Chief Financial Officer. Beginning fiscal year , campus GAAP coordinators must upload a pdf copy of the letter to PBC Sharepoint using the new assigned PBC reference number PBC018B. Please do not us the pdf copy like you did in prior years.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 YE Reporting Timeline – Component Units Single Audit Report (if required)(G-140) Deadline: October 27, 2017 (Friday) Reporting group: Component units  Campus  SFSR Method of submission: PBC SharePoint Site PBC reference number: PBC018C NEW! Auditor’s communications to management (G-140) PBC reference number: PBC018D NEW! October October 27th is the due date for campus GAAP coordinators to submit component units single audit reports (if applicable) and Auditors' Communications to Management indicating whether or not there are any significant deficiency and/or material weakness on the financial statement audit. Beginning fiscal year , campus GAAP coordinators must upload a copy of the Single Audit report to PBC Sharepoint using the new assigned PBC reference number PBC018C. If not applicable, upload a word document listing the name of the component units that do not have Single Audit Report so that SFSR can track the completeness of submission. As part of the Office of the Chancellor’s monitoring process, the component units are asked to provide us with copies of ALL auditors’ communication that may indicate whether the component unit have internal control findings that may be considered significant deficiency and/or material weakness. Any other communications from the auditors as it relates to internal control findings, please submit those as well to the Office of the Chancellor. All the information will be used by SFSR in monitoring the remediation of these findings. Beginning fiscal year , campus GAAP coordinators must upload a copy of the Component Units' Auditor's Communication to Management to PBC Sharepoint using the new assigned PBC reference number PBC018D. If there are no audit findings, please upload a word document listing the name of the component units that do not have any audit findings so that SFSR can track the completeness of submission. This will prevent unnecessary s to follow up on the submission.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 YE Reporting Timeline – Component Units FIRMS IPEDS Data (G-132) Deadline: October 30, 2017 (Monday) Reporting group: Component units  SFSR Method of submission: As prescribed in FIRMS submission guidelines October Similar to FIRMS legal basis data submission, component units will need to submit FIRMS IPEDS data by October 30th to the CO. IPEDS data contains GAAP adjustments and reported for each applicable GAAP fund classification. Same as the legal basis template, FIRMS IPEDS data template is updated annually and can be downloaded from the CSU Financial Services website. Data submission requirements are provided in the template, tab “IPEDS_Template_Notes”. The links for FIRMS submission guidelines and FIRMS IPEDS data template are provided in the Resources section of this presentation.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 YE Reporting Timeline – Component Units Corrective Action Plan and Evidence of Completion of Action Plan (G-146) Deadline: December 04, 2017 (Monday) Reporting group: Component units  Campus  SFSR Method of submission: PBC SharePoint Site PBC reference number: PBC018G NEW! December Finally, the corrective action plan and evidence of corrective action plan is due on December 04, 2017 or earlier if available. In prior years, SFSR sends the corrective action plan template to campus GAAP coordinators for completion and then will be sent back to the SFSR GAAP team for review. Beginning fiscal year , there will be some changes to help facilitate the monitoring of corrective action plan for component units audit findings more efficiently. The corrective action plan and evidence of completion of action plan will need to be uploaded to PBC Sharepoint using the new assigned PBC reference number PBC018G. Campus GAAP coordinators must work with the component units to gather the information and upload it to PBC Sharepoint. I will discuss the new process in more details in the following slides.

Knowledge Check Question #1
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Knowledge Check Question #1 Which of the following reports must be uploaded to PBC Sharepoint? A. Audited financial statements B. GAAP financial reporting checklist C. Campus President’s Letter to CSU Chief Financial Officer D. Single Audit Report (if required) E. All of the above We have our first knowledge check question. Please select one answer in response to the question, Which of the following reports must be uploaded to PBC Sharepoint? A. Audited financial statements B. GAAP financial reporting checklist C. Campus President’s Letter to CSU Chief Financial Officer D. Auditor’s communications to management E. All of the above

Knowledge Check Answer #1
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Knowledge Check Answer #1 Answer: Which of the following reports must be uploaded to PBC Sharepoint? E. All of the above The answer is E, All of the above. The following reports must be uploaded to PBC Sharepoint. A. Audited financial statements PBC018 B. GAAP financial reporting checklist PB018A C. Campus President’s Letter to CSU Chief Financial Officer – PB018B D. Single Audit Report (if required) – PB018C In addition, the auditor’s communications to management (PB018D), the corrective action plan, and evidence of action plan (PBC018G) must be uploaded to PBC Sharepoint using the assigned PBC reference numbers.

MAY 2017 YEAR-END GAAP TRAINING MAY 2017 MONITORING OF CORRECTIVE ACTION PLAN I am now going to discuss the monitoring of corrective action plan.

Audit Findings: 3-Year Statistics
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Audit Findings: 3-Year Statistics The Office of the Chancellor monitors the audit findings such as material weakness and significant deficiency either from financial statement audits or single audits. The audit finding review and corrective action plan implementation improve financial reporting process and assure compliance with Federal Awards requirement. The results are reported to the Board of Trustees. The bar chart on this slide shows, from fiscal year 2013/2014 through fiscal year 2015/2016, the number of component units that had audit findings and the number of audit findings in two categories of deficiencies, material weakness and significant deficiency. During fiscal year 2015/2016, in financial statement audit, they’ve identified five material weaknesses and 10 significant deficiencies. There are no significant deficiency in single audit. The number of audit findings are higher when compared to FY2014/2015 as presented on the slide.

Audit Findings Review – Process Flow
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Audit Findings Review – Process Flow Submission of completed corrective action plan and documentary evidence SFSR Review Office of Audit and Advisory Services Review Finance Management Review Presentation to the Board of Trustees This slide shows the process flow of our review of audit findings. After submission of the completed corrective action plan and documentary evidence to SFSR, we will perform review to make sure that the template has been completed accordingly, the documentary evidence and the corrective action plan addresses the audit finding and that the template has the appropriate signatures. I will discuss this in more detail. If the corrective action plan has been completed accordingly and addresses the internal control finding, we provide a copy of the completed corrective action plan and the documentary evidence to the Finance Management and the Office of Audit and Advisory Services for their review and approval. If there are no follow-up questions from the Finance Management and the Office of Audit and Advisory Services, they will concur and will deem the audit finding is fully remediated. The status of the corrective action plan is presented by the Finance Management to the Board of Trustees meeting in July.

Monitoring of Corrective Action Plan
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Monitoring of Corrective Action Plan SFSR will send out the corrective action plan template in excel and word format Component units are to complete the excel template based on the instructions provided Component units are to complete the certification letter from their Vice President, Business and Finance in word format Campus will submit the excel and word files to PBC SharePoint Site as PBC018G Example: “PBC018G LB Corrective Action Plan” “PBC018G LB Certification Letter” To help us with the monitoring of the corrective action plan, beginning in fiscal year , SFSR will send out a corrective action plan template in excel. The corrective action plan excel template will need to be completed by the component units following the instructions provided in the template. SFSR will also send out a template in word document for the certification letter from their Vice President, Business and Finance or equivalent and component units are to complete the letter. While the component units are the ones responsible for completing these new required deliverables, these must be uploaded by the GAAP coordinators to the PBC Sharepoint using the new assigned PBC reference number PBC018G. Name the file using the example as shown in the slide for reference. For example, the file name should start with PBC018G, the campus, the number of audit finding , followed by Corrective Action Plan. The same applies to the naming of the Certification Letter. The correct naming of the files is critical to assist us monitor and review the information efficiently. This will prevent unnecessary s to follow up on the submission. SFSR will send out more information on the detailed instructions on this item.

Monitoring of Corrective Action Plan
YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Monitoring of Corrective Action Plan Evidences of completion of action plan must also be uploaded by the campus GAAP coordinator as PBC018G. Example: “PBC018G LB Check Signor Matrix” BEFORE 1. DOCUMENT A.pdf 2. G141_002 Property.doc 3. DOCUMENT B.pdf 4. SST PS.PV doc 5. APS Order 6060LG.doc AFTER 1. PBC018G LB Requisition Copy 2. PBC018G SA Process Document 3. PBC018G CH Final Agreement 4. PBC018G BA Check Matrix 5. PBC018G NR Sun Guard Agreement Evidences of completion of action plan must also be uploaded by the campus GAAP coordinator as PBC018G. Similar to the corrective action plan template and certification letter, name the file using the example shown in the slide as reference. For example, the file name should start with PBC018G, the campus, the number of audit finding , followed by a description of the evidence. The slide shows some of the file names used in fiscal year on the left and examples of file names that should be used on the right. The correct naming of the file is critical to assist us monitor and review the evidence of the action plan efficiently. The file name must be descriptive of the evidence of the action plan. SFSR will send out more information on the detailed instructions on this item.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Knowledge Check Question #2 How many significant deficiencies from financial statement audits were identified in fiscal year ? A. 20 B. 7 C. 10 D. 2 E. 100 The next knowledge check question. Please select one answer in response to the question, How many significant deficiencies from financial statement audits were identified in fiscal year ? A. 20 B. 7 C. 10 D. 2 E. 100

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Knowledge Check Answer #2 Answer: How many significant deficiencies from financial statement audits were identified in fiscal year ? C. 10 The answer is C, 10. There were 10 significant deficiencies identified from financial statement audits in fiscal year

MAY 2017 YEAR-END GAAP TRAINING MAY 2017 RESOURCES Lastly, I will go over the resources that may be useful for the year-end GAAP reporting.

MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Resources Systemwide Financial Standards & Reporting Team – SW GAAP: Sedong John, Director Sheralin Klinthong, Associate Director Rima Tan, Manager Criselle Vela, Financial Reporting Analyst Cinthia Santamaria, Financial Reporting Analyst SW GAAP For resources, if you have any questions, please send the Systemwide Financial Standards & Reporting Team – Systemwide GAAP team at provided on the slide.

MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Resources Websites GAAP Manual, Master Timeline, and Year-End Training, IPEDS Template, and FIRMS Legal Basis Template FIRMS Data Submission Guide Table of Object Code Definitions/Table of CSU Fund Definitions and Authorities List of Approved External Auditors Component Units’ Homepage In addition, here is a summary of all websites for the following: 1. GAAP Manual, Master Timeline, Year-End Training, IPEDS Template, and FIRMS Legal Basis Template 2. FIRMS Data Submission Guide 3. Table of Object Code Definitions/Table of CSU Fund Definitions and Authorities 4. List of Approved External Auditors 5. Component Units’ Homepage For the list of approved external auditors for FY , it will be posted soon. Unlike last year where it only shows the name of the audit firm, this year, it will include the following information: Name of the firm, address, name of the component unit and whether the component is GASB or FASB. This will provide component units with more useful information that may be needed for the selection of their audit firms.

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Knowledge Check Question #3 Which of the following will be included in the list of approved external auditors? A. Address of the firm B. Name of the component unit C. Name of the partner D. A and B E. B and C The last knowledge check question. Please select one answer in response to the question, Which of the following will be included in the list of approved external auditors? A. Address of the firm B. Name of the component unit C. Name of the partner D. B and C E. A and B

YEAR-END GAAP TRAINING MAY 2017 YEAR-END GAAP TRAINING MAY 2017 Knowledge Check Answer #3 Answer: Which of the following will be included in the list of approved external auditors? D. A and B The answer is D, A and B. The following information will be included in the list of approved external auditors beginning fiscal year A. Address of the firm B. Name of the component unit In addition, it will include the name of the firm and whether the component unit is GASB or FASB.

MAY 2017 YEAR-END GAAP TRAINING MAY 2017 QUESTIONS? Thank you. Any questions?

discretely presented Component units (webcast)

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