1. FINANCIAL AUDITS AND gasB UPDATES WHAT IS NEW AND HOW TO BE PREPARED
Quest CPAs PLLC
11501 Highway 95
Payette, ID 83661
(208)
Kurt R. Folke, CPA
Daniel T. Coleman, CPA
Timothy M. Hoyt, CPA

2. Contents This interactive workshop will go over the following topics:
GASB Updates & Review
Financial Audit Best Practices
Quest CPAs PLLC –

3. GASB Updates & Review GASB Coverage:
19 new GASBs in the last few years GASB 68 – 87!
Focus on those most relevant to schools through FY18:
GASB 68 – Accounting and Financial Reporting for Pensions
GASB 71 – Pension Transition for Contributions Made Subsequent to the Measurement Date
GASB 82 – Pension Issues – An Amendment to GASB 67, 68, and 73
GASB 72 – Fair Value Measurement and Application
GASB 79 – Certain External Investment Pools and Pool Participants
GASB 75 – Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pension Plans
GASB 77 – Tax Abatement Disclosures
Quest CPAs PLLC –

4. GASB Updates & Review
GASB 68 – Accounting and Financial Reporting for Pensions
Required for reporting the school’s share of PERSI’s overall net pension liability on the full accrual financial statements as well as related deferred inflows and outflows of resources.
Lots of additional note disclosures and two more pages of required supplemental information.
What issues have you run into?
GASB 68 became effective for schools 6/30/15
GASB 71 – Pension Transition for Contributions Made Subsequent to the Measurement Date (Contributions made subsequent to measurement date = DOR)
GASB 82 – Pension Issues – An Amendment to GASB 67, 68, and 73 (PERSI should update in note disclosure)
Quest CPAs PLLC –

5. GASB Updates & Review GASB 72 – Fair Value Measurement and Application
Requires investments to be measured at fair value, defines investments and fair value, and more disclosure.
Applies to DBF (use market value balance) and other investments (bonds, etc.) that school may have.
LGIP is addressed under GASB 79.
What issues have you run into?
GASB 72 became effective for schools 6/30/16
Quest CPAs PLLC –

6. GASB Updates & Review
GASB 79 – Certain External Investment Pools and Pool Participants
Permits certain external investment pools to measure investments at amortized cost. Participating entities should do the same.
Applies to LGIP (use amortized cost balance).
What issues have you run into?
GASB 79 became effective for schools 6/30/16
Quest CPAs PLLC –

7. GASB Updates & Review
GASB 75 – Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pension Plans
Similar to GASB 68 accounting and reporting, but for OPEB plans rather than pension plans.
Replaces GASB 45, which reported the net OPEB obligation (required contributions – actual contributions) on full accrual financial statements.
GASB 75 requires reporting a net OPEB liability (total OPEB liability – fiduciary net position of the plan) on the full accrual financial statements, deferred inflows/outflows, RSI, and lots of note disclosures.
Quest CPAs PLLC –

8. GASB Updates & Review
GASB 75 – Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pension Plans
Note: If you previously implemented GASB 45 and/or are planning on implementing GASB 75, get started early.
You will need to engage an actuary.
Your auditor will need extra time to audit and integrate this information into the audit.
Sound like fun?
GASB 75 is effective for schools 6/30/18
Quest CPAs PLLC –

9. GASB Updates & Review GASB 77 – Tax Abatement Disclosures
Requires reporting entity (i.e. school) to add disclosure note regarding tax abatements that have been entered into with others that reduces tax revenues
The county may be the best source to find out about the existence of any tax abatements
What issues have you run into?
GASB 75 is effective for schools 6/30/17
Quest CPAs PLLC –

10. GASB Updates & Review Future GASBs GASB 84 – Fiduciary Activities
GASB 84 is effective for schools 6/30/20
GASB 87 – Leases
GASB 87 is effective for schools 6/30/21
Quest CPAs PLLC –

11. Financial Audit Best Practices
Audit Standard Changes
Heads up: There is a huge push in the audit industry right now to significantly reduce/eliminate the amount of non-audit services that auditors have historically provided audit clients. Examples include:
Yearend adjustments / cash-to-accrual adjustments
Drafting the schedule of expenditures of federal awards
Creating and maintaining worksheets for such yearend items as property taxes, debt, GASB 68 reporting, capital assets, and revenues/receivables
What about drafting the financial statements and notes?
The rationale is that auditor independence can only be maintained when the auditor is not auditing his/her own work.
History of audits.
Best defense -> Keep books in great shape and keep learning (which you are since you are here )
Quest CPAs PLLC –

12. Financial Audit Best Practices
Audit Standard Changes
AICPA issued ET Hosting Services (effective ) says auditors can no longer be the sole host of a client’s financial information system (i.e. capital asset/depreciation schedule, debt schedule, property tax schedule, GASB 68 worksheets, etc.)…
In other words, if your auditor continues to assist you with these schedules after this implementation date in a fashion permitted by the standards, the auditor must provide you with the schedules upon completion of the service.
Quest CPAs PLLC –

13. Financial Audit Best Practices
Yearend Processes Tips
Ensure your Balance Sheets are in balance 
Make sure all bank accounts are reconciled and resolve/remove old items (> 6 months)
Verify for each fund that current year beginning fund balances = prior year ending fund balances
Confirm transfers in = transfers out
Confirm that your property tax allocation is correct per your levy (Form L-2)
Ensure you make your local maintenance of effort match (Spec. Ed.) correctly (General Fund , 522, 616)
Quest CPAs PLLC –

14. Financial Audit Best Practices
Yearend Processes Tips
Make sure you are transferring your bus depreciation dollars to the 424 fund
CNP that receive commodities should also be recording the FMV of the commodities they receive (get this from the “Value of Commodities Shipped Report” or “STARS” report) as revenue and expenditures
Give your Balance Sheets and Budget Reports/Operating Statements a final review before giving them to your auditors
Quest CPAs PLLC –

15. Financial Audit Best Practices
Other Considerations In School Finance
Value of the Quality Business Manager
A quality business manager pays for him/herself.
Problems we are facing: Lots of turnover, pay is sub-par in some areas, and no budget/standard for training/cert.
Maximizing Attendance Funding
We have noticed that many schools are not maximizing their attendance funding (lost money).
We are completing a model that will assist schools in maximizing this funding. If you are interested in learning more on this, let us know.
Quest CPAs PLLC –

16. Congratulations – you made it through it!
Questions?
Congratulations – you made it through it!
Quest CPAs PLLC –