1. Fiscal Affairs Accounting and Reporting Update September 16, 2015 Claire Arnold, CPA Creating A More Educated Georgia 1

2. FY 2015 Financial Engagement Cycle Where are we now? Budgetary Basis Compliance Reports (BCRs) submitted and reviewed Annual Financial Reports (AFRs) submitted and reviewed DOAA currently is working on completing your fiscal year 2015 engagements Creating A More Educated Georgia 2

3. FY 2015 Financial Engagement Cycle BCRs Please provide auditor adjustments to USO (Email Claire.Arnold@usg.edu and Bruce.Jackson@usg.edu) Claire.Arnold@usg.edu Consolidation Process Institution confirmation of Surplus and BCR information Email to be sent September 25: Surplus by Institution (Excel File) BCR Reports (Excel Files) Balance Sheet by Institution Teaching State Approp by Institution – Parts 1 & 2 Teaching Other by Institution – Parts 1 & 2 SFI by Institution – Parts 1 & 2 Research Consortium – Parts 1 & 2 Creating A More Educated Georgia 3

4. FY 2015 Financial Engagement Cycle BCRs Submission to State Accounting Office on October 8, 2015 AFRs Please provide auditor adjustments to USO (Email Claire.Arnold@usg.edu, Ben.riden@usg.edu, Theresa.Jackson@usg.edu and Brad Freeman@usg.edu) Claire.Arnold@usg.eduBen.riden@usg.eduFreeman@usg.edu Submit updated AFRs to MoveIT application Creating A More Educated Georgia 4

5. FY 2015 Financial Engagement Cycle AFRs Example of AFR changes submission: Creating A More Educated Georgia 5

6. FY 2015 Financial Engagement Cycle AFRs Example of AFR changes submission: Creating A More Educated Georgia 6

7. FY 2015 Financial Engagement Cycle AFRs Consolidation Process Institution confirmation: Email to be sent October 5: Statement of Net Position (SNP) Statement of Rev, Exp & Changes in Net Position (SRECNP) Cash Flow Statement Confirmation of Information or changes must be emailed to Theresa.Jackson@usg.edu and ben.riden@usg.edu by October 12 Theresa.Jackson@usg.eduben.riden@usg.edu Creating A More Educated Georgia 7

8. FY 2015 Financial Engagement Cycle DOAA is currently conducting fieldwork on the audits and FDMR engagements Exit Conference – Include USO Accounting and Reporting Agreed Upon Procedures (AUP) engagements postponed until January 2016 Modifications to the AUP engagements Reduce testing to areas of importance – Balance Sheet Support; Bank Reconciliations, Subsidiary Module reconciliations, SEFA, AFR reflects accounting records activity, etc. Creating A More Educated Georgia 8

9. FY 2015 Financial Reporting Changes DOAA and USO have identified a few items that need to be adjusted in the AFR. DOAA has agreed to make the following changes: Note 1: Net Position – Unrestricted: Add final sentence: Included in the net deficit reported is the College/University’s Net Pension liability of $__________ which will be funded by appropriating resources each year as payments come due, rather than accumulating resources in advance. Creating A More Educated Georgia 9

10. FY 2015 Financial Reporting Changes Retirement Plan Note Disclosure Change (Per AFR email 9/1/2015) Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6.00 % of their annual pay during fiscal year 2015. The College/University’s contractually required contribution rate for the year ended June 30, 2015 was 13.15 % of annual College/University payroll. College/University contributions to TRS were $XX,XXX for the reporting period (fiscal year ended June 30, 2015) and $xx,xxx for the measurement period (fiscal year ended June 30, 2014). Creating A More Educated Georgia 10

11. FY 2015 Financial Reporting Changes Retirement Plan Required Supplementary Information Schedule of Contributions will include data for FY 2015, 2014 and 2013. Creating A More Educated Georgia 11

12. FY 2015 Financial Reporting Changes Additional Items Identified that were communicated during the USO Review process: Related party footnote to Capital Lease Liability Table in Capital Lease note disclosure Gain/Loss on Debt Refunding footnote to the Capital Lease Liability Table in the Capital Lease note disclosure MD&A additional verbiage related to Net Pension Restatement of Net Position Special Item Transfer note disclosure additional verbiage for P3 assets and capital lease liability transferred to USO Creating A More Educated Georgia 12

13. FY 2015 Financial Engagement Cycle Reporting to DOAA TIGA Payments and Obligations due October 15 Immigration Reform Act due December 31 SEFA – Changes Confirmation Response to Current Year Findings Submit Response with Closure Letter documents Submit to Findings Management System Creating A More Educated Georgia 13

14. FY 2015 Financial Engagement Cycle Response to Current Year Findings Creating A More Educated Georgia 14

15. FY 2015 Financial Engagement Cycle Creating A More Educated Georgia 15

16. Financial Reporting For FY 2016 What worked? What didn’t work? How can we improve? Creating A More Educated Georgia 16

17. Standardized Chart of Accounts Standardized Chart of Accounts verses SHARE Accounts Revisions to Chart of Accounts: Goals: Consistency Information Institutional Functionality Chart of Accounts Committee Committee Members: Bruce Spratt, Nick Henry, Julie Peterson, Ruth Berger, Kim Brown, Jeff Hall, Michelle Hamm, budget representatives, and ITS representatives Submit Suggestions to Claire.Arnold@usg.edu by October 16Claire.Arnold@usg.edu Timeframe – December 2 and 3 Creating A More Educated Georgia 17

18. December Workshop Dates: December 1 and 2 Location: Middle Georgia Math Auditorium Time: Day 1 - 9:30 am to 5:00 pm Day 2 - 8:30 am to 4:00 pm Preliminary Topics: New Federal Expenditure Requirements/State Purchasing New Retiree Health Insurance Accounting Process Standardized Chart of Accounts Reviewing Audit Results oneUSG Update Joint Staffing/TRS Eligible Salaries GSFIC/MRR/PPV/Capital Improvements – Allowable/Unallowable and Accounting AFR/BCR Improvement Discussion Creating A More Educated Georgia 18

19. Uniform Federal Grant Guidance Eight different OMB guidance streamlined into one. Eliminates overlapping duplicative and conflicting guidance. A-21 A-50 A-87Title 2 of CFR, Subtitle A, Chapter II, Part 200 A-89 UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, A-102 AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS A-110“SUPER CIRCULAR” A-122 A-133 Creating A More Educated Georgia 19

20. Uniform Federal Grant Guidance Intended Outcomes Stronger Oversight Improved Business Processes Well Trained Workforce Targets Risk and Minimize Burden Creating A More Educated Georgia 20

21. Uniform Federal Grant Guidance Effective Dates section 200.110  All awards or funding increments made on or after December 26, 2014 must adhere to the Uniform Guidance.  Audit requirements are effective for fiscal years beginning on or after December 26, 2014. Creating A More Educated Georgia 21

22. Procurement Claw Creating A More Educated Georgia 22

23. Procurement Claw Creating A More Educated Georgia 23

24. Methods of Procurement Micro Purchases: New term for supplies and services purchased, where the aggregate dollar amount is under $3,000. To the extent practical, must be distributed equitably among qualified suppliers. If your college/university considers the price reasonable after price analysis, the micro-purchase may be awarded without soliciting competitive quotes. Many college/university have procurement policies with a minimum of $5,000 and will need to lower this minimum to $3,000 to ensure they meet the requirement. Creating A More Educated Georgia 24

25. Methods of Procurement Small Purchases: Existing term for supplies and services purchases, where the aggregate dollar amount is under $150,000. The amount will be adjusted for inflation using the Simplified Acquisition Threshold. Price or rate quotations must be obtained from an adequate number of qualified sources. Must obtain quotes from more than one vendor. Quotes can be written, verbal, or internet searches but must be documented. Creating A More Educated Georgia 25

26. Methods of Procurement Sealed Bids: (Formal Advertising)Existing term for supplies and services purchases, where the aggregate dollar amount is over $150,000. Bids are publicly solicited and a firm-fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. Preferred method for construction projects funded with federal grant funds. Creating A More Educated Georgia 26

27. Methods of Procurement Competitive Proposals: Existing term for supplies and services purchases, where the aggregate dollar amount is over $150,000. Used when conditions are not appropriate for the use of sealed bids. Conducted when there is more than one source submitting an offer and either a fixed-price or cost-reimbursement type contract is awarded. New requirement: Non-Federal entities must have a written method for conducting technical evaluations of the proposals received and for selecting recipients. Creating A More Educated Georgia 27

28. Methods of Procurement Non-Competitive Bids: (Sole Source) Existing term for supplies and services purchased, of any dollar amount Can only be used if (one or more, are applicable): The item is only available from a single source. The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation. The federal awarding agency expressly authorizes non-competitive proposals in response to a written request. Competition is deemed inadequate after solicitation from multiple sources. Creating A More Educated Georgia 28

29. Other Procurement Items to Note 200.319: Contains language that prevents contractors who develop or draft specifications, requirements, statements of work, and invitations for bids or requests for proposals from competing for such procurements. 200.319c: Written procedures for procurement transactions are still required. August 2014 FAQ 200.320-6 –Clarifies that the Federal procurement standards are not required to apply to procurements made (charges to) the indirect cost pool and apply only to goods or services that are directly charged to a Federal award The non-Federal entity must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of the contract or purchase order. Creating A More Educated Georgia 29

30. Other Procurement Items to Note All non-Federal entities will need to update their internal procurement policies to reflect the changes described in the Uniform Guidance. Important that a recipient’s procurement policies identify the five allowable methods outlined in Section 200.320 (“the claw”). Ensure your institution’s current employee conflict of interest policies include the required language. Ensure the mandatory organizational conflict of interest policy is written, if applicable. Review Appendix II to ensure your institution’s contracts include the required specifications. Creating A More Educated Georgia 30