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Unaudited Agencies 2014 Closing Process Training

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Unaudited Agencies 2014 Closing Process Training. Agenda. Introductions CAFR/Single Audit Update Single Audit Closing Process New GASB’s wv OASIS. Financial Accounting & Reporting Section Staff. Renee King Dan Nary Michael Powell, CPA Jane Shinn Kay Walden.

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Presentation Transcript
slide2

Agenda

  • Introductions
  • CAFR/Single Audit Update
    • Single Audit
    • Closing Process
    • New GASB’s
    • wvOASIS
slide3

Financial Accounting & Reporting Section

Staff

  • Renee King
  • Dan Nary
  • Michael Powell, CPA
  • Jane Shinn
  • Kay Walden
  • Connie Byrne, CPA
  • Susannah Carpenter, CPA
  • Jordan Clay
  • Betsy Frame
  • Cheryl Garner
  • Becky Hayes, CPA
slide4

Guest Speaker

Darden Greene

slide5

FY 2013 Update

  • Issued CAFR on 2/13/14
  • Still expect to receive Certificate of
  • Achievement in Financial Reporting
  • Issued Single Audit on 3/31/14 at
  • 11:45 p.m. on Monday
slide6

CAFR for Fiscal Year 2013

  • Almost 500 journal entries
  • 100+ Work papers
  • 8 Full-time employees
  • 3 Part-time employees
slide7

FY 2013 Update

  • The CAFR combines 67 unaudited and 29 audited agencies.
  • Agencies struggle to submit financial information:
    • 9 of 29 audited agencies did not meet the final audit

deadline (31%)

    • Final audit was received on November 25
slide8

Subsequent Events

  • Bonds issued after June 30
  • Legal Case

Call FARS and we will discuss event and materiality

slide9

Single Audit Billing is for:

  • CAFR
  • Single Audit
  • SOC 1 Report
slide11

Reason Single Audit Bill Increases:

  • CAFR completion goes beyond December 31
    • Audits received after October 15th
    • Closing Book forms received after July 31st
    • Incomplete/Incorrect data for other liabilities (Medicaid, Special Reclamation, Taxes…)
    • Documentation still needed for samples
    • Fixed Assets not in system timely
    • Wrong Rev Src and Obj codes used
slide12

Reason Single Audit Bill Increases:

  • Single Audit completion goes beyond February 28
    • Closing Book forms received after July 31st
    • SEFA information on forms is incorrect
    • Transfers do not agree
    • Change in Major Program threshold (late forms and incorrect transfers)
    • Agencies giving incorrect population to auditors
    • Auditors still needing/requesting information
slide13

2013 Single Audit

  • 44 Findings –
    • Down 19 from 2012
    • 30 repeat findings
  • 41 are Program Audit Findings
slide14

Single Audit Team

Contact Information

OMB A-133

Team:

Currently out for bid, the contact information will be conveyed once the contract is signed.

2013 statewide finding
2013 Statewide Finding

2013 - 002 – Capital Assets

  • Assets not added to the fixed asset system in a timely manner

2013 - 003 – SEFA

  • Accurate SEFAs not received in timely manner
  • Internal control process are not established around the preparation and review of the SEFA
2014 single audit objectives
2014 Single Audit Objectives
  • FARS will continue to be involved in the entrance conferences.
  • FARS will provide final SEFA to Agencies.
  • Agencies will have 2 weeks to obtain requested documentation for the audit firm. If after 2 weeks and documentation is not provided will/may receive a finding.
  • FARS will be involved in the closing meetings.
  • Preliminary findings document will be issued in December.
slide18

Form 9A - SEFA Checklist

  • Required with SEFA submission
  • Signatures required: preparer and supervisor
  • Issues will be communicated with preparer and supervisor listed on this form.
  • Include DUNS and FEIN

SEFA Check List

slide19

Form 9A - SEFA Checklist (Cont.)

  • CFDA / Program beginning balances documented
  • Are the negative receipts or disbursements documented?
  • Is the ending cash account balance for WVFIMS account type equal to the 6/30/14 cash balance?
  • Reconciliation items $25K or greater documented
  • Forms 9C and Form 9D – Transfers confirmed and beginning balance = PY ending

SEFA Check List

slide20

Reconciliation

Total Disbursements and Subrecipient Awards from SEFA Software

- Transfers from Forms

= Actual Disbursements

slide25

eZ-Audit

Form 13

slide26

WorkForce West Virginia has already placed controls and new procedures into production to alleviate this type of issue with ETA 227. The staff member responsible for completing this report has developed a new Excel spreadsheet to assist in the tabulation of each field on this particular report. In addition, several additional automated reports have been programmed to assist in preparation of this report. We have been able to fully automate the ETA 227 and are currently reviewing the report to ensure the accuracy. Upon completion of this review, we will be completing the ETA 227 report with data directly from the fully automated report being generated from our system. Whether we use the current method of preparing the ETA 227 or the new automated report, an outside unit will still be reviewing the report before submission. Due to the time period used for the above audit, these measures were not in place. Therefore, we feel that the current procedures as well as new report will alleviate this type of issue in the future.

slide27

WorkForce West Virginia has already placed controls and new procedures into production to alleviate this type of issue with ETA 227. The staff member responsible for completing this report has developed a new Excel spreadsheet to assist in the tabulation of each field on this particular report. In addition, several additional automated reports have been programmed to assist in preparation of this report. We have been able to fully automate the ETA 227 and are currently reviewing the report to ensure the accuracy. Upon completion of this review, we will be completing the ETA 227 report with data directly from the fully automated report being generated from our system. Whether we use the current method of preparing the ETA 227 or the new automated report, an outside unit will still be reviewing the report before submission. Due to the time period used for the above audit, these measures were not in place. Therefore, wefeel that the current procedures as well as new report will alleviate this type of issue in the future.

slide28

WorkForce West Virginia (WorkForce) has already placed controls and new procedures into production to alleviate this type of issue with ETA 227. The staff member responsible for completing this report has developed a new Excel spreadsheet to assist in the tabulation of each field on this particular report. In addition, several additional automated reports have been programmed to assist in preparation of this report. WorkForcehas been able to fully automate the ETA 227 and is currently reviewing the report to ensure the accuracy. Upon completion of this review, WorkForce will be completing the ETA 227 report with data directly from the fully automated report being generated from the system. Whether WorkForce uses the current method of preparing the ETA 227 or the new automated report, an outside unit will still be reviewing the report before submission. Due to the time period used for the above audit, these measures were not in place. Therefore, WorkForce feels that the current procedures as well as new report will alleviate this type of issue in the future.

object codes oasis wvfims

Revenue Code 6861(861) is to be used to record federal revenue received by an agency.

  • Object Code 3302 (168)is used to record the federal funds disbursed between agencies.
  • Object Code 3285 (128) is used to record the federal funds disbursed to outside subrecipients.

Object Codes OASIS (WVFIMS)

slide31

Web link to Federal Grant Access Database Program at -

http://www.wvfinance.state.wv.us/grants.htm

  • Download the Federal Grant Information which consist of:
      • Installation Instructions
      • Grant Reporting Installation Program
      • FARS and Grantor Data Tables

SEFA Software

slide32

New Computer

  • Have a new computer?
      • Print the Program Installation Instructions
      • SEFA software must be downloaded to
        • C:\Program Files\SEFA
      • Need administrative rights to this folder
  • FARS and Grantor Data Tables must be downloaded to
  • C:\Program Files\SEFA\Import:
  • FARS Data Table Grantor Data Table

SEFA Software

slide33

Are you using the same computer from last year?

  • Warning! The new import will overwrite prior year data files
  • Maintain a copy of last year’s information by
    • Copying existing SEFA folder to new path
      • From: C:\ProgramFiles\SEFA
      • To: C:\ProgramFiles\FY 2013 SEFA

SEFA Software

slide34

Federal Reporting

  • Software Issues
    • When adding a New “Program” or “CFDA”
    • First thing you should do is select correct icon.

SEFA Software

slide35

Federal Reporting

  • Software Issues (cont.)
    • Always select an Account Number
    • Always select a Federal Grantor

SEFA Software

slide36

Federal Reporting

  • Software Issues (cont.)
    • Don’t enter information into Account
    • TRANSFERS XX (FARS use only)

SEFA Software

slide37

Federal Reporting

  • Documentation needed for:
    • Beginning balance changes
    • Reconciling items over $25,000
    • Negative disbursements and receipts

SEFA Software

slide38

Federal Reporting

  • Information Issues
    • Balance to WVFIMS as of 6/30/14
    • Do not include 13th month
    • Do not duplicate CFDA #’s in the same account

SEFA Software

slide39

Clean Up Items

  • Review the federal grant report for completeness
    • CFDA number should not be in program
    • number field.
    • CFDA / program number should be assigned a federal grantor.
    • Programs with no activity, with all zeros, can be removed. Keep if there is a beginning
    • balance adjustment.

SEFA Software

slide40

Due Date

July 31, 2014

SEFA Software

slide41

Submit supporting documentation and

export data via email to:

[email protected]

or

Mail with supporting documentation to:

FARS

Building 17, 3rd Floor

2101 Washington Street, East

Charleston, WV 25305

SEFA Software

slide42

AGENCY’S RESPONSIBILITY

    • Fixed Assets June 29, 2014
    • Leave Information July 11, 2014
    • SEFA Software July 31, 2014
    • Transmittal/Forms July 31, 2014
slide43

Procedures

Forms will be on the following website by July 1, 2014

http://www.wvfinance.state.wv.us/farsforms.htm

slide44

Procedures and Submissions

  • Download Excel Forms
  • Call if trouble downloading
  • Forms due July 31, 2014
slide45

Procedures and Submissions

READ CLOSING BOOK INSTRUCTIONS

(Included on bottom of all forms)

slide46

Procedures and Submissions

Email completed forms which

do not require supporting documentation to:

[email protected]

slide47

Procedures and Submissions

Mail completed forms along with supporting documentation to:

FARS

Building 17, 3rd Floor

2101 Washington Street, East

Charleston, WV 25305

slide48

Audit Notification Form

  • Included in Closing Forms or can be downloaded
  • separately from the FARS website
  • Complete and submit to FARS any time audit work or review will be performed by independent, federal, or other auditors/reviewers

Audit Notification

slide50

Leave Balance Information

  • Required Employee Information:
    • Name
    • Social Security Number
    • Balance of Annual Leave at 6/30/14
    • Balance of Sick Leave at 6/30/14

(in hours -2 decimals)

slide51

Leave Balance Information (cont.)

  • List employees in alphabetical order
  • Due July 11, 2014
slide53

Construction-In-Progress

  • Items under construction at June 30, 2014, with a total contract price of $100,000 or greater
  • Amounts should include retainage
  • Required documentation is listed in the form instructions

Form 11

slide55

Completed Construction-In-Progress

If items are in use as of June 30, 2014, then they should be considered complete and entered in the Fixed Assets System and depreciated regardless of payment status.

Form 11a

slide57

Capital Asset Entry Into WVFIMS

  • Enter assets carefully and accurately
  • Run Potential Assets report
  • Correcting a Capital Asset:
    • Within 30 days of entry agency can make necessary change
  • Review retirements to ensure they are completed
slide58

Capital Asset Entry Into WVFIMS

    • Agencies should be recording assets throughout the fiscal year as they are purchased
  • CAPITAL ASSETS IN WVFIMS
  • by June 29, 2014
  • WVFIMS WILL BE INQUIRY ONLY AFTER JUNE 30, 2014
slide59

Inventory Management Certification Cover Sheet

  • Inventory = Capital Assets
  • State Code 5A-3-35
  • SUBMIT to Purchasing no later than
  • July 15, 2014
  • Physical inventory every 3 years
slide61

Inventory Management Certification

  • Cover Sheet
    • WVFIMS Fixed Asset Training Manual can be downloaded and printed from the Surplus Property Website:
  • www.state.wv.us/admin/purchase/surplus
  • Click on Inventory Management,
    • then select the training manual.
i 9 form employment eligibility verification
I-9 FORM – Employment Eligibility Verification
  • Documents that a person is authorized to work in the United States.
  • All employees hired after November 6, 1986, and working in the United States must complete this form.
  • Employers must retain the I-9 form for three years after the date of hire or one year after the date employment ends, whichever is later.
payroll documentation
Payroll Documentation

OR

AND

  • List C
  • Social Security Card
  • State issued Birth
  • Certificate
  • List A
  • Passport
  • Permanent
  • Registration Card
  • List B
  • Drivers License
  • US Military Card
  • Student ID
slide64

AGENCY’S RESPONSIBILITY

    • Fixed Assets June 29, 2014
    • Leave Information July 11, 2014
    • SEFA Software July 31, 2014
    • Transmittal/Forms July 31, 2014
implementation of the following gasb s
Implementation of the following GASB’s:
  • GASB 67 – Financial Reporting for Pension Plans (an amendment of GASB Statement No. 25)

Effective Periods Beginning after June 15, 2013

  • GASB 70 – Accounting and Financial Reporting for Non Exchange Guarantees

Effective Periods Beginning after June 15, 2013

slide67

Upcoming GASB’s

  • GASB No. 68 – Accounting and Financial Reporting for Pensions (an amendment of GASB Statement No. 27)
  • Effective Periods Beginning after June 15, 2014
  • GASB No. 69 – Government Combinations and Disposals of Government Operations
    • Effective Periods Beginning after December 15, 2013
  • GASB No. 71 – Pension Transition for Contributions Made Subsequent to the Measurement Date (an amendment of GASB Statement No. 68)
    • Effective Simultaneously with the Provisions of Statement 68
new pension gasbs
New Pension GASBs

GASB 67

Financial Reporting for Pension Plans

(an amendment of GASB Statement No. 25)

Effective for Periods Beginning after June 15, 2013

GASB 68

Accounting and Financial Reporting for Pensions

(an amendment of GASB Statement No. 27)

Effective for Periods Beginning after June 15, 2014

gasb 67 68
GASB67/68

Revises existing standards of financial reporting for most pension plans and establishes standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and expenses/expenditures.

current financial reporting
Current Financial Reporting
  • Accounting liabilities are identical to the funding liabilities:
    • Single Employer Plans – State records a liability, Net Pension Obligation (NPO), on their books for the difference between actual contributions made and the Actuarially Required Contribution (ARC).
    • Multi-employer Plans (i.e. PERS) – State discloses in the Notes the amount of contributions in the prior three (3) fiscal years. No liability is recorded.
basic terminology changes
Basic Terminology Changes
  • Employers recognize the Net Pension Liability (NPL) on their balance sheets (where NPL is code for the Unfunded Accrued Liability based on Market Value of Assets).
    • This replaces the Net Pension Obligation (NPO) that is currently being recorded.
basic terminology changes1
Basic Terminology Changes

Employers will recognize a new measure of the Pension Expense (PE) on their income statements, which will be different from their actuarially determined contributions.

Annual required contribution is the actuarially determined amount needed to amortize a plan’s unfunded liability over a 30 year period.

major changes
Major Changes

Pension Expense is no longeran annual contribution or funding amount, rather it is a change in the Net Pension Liability (NPL) recognized from year to year.

major changes1
Major Changes

Cost Sharing Plans like PERS:

No longer allowed to just disclose contributions in the notes to the financial statements.

Each participating employer must report its proportionate share of the net pension liability, pension expense, and deferred inflows and outflows in the financial statements.

major changes2
Major Changes

Special Funding Situations:

  • Nonemployer entities that contribute to pensions of public sector employees (i.e. states that fund teachers’ retirement systems)
    • Obligations to contribute that are not dependent on events or circumstances unrelated to the pension plan.
    • The nonemployer entity is the only entity with a legal obligation to make contributions directly to a pension plan
additional disclosures notes
Additional Disclosures - Notes

Notes to the Financial Statements:

  • Components of Total Pension Liability (TPL) &Net Pension Liability (NPL), Net Position, and Ratio of Assets to TPL.
  • Description of each method and assumption used in calculating the actuarially determined contribution.
  • Investment policy, asset allocation, the assumed long-term investment rate of return (discount rate), and how it was determined.
  • Sensitivity of the NPL to changes in the discount rate illustrated by showing a 1% increase and a 1% decrease in the discount rate.
additional disclosures rsi
Additional Disclosures – RSI
  • Required Supplementary Information (RSI) for each of the most recent 10 fiscal years to be disclosed includes:
    • Sources of changes in the Net Pension Liability (NPL)
    • Information about the components of the NPL, including total pension liability, assets, net pension liability, payroll, and related ratios.
    • History of annual money-weighted investment rates of return.
    • Changes in benefits, assumptions, and membership.
measurement date
Measurement Date
  • Employers should report in their financial statements a net pension liability (asset) determined as of a date (measurement date) no earlier than the end of the employer’s prior fiscal year for each defined benefit pension plan in which they participate.
  • The measurement date used should be consistentlyappliedfrom period to period.
impact of gasb 67 68
Impact of GASB 67/68
  • Accounting liability will exceed the funding liability.
  • Pension costs will be more prominent and appear more volatile.
public university example
Public University Example

Public University participates in a cost-sharing multiple-employer defined-benefit plan sponsored by the State of West Virginia. Public University is implementing GASB Statement 68 during the year ended June 30, 2015. The cost-sharing plan also has a fiscal year-end of June 30th and implemented the provisions of GASB Statement 67 during the year ended June 30, 2014. Public University’s financial statements are a single-year presentation.

In accordance with GASB Statement 68, the measurement date for Public University must be as of a date no earlier than the end of its prior fiscal year. Since Public University and the Plan have the same year end. Public University may elect to use June 30, 2014 or June 30, 2015 as the measurement date. However, once selected, the measurement date should be consistently applied from period to period.

gasb 71

GASB 71

Pension Transition for Contributions Made Subsequent to the Measurement Date

Implemented with GASB 68

deferrals related to pensions
Deferrals Related to Pensions
  • If it is not practical for a government to determine all applicable deferred inflows and deferred outflows of resources related to pensions then a government should:
    • Recognize a beginning deferred outflow of resources for its pension contributions made subsequent to the measurement date of the beginning net pension liability but before the start of the government’s fiscal year.
deferrals related to pensions1
Deferrals Related to Pensions
  • Additionally, in those circumstances, no beginning balances for other deferred outflows of resources and deferred inflows of resources related to pensions should be recognized.
reminder
REMINDER
  • GASB 67 – Pension Plans are required to meet the new standards this year.
  • GASB 68 – Employers are required to meet the new accounting standards for Fiscal Years beginning after June 15, 2014.
  • GASB 71 – Implements with GASB 68
gasb 69
GASB 69

Government Combinations and Disposals of Government Operations

Effective Periods Beginning after December 15, 2013

gasb 691
GASB 69
  • Mergers, Acquisitions, Transfers, and Disposals
  • Establishes accounting and financial reporting standards related to government mergers, acquisitions, transfers and disposals of government operations
acquisition value and consideration
Acquisition Value and Consideration
  • Consideration > Acquisition value rather than fair value measurements
    • Exceptions to this
      • Deferred outflows of resources (carrying values)
      • Investments (fair value)
      • Postemployment benefits, comp abs (use existing guidance)
note disclosure for all types
Note Disclosure for All Types
  • Give basic information
  • Description of facts and circumstances
  • Total expenses, revenues, and net position
gasb 70
GASB 70

Accounting and Financial Reporting for Non Exchange Guarantees

Effective Periods Beginning after June 15, 2013

gasb 701
GASB 70
  • Accounting and Financial Reporting for Nonexchange Transactions
  • Governments occasionally extend or receive financial guarantees on obligations of other entities without receiving or paying equivalent value for the guarantees (nonexchange financial guarantee)
  • Guarantees of this nature are intended to provide an additional assurance to bondholders and serve to minimize their credit risk
gasb 702
GASB 70
  • Applies to governments that extend a nonexchange financial guarantee
  • Does not apply to guarantees related to special assessment debt
    • Factors, include, but are not limited to
      • Initiation of bankruptcy
      • Breach of debt, or other indicators of financial difficulty
recognition
Recognition
  • Show as a liability, if more likely than not that a payment will be required
  • If similar arrangements are being made, the “more likely than not” determination should be made on the group
  • Liabilities are recognized under modified accrual with expendable available resources
  • Governments receiving nonexchange guarantees recognize revenue when released from the obligation
measurement
Measurement
  • When a liability is recognized, measure at
    • Best estimate of the discounted present value of the future outflows expected to be incurred
    • If no best estimate, but a range exists, the minimum amount of that range
disclosures
Disclosures
  • For all extended nonexchange financial guarantees by type-description of the guarantee
  • When liabilities recognized or payments made during the period
    • Description of timing and recognition of measurement
    • Reconciliation of amounts recognized
    • Cumulative amounts paid
    • Amounts expected to be recovered
  • Received Nonexchange Financial Guarantees by type of Obligation
    • Name of guarantor, amount of guarantee, length of time of guarantee, payments during period, cumulative payments, description, and outstanding requirements to repay
slide97

AGENCY’S RESPONSIBILITY

    • Fixed Assets June 29, 2014
    • Leave Information July 11, 2014
    • SEFA Software July 31, 2014
    • Transmittal/Forms July 31, 2014
slide98

This PowerPoint presentation is available at

www.wvfinance.state.wv.us/gaapppt1.htm

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