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SHEEO Professional Development Conference South Lake Tahoe, CA August 14 – 16, 2003

SHEEO Professional Development Conference South Lake Tahoe, CA August 14 – 16, 2003. SHEEO Professional Development. Sheila K. Gestring, CPA Chief Financial Officer Flathead Valley Community College 777 Grandview Drive Kalispell, MT 59901 (406) 756-3808 www.fvcc.mt.cc.edu.

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SHEEO Professional Development Conference South Lake Tahoe, CA August 14 – 16, 2003

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  1. SHEEO Professional Development ConferenceSouth Lake Tahoe, CAAugust 14 – 16, 2003 Gestring, SHEEO, 2003

  2. SHEEO Professional Development Sheila K. Gestring, CPA Chief Financial Officer Flathead Valley Community College 777 Grandview Drive Kalispell, MT 59901 (406) 756-3808 www.fvcc.mt.cc.edu Gestring, SHEEO, 2003

  3. GASB 34/35, 39Lost & Found “Opportunities” Gestring, SHEEO, 2003

  4. GASB 34/35 • Issuance of GASB 34 represents the most significant change in governmental financial reporting in over a decade • GASB 35 brought those changes to colleges and universities. Gestring, SHEEO, 2003

  5. NACUBO & Staff • NACUBO and it’s staff have proven to be a fabulous resource • They have been our leaders in providing training and guidance Gestring, SHEEO, 2003

  6. Governing Boards & Audit Committees • Increased responsibilities in publicly traded companies • Colleges and Universities can anticipate similar increased responsibilities Gestring, SHEEO, 2003

  7. Ultimate Oversight • Governing Boards/Audit Committees have ultimate oversight of the financial reporting. • Management is responsible for any “abuses” • Boards/Audit Committees responsible for having a thorough understanding of the financial statements and related accounting policies. • Should be able to explain to stakeholders Gestring, SHEEO, 2003

  8. The Connection • Governing Boards/Audit Committees have read the old format financial statements for several years • Changes as a result of GASB 34/35 are complex and numerous • Need to provide our Boards/Audit Committees with enough information about GASB 34/35 to be able to read the financial statements effectively and ask the tough questions Gestring, SHEEO, 2003

  9. What is Lost is Not Entirely Lost • Fund sources are no longer displayed on the face of the financial statements • Funds that are designated can be discussed in both the MD&A and the notes to the financial statements • Plant Funds • Appropriations (not operating revenues, but a large part of the funding used to support general operation expenses) Gestring, SHEEO, 2003

  10. Key Elements of the Financial Statements • Management Discussion and Analysis (MD&A) • Statement of Net Assets • Statement of Revenues, Expenses, and Change in Net Assets • Statement of Cash Flows • Notes to the Financial Statements Gestring, SHEEO, 2003

  11. Management Discussion and Analysis (MD&A) • GASB 34, paragraph 11 • Analyze significant changes and assess reasons for changes (not just a % change) • Overall financial position – improving? Gestring, SHEEO, 2003

  12. Management Discussion and Analysis (MD&A) – cont. • Opportunity to explain the financial statements and the operations that affect the financial statements. • Objective (the good and bad) • Easy to read - Laymen’s terms, and charts and graphs • Known facts only • Not a transmittal letter Gestring, SHEEO, 2003

  13. Statement of Revenues, Expenses and Change in Net Assets • Public colleges & universities will report operating losses • Appropriations are non-operating revenues • Tuition and fees revenue – net of scholarship discounts and allowances • Defining operating and non-operating revenues Gestring, SHEEO, 2003

  14. Statement of Net Assets • Current and Non-current Assets and Liabilities (some assets & liabilities will be both current and non-current) • Accumulated depreciation could have a large impact on net assets category, “Invested in capital assets, net of related debt (what used to be fund balance) • Infrastructure now capitalized Gestring, SHEEO, 2003

  15. Statement of Net Assets (cont.) • 3 classes of net assets: • Invested in capital assets, net of related debt • Restricted • Expendable • Non-Expendable • Unrestricted Gestring, SHEEO, 2003

  16. Statement of Cash Flows • Direct method • Reconciles net operating income/(loss) to cash flows provided/(used) from operating activities • 4 sections • Operating • Non-capital Financing • Capital and Related Financing • Investing Gestring, SHEEO, 2003

  17. Notes to the Financial Statements • Capital Assets Gestring, SHEEO, 2003

  18. Notes to the Financial Statements (cont.) • Long-Term Liabilities Gestring, SHEEO, 2003

  19. Notes to the Financial Statements (cont.) • Functional to Natural Classification of Expenditures Matrix Gestring, SHEEO, 2003

  20. Notes to the Financial Statements (cont.) • Segments • Designated Funds Gestring, SHEEO, 2003

  21. Questions and Experience Sharing • What are various organizations currently doing? Gestring, SHEEO, 2003

  22. Resources • http://www.gasb.org/repmodel/index.html • Click on “Implementers of Statement 34” • Click on “Colleges & Universities” • NACUBO • http://www.fvcc.mt.cc.edu Gestring, SHEEO, 2003

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