The GASB 34 Compliant AFR A Learning Experience

1. The GASB 34 Compliant AFRA Learning Experience Presented by: Mary Kay Beer School Accounting Section Chief mbeer@state.pa.us/(717) 783-9001 And LouAnn Caldarella Accountant lcaldare@state.pa.us/(717) 783-9003 School Finance Division

2. AFR Package Statistics • For fiscal year 2002-03 • There were 696 entities required to file an AFR • Of these there were 450 in Phases I and II of GASB 34 implementation • 246 entities were not required to file using the new standards; however some have implemented early

3. Due date – What due date???? • The IU due date was October 1 per PA School Code, all other entities had a November 21 due date • As of November 21, only 334 out of 696 school entities had filed their AFR database file • There were 282 SD’s; 14 IUs; 47 Charter Schools and 19 CTCs outstanding • 201 outstanding were to file in compliance with GASB 34

4. AFR Package Problems reported • Access 2003 incompatibility – request the run time version • Rename and zip function • Downloading issues – check with your in school technical support • Transmitting problems – file size issues

5. What to send • A complete AFR submission consists of: • Renamed database file, there is a button on the Main Menu to assist with this process • Send to: schlfin@state.pa.us • Our office began to reply automatically to files received via email this year • Signed cover sheet with original signatures and the printed financial statements sent via surface mail • Notes to the Financial Statements sent via surface mail, this can be filed at a later date

6. AFR Package Validations • Check on accounting accuracy – there are over 600 validations built into the AFR to ensure compliance • Check on revenue/expenditure reporting accuracy • Ensure that schedule information ties into the overall functional area • Avoid the phone calls by clearing validations that cannot be justified

7. Common ErrorsBig Offenders • 7110 – not including delayed payment and missing deductions • 7310 accruing “owed” money before notification by the PDE • CY/PY discrepancies: fund balance, net assets • Reconciliation Statements – provide detailed descriptions, not one word explanations

9. Common Errors: But my auditor says you’re wrong • Recording accruals and deferrals – it’s owed to me, so it’s mine Measurable and Available criteria • Long term liability for Rental reimbursements due – let’s just book them all • Recording revenues and expenditures – where do I get the backup? • 2548 is sent in June via surface mail • Payment and deduction letters are sent via Penn Link when the payment is made • FAI payment system

10. Common Errors • Internal balances – not intergovernmental funds • Reconciliation Statements – but that’s the number that makes the validation go away • Explain the differences between your information presented using the modified accrual accounting method for fund reporting versus the full accrual for the government wide statements

11. Comments on the following • Materiality issues – materiality does not negate accuracy • Revenue coding information is included on the FAI system and as part of your payment correspondence • Incorrect coding and omissions • Negative cash balances

12. Why do we insist on accuracy • Federal reports – Title 1 money to PA • Actual Instructional Expense • Restricted Indirect Cost • Requests by taxpayers, other states, the legislature, PSEA and PSBA • Tuition Rate – used to calculate payments/deductions for Incarcerated Ed, PRRI, APS, 1305 & 1306 students

15. Lessons Learned • Fiduciary funds reporting – just trying to be consistent, this year we will have the Fiduciary funds available as a drop down box or all available to enter data into • What to do with those earned income taxes on the Statement of Activities • Rounding errors – we will establish a variance so that those schools who provide their detail in whole dollars may not get a validation to justify

16. New for 03-04 • Validations to check: • No elementary expenditures will be allowed in 1300 • 1200 object 300 vs 560 & 590 – will need to provide a justification • Check to see if there is data in 2750 & 2250 – justification needed if no entries • Act 89 revenue verifications (IUs only) • If you are entering data regarding a component unit (CU) you will be asked to identify that CU

17. 03-04 Changes • Additional collection of certain objects for consistency • Additional reporting of termination benefits on the Restricted Indirect Cost Schedule – object codes 115, 221 and 222 • Delete the Other Fiduciary funds column

18. 03-04 Changes • Add object code 780 for reporting infrastructure assets • Add revenue codes 7291 and 7340 • New schedule to report Title V part A (Innovative Programs) and 7291 revenues • Add a column for Other Major Proprietary fund

19. Additional Information • Revise the line on the Statement of Activities to reflect “Other taxes levied” to replace the “Taxes levied for specific purposes” line • There will continue to be an automatic reply when your message is received in our office informing you that your message was received • Problems with attachments will receive a reply indicating the problem • When filing the Notes to the Financial Statements we are requesting a Word file not paper

20. Where can I get help? • The Comptroller’s website:www.pde.state.pa.us/school_acct • The GASB website:www.gasb.org • The PASBO website:www.pasbo.org • Various reference books including the GAAFR, and the Manual of Accounting and Financial Reporting for PA Public Schools (available on the Comptroller’s web site).

21. Questions