Fiscal Officer Meeting

1. Fiscal Officer Meeting Thursday, May 21, 2009

2. Accounting Updates Ernie Cornford

3. New GASB’s FY 2009 GASB 49 – Pollution Remediation Obligations GASB 52 – Land & other real estate held as investments by endowments GASB 55 – GAAP Hierarchy (Incorporates AICPA definitions to GASB literature) FY 2010 GASB 51 – Intangible Assets GASB 53 – Derivatives FY 2011 GASB 54 – Fund Balance

4. FY 2009 GASB 49 – Pollution Remediation Obligations Requires accounting & disclosures for University’s existing pollution remediation obligations Excludes pollution prevention & control obligations and future pollution remediation required when retiring assets (e.g., nuclear power plant decommissioning)

5. FY 2009 – GASB 49 continued Obligating events that cause a need for accounting/disclosure: Being compelled to take pollution remediation action due to immediate endangerment Violating a pollution prevention-related permit or license Being named or expecting to be named as Responsible or Potentially Responsible Party Being named or expecting to be named in lawsuit to compel pollution remediation Commencing or legally obligating itself to commence pollution remediation

6. FY 2009 – GASB 49 continued Components of the Liability Legal services Site investigation Remediation design & implementation Required postremediation monitoring Recognized as costs become reasonably estimable Measurement is based on current value of expected outlays

7. FY 2009 – GASB 49 continued Expected recoveries from third parties or insurance Pollution remediation outlays are capitalized in certain circumstances Information gathered to date: Currently known obligations are minor, but results of a couple assessments are now pending

8. FY 2009 continued GASB 52 – Land & Other Real Estate Held as Investments by Endowments Requires endowments to report land & other real estate investments at fair value Changes in fair value are reported as investment income Disclosure of methods & significant assumptions required Affects Columbia campus GASB 55 – GAAP Hierarchy Incorporates the Generally Accepted Accounting Principles hierarchy into GASB’s literature (previously existed only in AICPA literature) No changes to hierarchy, therefore immediately applicable

9. FY 2010 GASB 51 – Intangible Assets 3 required characteristics: Lack physical substance Nonfinancial in nature Initial useful life beyond a single fiscal year Includes such things as patents, trademarks, computer software, land use rights, etc. Has to be identifiable, separable (can be sold, rented or otherwise transferred to another party) OR arise from contractual or other legal rights

10. FY 2010 – GASB 51 continued Accounting – If held as assets, treated as Capital Assets If acquired or created for income production or profit, treated as Investments If internally-generated, 3 required criteria to be capitalized: A specific objective and service capacity has been determined Feasibility of completing the project has been demonstrated The intent to complete or continue development has been demonstrated One known challenge – Identifying the University’s patents

11. FY 2010 GASB 53 – Derivatives Agreements that transfer risk from one party to another The value is based on changes in market prices of item being hedged Can be used to hedge (reduce) financial risk, lower borrowing costs, generate income, or manage cash flows.

12. FY 2010 – GASB 53 continued Required to measure derivatives at fair value as assets or liabilities Fair value at June 30 reported in SNA Change in fair value of a investment derivative is reported in SRECNA as investment gains or losses Change in a hedging derivative is deferred until agreement is terminated or hedge ceases to be effective

13. FY 2010 – GASB 53 continued Do you really want to know more? Note disclosures include: Financial objective for the agreement, significant terms, net cash flows of those that hedge debt (e.g., interest rate swaps), termination risk, credit risk, interest rate risk, basis risk, rollover risk, market-access risk, and foreign currency risk

14. FY 2011 GASB 54 – Fund Balances Establishes fund balance hierarchy based on extent to which government is bound to observe spending constraints on its resources Nonspendable Restricted Committed Assigned Unassigned

15. Update on Strategic Initiatives Scrub Accounts CRR/ARR Redesign Online Managerial Review/Checklist Audit Trail

16. Scrub Accounts Objective: To ensure our Accounts are relevant, useful, streamlined and meet our business needs Goals Users can easily determine the appropriate Account to use (eliminate overlapping descriptions) Smart numbering is improved Elimination of immaterial Accounts Elimination of Accounts no longer relevant to current business needs Elimination of duplicate/ambiguous Accounts

17. ARR/CRR Rewrite Objective To provide end users with a web-based interface to efficiently enter cash receipts with enhanced business features.

18. ARR/CRR Rewrite cont’d Goals Accurate accounting records: Allows limited posting to prior periods for wires Elimination of posting errors Real-time save and validation in production system (but nightly posting to GL) Streamlined user interface User can enter ChartFields on Receipts Can enter both negative and positive amounts Better handling of Letter of Credit across multiple Business Units Enhanced Internal Controls Security is enhanced to provide data accuracy and ease of entry, different access rights (add, update, correct, delete & view Improved ability to segregate duties

19. Managerial Review/Checklist Audit Trail Objective: To provide managers the ability to indicate their review online and provide ablility to review history of checklist online Goals Provide online an efficient way for users to indicate managerial review and their comments Reduce paper documentation Provide monitoring too for management

20. Fiscal Officers Meeting Errol Benson

21. Time & Labor Update Schedule Change Complete by Thanksgiving 2009 Training Requirements Train the Trainer Concept Talx the Work Number Employment verification system Implementing Jun 1 Mass communication coming

22. ASIA (Annual Salary Increase Application) Will be used to update appointment end dates for contracts Non-contracts with no increase Will update JOB with action/reason (DTA/RPT) JED Updates Salary Increases if any

23. Employee contributions to UM Retirement Plan 1%/2% July 1, 2009 Implementation Monthly: 7/1-7/31 for 7/31/2009 pay date Biweekly: 7/12-7/25 for 8/5/2009 pay date New “T” Earn Code developed to identify earning that should not contribute to retirement For Summer Session 2/9s for Research Must us “T” to identify periods in excess of 2/9s We currently distinguish excess 2/9s for Teaching Payroll Reconciliation Please insure you complete them

24. Senior Fiscal Officer Meeting Randall Vogan May 21, 2009

25. FY 2009 Closing Schedule No access to Finance Production instance between 7/1/09 and 7/3/09. This includes: Non-PO Voucher Create, Requisitioning, Approving, Receiving, and eProcurement Budget entry, AR/BI, GL Journal Import, and Grants Module Web applications that will be available include: Web JE, MoCode Create, PS Financial Reports, CRR No nightly processing will take place

26. FY 2009 Closing Schedule Last day to enter non-PO vouchers in FY 09 is 6/30/09 Verify that the ChartFields entered on each voucher are appropriate and budgeted Vouchers (non-PO and PO) entered between 7/4/09 and 7/9/09 with invoice dates before 7/1/09 will be accrued in the old FY First day to enter vouchers in FY 10 is 7/4/09 Check invoice dates entered during this period

27. FY 2009 Closing Schedule Last day for departments to edit Purchasing Card transactions in PaymentNet is 7/1/09, Noon Departments have until 7/10/09 to get signed Statement of Accounts to Procurement Services

28. FY 2009 Closing Schedule Last day to enter web JE’s in FY 09 is 7/16/09 Between 7/1/09 and 7/16/09, if FY 09 entry, enter 6/30/09 journal date Last day to import FY 09 data into GL is 7/7/09 Between 7/4/09 and 7/7/09 use 6/30/09 date Last day to enter FY 09 CRR’s is 6/30/09 Accounting will review CRR’s prepared between 7/1/09 and 7/9/09 for cash in transit entry

29. FY 2009 Closing Schedule Last day to enter FY 09 AR/BI invoices is 6/30/09 Invoices entered between 7/4/09 and 7/9/09 with June date will be posted back to FY 09 Last day to enter FY 09 ARR’s is 6/30/09

30. Prepaid Expenses Expenses vouchered in the current fiscal year for goods or services that will not be received until next fiscal year are considered prepaid expenses Accounting will check for prepaid expenses greater than $5,000 (excluding grants) and transfer the expense to new FY as appropriate Accounting will transfer prepaid expenses less than $5,000 to new FY at fiscal officer’s request

31. Accrued Expenses Expenses vouchered in FY 10 for goods or services that were received before 7/1/09 are considered accrued expenses If voucher processed between 7/4/09 and 7/9/09 with old year invoice date, expense will be transferred to old year using original ChartFields If voucher processed between 7/10/09 and 8/8/09 with old year invoice date, expense will be transferred to old year using high level ChartFields

32. Deferred and Accrued Revenue Revenue that is recorded in the current FY for a good or service that will be provided by the department in the next FY is considered a deferred revenue Revenue should be accrued in the current FY if a good or service was provided this year and the payment will not be recorded until next FY Use a revenue threshold of $5,000

33. Expense or Revenue Check for year to year consistency and the dollar amount when considering whether an expense or revenue item should be recorded in the old or new fiscal year

34. Summer Session Expenses/Revenues Accounting will transfer summer session payroll charges from the lower department DeptID level to the higher campus DeptID level as of 6/30/09. Entry will be reversed in FY 10 Finance will record 50% of summer session revenue and scholarships as deferred/prepaid and 50% as revenue/expense at higher campus DeptID level as of 6/30/09. Entries will be reversed in FY 10

35. Reduction of Expense Refunds, discounts, or rebates received by the University from a vendor for goods or services purchased from the vendor Reimbursement of insignificant and incidental usage of University resources when the resources are not typically used to provide services on a fee for service basis

36. Budget Stuff Joann Wilkinson

37. Segregation of Duties Ernie Cornford

38. Segregation of Duties Campus events Steve Stanley willing/wants to meet with units Tuesday, Wednesday or Thursday About 1 ½ to 2 hours May/June timeframe Unit Heads