Budget and Accounting manual - Community College Internal Auditors

COMMUNITY COLLEGE’S BUDGET AND ACCOUNTING MANUAL 2012 EDITION

Community College Internal Auditor’s Fall Conference October 4, 2012

Prepared by Heidi E. White, CPA VAVRINEK, TRINE, DAY & CO., LLP

KEY COMPONENTS TO THE 2012 EDITION

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Who is Responsible for Updates and Changes?

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Why Did the BAM Change?

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What Was Changed?

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What was Added

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When is it Effective?

RESPONSIBILITY FOR UPDATES & CHANGES

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Education Code Section 70901  The

Board of Governors of the California Community Colleges shall provide leadership and direction in the continuing development of the California Community Colleges . . . .

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CA Code of Regulations, Title 5 Section 59011

RESPONSIBILITY FOR UPDATES & CHANGES College Finance and Facilities Planning Division of the State Chancellor’s Office  Association of Chief Business Officials Board 

 Fiscal

Standards and Accountability Committee

 District

Personnel  State Chancellor’s Office Personnel

WHY DID THE BAM CHANGE?

WHY DID THE BAM CHANGE? A. To Bring Clarity to Accounting Standards B. Provide Consistent Direction to District Personnel C. Update Prior Direction to Conform with Current Accounting Guidance D. To Give the Fiscal Standards Committee a Project to focus on E. All of the Above

OVERALL REVISION CONCEPTS  Provide for a open format for more frequent change in the future  Each Chapter is a separate document which will allow changes to specific areas rather than wait for another 12 years for an update

 Provide reference materials to allow District staff to research issues and questions

WHAT WAS CHANGED? 

Chapter 1 - Introduction  Specific

websites for GASB, OMB and the Chancellor’s Office Guidance was included as a hyperlink to allow access for more review and research by District staff.  Included budgeting and other dates that are important in the financial reporting requirements  Requirements of Accreditation Standard 3 were included  References to the California CCR’s included

WHAT WAS CHANGED? 

Chapter 2 – Fund/Structure  References

have been removed related to the General Fixed Asset and General Long Term Debt Account Groups  Added additional Funds in the Capital Project Fund Type to reflect the General Obligation Bond Fund (Fund 43) and Other Capital Project Funds (Fund 4X)  Provides references to possible Unrelated Business Income within the Enterprise Funds

WHAT WAS CHANGED? 

Chapter 3 – Revenue and Financing Sources  References

to OMB Circular A-21 “cost Principles for Education Institutions”  Website reference for the Catalog of Federal Domestic Assistance (CFDA) numbers  Provides some guidance on the Redevelopment Funds - - - information is still fluid  New guidance from GASB to recognize Bad Debt as a contra-revenue to student enrollment fees – NOT an operating expense

WHAT WAS CHANGED? 

Chapter 3 – Revenue and Financing Sources  References

the Student Fee Handbook that is included on the Chancellor’s Office website  Provides guidance for the Student Parking and Transportation Fees to be accounted for within the Restricted General sub-fund.  Provides guidance for the Prop 20 Lottery Funds to be included within the Restricted General sub-fund

WHAT WAS CHANGED? 

Chapter 4 – Expenditures and Other Outgo  Focus

is on Activity Codes as well as Object Codes  Administrative and Support Activities references language for Faculty reased from instruction  Language for Supplies and Operating expenses was clarified for Software and licensing agreements as necessary  Mirrors reference for bad debt to be included as a Contra Revenue

WHAT WAS CHANGED? 

Chapter 4 – Expenditures and Other Outgo  Updated

Language for Capital Outlay expenditures to conform to current GASB guidance related to non print media for Libraries and intangible assets such as software and licensing.  Updated threshold for an inventory for equipment purchases.

WHAT WAS CHANGED? 

Chapter 5 – The Balance Sheet  Provides

greater guidance and information in defining Fund Balance Classifications in accordance with GASB Statement 54 “Fund Balance Reporting and Governmental Fund Type Definition”. This pronouncement requires fund balance designations for external reporting.  NonSpendable

Assigned

Restricted Unassigned

Committed

WHAT WAS CHANGED? 

Chapter 5 – The Balance Sheet  Provides

greater guidance and information in defining Fund Balance Classifications in accordance with GASB Statement 54 “Fund Balance Reporting and Governmental Fund Type Definition”. This pronouncement requires fund balance designations for external reporting.  NonSpendable

Assigned

Restricted Unassigned

Committed

WHAT HAS BEEN ADDED?  Chapter

6 – Governmental Account And Reporting - - All new information within the Budget and Accounting Manual

WHAT HAS BEEN ADDED? 

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Chapter 6 – Describes the GASB Statement 35 reporting model. By placing this in the Budget and Accounting Manual, the emphasis is that the external reporting of the Community College Districts under GASB Statement 35 is the responsibility of the District not the external auditors. The specific guidance includes discussions related to . . . . .

WHAT HAS BEEN ADDED? Chapter 6 – Describes the GASB Statement 35 reporting model.  Management’s Discussions and Analysis 

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Introduces the financial statements. Provides an objective and easily readable narrative of the financial activities, programs and services

Statement of Net Assets  Statement of Revenues, Expenses and Changes in Net Assets  Statement of Cash Flows 

WHAT HAS BEEN ADDED? Chapter 6 – Describes the GASB Statement 35 reporting model.  Required Supplementary Information  Reconciliations of Governmental (modified accrual) Statements to the Entity-Wide (full accrual) Statements  Typical consolidation and Conversion Entries for financial statement reporting 

WHAT HAS BEEN ADDED? 

Chapter 7 – Special Accounting Issues  Guidance

related to Cash Accounts  Guidance related to Lease Accounting  Designed to be expanded when needed  What

other issues might be included here?

WHAT HAS BEEN ADDED? Subject Index  Glossery  Common Categorical Restricted Programs for both Federal and State  Reference to pertinent Fiscal and Legal Advisories  New reference to current guidance from the Governmental Accounting Standards Board 

WHEN IS THE BAM EFFECTIVE? 

The Board of Governors approved the BAM July 9, 2012

Effective date  Link 

Fiscal year 2011/12

http://extranet.cccco.edu/portals/1/CFFP/Fiscal_Services/Standards/BAM/bam2012ed/complete BAM/Budget_and_Accounting_Manual_2012_Edition.pdf

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Questions? [email protected]

HEIDI WHITE, CPA PARTNER VAVRINEK, TRINE, DAY & CO., LLP

[email protected] (909) 466-4410