Transcript GASB UPDATE - Association of County Commissions of Alabama

Examiners Update to
County Administrators
Presented by: James E. Hall, CPA
Director County Audit Division
Examiners of Public Accounts
State of Alabama
Disclaimer
 This information was presented to the Association of
County Commissions of Alabama’s (ACCA) Annual
Conference on May 13, 2015.
 This presentation represents the audit position of the
Department of Examiners of Public Accounts as of that
date.
Objectives…
 GASB Statements
 Common Problems
 Financial Statements
GASB Updates
GASB FY2014
 Statement No 67 – Financial Reporting for Pension
Plans – An Amendment to GASB Statement No. 25
 Statement No 70 – Accounting and Financial
Reporting for Nonexchange Financial Guarantees
Statement No 70 – Accounting
and Financial Reporting for
Nonexchange Financial
Guarantees
 Applies to governments who guarantee the financial
obligations of others in a nonexchange transaction
 Other entities may include governments or authorities,
not-for-profits, private companies and individuals
 Must recognize a liability if it is more likely than not
(more than 50%) that the government will be required
to make a payment on the guarantee.
GASB 70
Note Disclosures
Regardless of whether the governmental entity determines
that it is more likely than not that a payment will be required,
GASB requires the entity to make certain disclosures for all
nonexchange financial guarantees.
 A description of the nonexchange guarantee
 The legal authority and limits for extending the guarantee
and the types of obligations guaranteed
 Relationship between guarantor and the entity issuing the
obligations that are guaranteed
 Description of recovery arrangements
 Length of time of the guarantees
 Total amounts of all guarantees extended that are
outside of the reporting date.
GASB 70
Note Disclosure
In addition to previous disclosures, governments that have
recognized a liability or made payments during the year
there are additional disclosures
 Description of changes in recognized liabilities, including
beginning and end of year balances, increases,
decreases and adjustments
 Discussion of timing of recognition & measurement
 Amount of outstanding guarantees
 Amount of commitments to extend guarantees
 Cumulative amount paid towards outstanding
guarantees
 Amounts expected to be recovered
GASB 70
Note Disclosures
Governments with obligations guaranteed by another
entity in a nonexchange transactions should disclose the
following:
 Name of entity providing the guarantee
 Amount of obligations guaranteed
 Length of time of the guarantee
 Amount paid by guarantor during the audit period
 Cumulative amount paid by guarantor on outstanding
obligations.
 Description of requirements to repay
 Outstanding amounts to be repaid to the guarantor
GASB FY2015
 Statement No. 68 – Accounting and Financial Reporting
for Pensions
 Statement No. 69 – Government Combinations and
Disposals of Government Operations
Statement No. 68 –
Accounting and Financial
Reporting for Pensions
 Must report the net pension liability on the
government-wide and enterprise fund type financial
statements.
GASB Statement 69
Government Combinations and
Disposals of Government
Operations
GASB Statement 69
Government Combinations and
Disposals of Operation
 Statement identifies 3 types of combinations
 Merger - assets and liabilities are recognized at their carrying value as of
the merger date
 Acquisition - assets and liabilities are recognized at acquisition cost as of
the acquisition date, except for
 Employee benefit arrangements
 Landfill and pollution remediation liabilities
 Investments and derivatives reported at fair value
 Deferred Outflows and Deferred Inflows
 Transfer of Operations – assets and liabilities are recognized at their
carrying value as of the merger date
GASB Statement 69
Government Combinations and
Disposals of Operation
 Merger – combination of legally separate entities with no significant
exchange of consideration and either
 2 or more governments cease to exist as entities and are combined to
form one or
 A legally separate entity ceases to exist and the operations are
absorbed into a continuing government
GASB Statement 69
Government Combinations and
Disposals of Operation
 Acquisitions – combination in which a government acquires another
entity or operations of another entity in exchange for significant
consideration
 Transfer of Operations – Involves combination of operations rather
and legally separate entities in which no significant consideration is
exchanged
 Can be a transfer of operations to a continuing government or a newly
formed government.
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Common Problems and
Ways to Correct
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Cash and Investments
 Not making deposits in a timely manner.
 Not performing bank reconciliations
 Investing in items not authorized by the Code of
Alabama 1975, Section 11-8-11 and 11-81-21
Proper Procedures Depositing
 Funds should be deposited in a timely manner; daily –
recommended.
 If deposit cannot be made before the bank closes, a
locked night deposit bag should be used to secure
funds in the bank’s night depository.
 Pre-printed, duplicate deposit slips containing the
account name and bank account number should be
used.
Proper Procedures Depositing
 Checks should be endorsed with “For Deposit Only”,
along with account name and bank account number.
 The deposit slip should contain the receipt numbers of
the funds deposited.
 The deposit date and deposit amount should be
noted on the last receipt included in the deposit.
Proper Procedures Depositing
 Daily receipts should be deposited intact.
 Do not cash checks with the funds received.
 Do not use cash receipts for change cash.
 Do not use cash received for expenses.
 Do not use correction fluid or erase mistakes on
deposit slips.
 The bank should authenticate the duplicate deposit
slip at the time of deposit and be retained for audit.
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Receivables
 Not recording receivables for amounts earned during
the fiscal year but not received until the next fiscal
year.
 If in doubt of year end receivables, it is OK to make an
estimate!
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Inventories
 Commission not recording any inventories when
material amounts are on hand. Examples include
road department supplies, gas, water treatment
supplies, etc.
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Capital Assets
 Not performing a physical inventory at least once
every 2 years (federal requirement)
 Amounts recorded as Capital Outlay do not agree
with additions to Capital Assets
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Liabilities
 Failure to record debt refundings or new debt issued
 Improperly recording principal and interest payments
 Payables subsidiary listing not agreeing with general
ledger
 Due to / Due From not agreeing
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Revenues/ Receipts
 Not reporting all income earned or received during
the year.
 Receipt books were not retained or made available
for review.
 Voided Receipts not being maintained.
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Revenues/Receivables
Proper Procedures
 Voided receipts must be retained in the receipt book.
 Do not use correction fluid or erase mistakes.
 Secure funds received
 Do not cash checks with funds received
 No money should be left in office overnight
 All receipts books should be logged and secured
when not in use.
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Payroll / Personnel
 Not reporting vehicle usage as income on individual’s
W-2 (IRS Pub 13b)
 Personnel files not being updated.
 Promotions/raises not indicated in files
Expenditures
 Expenditures did not contain the proper supporting
documentation.
 Expenditures were not properly coded in the
accounting system.
 Failure to follow the Alabama Competitive Bid Law
and/or the Alabama Public Works Law
 Transfers In / Transfers Out not agreeing
Proper Procedures Expenditures
 Do not sign blank checks – must contain payee name
and amount.
 Do not pay for items in advance of receipt of
materials, supplies, or equipment.
 Invoices and supporting documents should be
provided with the check to be signed.
 Invoices should be cancelled (marked PAID) when the
check is signed.
Proper Procedures Expenditures
 Vendors should be paid in a timely manner to avoid
late fees.
 Checks should be used in numerical order.
 Checks must be secured at all times.
 Voided checks must be retained for audit.
 Checks outstanding for more than 60 days should be
investigated.
Bid Law
 Goods and Services in excess of $15,000 not being bid
in accordance with Code of Alabama 1975, Section
41-16-50.
 Be very careful using credit cards and purchasing cards –
still subject to bid law!
 Not following all aspects of public works law
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Contact Information
Managers
 Robin Lakey – Madison; Colbert; Franklin; Marion; Winston;
Lawrence
 Randy O’Bannon – Lauderdale; Limestone; Jackson;
Morgan; Marshall; Cullman
 Gwyn Griggs – DeKalb; Etowah; Cherokee; Calhoun;
Cleburne
 Whitney Atchison – Jefferson; St Clair; Blount; Walker;
Fayette
 Nikki Morrison – Shelby; Talladega; Clay; Coosa;
Randolph; Tallapoosa
 Shelley Patrenos – Lamar; Pickens; Tuscaloosa; Sumter;
Greene; Hale
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Contact Information
Managers
 Emily Tyler – Bibb; Perry; Dallas; Marengo; Choctaw
 Teresa Dekle – Chilton; Autauga; Elmore; Lowndes;
Montgomery
 Tammy Shelley – Chambers; Lee; Macon; Russell;
Barbour
 Brian Wheeler – Mobile; Baldwin; Washington; Monroe
 Christina Smith – Clarke; Wilcox; Conecuh; Escambia
 Lynn Otto – Butler; Crenshaw; Covington; Coffee;
Geneva
 Cherie Raffle – Houston; Henry; Dale; Pike; Bullock
Managers
Information
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Email is First Name.Last
[email protected]
 Robin Lakey (256-314-5783)
 Emily Tyler (334-295-2241)
 Randy O’Bannon (256-5323509)
 Teresa Dekle (334-832-7713)
 Whitney Atchison (205-3255680)
 Brian Wheeler (251-9370338)
 Tammy Shelley (334-619 Gwyn Griggs (256-927-8649)
1517)
 Nikki Morrison (256-215-3041)  Christina Smith (251-8670296)
 Shelley Patrenos (205-6522285)
 Lynn Otto (334-347-8820)
 Cherie Raffle (334-677-4768)
Contacting the Department
•
Located in the Gordon Persons Administrative Building
at 50 North Ripley Street, Room 3201 in Montgomery,
AL
•
Mailing Address – P. O. Box 30225
Montgomery, AL 36130-2251
•
Phone – 334-242-9200
•
Fax – 334-242-1775
•
Email – [email protected]
•
Website – www.examiners.alabama.gov
Hotline
 To report Fraud, Waste & Abuse:
1-844-56F-RAUD
1-844-563-7283
Email: [email protected]
Other Issues
 Financial Statements…
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Questions