Reporting Requirements Presented by Steve DeVetter Partner – KPMG LLP

KPMG LLP

Preparing Your Stand-Alone Financial Statements

 Campus stand-alone financial statements include the following components:  Management’s discussion and analysis (MD&A)  Statement of net assets  Statement of revenues, expenses, and changes in net assets  Statement of cash flows  Notes to the financial statements May 22, 2007 GAAP Reporting Workshop 2

Preparing Your Stand-Alone Financial Statements, continued

 Key Dates (refer to Audit Timeline)  Stand-alone proforma financial statements available on CO website – September 28, 2007  Campus to provide complete draft stand-alone financial statements (including management approved MD&A) to KPMG for review – November 16, 2007  Financial statements issued – December 14, 2007  Campus must submit a complete draft of the financial statements, including MD&A, to KPMG in order to begin the review process  Access to technical accounting literature and resources to help ensure successful preparation of GAAP financial statements (refer to Chapter 14) May 22, 2007 GAAP Reporting Workshop 3

Preparing Your Stand-Alone Financial Statements, continued

 Must use electronic template of pro forma financial statements (refer to Chapter 12) to begin the preparation process  Option of 1 year or 2 year comparative presentation  Electronic template should be tailored as applicable to the individual campus  MD&A  If opting for 1 year presentation, presentation of current year and prior year financial data is still required  Campus is responsible for drafting the MD&A. KPMG cannot assist under GAO Independence Standards.

4 May 22, 2007 GAAP Reporting Workshop

Preparing Your Stand-Alone Financial Statements, continued

 Based on the significance of the discretely presented auxiliary organizations to the financial reporting entity, the campus must evaluate whether certain auxiliary information should be included in the notes to the financial statements.

 KPMG campus teams must revise the opinion accordingly based on which accounting firms audit which auxiliary organizations (i.e. KPMG or other auditors) May 22, 2007 GAAP Reporting Workshop 5

MD&A - What is it?

 Required supplementary information (RSI) which precedes the audited financial statements  Management’s opportunity to communicate key financial activities of the campus  MD&A requirements  Minimum and maximum requirements  General rather than specific  See “Guide to Preparation of MD&A” (Chapter 7, Appendix 1) for discussion of required elements (GASB 34, par. 11) May 22, 2007 GAAP Reporting Workshop 6

MD&A Overview

 Discussion of the financial statements including the relationship of the statements to each other  Analysis of financial activities based on currently known facts, decisions or conditions  Discussion of current year results in comparison with prior year, with emphasis on the current year  Use of charts, graphs, and tables to facilitate understanding of management’s analysis May 22, 2007 GAAP Reporting Workshop 7

MD&A Overview, continued

 Focus of analysis should be on the campus as the primary reporting entity, with component units (auxiliary organizations) included if considered significant  Reference to the component unit’s separately issued financial statements, when appropriate May 22, 2007 GAAP Reporting Workshop 8

MD&A Overview, continued

 Presentation of condensed financial information comparing current year to prior year for each year presented  Overall financial position and result of operations  Description of significant capital assets and long-term debt activity  Changes in bond ratings  For comparative financial statements, must provide two-year comparative analysis (i.e. 2007 vs. 2006 and 2006 vs. 2005)  Description of currently known facts, decisions, or conditions that are expected to have a significant financial impact 9 May 22, 2007 GAAP Reporting Workshop

Preparation of MD&A

 “Guide to Preparation of MD&A” (refer to Chapter 7, Appendix 1)  Starting point – comprehensive analytical review / variance analysis from your reporting package  Identification of significant changes, and the reasons for significant changes, from the prior year  Coordination with appropriate campus personnel to identify:  Underlying causes for the changes  Key decisions, transactions, events and conditions  Expected changes, based on existing campus decisions and circumstances (i.e. known facts). Examples include :  Changes in enrollment  Campus master plan  Debt  New construction May 22, 2007 GAAP Reporting Workshop 10

Preparation of MD&A, continued

 Completion of MD&A Checklist (included in Chapter 7, Appendix 1)  Helps management ensure all required elements have been included in the MD&A  Review and approval signature by appropriate level of management  Completed and approved checklist must be provided to KPMG campus team along with draft MD&A  Other resource tools  2006 financial statements for each campus issued to date – available on CO website  Must use pro-forma financial statements (refer to Chapter 12) - 1 year and 2 year comparative presentations 11 May 22, 2007 GAAP Reporting Workshop

Questions?

May 22, 2007 GAAP Reporting Workshop 12