2017 fall ncgfoa conference 10/12/2017 - sog.unc.edu · pdf file2017 fall ncgfoa conference...

2017 Fall NCGFOA Conference 10/12/2017

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LGC/GAAP Update – 2017 NCGFOA Fall Conference

Sharon Edmundson

October 12, 2017

CHANGES AT SLGFD

•  Staff Changes o  Marian Griffis moved into admin specialist position o  Darrus Cofield moved to Debt Management as an analyst o  Lorna Hodge moved into Admin position in Fiscal

•  New employees o Michael Malim – Fiscal o April Ammons – Fiscal

•  Saying good-bye o Manasa Cooper

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2018 Treasurer’s Conference/Auditor Class

•  2018 Treasurer’s Conference

o Tuesday, June 26 at SOG

o David Bean will be featured speaker

•  2018 Auditor’s Training Class

o Tuesday, June 12 at SOG

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ADMINISTRATIVE ANNOUNCEMENTS

•  2017 AFIRS are available

o User name is same as last year

o Will have to change your password, use

“forgot password” link

o Will be providing short video on how to

access and change password

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Changes in LGC Meetings

•  If you received a unit letter, you and/or representative from management will be requested to be at meeting in person or by telephone

•  Units with letters are taken first and one at the time •  Treasurer may inquire about OPEB and LEOSSA

liabilities or if you have pending revaluation •  Remainder of agenda is addressed as a consent agenda

unless a member of LGC wants to pull anything for individual consideration

•  Considering moving to meetings of full LGC every month


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OPEB and LEOSSA Liabilities/AGPIP Fund

AGPIP Fund – Ancillary Governmental Participant Investment Program •  Investment Fund for locals to invest funds set aside in trust to fund

OPEB and LEOSSA liabilities •  Three investment choices

o  Short Term Investment Fund (STIF) o  Bond Index Fund (BIF) o  Equity Index Fund (EIF)

•  Unit chooses the percentage allocation across the funds •  $100,000 minimum balance in BIF and EIF •  Intended to hold funds for the long term •  Unit still has to establish an irrevocable trust – template form on the

website; strongly encourage you to review with your attorney

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•  18 units in for OPEB, 2 for LEOSSA •  For 11 months ended June 30, 2017

o BIF earned (1.0%) o EIF earned 14.2% o STIF earned 1.0%

•  Participants receive monthly statements •  Only vehicle for units to invest outside of GS

159-30

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•  Any funds you set aside in irrevocable trust “count” against your liabilities for GASB purposes o  Statements 74/75 for OPEB o  Statements 67/68 for LEOSSA (note NOT Statement 73)

•  Investments in AGPIP are more risky than what you are permitted to invest operating funds in per GS 159-30 but tend to provide a higher return over time

•  Application packet on our website, along with FAQ and contact email

•  https://www.nctreasurer.com/slg/lfm/forms-instructions/Pages/AGPIP.aspx

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Fiscal Website

•  Changes to Pensions Webpage o Added separate page for GASB 73 o GASB 68 – separate sub-page for items you

need to do financials – workbooks, etc. o Firefighters and Rescue Squad workers on-

behalf contributions and actuarially derived pension expense number has been published on the website #2017-19

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Fiscal Website

•  Sample Financial Statements 2017 – all are on the web o  Carolina County

o LEOSSA disclosures and RSI for GASB 73 o OPEB assets in trust, illustrates GASB 74

o  City of Dogwood o LEOSSA disclosures and RSI for GASB 73

o  Carolina County BOE, Cardinal Charter and the Housing Authority also have been updated

•  GASB 34 conversion workbook is posted for Carolina County, Dogwood, and Carolina County BOE

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Late Audits/AFIRS

•  Becoming more of an issue •  Serious consequences of late audit

o  Inability to get debt approved o  State grant and loan program applications can be

delayed o  EMMA filings o  Likely extra cost to unit if unit is not prepared on time o  Less time to address findings and more likely they will

reappear in next year’s audit o  Requests from GA start in January

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Late Audits/AFIRS

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•  Serious consequences (cont.) o  Governing board does not have timely information for decision

making processes o  Federal Government does not get timely information it has

requested – AFIR o  State Government Agencies do not get timely information –

DOT, DEQ, DHHS, DOR, etc. o  The State Auditor relies on some local audits to issue the State’s

Single Audit o  More than 50% of the reports needed are not in at the time we

need to write annual statistical reports.

Data from 2016 Audit Season, June 30 FYE

Reports Received By Month All Units

All Units % Coun8es Only

Coun8es %

Oct 2016 406 34% 6 6%

Nov 2016 304 25% 18 18%

Dec 2016 276 23% 50 50%

Jan 2017 87 7% 11 11%

Feb 2017 44 4% 9 9%

March 2017 – Sept 2017 70 6% 5 5%

Reports not yet received 20 1% 1 1%

Total Accounted For 1,207 100% 100 100%

County Audits and Compliance Work for 2017

•  Firm due date for County Audits is December 15, 2017 o State Auditor relies on county audits as part of

the group audit of federal and state money •  Interim populations for major programs were

available by March 31 •  Final populations were to be available August 1;

some delay so deadline was moved to December 15 •  Everything is out now so no further extensions

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Community College Training Class

•  Pilot has wrapped up at three locations o  Beaufort County Community College o  Johnston Community College o  Rowan-Cabarrus Community College

•  Intended for staff new to governmental and/or staff that does not have formal accounting or finance training

•  Eventually hope to expand to a curriculum course and possibly part of a government finance certificate or degree program

•  If you know anyone that is interested in teaching this course in your area please have them contact me

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•  Johnston Community College o  Thursday evenings, 2/15/2018 to 5/10/2018, 6-8 pm,

Smithfield campus o  2 hours of online work per week o Maria Mapagu, who taught the class last Spring, will

be teaching this course as well. o  https://webadvisor.johnstoncc.edu/WebAdvisor/

WebAdvisor?TOKENIDX=7800833681&type=M&constituency=WBCE&pid=CORE-WBCE

•  Beaufort Community College and Rowan Cabarrus finalizing their plans to offer again, Lenior Community planning to offer

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•  If you want to attend or have staff you want to attend but class is currently not being planned in your area please contact your college o Workforce Development or Continuing

Education office o Tell them you are interested in course o Feel free to give them my contact information

if they have questions or are not familiar with the course

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COACH Team and Staff Unit Visits

•  Last year we changed our approach to communicating concerns that arose from our review of annual audit

•  Objectives for change o  Get unit letters out more quickly o  Only require a written response when it would be useful for unit

and SLGFD staff – if internal control issues only, we don’t ask for a response; schedule a unit visit instead

o  Internal control findings addressed more effectively with a unit visit than a written response

•  As a result, staff is performing more unit visits, along with the number of visits being done by the COACH team

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•  Unit visit is not a punitive measure •  More effective way to resolve internal control issues –

we can observe unit processes and gain a better understanding of the issues, and unit can explain better those processes and what it has changed in order to address findings in audit

•  Due to staff shortages, we have prioritized units wishing to get debt approved. Hope to get to everyone eventually

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•  COACH team focuses on units that have been identified as needing additional attention

•  Can make multiple visits to monitor progress, help train staff, and be a remote resource when not on site

•  Start out with assessment visit, then follow up as needed

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Unit Assistance List

Top 5 Rumors About the UAL – Unit Assistance List 5.  The more often you call or email SLGFD with

questions, the more likely you are to be on the UAL 4.  You can be on the UAL just for a Segregation of

Duties finding 3.  You can be on the UAL just for over-expending your

budget 2.  Units on UAL can’t borrow money, no exceptions 1. If you are on the UAL, takeover by the LGC is

imminent

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•  List has always existed in some form, usually more informal than its current state

•  Started out as a internal working document to help staff organize and prioritize work

•  After economic downturn, list became more important as we further prioritized work to make most of limited resources

•  Evolved into current form as GA became aware of its existence •  Public records request in February, 2017 cause us to formalize

o  Notified units prior to releasing list o  Evaluate list periodically and add and/or delete units as

appropriate o  Units that come off the list are formally notified

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•  What does it mean to be on the UAL? o  Have priority for Fiscal staff resources o  Assigned to an individual staff person as a point of

contact and resource o Will be contacted by staff person periodically o Will get a unit visit at some point – to assist unit staff

however we can to address issues o May address elected officials if need exists

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Observations from COACH Team and Other Unit Visits

•  One signature on check must be a finance officer or duly appointed deputy finance officer o  Not enough to just have two signatures; one must be

a finance officer or deputy o  Can appoint a deputy and limit authority to just

signing checks in finance officer’s absence – can also include pre-audit in authority

o  Deputy needs to understand s/he is likely signing the pre-audit in addition to the check and what that means

•  Budget must be in the form of an ordinance o  Can incorporate other documents by reference

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Reporting Issues

•  Incomplete notes on purposes of transfers and interfund borrowings – increasingly important o  H 718 – Study bill to look at water/sewer revenues being

used for something other than: 1.  Operating costs 2.  Debt service payments for W/S debt 3.  Infrastructure 4.  Reimbursement for direct costs paid by another fund 5.  Look at Carolina County note for a good example

o  Account for cost allocations correctly!

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Update on Proposed Rules Changes re Pre-Audit

•  Still in the process of adopting new rules o Have been through all the pre-approval and

public hearing processes o Pending Rule Review Committee Approval to

be entered into the Administrative Code •  Changes related to change in GS 159 that was

adopted in 2015 regarding pre-audit

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•  Exemption from requirement for pre-audit certificate on electronic transactions o  Board adopted policy allowing unit to enter in to electronic

transactions o  Policy adopted by board or by finance officer (if given that

authority by board) regarding the pre-audit of electronic transactions that o  There is budget authorizing the expenditure o Sufficient budget remains to cover the expenditure o  The transaction is encumbered

o  Unit shall provide training to appropriate staff

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o  Unit shall report quarterly at a minimum to board including a year-to-date budget to actual report including encumbrances and remaining budget

o  Unit must have an encumbrance system either electronic or manual

•  Adherence to these rules exempts unit from affixing the pre-audit certificate to transactions made with o  Credit cards o  P-cards o  Fuel cards

•  Does Not exempt unit from performing the pre-audit

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World’s Fastest GAAP

Update!

GASB Standards

STATEMENT # TITLE IMPLEMENTATION DESCRIPTION

GASB 73 Pensions Not Within Scope of 68 FYE 6/30/17

LEOSSA (unless holding funds in trust)

GASB 74 OPEB Plan ReporTng FYE 6/30/17

Only affects units with assets held in trust

GASB 75 OPEB Employer ReporTng FYE 6/30/18

Affects all units that offer OPEB benefit

GASB 76 GAAP Hierarchy FYE 6/30/16 CIG now Cat B GAAP

GASB 77 Tax Abatements 3/31/17 6/30/17 Not applicable for NC local governments

GASB 78

Pensions Provided Through Certain MulT-‐Employer DB Plans 12/31/16 6/30/17

No applicability in NC that we are aware of 32

GASB Standards STATEMENT # TITLE IMPLEMENTATION DESCRIPTION

GASB 79

External Investment Pools and ParTcipants 12/31/16 6/30/17

No applicability for NC local governments

GASB 80

Blending Requirements for Certain CUs 6/30/17

NFPs of which the PG is the sole corporate member must be blended

GASB 81 Irrevocable Split Interest Agreements 12/31/17 6/30/18

Only applies to governments that are beneficiary of split interest agreement

GASB 82 Pension Issues – Amend 67,68, and 73 6/30/17

Specific issues that arose from implementaTon of 68

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GASB Standards


GASB 83

Certain Asset ReTrement ObligaTons 6/30/19

AccounTng for reTrement of assets that potenTally create LT liabiliTes as a result of closure, similar to landfills

GASB 84 Fiduciary AcTviTes 12/31/19 6/30/20

4 types of FF, 3 associated with legally entrusted arrangements, 1 for acTviTes not in trust

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GASB Standards


GASB 85 Omnibus 6/30/18

Specific items re pensions/OPEB, most won’t affect NC

GASB 86 Certain Debt ExTnguishments 6/30/18

In substance defeasance using exisTng resources

GASB 87 Leases 12/31/20 6/30/21

Leases booked by lessee as a liability with offset of intangible right to use asset; only lease that is operaTng is < 12 months

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GASB Standards

•  New Reporting Model o  Considering making significant changes to reporting

model including eliminating modified accrual o  First phase of a long and involved project – will be

more ITCs to come, and continued due diligence from GASB

o  Encourage you to participate in the process! o Good news – won’t go in effect until 2021 or later o  Next opportunity for comment August, 2018

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QUESTIONS?

Questions and Contact Info

Sharon Edmundson – [email protected] or 919.814.4289

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Thank You!

Together we can build and maintain a fiscally strong and prosperous North Carolina.

www.NCTreasurer.com

2017 fall ncgfoa conference 10/12/2017 - sog.unc.edu · pdf file2017 fall ncgfoa conference...

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