The GASB 34 Compliant AFRA Learning Experience

Presented by:

Mary Kay Beer

School Accounting Section Chief

mbeer@state.pa.us/(717) 783-9001

And

LouAnn Caldarella

Accountant

lcaldare@state.pa.us/(717) 783-9003

School Finance Division

AFR Package Statistics

• For fiscal year 2002-03– There were 696 entities required to file an AFR– Of these there were 450 in Phases I and II of

GASB 34 implementation– 246 entities were not required to file using the

new standards; however some have implemented early

Due date – What due date????

• The IU due date was October 1 per PA School Code, all other entities had a November 21 due date

• As of November 21, only 334 out of 696 school entities had filed their AFR database file

• There were 282 SD’s; 14 IUs; 47 Charter Schools and 19 CTCs outstanding

• 201 outstanding were to file in compliance with GASB 34

AFR Package Problems reported

• Access 2003 incompatibility – request the run time version

• Rename and zip function

• Downloading issues – check with your in school technical support

• Transmitting problems – file size issues

What to send

• A complete AFR submission consists of:– Renamed database file, there is a button on the Main

Menu to assist with this process– Send to: schlfin@state.pa.us– Our office began to reply automatically to files

received via email this year– Signed cover sheet with original signatures and the

printed financial statements sent via surface mail– Notes to the Financial Statements sent via surface mail,

this can be filed at a later date

AFR Package Validations

• Check on accounting accuracy – there are over 600 validations built into the AFR to ensure compliance

• Check on revenue/expenditure reporting accuracy• Ensure that schedule information ties into the

overall functional area• Avoid the phone calls by clearing validations that

cannot be justified

Common ErrorsBig Offenders

• 7110 – not including delayed payment and missing deductions

• 7310 accruing “owed” money before notification by the PDE

• CY/PY discrepancies: fund balance, net assets• Reconciliation Statements – provide detailed

descriptions, not one word explanations

Common Errors: But my auditor says you’re wrong

• Recording accruals and deferrals – it’s owed to me, so it’s mineMeasurable and Available criteria

• Long term liability for Rental reimbursements due – let’s just book them all

• Recording revenues and expenditures – where do I get the backup?– 2548 is sent in June via surface mail– Payment and deduction letters are sent via Penn Link

when the payment is made – FAI payment system

Common Errors

• Internal balances – not intergovernmental funds• Reconciliation Statements – but that’s the number

that makes the validation go away• Explain the differences between your information

presented using the modified accrual accounting method for fund reporting versus the full accrual for the government wide statements

Comments on the following

• Materiality issues – materiality does not negate accuracy

• Revenue coding information is included on the FAI system and as part of your payment correspondence

• Incorrect coding and omissions

• Negative cash balances

Why do we insist on accuracy

• Federal reports – Title 1 money to PA • Actual Instructional Expense• Restricted Indirect Cost• Requests by taxpayers, other states, the legislature,

PSEA and PSBA• Tuition Rate – used to calculate

payments/deductions for Incarcerated Ed, PRRI, APS, 1305 & 1306 students

Lessons Learned

• Fiduciary funds reporting – just trying to be consistent, this year we will have the Fiduciary funds available as a drop down box or all available to enter data into

• What to do with those earned income taxes on the Statement of Activities

• Rounding errors – we will establish a variance so that those schools who provide their detail in whole dollars may not get a validation to justify

New for 03-04 • Validations to check:

No elementary expenditures will be allowed in 1300

1200 object 300 vs 560 & 590 – will need to provide a justification

Check to see if there is data in 2750 & 2250 – justification needed if no entries

Act 89 revenue verifications (IUs only)

If you are entering data regarding a component unit (CU) you will be asked to identify that CU

03-04 Changes• Additional collection of certain objects for

consistency

• Additional reporting of termination benefits on the Restricted Indirect Cost Schedule – object codes 115, 221 and 222

• Delete the Other Fiduciary funds column

03-04 Changes

• Add object code 780 for reporting infrastructure assets

• Add revenue codes 7291 and 7340

• New schedule to report Title V part A (Innovative Programs) and 7291 revenues

• Add a column for Other Major Proprietary fund

Additional Information

• Revise the line on the Statement of Activities to reflect “Other taxes levied” to replace the “Taxes levied for specific purposes” line

• There will continue to be an automatic reply when your message is received in our office informing you that your message was received

• Problems with attachments will receive a reply indicating the problem

• When filing the Notes to the Financial Statements we are requesting a Word file not paper

Where can I get help? • The Comptroller’s website:

www.pde.state.pa.us/school_acct

• The GASB website: www.gasb.org

• The PASBO website: www.pasbo.org

• Various reference books including the GAAFR, and the Manual of Accounting and Financial Reporting for PA Public Schools (available on the Comptroller’s web site).

Questions