Budget and Accounting manual - Community College Internal Auditors

Report
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

Who is Responsible for Updates and Changes?

Why Did the BAM Change?

What Was Changed?

What was Added

When is it Effective?
RESPONSIBILITY FOR UPDATES & CHANGES

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 . . . .

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?



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



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

Questions? [email protected]
HEIDI WHITE, CPA PARTNER
VAVRINEK, TRINE, DAY & CO., LLP
[email protected]
(909) 466-4410

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