Page 1

What’s New at the State Auditor’s Office 2016 WPPA Finance & Administration Seminar June 15, 2016 Andy Asbjornsen, Program Manager Christy Raske, Manager Local Government Support Duane Walz, Local Government Specialist Wa s h i n gto n S tate A u d i to r ’s O ff i ce


Presentation Agenda  What’s New:  

Current Events Snapshot of all Local Government Audits

 New GASBs on the Horizon  Filing results and BARS topics

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

2


Current Events  Changes in Audit Billings and Billing Rate 

Hourly Billing Rate Increase  Increased $4.50 from $88.50 to $93.00, effective January 1, 2016.

Travel Billing Rate  Now ½ of hourly billing rate.  Previous travel billings will be adjusted.

Invoice Changes  Now details hours worked by audit type.  Separate line for travel charges.

 Moody’s – Biennial Audits Required Wa s h i n gto n S tate A u d i to r ’s O ff i ce

3


Current Events

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

4


2015 Snapshot: Local Government Audits

Local governments audited annually:

2014 2015 1,391 1,426 Management letters issued:

2014 2015 236 269

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

5


Audit Reports Issued by Government Type Reports Government Type

2014

2015

School Districts City/Town Fire Protection District

444

567

423

437

238

Water/Sewer District

Reports Government Type

2014

2015

272

Library District Park and Recreation District Regional Planning Council

26 20 20

31 39 15

153

174

Educational Service District (ESD)

19

17

Port/Airport District

94

88

Miscellaneous

18

27

County

91

99

Health District

18

22

Diking/Drainage District

83

47

Transportation Benefit Districts

18

24

Cemetery District

75

47

Mosquito/Pest/Weed District

15

24

Public Utility District (PUD)

63

56

Economic/Industrial Development

13

8

Hospital District

60

52

Area Agency on Aging

10

8

Housing Authority

54

46

Local/Regional Trauma Care Councils

8

0

Irrigation and Reclamation District

51

66

Regional Support/Community Network

7

7

Transportation Authority

46

44

Air Pollution District

6

16

Emergency Management Service

32

32

Government Association

6

5

Insurance Pool/Risk Management

32

26

Flood Control District

5

12

Public Development Authority

30

28

Stadium Authority

2

0

Conservation District

28

25

Water Conservancy Board

2

10

Public Facilities District Public Charter Schools

26 0

22 1

TV Reception District

1

3

2,237

2,397

Grand Total Wa s h i n gto n S tate A u d i to r ’s O ff i ce

6


Number of Exceptions by Category Area of Issue Accounting/Financial Reporting Grants (Federal) Cash Receipting Disbursements/Expenditures Procurement/Bid/Prevailing Wage Safeguarding of Assets/Property Payroll/Personnel Miscellaneous Open Public Meeting/Record Billings/Receivables Apportionment (Transportation) Contracts/Agreements Financial Condition Restricted Funds ASB (Legal Compliance) Apportionment (Staff Mix) Apportionment (Enrollment) Interfund Transactions/Balances

Exceptions 2014 2015 796 435 360 249 191 184 179 133 104 100 95 91 87 55 53 45 35 34

1,045 479 324 240 163 224 229 138 137 66 1 74 88 88 62 54 86 39

Exceptions 2014 2015

Area of Issue Gift of Public Funds IT Controls Insurance/Risk Management Investments/Deposits Conflict of Interest/Ethics Grants (State/Local) Misappropriation Surplus Property Taxes/Assessments Budget Compliance Donations/Fundraising Misuse/Abuse Debt/Covenants Danger to Public Health/Safety Police/Jail (Legal Compliance) Authority Courts (Legal Compliance)

Grand Total Wa s h i n gto n S tate A u d i to r ’s O ff i ce

21 19 17 17 14 14 12 9 9 8 6 5 0 0 0 0 0

15 11 12 7 15 15 6 6 8 13 8 4 3 0 0 0 0

3,377

3,645 7


GASB Statements Effective 2016  Statement 72-Fair Value Measurement and Application 

Describes how FV should be defined and measured, what assets & liabilities should be measured at FV and disclosure

 Statement 73-Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68 

Assets accumulated for a pension plan that don’t meet GASB 68 criteria be reported as assets of employer for 2016. Remaining requirements effective 2017.

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

8


GASB Statements  Effective 2016, continued  Statement 76-Heirarchy of GAAP for Local Governments 

Now 2 categories of GAAP (statements and bulletins)

 Statement 77-Tax Abatement Disclosures 

Definitions and note disclosures

 Statement 78-Pensions Provided though Certain MultipleEmployer Defined Benefit Plans 

Standards for non-governmental pension plans (union plans)

 Statement 79-Certain External Investment Pools & Pool Participants 

Criteria for External Pools to value at amortized cost

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

9


GASB Statements  Effective after 2016  Statement 74-Financial Reporting for OPEB Plans-effective 2017  Statement 75-Accounting and Financial Reporting for OPEBeffective 2018  Statement 80-Blending Requirements for Certain Component Units-effective 2017 

Amendment to No. 14-requires blending of CU’s incorporated as a not-for-profit if PG is the sole corporate member

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

10


GASB Statements Effective after 2016, continued  Statement 81-Irrevocable Split-Interest Agreements-effective 2017 

Applicable to colleges, hospitals, libraries, schools

 Statement 82-Pension Issues-effective 2017 

Amendment of Statement 67, 68, and73

Corrects minor issues raised with respect to GASB 68

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

11


GASB Exposure Drafts  Certain Asset Retirement Obligations-Comments 3/31/16 

Government has legal obligation for future capital asset retirement activities (liability/deferred outflow)

 Fiduciary Activities-Comments 3/31/2016 

Clarifies fiduciary activities for financial reporting and fund types to be reported

 Leases-Comments 5/31/2016 implementation 2019 or later 

Lessee would be required to recognize lease liability and intangible asset right-to-use lease assets. Lessor recognizes the lease receivable/and deferred inflows

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

12


SAO GASB Checklist  Checklist for Accounting Standards Changes  Purpose 

To ensure financial statement preparation team performs sufficient research to correctly and timely implement changes in GASB standards. This form should be adjusted to reflect the assigned responsibilities and processes for financial statement preparation at each government.

 Complete checklist located in the local government resources Database at http://www.sao.wa.gov/local/Pages/LGPC

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

13


FY2015 Filing FY2015 Reporting had numerous changes:  $1,000 footing requirement  Uniform BARS for Ports, Transits and PUDs  New Balance Sheet Accounts (8XX) for GAAP governments  Updated Chart of Accounts logic (more red flags) SAO prepared to assist  Outreach efforts began summer of 2015  Staffed up

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

14


2015 Filing SAO Helpdesk Activity

Year 2012 2013 2014 2015 2016 *

Jan - May 488 741 736 773 929 *

This included 373 in the month of May.

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

15


2015 Filing

Year 2013 2014 2015 Year - Ports 2015

# of timely filings 1,372 1,548 1,608 On-Time 74

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

Late 3

Soon 6 16


BARS Topics  Central depository of government financial data  Schedule 01 is the primary tool to collect this data  Major outputs 

Local Government Financial Reporting System (LGFRS)

Financial Intelligence Tool (FIT)

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

17


BARS Topics Financial Intelligence Tool  Current Ratio  Change in Net Position  Operating Income  Possible Future Indicators  Note: FIT indicators data collected from Schedule 01. Schedule 01 ties to financial statements. Wa s h i n gto n S tate A u d i to r ’s O ff i ce

18


BARS Topics  Current Ratio – Current assets compared to current liabilities

BARS Code 81XXXXX – Cash, Cash Equivalents and Investments BARS Code 82XXXXX – Other Current Assets BARS Code 85XXXXX – Current Liabilities 8100000 8200000 8300000 8400000 8500000 8600000 8700000

Cash, Cash Equivalents and Investments Other Current assets Noncurrent Assets Deferred Outflows Current Liabilities Noncurrent Liabilities Deferred Inflows

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

$7,397,316 $269,311 $34,850,948 $187,920 $2,275,744 $7,9242,455 $201,416 19


BARS Topics

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

20


BARS Topics  Change in Net Position – Percent change in net position

BARS Code 308XXXX – Net Position (Beginning) BARS Code 508XXXX – Net Position (Ending) 3081900 3086000 3088900 5081900 5086000 5088900

Restricted Net Position-Beginning Net Investment in Capital Assets-Beginning Unrestricted Net Position-Beginning Restricted Net Position - Ending Net Investment in Capital Assets - Ending Unrestricted Net Position - Ending

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

$78,864 $23,798,114 $8,266,795 $0 $25,422,745 $6,881,135 21


BARS Topics

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

22


BARS Topics Operating Margin – Net Income as percent of revenue

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

23


BARS Topics

BARS Code 346XXXX – Airport/Port operating revenue BARS Code 36991XX – Other operating revenue Schedule 01 3446000

Airports and Ports Services

$5,495,128

3629000

Other Rents, Leases and Concession Charges

$2,256,655

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

24


BARS Topics

BARS Code 546XXPX – Airport/Port Operating Expense BARS Code 50146PX – Airport/Port Depreciation BARS Code 59810PX – Other Operating Expense Schedule 01 5460010 5460020 5460030 5460040 5014600

Airports and Ports-Salaries Airports and Ports-Benefits Airports and Ports-Supplies Airports and Ports-Services Depreciation - Airports and Ports

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

$1,604,718 $801,054 $986,487 $1,141,749 $1,697,024 25


BARS Topics Operating Margin 25.00%

19.62%

20.00% 17.52% 15.78% 15.00%

10.00%

5.00%

0.00%

1

Operating Revenue Operating Expenses Net Operating Revenue Operating Margin Wa s h i n gto n S tate A u d i to r ’s O ff i ce

2

2013 7,148,893 6,020,860 1,128,033 15.78%

3

2014 7,355,914 6,067,294 1,288,620 17.52%

2015 7,751,783 6,231,031 1,520,752 19.62% 26


BARS Topics Official release is June 29

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

27


BARS What’s Next?  Activate Operating Margin for GAAP Proprietary Special Purpose Districts  Create Trend data, add 2013 and 2014  Discuss Operating BARS coding 

Operating revenue – 346XXXX, 36991XX, what to do with 362?

Operating expenses – 546XX, 50146, 5981X

Any port initiated BARS request

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

28


Questions?

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

29


Contacts Andy Asbjornsen Program Manager (360) 676-2165 ext. 100 Andrew.Asbjornsen@sao.wa.gov Christy Raske LGS Audit Manager (360) 725-5593 Christy.Raske@sao.wa.gov Duane Walz Local Government Specialist (360) 725-5594 Duane.Walz@sao.wa.gov

Wa s h i n gto n S tate A u d i to r ’s O ff i ce

30

WPPA 2016 Finance & Admin Seminar - New at the State Auditor Office, Asbjornsen  
WPPA 2016 Finance & Admin Seminar - New at the State Auditor Office, Asbjornsen  
Advertisement