Minutes of the Financial Standards Advisory Committee (FSAC) Meeting

January 16, 2002

LAX Crowne Plaza

 

Attendance

 

 

Campus

Present

Absent
  1.  

Bakersfield

Suzanne Muller

 
  1.  

Channel Islands

 

Leah Campbell Kirklin
  1.  

Chico

Michelle Korte

 
  1.  

Dominguez Hills

Brian Dahm, Cecilia Patz

George Pardon
  1.  

Fresno

Steve Katz

 
  1.  

Fullerton

Flora Farzad

*  Pearl Cheng

 
  1.  

Hayward

Neal Hoss

 
  1.  

Humboldt

Donna Sorenson

 
  1.  

Long Beach

Shawn McCowan, Lily Wang

Maria D’Alaisa

 
  1.  

Los Angeles

Thomas Leung

 
  1.  

Maritime Academy

Christy Redford

 
  1.  

Monterey Bay

Ruth Stipp

 
  1.  

Northridge

Robert Barker, Willie Miranda

 
  1.  

Pomona

Brian Jenkins, Joyce Wagar

 
  1.  

Sacramento

 

Justine Crossno, Kendal Chaney-Buttleman
  1.  

San Bernardino

Muriel Vita

 
  1.  

San Diego

Leslie Chase, Ellene Gibbs, Lorretta Leavitt

 
  1.  

San Francisco

 

Jim Van Ness
  1.  

San Jose

 

Shawn Bibb
  1.  

San Luis Obispo

* Kimberly Perez

*  Scott Cooke

Debbie Brothwell, Lorlie Leetham
  1.  

San Marcos

Randy Helfond

*  Dan Zorn

Richard Loucks
  1.  

Sonoma

Letitia Coate, Brian Orr

 
  1.  

Stanislaus

Jim Phillips

 
  1.  

Chancellor’s Office

Laleh Graylee (Chair), Ron Basich, Sean Boylan, Dennis Hordyk, Katherine Hughes, Sedong John, Bill Musselman, Chris Canfield and Jill Peden

 
  1.  

KPMG

Kristan Livingston, Mark Thomas

 
  1.  

FOA

Robert Barker

 

*  Signifies Guest

1)      Introduction:

 

 

 

(a)     Jill Peden has joined the Financial Systems, Standards, and Reporting department to serve as coordinator and assistant to Laleh.

(b)   Lorlie Leetham was appointed as Director of Fiscal Services at CalPoly, San Luis Obispo, replacing Bob Dignan who retired at the end of last year.  Scott Cooke and Kimberly Perez are attending today in her place.

(c)    Cecilia Patz left the Chancellor’s Office to become Assistant Director of Accounting Services at Dominguez Hills as of January this year.

(d)   Laleh Graylee introduced Dennis Hodyk, Assistant Vice Chancellor for Financial Services, and the FSAC committee was introduced to Dennis.

(e)    Laleh Graylee also introduced Andrew Tran from the Chancellor’s office BMS department.  Andrew stated that he was there to make sure his department would be able to provide the necessary support in a timely manner in case there are any changes required in FRS due to the GASB 34/35 implementation.

.

2)      Approval of Minutes of 10/10/01 meeting:

 

a)      After a review of the minutes from the last meeting on October10, 2001, the minutes were approved with no changes.

 

3)      Review of GASB 34/35 implementation:

 

a)      Education (chaired by Ruth Stipp)

 

Ruth reviewed the tentative agenda for the training scheduled for March 12 and 13, 2002.  A suggestion was made to add the parking bonds issue to the agenda.  The concept is for the first training to be in March to give the basics to all campuses so that they will go back to their office to restate the financial statements then come back in June with any and all questions for follow-up discussion.  Since scheduling the second training during the first week of June should not interfere with year-end closing, all campuses should plan to attend the training.  The question was raised as to whether the auxiliary organizations should attend at least the 2nd day of the training in March   It was agreed that the training is important for auxiliary organizations as well, especially those on GASB. 

 

·        Volunteer instructors are being sought for the training in March.  Those interested should notify Ruth Stipp.  In addition, it was decided that the Education Committee should meet via conference call at least once a week and via a face-to-face meeting every other week between now and March 12-13.  Also, it is imperative that all training materials are submitted to the Chancellor’s Office by the end of February – otherwise there is too much confusion and pressure to present the materials professionally.

 

·        Kristan Livingston of KPMG stated that they will help with the instruction but stressed the need for volunteers as well.

b.)    Financial Reporting Model (chaired by Brian Dahm)

 

·        This model incorporates the new definitions for GASB 34/35, which is similar to FASB.  Any FASB auxiliary organizations will be asked to map directly to this model.  An example was requested regarding campuses that have both GASB and FASB.  The discussion continued with the following points being highlighted; a) campuses are not to make any changes to the reporting template because this will cause problems in the final consolidation for the auditors, b) there will be no need for supplemental reporting if FASB and GASB are in agreement with line items and c) if campuses have both GASB and FASB then they will have three separate forms to report.  This committee is to discuss the verbiage to be changed to reflect consistency throughout the system wide reporting to address auxiliary organizations reporting obligation for GAAP financial statement consolidation, fourth quarter FIRMS reporting of revenues and expenditures for legal basis, and supplemental FIRMS data collection in October to provide additional detail for IPEDS reporting.  The plan is for this packet to be sent to all AOA and campuses with instructions on its use as soon as possible.  The timeline would be to have it sent by the end of the month, as it is essential to get this out to all of the auxiliary organizations.  Laleh Graylee and Mark Thomas have given presentations to Auxiliary Organization Association (AOA) to inform them the new reporting requirements will be communicated via a new auxiliary organization-reporting packet.  The Auxiliary organizations are expecting these packets and have indicated positive feedback.  It was decided by the committee that a revised Statement of Net Asset would be distributed for a final review before next meeting.

 

·        Cecilia Patz passed out the footnotes and led the discussion regarding their relation with the Model.  The footnotes are a draft and for discussion only at this point.  After much discussion regarding the new compensated absence reporting it was decided that they would stay as they are. It was also requested the final draft of the footnotes be distributed with the minutes of this meeting.

 

·        Sedong John distributed a hand out of FIRMS object codes and explained that some of these codes were new ones created to support the GASB 34/35 reporting requirements and facilitate mapping of FIRMS objects to line items on financial statements.  Much discussion resulted in the following: a) Sedong will break down the codes into two separate columns – existing and newly created – so that those created specifically for GAAP reporting can be easily identified; b) Sedong will distribute the revised list to the committee via email with instructions to the web site link as well as give notification of any newly created object codes in the future; and finally c) the decision on whether to make these new objects available in FIRMS Object table will be postponed until the next meeting.  (See item 5.)

 

c.)    Auxiliary Organization Reporting (chaired by Ellene Gibbs)

 

·        Ellene Gibbs presented the draft-reporting package for Auxiliary organizations. There was discussion of attachment I in regards to whether or not the reporting requirements are applicable to Fresno Bulldog foundation.  It was decided that attachment I, which lists the auxiliary organizations to be included in the CSU combined financial statements, is applicable to the reportable auxiliary organizations that meet the criteria of “in good financial position” and the Bulldog foundation will continue to be excluded from the combined financial statements. Ellene will obtain the current list of auxiliary organizations from Rick Leffingwell at the C.O. for attachment I.   Ellene will also include reference to Executive Order 648 in the draft letter as the authoritative source for auxiliary organizations’ financial reporting responsibility.  Discussion ensued as to the wording of page 19 of the document.  In addition, it was determined that Kristan will need to make some additions to page 12 and to the financial template to include the following Endowments, Research, Real Estate and Fund Raising.

 

d.)    Segment Reporting (chaired by Cecilia Patz)

 

CSU is not required to include segment reporting for revenue bonds in the note disclosure of the CSU combined GAAP financial statements.  The stand-alone financial statements of each revenue bond should still follow GASB 34/35.

 

e.)    Capital Assets and Infrastructure (chaired by Bill Musselman)

·        This was a result of KPMG consulting with experts to review and develop this packet.  It was determined that this packet should be reworded to reflect that it is a Guideline and another footnote indicating that should be included in the footnote portion of this packet.  It was noted that there are several places in which it will be necessary to re-word some segments to avoid confusion between campuses.

·         It has been decided that library books need to be treated as depreciable fixed assets.  Consulting with librarians would be a good way to estimate the approximate ‘life of a book’ for the depreciation table.  Christy Redford of CMA will follow up on this.

·        Laleh suggested sending out a 2-page scope of work document and out-sourcing the appraisals to outside vendors.  Mark Thomas stated that American Appraisals is an excellent firm.  It was decided that an RFP would be necessary to include others.  Leslie Chase was volunteered to work on the RFP document.  It will need to have two different components to it – 1) to allow the CSU to purchase the methodology and to use it in house and/or 2) to allow the CSU to purchase the methodology as well as hire the firm to do the scope of work, then keep it updated in house for future years.  An RFP will be developed and then approved by this committee prior to being sent out for bid.

f.)      MD & A (chaired by Bill Musselman)

·        MD & A implementation project packet was presented.  This document will be for campus use and not for systemwide use.  Discussion revolved around how to implement this for every campus.

4.      FIRMS Update:

 

Laleh presented the new FIRMS validation criteria to the group for comment before their implementation at year-end. The new validation rules are a tool to encourage and enforce data integrity for proper usage of fund and program classification by campuses.  The new Program/Fund combination edit under item #4 on page 3 is a draft only at this time and will be further reviewed before it is implemented.  It was agreed to implement this new validation criteria with a warning message to be given effective third quarter submission so the campuses can fix the problem by the following quarter.  It was also suggested to select a campus as a pilot for testing  – San Diego volunteered for this.  Campuses with a problem that is known now would like to be notified so that they are allowed to fix the problem prior to receiving a ‘fatal/reject’ at the 4th quarter.  Those campuses, which are showing a problem, will be notified, privately.

             

  1. Next meeting:

 

·        Ruth Stipp requested that another meeting be held in February; therefore the next meeting is tentatively scheduled to be an in-person meeting at the Lax Crowne Plaza on 2/20/2002.  A request was made that the meeting begin earlier and 9:00 a.m. was agreed upon.  Once the date and time is verified with the hotel, etc. an invitation will be issued.

 

Meeting adjoined at 3:35 p.m.