Date: April 22, 1997 Code: AD 97-04

To: Vice Presidents for Administration

From: George A. Pardon

Accounting Director

Business and Finance

Subject: FIRMS Implementation/Summary of Operational Changes

Enclosed please find a revised copy of the FIRMS manual dated March 28, 1997 which incorporates changes in the reporting requirements requested by various campuswide FIRMS implementation committees and advisory groups. The following summarizes the changes that will impact the reporting of financial data beginning in fiscal year 1997/98.

Reimbursed Activities Program (1100): A new program titled 'Reimbursed Activities' has been added under Educational and General programs. Both income and expenditures for this program should be classified as program code '1100'. As a result, campuses can use the same account for both income and expenditures. These are activities that are primarily allocations of costs across funds and to/from auxiliary organizations. This may present a change from how your campus previously recorded income from auxiliary organizations. Reimbursed Activities that traditionally were recorded in the Independent Operations program should now be recorded in this new program, as long as the reimbursements offset the expenditures (net zero) at the end of the fiscal year. If there are excess revenues or expenditures as a result of the operation, then the excess should be recorded in the appropriate fund where the funds are received or expensed using the related functional program and object code. An example of this type of an operation is the General Fund reimbursed activities for Federally funded trust projects.

Independent Operations Program: GAAP defines Independent Operations as "any operation that is independent of or unrelated to, but that may enhance the primary missions of, an institution". This program can be used if the nature of the campus project meets the definition of the Independent Operations program. As was experienced during the GAAP audit pilot project, it is very likely that a campus will not have any Independent Operations activities.

Distribution: (without Attachments)

Financial Managers

Accounting Officers

Budget Officers

Payroll Officers

Chancellor's Office

Program Classification for the Trust Funds: Trust Fund revenues and expenditures should be classified by expenditure programs. Revenue detail will be obtained from the object code assigned. As a result, campuses can continue to use the same account for both revenues and expenditures.

Data Submission: A significant change that will occur with the implementation of FIRMS is the frequency of data submissions required. Currently, campuses submit summarized financial information to the Chancellor's Office on a monthly basis. Effective fiscal year 1997/98, campuses will submit financial information in a FIRMS format on a quarterly, plus a post-closing file, at the end of the year. Financial information for campus auxiliary organizations is required annually, not quarterly.

A revised FRS Code Book for fiscal year 1997/98 which accommodates the new FIRMS framework will be sent to all campuses by Monday, April 28, 1997. Please contact me with questions pertaining to this new reporting framework. I can be contacted at (562) 985-2886 or via email at george_pardon@calstate.edu. Questions pertaining to FRS modifications necessary to address the FIRMS framework should be directed to Mr. Chuck Kensicki at (562) 985-9450 or via email at chuck_kensicki@calstate.edu.