GAAP MANUAL AND OTHER UPDATES YEAR-END GAAP TRAINING APRIL 2017 GAAP MANUAL AND OTHER UPDATES Sheralin Klinthong, Associate Director, Chancellor’s Office Evajoy Tito, Accounting & Reporting Manager, Fullerton Kelly Cox, Associate Director, Chancellor’s Office Lan Luong, Senior Accountant, Chancellor’s Office

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 LEARNING OBJECTIVES Know the key GAAP deliverables and due dates Understand the GAAP Accounting and Reporting Manual updates and key changes Know the key reminders specific to GAAP financial reporting

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING MASTER TIMELINE

Reporting Package Submission YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 Reporting Package Submission 1st Version Friday, August 25 2nd Version Monday, September 18 Final Version Thursday, September 21

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 Other Key Dates Year-end Audit Fieldwork Monday, August 28 Component Unit’s Audited FS Monday, September 18 Issuance of CSU Audited FS Monday, October 16

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 FY 2016-17 Master Timeline Located in the CSU public website under Financial Services. Link: Master Timeline Created “Not applicable” option under Status in addition to “Completed” and “Not Started”

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING TM1 UPDATES

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 TM1 Updates Other postemployment benefits obligation is now an input cell [2] SNP CY Added a new line Other nonoperating revenues (expenses) – interagency transfers Updated the line Other nonoperating revenues (expenses) – excluding interagency transfers [4] SRECNP CY Updated the conditional formatting to highlight abnormal balances for each line item Removed other current liabilities line in the reconciliation of operating income (loss) to net cash provided by (used in) operating activities [6] Cashflow

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 TM1 Updates Presents 2 fiscal years instead of 3 The “as a % of total assets/total liabilities and net position” column is now hidden Added new lines in Section 1: Summary of accounts receivable: Government grants and contracts (current and noncurrent) Federal grants and contracts State grants and contracts Local grants and contracts Nongovernmental grants and contracts [7] Analytical SNP

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING TM1 Updates Presents 2 fiscal years instead of 3 The “as a % of operating revenues” column is now hidden The “as a % of student tuition and fees” column is now hidden The increase (decrease) between the prior fiscal year and the fiscal year before that is now hidden Added the line other nonoperating revenues (expenses) – interagency transfers Updated the line Other nonoperating revenues (expenses) – excluding interagency transfers The operating expense analytics section has been updated. Except for Student grants and scholarships and depreciation and amortization, the only analytics for operating expenses that will be required is section 3: Operating expenses by function for each natural classification type. [8] Analytical SRECNP

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING TM1 Updates Updated to reflect the legal names of the component units Added the type of discretely presented component unit (Foundation, Associated Students, Auxiliary Services, and Others) [11] FN2 List of discretely presented component unit names The government grants and contracts line was split into the following: Federal grants and contracts State grants and contracts Local grants and contracts Nongovernmental grants and contracts [13] FN4.1 Composition of accounts receivable at June 30

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING TM1 Updates Added a formula as check point for the capital lease receivable related to SRB for the campus compared to the capital lease payable for the discretely presented component units [13] FN4.2 Leases (as lessor) – future minimum lease payments to be received Hid the Balance June 30, 20CY Capital assets, net (Calculated) for MD&A purposes [14] FN5.1 Composition of capital assets at June 30 Hid the lines: Carrying value of capital assets under capital leases at June 30 Range of interest rates on capital leases (e.g., 12%-15%) Maturity date of capital lease with longest term [15] FN6.1 – Capital lease information (passed down from Chancellor’s Office)

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING TM1 Updates Hid the principal, interest, and principal and interest columns related to capital lease obligations passed down from the CO as well as the total capital lease obligations. [15] FN6.4 Future minimum lease payments Hid the table that shows the description, interest rate range, fiscal year maturity, original issue amount and amount outstanding at June 30. Information about the interest rate range, maturity date and original issue amount is moved to FN8.1 Long-term liabilities activity schedule. [16] FN7.1 Long-term debt detail (passed down from Chancellor’s Office) [16] FN7.2 Long-term debt detail (campus-originated)

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 TM1 Updates Updated the formula of the check to agree with FN8.1 Long-term liabilities activity schedule instead of the above table [16] FN7.3 Long-term debt schedule Removed input cell for prior period adjustments column Added row for information about the interest rate range, maturity date and original issue amount related to the long-term debt [17] FN8.1 Long-term liabilities activity schedule: Sheet is now hidden [18] FN10 Pension plan and postretirement benefits Updated the table to remove source of funding for the commitments [19] FN12.1 Commitments

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 TM1 Updates Linked the portion of outstanding debt that is unspent at year-end in FN3.2 Investments held by CO – Revenue Bond Program [25] FN18 Calculation of Net Position per Statement of Net Position (SNP) Sheet is now hidden [26] FN19 Other postemployment benefits obligation (OPEB) Removed the input cell for the federal expenditures and linked to table 5 SEFA Loan Programs for the following: 84.038 Federal Perkins Loan Program 93.364 Nursing Student Loan Program [28] A-133 1. Student financial assistance cluster

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 TM1 Updates Added a new table to show the total loans made during the year that includes prior year loans for disclosure in the SEFA [28] A-133 5. SEFA Loan Programs Added the line CSU consolidated investment pool (includes SWIFT and 0948 SMIF) Noncurrent unrestricted endowment investments is now an input cell [32] FN2.1 Composition of investments at June 30, [32] FN2.5 Fair value hierarchy in investments at June 30 The line unamortized loss on refunding (DO NOT USE) is now hidden [32] FN4 Long-term liabilities activity schedule

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 TM1 Updates Added a formula as check point for the capital lease receivable related to SRB for the campus compared to the capital lease payable for the discretely presented component units [32] 5 Future minimum lease payments

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING GAAP MANUAL UPDATES

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 GAAP Manual Updates General Updated the links throughout the GAAP manual Ch. 4.01.1 Cash, Cash Equivalents, and Investments Added a new discussion about the new authority regarding investments Updated entries on State Appropriations Updated the new SWAT object codes Ch. 4.01.2 Fund Balance Clearing Added the process of adjusting fund balance clearing in CSU Fund 230 Ch. 4.01.3 Receivables Added discussion about the Interagency Accounts Receivable and Accounts Payable

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING GAAP Manual Updates Ch. 4.01.5 Capital Assets, Depreciation and Amortization Updated the discussion of capitalization interest to refer to the GASB standard instead of FASB standards Ch. 4.03.10 Net Pension Liability Updated discussion about GASB No. 68 and the preparation of the pension passdown file Ch. 4.05.1 Student Tuition and Fees (net of Scholarship Allowance) Removed the section and discussion about the alternative method of calculating tuition discounting

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 GAAP Manual Updates Ch. 4.05.04 Nonoperating Revenues (Expenses) Added the new object codes for interagency transfers Ch. 4.06.01 Elimination Updated the discussion about the different types of eliminations Added discussion about the Interagency Accounts Receivable and Accounts Payable Ch. 5.00 GAAP Adjustments or Reclassifications that Require Information from the Office of the Chancellor Updated the requirement to exclude Systemwide Forward purchases to be excluded when completing TM1 Ch. 6 Statement of Cash Flows Updated tab Added 6.02 Blank Statement of Cashflows Worksheet

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING GAAP Manual Updates Ch. 7.00 Completion of YES (TM1) Reporting Package and Other Information Updated to reflect all current changes in TM1 Chapter 7.01 Attachment: FY2016 Reporting Package All Campus Added the most current fiscal year version of the reporting package that includes all updates in TM1 Ch. 8.00 Presentation of Component Units Added a discussion about GASB No. 80 Blending Requirements for Certain component Units – an amendment of GASB Statement no. 14 Ch. 8.00.01 Template: Component Unit Presentation: Blended vs. Discretely Presented Updated the template to include the additional requirement of GASB No. 80

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING GAAP Manual Updates Ch. 8.03.01 Template: Supplementary Information Updated the template to reflect the changes in TM1 Added the CSU Consolidated Investment Pool (includes SWIFT and 0948 SMIF) line in table 2.1 Composition of investments at June 30, 2017 and table 2.5 Fair value hierarchy in investments at June 30, Total auxiliaries Noncurrent unrestricted endowment investments is now an input cell in table 2.1 Composition of investments at June 30, 2017

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING GAAP Manual Updates Ch. 9 Preparing for the Financial Statements Audit Updated to reflect the FY2016/2017 audit dates Ch. 10.01 Template: GAAP Preparation and Financial Reporting Checklist Updated to include the review of component units’ financial statements and TM1 Updated to separate the portion of OPEB and pension

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING GAAP Manual Updates Ch. 14 GASB Updates and Other Information Added the following discussion GASB 81 Irrevocable Split-Interest Agreements GASB 82 Pension Issues – An Amendment of GASB Statements No. 67, No. 68, and No. 73 GASB 83 Certain Asset Retirement Obligations GASB 85 Omnibus 2017 Ch. 17 IT Audit Removed chapter

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING OTHER REMINDERS

CSU Consolidated Investment Pool Rollforward APRIL 2017 YEAR-END GAAP TRAINING CSU Consolidated Investment Pool Rollforward What are some of the major changes to the Investment Rollforward? Added “Ending Unrealized Gains/(Losses)” column to the Accrual Tab Removed “Legal Recorded Earnings” and “GAAP Earnings” columns and replaced with “Investment Income Reinvested” column Added “Period” to differentiate between Legal and GAAP data Added Investment Income Tab

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 CSU Consolidated Investment Pool Rollforward Investment Rollforward Tab

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 CSU Consolidated Investment Pool Rollforward Investment Income Tab

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 Interagency Accruals Source of AR and AP Balances Legal balance derived from Due to/from accounts Interagency Transaction Table (ITT) Report Legal balance derived from AR Operating and AP Other Prior Year Expenditure CPOs Report GAAP adjustments Transactions in CSU Fund 230 (claims outstanding) Other (if any)

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 Interagency Accruals Prior Year Expenditure CPOs Report 16/17 CPOs issued in 17/18 Every attempt will be made NOT to issue CPOs as GAAP adjustments Only record CPOs at the direction of SFSR

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 Interagency Accruals Transactions in CSU Fund 230 The activity in CSU Fund 230 is not passed down to the campuses in GAAP Therefore, the outstanding AP need to be offset from the campuses records. To facilitate this, we have developed a new matrix to confirm the campus’ balance. https://csyou.calstate.edu/groups/StateReporting/Interagency%20ARAP

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 Interagency Accruals New input matrix for campus interagency reconciliation

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 Interagency Accruals Accounts payable To

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 Interagency Accruals Reconciliation

YEAR-END LEGAL TRAINING APRIL 2017 YEAR-END LEGAL TRAINING APRIL 2017 Interagency Accruals Reconciliation will assist with the Footnote 4.1 & 17 Reconciliation will assist with the Footnote 4.1 & 17

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 Interagency Accruals How to Edit the file Use Internet Explorer Click the down arrow Select ‘Edit in Browser’ Make your edits Close page by clicking ‘Interagency AR/AP’

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING APRIL 2017 Interagency Accruals Deadline GAAP transactions received between Legal close and August 18th are to be reconciled in the new GAAP interagency matrix Deadline is August 18th https://csyou.calstate.edu/groups/StateReporting/Interagency%20ARAP

TM1 Completion – Accounts Receivable APRIL 2017 YEAR-END GAAP TRAINING TM1 Completion – Accounts Receivable How should the FN4.1 Composition of accounts receivable at June 30, other major receivables be listed? FN4.1 breakdown of accounts receivable is presented for two years. To appropriately capture the change for other major receivables, ensure that the major item is aligned to how it was presented in the previous year.

TM1 Completion – Accounts Receivable (cont.) APRIL 2017 YEAR-END GAAP TRAINING TM1 Completion – Accounts Receivable (cont.) How should the FN4.1 Composition of accounts receivable at June 30, other major receivables be listed? FN4.1 breakdown of accounts receivable is presented for two years. To appropriately capture the change for other major receivables, ensure that the major item is aligned to how it was presented in the previous year.

TM1 Completion – Capital lease receivable APRIL 2017 YEAR-END GAAP TRAINING TM1 Completion – Capital lease receivable Is there a tie point and/or validation check for FN4.2 Leases (as lessor) – future minimum lease payments to be received the capital leases receivable related to SRB in? Capital leases receivable related to SRB by a campus should have a corresponding capital lease payable related to SRB by a component unit. TM1 FN4.2 of a campus should generally agree to the total component unit’s FN5 future minimum lease payments for capital lease obligations related to SRB. Any differences in the amounts should be communicated to SFSR for further evaluation.

TM1 Completion – Eliminations APRIL 2017 YEAR-END GAAP TRAINING TM1 Completion – Eliminations How are the elimination of non-exchange transactions presented in the SRECNP? FN16.1 Transactions between University and its Discretely Presented component units should be presented in the Eliminations column in the SRECNP FN16.2 Transactions between two Discretely Presented Component Units should not be included in the Eliminations column of the SRECNP. This will be part of the Systemwide elimination entries. FN16.3 Transactions between University and Discretely Presented Component Unit of another University should not be included in the Eliminations column of the SRECNP. This will be part of the Systemwide elimination entries.

TM1 Completion – Eliminations APRIL 2017 YEAR-END GAAP TRAINING TM1 Completion – Eliminations How should the FN16 be presented in TM1? The format of the journal entry to be input in this section should be in the format as referenced in the GAAP Manual Ch. 4.6.1 Elimination

TM1 Completion – Commitments APRIL 2017 YEAR-END GAAP TRAINING TM1 Completion – Commitments What should be included in the commitments section in TM1 FN12.1 Other commitments footnote should only include campus originated commitments. The gas and electricity commitments handled by Systemwide should be excluded in this footnote.

TM1 Completion – Accounts Payable APRIL 2017 YEAR-END GAAP TRAINING TM1 Completion – Accounts Payable How should the FN17 Accounts Payable other payables be listed? FN 17 breakdown of accounts payable is presented for two years. To appropriately capture the change for other payables, ensure that the major item is aligned to how it was presented in the previous year.

TM1 Completion – Accounts Payable (cont.) APRIL 2017 YEAR-END GAAP TRAINING TM1 Completion – Accounts Payable (cont.) How should the FN17 Accounts Payable other payables be listed? FN 17 breakdown of accounts payable is presented for two years. To appropriately capture the change for other payables, ensure that the major item is aligned to how it was presented in the previous year.

Component Unit – Supplemental Schedule APRIL 2017 YEAR-END GAAP TRAINING Component Unit – Supplemental Schedule A component unit received SRB related funding, how should the liability be reflected in their supplemental schedule? If the funding has been received prior to FY2008 and the agreement is between the campus and the component unit, this should be reflected as capital lease obligations. Accordingly, the campus will have a corresponding capital lease receivable related to SRB. If the funding has been received after FY2008 and the agreement is between the CO and the component unit, this should be reflected as notes payable related to SRB. Accordingly, the CO will have a corresponding notes receivable related to SRB.

Component Unit – Supplemental Schedule APRIL 2017 YEAR-END GAAP TRAINING Component Unit – Supplemental Schedule If a component unit has current restricted cash, how should this be presented in the supplemental schedule? For purposes of the supplemental schedule, if a component unit has a current restricted cash, this should be reported under cash and cash equivalents.

Component Unit – Supplemental Schedule APRIL 2017 YEAR-END GAAP TRAINING Component Unit – Supplemental Schedule If a component unit is participating in the SWIFT investment pool, how should this be presented in the supplemental schedule? Based on the requirement of GASB No. 72 for purposes of the systemwide consolidated financial statements, a look-through should be made, meaning, the disclosure should be made related to the underlying investments of the pool and not its position in the internal investment pool.

APRIL 2017 YEAR-END GAAP TRAINING SRB Debt Passdown What are the changes to the SRB debt passdown schedule? The purchases and sales of investments related to the 0576/0578 will be added in the file To avoid negative net position in SCO Funds 0576 and to facilitate capitalization of interest, interest expense will now be booked in CSU Fund 501 rather than initially allocate between CSU Fund 501 and SCO Funds 0576 on the basis of long-term debt in both funds.

Statement of Cash Flows APRIL 2017 YEAR-END GAAP TRAINING Statement of Cash Flows How do you calculate the purchases and sales of investments related to SMIF 0576/0578? In the C_576.578RF tab under the grand total column: Add all the negative numbers, flip the sign and that will be the investment purchases Add all the positive numbers, flip the sign and that will be the investment sales Take the amount from the investment income line, flip the sign and that will be the investment income reinvested

Statement of Cash Flows (cont.) APRIL 2017 YEAR-END GAAP TRAINING Statement of Cash Flows (cont.) How do you calculate the purchases and sales of investments related to SMIF 0576/0578? In the C_576.578RF tab under the grand total column: Add all the negative numbers, flip the sign and that will be the investment purchases. Add all the positive numbers, flip the sign and that will be the investment sales. Take the amount from the investment income line, flip the sign and that will be the investment income reinvested.

Statement of Cash Flows APRIL 2017 YEAR-END GAAP TRAINING Statement of Cash Flows Is the supplemental schedule of noncash transactions in the SCF all inclusive? No. This list shows the most common non-cash transactions for the University and is not all inclusive. There may be non-cash transactions specific to the campus and should be entered into the additional space provided in the cash flows.

YEAR-END GAAP TRAINING APRIL 2017 YEAR-END GAAP TRAINING Questions?