May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. Prepared by Client (PBC) List - Part 2 Chapter 9 Presented by KPMG LLP and CSU KPMG LLP

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 2 The List – Capital Assets #74 – Capital Asset Rollforward KPMG will test at interim if campus can complete the rollforward – see #75 below Interim testing is optional, but encouraged Rollforward from interim to final is required if tested at interim – see exhibit Depreciation expense not required to be recorded at interim #75 – Detail of Capital Asset Additions Two options Provide by project, then further detail will be requested Provide all detail initially

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 3 The List – Capital Assets #75 – Detail of Capital Asset Additions (continued) List of additions will be required at final if tested at interim – see #74 #81 – Sales (disposals) of Capital Assets Identify where proceeds of sales (if any) are recorded in legal – may need a GAAP adjustment NBV of disposed capital assets should agree to Note 5 #82 – CWIP Rollforward Accrue retention, if any – GAAP adjustment to DR Capital Assets and CR A/P (also, search for unrecorded liabilities)

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 4 The List – Capital Assets #82 – CWIP Rollforward (continued) Accrue A/P in CSU Funds that will ultimately pay for the cost (affects your unrestricted vs. restricted net assets) #83 – Capitalized Interest Separate Training Required on SFAS 62 If an entry is required, must wait for debt passdown entries from Chancellor’s Office – record as a GAAP adjustment

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 5 The List – Other Noncurrent Assets #85 – Documentation of Realizability Reference GASB Concept Statement No. 4 to ensure you have a valid and realizable asset

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 6 The List – A/P, ASW and Compensated Absences #86 – State Payroll File Reconciliation Provide one month as selected by KPMG at interim and June 2008 at final #87 – Detail of Employees Using Timecards May be worthwhile to provide list to local KPMG team prior to arrival if convenient for campus and KPMG #88 – A/P Leadsheet Ensure you can reconcile between your campus A/P and the A/R of your auxiliaries #90 – ASW PIMS H43 or the Chancellor’s Office query may be used

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 7 The List – A/P, ASW and Compensated Absences #90 – ASW (continued) SCO Reports like H43 may no longer be available if your campus has implemented Absence Management Ensure you accrue for Benefits in Faculty Salary Accrual Accrue for Faculty Pay for Summer Session earned prior to June 30th #92 – Compensated Absences Again, SCO Reports may no longer be available – check with your campus HR personnel

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 8 The List – A/P, ASW and Compensated Absences #93 – Salary and Benefit Leadsheet Revised format of leadsheet for 07/08 – see Exhibit #94 – Commitments and Contingencies Should NOT include items already accrued in A/P

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 9 The List – Deferred Revenue #95 through #97 – Deferred Revenue Reasonableness Test and Schedules Lily covered at FOA Separate Task Force addressed issues of KPMG’s difficulty in testing this liability balance Issue primarily stemmed from the variability in the ways that deferred revenue and summer revenue are recorded from campus to campus Two standardized schedules created by Steve DeVetter that will support KPMG testing and GAAP adjustment Review Schedules Think about this from a revenue standpoint Discuss three inputs

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 10 The List – Deferred Revenue Review Schedules (continued) Review the formulas on your own Schedule details what A/R, Deferred Revenue, and Revenue Recognized in the current fiscal year should be Use for any revenues earned over time (example: housing, parking, etc.) Ensure large fluctuations are explainable (for example, increase in Fall SUF resulting from bills going out one week earlier than prior year)

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 11 The List – Deferred Revenue

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 12 The List – Deferred Revenue

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 13 The List – A Break Start Your PBC’s Early!!!

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 14 The List – Leases and Long-Term Debt #104 and #105 – Campus Originated Debt SRB, Senior Debt, and BAN’s excluded Some campuses continue to have some campus- originated debt (for example, Energy Efficiency Loans)

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 15 The List – Self-Insurance Claims Liability #108 – Passdown Entry Should not be prepaying premium under RMP guidelines Likely will not have a prepaid balance Discuss CSURMA dividend

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 16 The List – Revenues KPMG – Various Means of Testing Revenue and Likely Audit Approach Reasonableness Test Trend Analysis Specific Items Detail Testing Other

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 17 The List – Revenues #117 – Cash Receipts Control Testing If possible, work with KPMG to select prior to interim #120 – Tuition and Fee Reasonableness Test No change from prior year Items #121 – 124 are supporting documentation #125 – Grants and Contracts Revenue Pell Cal Grant

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 18 The List – Revenues #126 – Sales and Service of Auxiliary Enterprises Reasonableness test is more efficient for KPMG and the campus (in the long run) Similar to tuition and fees reasonableness test or exhibit Challenges to reasonableness test – student using housing like a hotel room May want to break-out nonroutine items (ex. conference revenue) KPMG – Other testing techniques Include CSU Fund for SRB Audit

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 19 The List – Revenues #127 – Other Operating Revenues Other operating revenues vs. other nonoperating revenues GASB #9 – Cash Flows Certain Object Codes Remapped – RMP Nonexchange vs. Exchange Reasonableness test probably not efficient – nonroutine transactions If one object code is a large portion of total revenue, may consider going another level down for leadsheet

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 20 The List – Revenues #128 – Other Nonoperating Revenues See discussion above in other operating revenues #129 - Other Revenues Other Than Other If material, a leadsheet must be provided to KPMG KPMG is required to test every material SRECNA balance Sales and services of educational activities – if Athletics is not self-supporting, revenue should be classified here with expenses in student services

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 21 The List – Expenses Items #130A and 130B Goal – Reduce Sample Size How It Works Take out capital asset expenses Reconciliation of total expenses Item #131 – Auxiliary Enterprise Expense Show variances and have explanation prepared for material variances