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1.Welcome and Introductions 2.H.R – ARRA Type Reporting to all Federal Awards 3.Advisory Draft – Voluntary Uncommitted Cost Sharing 4.SAM Restricted Research Reporting Guidelines – Anthony Turrietta 5.3 Percent Withholding Requirement 6.SEFA Checklist 7.GASB Update 8.NACUBO APC Update 9.Other Issues 2

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H.R Intent is to greatly improve the tracking of federal spending Would require recipients of Federal funds, as either Prime or Sub-recipient, to report various characteristics of the received grants Bill requires creation of a single collection platform for this information Very similar to ARRA required reporting 4

H.R At a minimum, the following will be required not less than every quarter: Identification of recipient Identification of executive agency Identification of federal award and source Amount of federal funds received, expended, or obligated Detailed list of projects/activities for which funds were expended Status as prime or sub-award, and any sub-awards issued Additional information reasonably related to the receipt and use of Federal funds as the Board shall, by rule, require 5

H.R.2146 Already approved by House Committee on Oversight and Government Reform Bill is very popular among lawmakers-they cite accountability, reduction of fraud, transparency Bill is unpopular among universities, who cite increased bureaucracy and cost Copy of bill can be found at: mendments/ISSA_043_xml.pdf or mendments/ISSA_043_xml.pdf 6

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Advisory Draft-VUCS NACUBO is working on how VUCS should be treated for functional expense purposes Guidance based on hypothetical question – can institutionally funded research effort (instruction, research, public service) be reported as VUCS if the activities are separately budgted? 8

Advisory Draft-VUCS VUCS are effort or other costs incurred that are over and above the amount committed and budgeted for in a sponsored agreement In essence, the institution is incurring costs related to a research project as cost sharing OMB issued clarification in 2001 related to treatment of VUCS in F&A calculation 9

Advisory Draft-VUCS “VUCS should be treated differently from committed effort and should not be included in the organized research base for computing the F&A rate or reflected in any allocation of F&A costs” OMB Guidance did not dictate VUCS treatment for classification of functional expenses in Financial Statements 10

Advisory Draft-VUCS Guidance is still in draft form: “Functional expense reporting should not be driven solely by budget allocations, but rather by the actual amounts spent on a particular function” To the extent that VUCS can be associated with a specific institutional research objective, it should be included in the functional expense category of research 11

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SAM – Review Standards and Accounting Methods for Reporting Restricted Research Expenditures (SAM) was issued by the THECB in 2005 Sets standards and accounting for reporting restricted research Defines the concept of “restricted research” Definition excludes Indirect Cost Recovery funded expenditures from consideration in “restricted research”, although IDC can be reported in the research survey for total research 13

SAM – Advisory Committee Advisory Committee on Revision to SAM met on February 10 th Editorial changes were proposed to SAM to add clarity To add further clarity, SAM for Reporting Restricted Research Expenditures for the Research Development Fund was issued after May 24, 2011 Guidance in this is very similar to original SAM 14

SAM – Advisory Committee Threshold for SAM for RDF is $250,000 Revisions were made again on July 11, 2011, and will be available for public comment on or about July 29, 2011 Gives clear definition of restricted research as it relates to RDF: “Only selected state appropriated grant programs having a competitive award process may be considered restricted research (See Appendix A). State appropriations directly to institutions through formula or special item funding do not qualify as restricted research.” 15

SAM – Advisory Committee New draft that will be posted in late July: 16

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IRC 3402(t) Applicable to Governmental Entities Exclusion for entities – less than $100 million in payments for goods and services Originally effective January 1, 2011 Now set for January 1, 2013 Affects all payments for goods & services Applies to individuals, trusts, estates, partnerships, associations, companies, or corporations 18

IRC 3402(t) Does not apply to other non-profit and governmental entities Real property transactions are exempted, construction costs are not All transactions over $10,000 Credit Card Transactions Some exemptions for pass through entities Withheld amounts are to be reported on Form 945 Report to recipients on 1099-M 19

IRC 3402(t) More complete copy of regulation and exceptions: 20

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SEFA Checklist - Background PY Audit finding, , Agencies and Higher Education Institutions Should Strengthen Their Reviews of Their Schedules of Expenditures of Federal Awards, was related to 17 institutions of Higher Ed Deficiencies related to SEFA In order to prevent this, a checklist was created Points taken from State Comptroller website – Reporting Requirements for Annual Financial Report of State Agencies and Universities 22

SEFA Checklist Created checklist does not include all areas on CPA website - only those applicable to Universities Can be modified to institution needs dex.php 23

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Statement 59 Financial Instruments Omnibus Effective FYE June 30, 2011 Clarifies Statements 31 and 40, and amends 53 25

Statement 60 Accounting and Financial Reporting for Service Concession Arrangements Effective for FYE June 30, 2013 SCAs are a type of public-private or public-public partnership, including service arrangements and management arrangements SCAs are also a type of lease Certain criteria have to be met to meet scope of statement Statement deals with revenue and liability recognition 26

Statement 61 Financial Reporting Entity: Omnibus Effective FYE August 31, 2013 Updates inclusion data from Statement 14 for component units 27

Statement 62 Codification of Pre-November 30, 1989 FASB and AICPA Guidance Effective for FYE August 31, 2013 Supersedes Statements 20 and 29 Earlier application is encouraged 28

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Other Issues CPA adopted TASSCUBO guidance on tuition discount reporting Will increase consistency and comparability of this financial reporting element 30

J. Carlos Hernandez 31

APC Mission and Members Accounting guidance and advocacy APC members are your colleagues Council appointments typically do not exceed 5 years APC’s principal charge is to inform and advise NACUBO 32

Bi-annual meeting with GASB APC provided information concerning: Alternative SRECNA Endowments held by public institutions Treatment of PELL grants GASB provided information on: Pension project Deferred inflows and outflows of resources 33

Reporting Changes/Concerns GASB NACUBO Comment Letters: Service concession arrangements (60) The financial reporting entity (61) Deferred inflows and outflows of resources (63) Termination of Hedge Accounting (64) Pension accounting 34

Other Projects Fair value measurement Fiduciary responsibilities Electronic reporting Lease Reporting inconsistencies Revenue survey Defining an operating measure Agency transactions 35

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