APRIL 3-6, 2013, LONG BEACH, CA Facilities Accounting What Every District Should Know Lettie Boggs-Cowie, COLBI Technologies, Inc APRIL 3-6, 2013, LONG BEACH, CA

 Annual Cycle  Budget  Multi-year, Multi-fund  Pace and timing  Chart of Accounts  Risk and internal controls What are the differences between fiscal and facilities accounting?

Cash demand by Fund Appropriation levels by fiscal year Internal control assurance Fiscal needs… Whole project funding plan and expenditure budgets Status of project balances - every day Workflow that meets timelines and provides control Facilities needs… A funding strategy that maintains positive cash flow and gets the whole program funded ! While assuring the high-dollar, high-profile program is well run ! Everyone needs…

Annual Cycle What are the differences between fiscal and facilities accounting?

 Facilities goes into its most active phase when Fiscal goes into closing activities  Important to have clarity of project scopes and budgets so facilities can proceed while fiscal is down 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Annual Cycle CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO 2013

 Facilities budgets need to be done for the annual update to the board, typically in conjunction with the Montieth Report, within 120 days after Fiscal close.  Project budgets span multiple years  Facilities projects typically have multiple sources  The aggregate of project budgets constitute the Facilities Program Annual Cycle CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO 2013

Project budgets combine to become the Program CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO 2013

Program budgets become cash schedules CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO 2013

Each project budget should be aged CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO 2013

Budget What are the differences between fiscal and facilities accounting?

 The annual appropriation budget in fiscal is a subset of the project budget  The project budget can be funding driven – or need driven  And the basis may shift  The budget will change over time 2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Budget CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO 2013

2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Budget CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO 2013

2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO 2013 The Triangle Effect If you constrain one – the others move. The same essential project, with different constraints, will need budget adjustments. Budget

Pace and Timing What are the differences between fiscal and facilities accounting?

 In the spring the project budgets should inform the fiscal planning process  In the fall the fiscal close should inform the project budgets prior year actuals  Project budgets should be routinely be analyzed to keep them real and coordinated with fiscal (twice a year minimum) CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO 2013 Pace and Timing

Chart of Accounts What are the differences between fiscal and facilities accounting?

 Fund Codes  The source of the funds  Object Codes  How you spend the money  Site Codes  Don’t differentiate projects, but can help combine projects  Resource Codes  Unique Code for Each Project Coding Projects in SACS The perfect accounting system tracks everything you need to know – And nothing more!

Resource Codes  Resource 7710 is required for OPSC projects  Each 77XX Resource has a balance sheet  More work for Fiscal at year end So…  If one self contained project  Use a unique 77XX Resource  Avoid use of unique 77XX Resource numbers for sub projects

Strategies  Begin with the end in mind  SAB Columns  What constitutes a project?  If it is an OPSC project – account for it alone!  Otherwise, track projects as bid  Have a distinct object code for every reporting category  Make sure your coding matches the way the projects will be billed If you can’t easily know the number, it will be a lot of work to track it separately!

Monitor the interest and assign it to projects –Its yours, but they track it –Be consistent in your methodology Track the savings and be able to report them –Need to report on the SAB for the giving project and the receiving project –Working on a change at OPSC on this one… The challenge of using 5800’s –What type of consultant? –All capital project costs can legitimately be in 6XXX More Strategies…

Risk and Internal Controls What are the differences between fiscal and facilities accounting?

Internal Control Elements  Control environment  Risk assessment  Control activities  Information and communication  Monitoring

Review Procedures and Workflow  Examine workflow in a team meeting  Map existing system  Correct bottlenecks and inappropriate assignments  Communicate to all team members

For the leader of the process  Identify the processes  Contracting, PO process, invoice payments, change orders, stop notices, budget adjustments  Define your starting points clearly  For the Contracting Process, you may want to start at approval of the bid set and front end docs  For the Payment Process, you may start at the arrival of an invoice or payment application  Do the complex example, not the simple one  One step per post it  Let everyone contribute for themselves  This gets to the real process  Each participant’s role is validated

Flowchart Workshop  Give each dept a different color post-it pad  Have each participant write down each step they do in the process  Work together to put the post-its in the correct order for the workflow

Control Checks  Establish approval routing  Someone with knowledge of the work/purchase  Someone with knowledge of the budget  Look at the results – is it what you want?  Appropriate redundancies  Inappropriate redundancies  Legal compliance

Keep it real  Prepare a formal write up and circulate that draft for comments  If significant changes were made, schedule a Review & Revise meeting for 4-6 weeks after the flow charting  Assure that changes have really happened  Verify the system is working This is a great opportunity to promote conversations and understanding between departments

Remember to review  Review when new employees are hired  Review when people leave the process  The most likely person to pick up the work is the person who is the “second set of eyes”  Review when people are walking things through to make it happen – the process is broken!  Review when process changes  Review annually  Calendar it

Lettie Boggs-Cowie CEO COLBI Technologies, Inc For questions or assistance with additional resources: