1. Georgia FMC Annual Conference SAO Update
October 2-5, 2016

2. SAO Vision & Values Vision Values What do we want to be?
Trusted provider of efficient enterprise business process solutions.
Values
How do we want to act getting there?
Integrity- Do the right thing
Accountability- Take ownership
Reliability- Do what you say you will do
Service Excellence – Exceed customer expectations

3. SAO Org Chart

4. Agenda
SWAR update
GASB update
TeamWorks
Other

5. SWAR
Georgia won
GFOA award
for 4th straight
year for the CAFR

6. SWAR Update General Info Upcoming dates
Internal Controls
Capital Projects Funds (e.g. GO Bond Proceeds) – working towards consistency in having ALL agency managed GO Bond funded projects presented in the BCR in 2017.
For FY2017, these organizations need to include their GO Bond Project information in BudgetNet.
The data must be recorded by funding source within program in a or fund.
The first two digits of the funding source should begin with 90xxx.
Note – it is OK to put State/Federal/Other matching fund sources in this fund
Submit a request to the CSC to have their GO Bond Fund set to controlled (if applicable).
Contact with any questions

7. GASB Update Upcoming GASB Statements FY2016 FY2017
No. 72 – Fair Value Measurement and Application
No Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68 (portion is effective FY2017 as well)
No. 76 – GAAP Hierarchy
FY2017
No. 74 – Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
No. 77 – Tax Abatement Disclosures

8. GASB Update Upcoming GASB Statements FY2017 (continued)
No. 78 – Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans
No. 79 – Certain External Investment Pools and Pool Participants
No. 80 – Blending Requirements for Certain Component Units*
No. 81 – Irrevocable Split Interest Agreements*
No. 82 – Pension Issues—an amendment of GASB Statements No. 67, No. 68, and No. 73
*Not speaking to these statements today due to primary relevance to BOR

9. GASB 72 – Fair Value Measurement and Application

10. GASB 72 – what is it?
This Statement addresses accounting and financial reporting issues related to fair value measurements.
This Statement provides guidance for determining a fair value measurement for financial reporting and for applying fair value to certain investments and disclosures.
The definition of fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

11. GASB 72 – what is it?
Defines an investment as a security or other asset that a government holds primarily for the purpose of income or profit, and its present service capacity is based solely on its ability to generate cash, or to be sold to generate cash
Definition of investments generally excludes student loan receivables, mortgage loan receivables when the purpose is to encourage home ownership and property held to preserve the natural environment

12. GASB 72 – what is it? Fair value is described as an exit price.
Fair value assumes a transaction takes place in a government’s principal market, or a government’s most advantageous market in the absence of a principal market.
The fair value also should be measured assuming that general market participants would act in their economic best interest.

13. GASB 72 – what is it?
Fair value should be determined at the unit of account such as:
For investments held in a brokerage account it would be each individual security
For an investment in a mutual fund the unit would be each share of the mutual fund

14. GASB 72 – what is it? Valuation techniques include:
Market approach uses prices and other relevant information from transactions involving identical or comparable assets or liabilities
Cost approach uses the amount that would be required to replace the present service capacity of an asset
Income approach converts future amounts to a single current discounted amount
Always maximize the use of relevant observable inputs

15. GASB 72 – what is it? Hierarchy of inputs used to measure fair value:
Level 1 – Quoted prices in active markets
Level 2 – Observable inputs
Quoted prices for similar assets or liabilities
Quoted prices for identical or similar assets or liabilities in markets that are not active
Other, such as yield curves, credit spreads
Market corroborated inputs
Level 3 – Unobservable inputs
Applies to liabilities

16. GASB 72 – what is it?
Certain items currently measured at fair value will now be measured at acquisition value (entry price):
Donated capital assets
Donated works of art
Historical treasures
Similar assets and capital assets received in a service concession arrangement

17. GASB 72
Certain investments would be excluded from fair value measurement:
2a7-like pools
Money market w/maturity less than one year
Life insurance policies
Common stock eligible for equity method
Certain entities that calculate NAV
Joint ventures or component units
Realized gains and losses should not be displayed separately in financial statements

18. GASB 72
Disclosures should be organized by type or class of asset and include:
Fair value and level classification
Description of valuation techniques
Additional Level 3 disclosures
Additional disclosures for investment in entities that calculate NAV per share
Reason for nonrecurring fair value measurements
Appendix C to the GASB 72 includes illustration examples and sample disclosures

19. GASB 73 – Accounting and Financial Reporting for Pensions and Related Assets That Are Not Within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68

20. GASB 73 – what is it?
The requirements of this Statement extend the approach to accounting and financial reporting established in Statement 68 to all pensions, with modifications as necessary to reflect that for accounting and financial reporting purposes, any assets accumulated for pensions that are provided through pension plans that are not administered through trusts that meet the criteria specified in Statement 68 should not be considered pension plan assets.
It also requires that information similar to that required by Statement 68 be included in notes to financial statements and required supplementary information by all similarly situated employers and nonemployer contributing entities.

21. While the Statement includes clarifying amendments to Statements 67 and 68 that apply to all employers and non‐employer contributing entities (NCEs), its primary focus is to establish accounting and financial reporting requirements for state and local government employers and NCE’s that sponsor defined bene fit (DB) or defined contribution (DC) pensions that are “not within the scope of Statement 68.” In essence, the Statement requires all employers and CE’s with pensions to follow the rules provided under Statement 68, with certain adjustments and exceptions.

22. GASB 76 – The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments

23. GASB 76 – what is it?
The “GAAP hierarchy” consists of the sources of accounting principles used to prepare financial statements in conformity with GAAP.
This Statement reduces the GAAP hierarchy to two categories of authoritative GAAP and addresses the use of authoritative and non-authoritative literature in the event that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP.

24. GAAP Hierarchy

25. GASB 74 – Financial Reporting for Postemployment Benefits Plans Other Than Pension Plans

26. GASB 74 – what is it?
The objective of this Statement is to improve the usefulness of information about postemployment benefits other than pensions (other postemployment benefits or OPEB) included in the general purpose external financial reports of state and local governmental OPEB plans for making decisions and assessing accountability.

27. GASB 74 – what is it?
The scope of this Statement includes OPEB plans—defined benefit and defined contribution—administered through trusts that meet the following criteria:
Contributions from employers and non-employer contributing entities to the OPEB plan and earnings on those contributions are irrevocable.
OPEB plan assets are dedicated to providing OPEB to plan members in accordance with the benefit terms.
OPEB plan assets are legally protected from the creditors of employers, non-employer contributing entities, and the OPEB plan administrator. If the plan is a defined benefit OPEB plan, plan assets also are legally protected from creditors of the plan members.

28. GASB 77 – Tax Abatement Disclosures

29. What is a tax abatement?
A reduction in tax revenues that results from an agreement between one or more governments and an individual or entity:
One or more governments promise to forgo tax revenues to which they are otherwise entitled,
AND
the individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the State
Substance over form

30. Tax abatement definition
Tax abatement recipient:
Can be a business or other type of entity, not only a person
May not be a current taxpayer at the time the agreement is entered into, such as in a business relocation agreement
May be a remitter of taxes, rather than the obligor of the tax, such as a retail business in a sales tax diversion agreement.

31. General disclosure principles
Disclosures should distinguish between tax abatements resulting from:
Agreements that are entered into by the State
Agreements that are entered into by other governments that reduce the State’s tax revenues
Tax abatement disclosure information may be provided individually or in the aggregate
Disclosure information should be organized by each major tax abatement program,
Disclosures begin in the year an agreement is executed and continue until expiration

32. Other Government Abatements
Required Disclosures
Brief Descriptive Information
State’s Abatements
Other Government Abatements
Name of abatement program 
Purpose of tax abatement program
Name of Government
Tax being abated
Authority under which abatements are provided
Eligibility criteria
Mechanism by which taxes are abated
Provision for recapture
Types of commitments made by recipient

33. Other Government Abatements
Required Disclosures
Other Disclosures
State’s Abatements
Other Government Abatements
Gross dollar amount of the reduction of tax revenues during the reporting period 
Amounts received or receivable from other governments related to foregone tax revenue
Commitments made by government other than reduction of taxes
Quantitative threshold for individual disclosure
Information omitted due to legal prohibition and source of legal prohibition1
1Governments that are legally prohibited from disclosing specific information required by Statement No. 77 may omit that information, provided they:
Describe the general nature of the tax abatement information omitted, and
Describe the specific source of the legal prohibition

34. GASB 78 – Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans

35. GASB 78 – what is it?
The objective of this Statement is to address a practice issue regarding the scope and applicability of Statement No. 68, Accounting and Financial Reporting for Pensions. This issue is associated with pensions provided through certain multiple-employer defined benefit pension plans and to state or local governmental employers whose employees are provided with such pensions.

36. GASB 78 – what is it?
Addresses a practical issue with Statement No. 68, associated with pensions provided by certain multiple-employer pension plans and to state and local governmental employers whose employees are provided with pensions from these plans.
Amends Statement 68 to exclude pensions that:
Is not a state or local governmental pension plan,
Is used to provide pensions both to employees of state or local governmental employers and to employees of employers that are not state or local governmental employers,
Has no predominant state or local governmental employer (either individually or collectively with other state or local governmental employers that provide pensions through the pension plan).

37. GASB 78 – what is it?
Jurisdictions participating in multiple-employer DB plans (for example, Taft-Hartley plans) found it difficult to obtain the measurements and other information needed to comply with Statement No. 68 due to the nature of a governmental employer’s involvement in and relationship with the pension plan. Statement 78 establishes:
The criteria for identifying the applicable pension plans;
Recognition of pension expense equal to the employer’s required contributions and a payable amount for unpaid required contributions
Note disclosures of descriptive information about the plan, benefit terms, and contribution terms;

38. GASB 79 – Certain External Investment Pools and Pool Participants

39. GASB 79 – what is it?
This Statement addresses accounting and financial reporting for certain external investment pools and pool participants.
Specifically, it establishes criteria for an external investment pool to qualify for making the election to measure all of its investments at amortized cost for financial reporting purposes.
An external investment pool qualifies for that reporting if it meets all of the applicable criteria established in this Statement. The specific criteria address:
(1) how the external investment pool transacts with participants;
(2) requirements for portfolio maturity, quality, diversification, and liquidity;
(3) calculation and requirements of a shadow price.
Significant noncompliance prevents the external investment pool from measuring all of its investments at amortized cost for financial reporting purposes.

40. GASB 80 – Blending Requirements for Certain Component Units – an amendment of GASB Statement No. 14

41. GASB 80 – what is it?
The objective of this Statement is to improve financial reporting by clarifying the financial statement presentation requirements for certain component units.
This Statement amends the blending requirements for the financial statement presentation of component units of all state and local governments.
The additional criterion requires blending of a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member.
The additional criterion does not apply to component units included in the financial reporting entity pursuant to the provisions of Statement No. 39, Determining Whether Certain Organizations Are Component Units.

42. GASB 81 – Irrevocable Split-Interest Agreements

43. GASB 81 – what is it?
Split-interest agreements are a type of giving agreement used by donors to provide resources to two or more beneficiaries, including governments.
Split-interest agreements can be created through trusts in which a donor transfers resources to an intermediary to hold and administer for the benefit of a government and at least one other beneficiary.

44. GASB 82 – Pension Issues- an amendment of GASB Statements No. 67, No
GASB 82 – Pension Issues- an amendment of GASB Statements No. 67, No. 68, and No.73

45. GASB 82 – what is it?
Think if GASB 82 as a clean-up statement for prior pension statements
This Statement addresses issues regarding:
Presentation of payroll-related measures in required supplementary information,
Selection of assumptions and the treatment of deviations from Actuarial Standards of Practice for financial reporting purposes,
Classification of payments made by employers to satisfy employee (plan member) contribution requirements.

46. GASB Update Other Topics Financial Reporting Model Re-examination
Leases

47. TeamWorks Update

48. TW Update Projects coming to completion: Projects in planning stages:
HMC Upgrade
HRA Enhancements
Projects in planning stages:
FSCM Upgrade
Time and Labor/Absence Management
Projects under discussion:
Grants Management