1. 2017 FIRMS & Legal reporting updates
YEAR-END LEGAL TRAINING
APRIL 2017
2017 FIRMS & Legal reporting updates
Nathanael Bryant, Financial Systems & Reporting Analyst
Systemwide Financial Standards & Reporting, CO

2. YEAR-END LEGAL TRAINING
APRIL 2017
YEAR-END LEGAL TRAINING
APRIL 2016
Learning Objectives
Provide overview of Report 22 and discuss common errors in preparation
Discuss accounting for due to / from transactions with non-CSU state agencies
Discuss common warnings/errors displayed on the FIRMS Validation Report and how to resolve them
Discuss SCO instructions for completing the Material Variance Report
Discuss the importance of legal combination edits
Discuss the importance of guidance contained in the CSU Legal Accounting and Reporting Manual
Provide information on object codes scheduled for deactivation July 1, 2017

3. YEAR-END LEGAL TRAINING
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YEAR-END LEGAL TRAINING
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Report 22
Report 22 is a mandatory submission, by fund, where the fund has reportable contingent liabilities.
Campuses complete for all governmental funds for which it is applicable and submits to the SCO.
Campuses also complete for non-governmental funds, where applicable, but submits to the Chancellor’s Office.
Campuses will report only those contingent liabilities not covered by insurance (including deductibles).
The “Criteria” tab for the Report 22 template provides a guideline for what to report

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Report 22 (cont.)

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Report 22 (cont.)
In determining what to report, consider:
The likelihood of occurrence --- is it probable, reasonably possible or remote?
The timing of the event --- did the incident occur before or after 6/30?
The materiality of the liability --- what is its dollar value?

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Report 22 (cont.)
In reporting the amount of the contingency, only enter the campus’ out-of-pocket cost. The amount that the campus pays is generally the deductible. If the event is covered by CSURMA, it is CSURMA that will cover the balance of the cost and that amount will NOT be included on the report.

7. YEAR-END LEGAL TRAINING
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Report 22 (cont.)
Data sources:
Outstanding claims report issued by CO Risk Management
Campus risk manager
General counsel assigned to campus

8. YEAR-END LEGAL TRAINING
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Report 22 (cont.)

9. YEAR-END LEGAL TRAINING
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Report 22 (cont.)
Some of the most common errors include:
Failure to provide complete information on nature of liability.
The template has a list of the typical types of liabilities that occur.

10. YEAR-END LEGAL TRAINING
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YEAR-END LEGAL TRAINING
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Report 22 (cont.)
Failure to provide a valid Reference Identification
Most of the claims will come with a CSURMA claim number, that number is acceptable.
If disclosing a claim that does not have a CSURMA claim number, use a standard naming convention at your campus.
Entry of incorrect amount of liability
Remember: only enter what your campus is liable for, not the total amount of the claim!
See Appendix 16 for template and instructions.

11. YEAR-END LEGAL TRAINING
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Report 22 (cont.)
Failure to provide complete information on the nature of the status. The template has a list of the typical statuses that occur.
If unsure what status to use, contact SFSR team for advice.

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Quiz 1
Assume your campus has a disclosable contingent liability and CSURMA has assessed the exposure at $50,000. Your campus pays a premium to CSURMA of $1,000 a month and has a deductible of $10,000 per claim.
How much should your campus enter into Report 22 when disclosing this contingency?
$50,000
$10,000
$1,000
Not enough information is given in the problem to determine the answer

13. YEAR-END LEGAL TRAINING
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YEAR-END LEGAL TRAINING
APRIL 2017
Due To / From
New series of object codes established for receivable/payable transactions with non-CSU state agencies:
1052XX – Due from, between state funds, between campuses/CO and another state agency
2022XX – Due to, between state funds, between campuses/CO and another state agency
Excluded from FIRMS validation testing the equality of due to and due from transactions.

14. YEAR-END LEGAL TRAINING
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Due To / From (cont.)
Object codes established in their new series (1052XX & 2022XX) based on historical transactions with non-CSU state agencies.
Contact SFSR to request creation of an object code for a transaction relating to a state fund for which no object code is currently available.
DO NOT use an object code that does not accurately describe a transaction with another state agency.
Effective July 1, 2017, object codes , Due From Federal Government, and , Due From Other Governmental Entities, will be deactivated. Use and instead. Campuses can use either in FY2016

15. YEAR-END LEGAL TRAINING
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Due To / From (cont.)
Chart found in Chapter 29 Section 3.9 of the CSU Legal and Reporting Manual

16. YEAR-END LEGAL TRAINING
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Appendix 17
The purpose of Appendix 17 is to provide the SCO with the organization codes of all state agencies who are party to receivable / payable transactions. This information facilitates the SCO’s elimination of interagency receivables and payables.
Completed by fund, for all funds where interagency receivables/payables are recorded.
Campuses submit form to SCO for governmental funds
Campuses submit form to CO for non-governmental funds
Appendix 23 has a list of non-governmental funds.

17. YEAR-END LEGAL TRAINING
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Appendix 17 (cont.)

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Appendix 17 (cont.)
Things to remember when filling out form:
The campus must coordinate with the agency booking the other side of the due to / from transaction to ensure accurate entry of the subsidiary organization name and organization code.
The correct organization code can also be obtained using this link: .
Make sure you are using the correct organization code in this form!

19. YEAR-END LEGAL TRAINING
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FIRMS Submission
Monthly submissions
Due on the 15th of each month
Used by Financing & Treasury for monthly cash projections
Not retained in the corporate database
Quarterly submissions (September, December, March and June)
Due on the 10th business day
Official corporate record; retained in the FIRMS Corporate Table
For information concerning quarterly FIRMS submission due dates:

20. FIRMS Submission (cont.)
APRIL 2017
YEAR-END LEGAL TRAINING
FIRMS Submission (cont.)
FIRMS validates the reasonableness of submitted data by checking:
That established business rules have been followed;
That each CSU fund’s trial balance reaches zero;
That entries conform to the legal combination edits table.
Exceptions are reported on the FIRMS Validation Report and take two forms:
Warnings: A flag indicating that a transaction may not be correct and requires review to determine validity. Some warnings become errors in the 4th quarter.
Errors: Transactions which violate established business rules and which must be corrected before the CO will accept the data.

21. FIRMS Submission (cont.)
APRIL 2017
YEAR-END LEGAL TRAINING
FIRMS Submission (cont.)
CO will accept low value errors (those that don’t significantly skew financial results) on monthly submissions, but such errors must be cleared for the quarterly submissions.

22. YEAR-END LEGAL TRAINING
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POP QUIZ!
What does ITT stand for in the context of FIRMS submissions?
Information Technology Tools
Insulin Tolerance Test
Information, Tickets and Tours
Interagency Transaction Table
Integrated Test Team

23. FIRMS Submission (cont.)
YEAR-END LEGAL TRAINING
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YEAR-END LEGAL TRAINING
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FIRMS Submission (cont.)
Common errors and their resolution:
Failure of campus interagency transactions to match the Interagency Transaction Table (ITT). Campuses should review the table distributed to them by CO Accounting on the first day of each month to confirm that all their interagency transactions have been captured and accurately posted.
Failure of specified transactions to meet combination rules. This is a mismatch between the object code and the CSU fund used for a transaction. Requires (a) evaluation of transaction to determine if an incorrect object code, incorrect CSU fund or both are being used and (b) a determination of what should have been used, generally through reference to the CSU Legal Accounting & Reporting Manual.

24. FIRMS Submission (cont.)
YEAR-END LEGAL TRAINING
APRIL 2017
YEAR-END LEGAL TRAINING
APRIL 2017
FIRMS Submission (cont.)
Sometimes errors persist even after campus analysis.
If your campus cannot clear an error, please let the SFSR team know.
Briefly describe the nature of the error and plans the campus has to remedy the error in the future.
Often, campuses do not have enough time to clear errors before the 15th, if the campus has a plan to resolve the errors, CO will accept the submission.
It is important to understand the nature of the error and have a plan to resolve the issue before the 15th.
Do not expect the SFSR team to simply pass on a monthly submission with errors.

25. Appendix 21, Material Variance Report
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YEAR-END LEGAL TRAINING
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Appendix 21, Material Variance Report
The SCO has communicated to us that all encumbrances need to be included in the expenditures section.
We were not consistent on a system wide basis last year.
If you excluded encumbrances in this section last year, you will need to recalculate the “Prior Year” section in the current submission.
To have meaningful data, we need to compare encumbrances + expenditures to encumbrances + expenditures
The PY amounts may not equal the CY amounts in the prior submission.

26. Legal Combination Edits
YEAR-END LEGAL TRAINING
APRIL 2017
YEAR-END LEGAL TRAINING
APRIL 2017
Legal Combination Edits
Legal combination edits determine the validity of CSU fund, Fund Processing Type, and object code combinations and ensure the quality of legal financial data.
When an incorrect combination is used, the FIRMS Validation Report displays a message similar to this. In this example, object code is not allowed in 471.
Either the object code is incorrect for the transaction or the fund.
Revisit the transaction to determine the necessary correction.

27. Legal Combination Edits (cont.)
YEAR-END LEGAL TRAINING
APRIL 2017
YEAR-END LEGAL TRAINING
APRIL 2017
Legal Combination Edits (cont.)
Determine the correct combination for the transaction flagged as an error. DO NOT select a combination which will merely clear the error, but which does not accurately describe the transaction.
In recording transactions, also consider the program code being used. Although use of the incorrect program code for a transaction will not result in a legal combination error, it will result in a GAAP combination error.

28. Legal Combination Edits (cont.)
YEAR-END LEGAL TRAINING
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YEAR-END LEGAL TRAINING
APRIL 2017
Legal Combination Edits (cont.)
If you do not know why a combination is invalid, contact the SFSR team for assistance.
If you believe the combination should be valid, send an to the SFSR team explaining why the combination should be allowed.

29. YEAR-END LEGAL TRAINING
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Report 14
Implementation of FI$CAL may result in a requirement to electronically enter data formerly reported on a paper version of Report 14. It is unknown if this requirement will be imposed for FYE 6/30/17.
If FI$CAL is not in a position to accept the data electronically for the current fiscal year, we believe the Excel version at Appendix 14 will be accepted by both the State Treasurer’s Office (STO) and the State Controller’s Office (SCO).
SFSR will provide final instructions on the submission of Report 14 data once they have been received from FI$CAL and/or STO and SCO.

30. CSU Legal Accounting & Reporting Manual
APRIL 2017
YEAR-END LEGAL TRAINING
CSU Legal Accounting & Reporting Manual
Purpose of manual is to:
Provide guidance on the accounting for transactions unique to the CSU
Achieve consistency in the accounting for similar transactions across all 23 campuses and the Chancellor’s Office so that financial data is meaningful to all stakeholders
Manual is a set of instructions intended to be followed by all campus accounting departments and is not to be viewed as a body of suggestions to be applied only as an option. Failure to follow the guidance contained in the manual will result in financial reports that are not meaningful.

31. Scheduled Deactivations
YEAR-END LEGAL TRAINING
APRIL 2017
YEAR-END LEGAL TRAINING
APRIL 2017
Scheduled Deactivations
The following actions are scheduled to be taken after July 1, Be sure to zero these accounts no later than June 30, 2017.
Remove the validity of – Minor Capital Outlay in no capital outlay is allowed in the fund
Deactivate object code – repair and maintenance expenses should be recorded in the new 66006X series
Deactivate object code – unnecessary object code; use object codes in 607XXX series instead
Deactivate & – Due from Federal Government & Due from Other Governmental Entities duplicate object codes &

32. Scheduled Deactivations (cont.)
YEAR-END LEGAL TRAINING
APRIL 2017
YEAR-END LEGAL TRAINING
APRIL 2017
Scheduled Deactivations (cont.)
The following capital asset object codes are scheduled to be deactivated after all the funds encumbered to date have been expended:
Capital-Design Other
Capital-Design Arch Extra Services
Capital-Design Arch Extra Services Contractual
Capital-Design Reimbursables
For any new project that would have used these codes, use Capital-Design Fees (pre-construction phase)

33. Scheduled Deactivations (cont.)
YEAR-END LEGAL TRAINING
APRIL 2017
YEAR-END LEGAL TRAINING
APRIL 2017
Scheduled Deactivations (cont.)
The following capital asset object codes are scheduled to be deactivated after all the funds encumbered to date have been expended:
Capital-Const-Arch Extra Services
Capital-Const-Arch Reimbursables
For any new project that would have used these codes, use Capital - Design Fees (construction phase)