GASB STATEMENT 34 ADVISORY COMMITTEE

 

Minutes

 

November 7, 2000

 

 



LOCATION         Conference Room 222

                              Wade Hampton State Office Building

                              Columbia, South Carolina

 

TIME                    10:00 AM

ATTENDEES      Barbara Hevener–South Carolina Office of Comptroller General (OCG), Program Sponsor

Kathy Glass–KPMG, Program Manager

Becky Carver–South Carolina Department of Mental Health (Guest)

Mel Commins–South Carolina State Treasurer’s Office

Lanna Harris–State Budget and Control Board, Internal Operations

Billy Martin–South Carolina Employment Security Commission

Renee Moore–State Budget & Control Board, Office of Information Resources

Pat O’Cain–South Carolina Office of Comptroller General, Data Processing

Mike Reeves–South Carolina Department of Social Services

Don Royal–South Carolina Department of Public Safety

Bonnie Gunter–South Carolina Office of Comptroller General (Administrative Coordination and Minutes)

 

 

AGENDA

 

·         Welcome and Introduction

·         Progress of OCG Efforts

·         October Training Sessions

Ř      Feedback from Advisory Committee Members

Ř      Suggestions for Upcoming Training

·         Discussion of Emerging Issues at the GASB

·         Request for Future Topics

·         Other Questions

 

Welcome and Introductions

 

                  Barbara Hevener called the meeting to order at 10:00 a.m. on Tuesday, November 7, 2000, and welcomed the members to the meeting.  Mr. Don Royal represented the Department of Public Safety in the absence of committee member Bruce Dorman.  Barbara called on Kathy Glass to proceed with the meeting.

Minutes

 

                  Kathy asked members to review the October minutes then called for a motion to approve the minutes.  Pat O’Cain made the motion, Mel Commins seconded it, and members unanimously adopted the minutes as recorded.

Progress of OCG Efforts

 

                  Kathy presented a summary of the OCG’s efforts in the following areas:

 

·        STARS--one-byte internal/external indicator for batch type 0 documents

            Kathy stated that the Comptroller’s efforts for the fall of 2000 mostly focused on data processing work that began in August with the design of STARS modifications necessitated by GASB 34 requirements—specifically, the addition of a one-byte indicator to the document header on batch type “0” documents (i.e., journal vouchers).  The additional field would enable segregation of internal transactions from external transactions as required by GASB 34.  As an example, some agencies initially deposit both checks from non-State parties and IDT receipts from other State agencies into a revenue clearing account.  They then later use batch type "0" documents to distribute the clearing account’s balances to the proper accounts.  Kathy explained that the journal voucher entries to clear the IDT portion of the clearing account’s balances should be designated as internal whereas the entries to clear the amounts received from non-State parties should be designated as external.   Accordingly, the journal voucher entries to clear the clearing account’s balances would need to be split into at least two batches—one designated as internal and another designated as external.  Meanwhile, this methodology and several alternatives were discussed with various parties (General Services, STO, and other key agencies at the October training sessions), and the consensus was to use a one-byte indicator field in the document header for Batch “0” documents.  This change should be the easiest of the options for agencies from the information technology perspective.  Also, changes in procedures for accountants as a result of this change will be limited to the batch type “0” transactions.  Kathy stated that everyone seemed comfortable with this decision and, therefore, the project to add the one-byte indicator field would go forward.

Pat reported that the Comptroller General’s Office had taken the additional one-byte indicator project one step further by posting this new field to the STARS Operating File.  He said, “By doing so, it will allow agencies with access to the Agency On-Line Inquiry System to have up-to-date information as to internal vs. external balances on a daily basis.”  The indicator will come to the OCG on the STARS journal voucher’s header record for batch type “0” documents but STARS will be programmed to automatically set the indicator to the correct value for other batch types.  Data Processing will then post that information to the STARS summary files.  Pat stated that agencies would receive additional information regarding these changes (and a few others that are not related to GASB 34) in or around December 2000.  The new STARS procedures for journal vouchers will become effective on July 1, 2001.

 

·        Series Z modifications—early stages

Kathy reported that the OCG’s Data Processing Division also has begun designing modifications to the OCG’s internal Series Z financial reporting system.  The OCG uses this system to combine appropriate year-end STARS balances and activity, audited financial statement balances, closing package data, and other adjustments to produce the statewide financial statements in accordance with generally accepted accounting principles.  This system must be modified to produce new financial statements at the government-wide level as required by GASB 34 and to effect required changes in the existing fund level financial statements. 

 

·        Selection of report writer software to assist with financial statement preparation process

 

Kathy reported that the Data Processing Division also has been working toward selecting and purchasing additional report writer software to more efficiently prepare financial reports and schedules needed for GASB 34 and other purposes.

 

·        Prepared quarterly reporting form for State agencies

Kathy informed the members that a quarterly reporting form had been designed for agencies to report their GASB 34 implementation efforts to the OCG.  The OCG plans to send the form to agencies in December 2000 along with instructions and explanatory materials.  Kathy explained that the form would be simple to complete and would not be voluminous.  The quarterly report form requests that agencies identify their most significant GASB 34 issues and outline their progress toward addressing those issues.  There also is a section on the form where agencies can report significant roadblocks/issues with which they have difficulty.  The completed reports will be used by the OCG to identify where agencies need the most assistance and to provide the OCG with the status of GASB 34 implementation efforts for all agencies/entities.  Agencies may select from among a few format options (Word 97/2000, PDF, etc.), and they will be encouraged to submit the information to the OCG via e‑mail, fax, or hard-copy via U.S. mail.  The first quarterly report will be due January 8, 2001, and reporting will continue thereafter for each quarter through 2002.  Barbara stated that some agency reports might reveal implementation difficulties that neither the OCG nor KPMG has yet contemplated.  Further, the quarterly reports will help to keep the OCG’s staff in touch with areas that are problematic to agencies.

 

·         Initial training segment (overall awareness/education) completed in October

             Kathy reported that the first segment of GASB 34 training for agencies was held in October 2000.  Participants had the option of attending either the October 17 or October 25 session.  She said that feedback from the approximately 400 participants had been favorable.  The OCG was particularly pleased with the fact that approximately 90% of State agencies sent representatives.

 

·        Initial planning for future training sessions

             Kathy requested that the committee help to identify some meaningful topics for discussion for the next segment of GASB 34 training.  Although that training was originally scheduled for May 2001, it was suggested that it be changed instead to mid April 2001.  The committee concurred.  Kathy indicated that it would be desirable for the committee to identify and discuss significant issues within the next few meetings so that the issues and the resolution thereof could be presented to agencies during the upcoming training.  Kathy specifically suggested the following as general areas that the committee should discuss prior to the next agency training sessions:

1.      Capital assets, including depreciable useful lives;

2.      Revenue recognition in general and for specific practical situations; and

3.      Changes needed in centralized billing and accounts receivable systems.

 

October 2000 Training Sessions

 

 

Kathy asked the committee for their comments regarding the October 17 and 25 training sessions.  The general response from the committee was favorable.  Some of the comments are provided below:

      1.      “The training provided a good overview for top management.”

      2.      “The sessions helped our agency gain insight into the significance and magnitude of the GASB 34 implementation project.”

      3.       “Training site was comfortable and convenient – a good choice.”

Committee members also mentioned two areas of concern/improvement.  They recommended that the presentation slides for future sessions be in larger print.  Additionally, committee members expressed concerns related to the timing of OCG specific guidance for implementation areas for agencies.

When asked to provide suggestions for the next segment of agency training, the majority of the committee members placed capital assets and infrastructure near the top of the list.

 

Discussion of Emerging Issues at the GASB

 

                  Kathy commented briefly on each of the following issues currently under review by the Governmental Accounting Standards Board (GASB):

·        Program revenue issues

 

·        Segment reporting

 

·        Internal service fund reporting

 

·        General purpose external financial reporting

 

·        Issuance of a guide to state financial statements

 

·        Other issues

 

                  Kathy will keep the committee abreast of developments in these areas as information is made available to her.

 

Requests for Future Topics

 

                  Kathy said that she would like to see the committee set one main topic for each of the advisory committee meetings during the period January through June 2001.  Kathy stated that she would expect the following topics to be discussed during those months:

1.      Capital assets

 

2.      Infrastructure

 

3.      Grants – revenue recognition/classification

 

4.      Others topics recommended by the committee

 

 

Other Questions and Miscellaneous Discussion

 

                  Renee Moore inquired about the timeframe and guidelines that will be used for useful lives of depreciable capital assets.  Barbara responded that the OCG plans to focus on the capital assets area early in 2001.  Kathy stated that she hoped this topic could be discussed in the January or February advisory committee meeting because of the many changes that agencies must make to their capital asset systems.

                  There was some discussion with reference to use of the State’s procurement card for purchases from the General Services supply warehouse and whether these transactions would be considered internal or external.  Barbara stated that she would need to research this matter and report her findings at a future meeting.

                  Barbara reported that the OCG soon would be updating the links page on the OCG’s GASB 34 website.  She also stated that every effort would be made to update this page monthly.  Some links that will be added in the near future are those that will answer user questions regarding:

1.      Where can I easily order a copy of GASB 34?

2.      How can I order a copy of the Q&A Implementation Guide?

                  Barbara also reported that John Campbell of the University of South Carolina had provided her with a report outlining the approach that the colleges and universities propose regarding implementation of GASB 34/35.  The college and university controllers’ group developed the report.  Barbara complimented the controllers on making a good group effort to address implementation issues early.  The OCG’s Financial Reporting Division will analyze the issues outlined in the report.

                  Kathy mentioned that she would be attending the NASACT Conference in Florida next week.  Mel Commins indicated that he also would be in attendance.  Barbara said that she would join General Lander and Don Lovett for a portion of the conference--a National Association of State Controllers’ roundtable session dealing exclusively with GASB 34 implementation issues. 

                  A member asked whether any states plan to implement GASB 34 early.  Barbara reported that Michigan currently might be the only state planning to implement GASB 34 early.  Wisconsin and Oklahoma had earlier said that they planned to implement the statement early, but it is Barbara’s understanding that they no longer plan to do so.

 

Next Meeting

 

                  Due to the Thanksgiving and Christmas holiday schedule, the group decided to cancel the December meeting.  The next meeting will be held on Tuesday, January 9, 2001.  Members are requested to meet in Conference Room 222 of the Wade Hampton State Office Building, Columbia, South Carolina, at 10:00 AM.

 

Respectfully submitted,

Barbara C. Hevener

 

/bpg

Enclosures

 

 

Click here to view the Agenda provided to Advisory Committee members at the meeting.

 

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