COMMUNITY COLLEGE’SBUDGET AND ACCOUNTING MANUAL2012 EDITION

Community College Internal Auditor’s Fall Conference

October 4, 2012

Prepared by Heidi E. White, CPAVAVRINEK, TRINE, DAY & CO., LLP

KEY COMPONENTS TO THE 2012 EDITION

Who is Responsible for Updates and Changes?

Why Did the BAM Change? What Was Changed? What was Added When is it Effective?

RESPONSIBILITY FOR UPDATES & CHANGES

Education Code Section 70901 The Board of Governors of the California

Community Colleges shall provide leadership and direction in the continuing development of the California Community Colleges . . . .

CA Code of Regulations, Title 5 Section 59011

RESPONSIBILITY FOR UPDATES & CHANGES

College Finance and Facilities Planning Division of the State Chancellor’s Office

Association of Chief Business Officials Board Fiscal Standards and Accountability

Committee District Personnel State Chancellor’s Office Personnel

WHY DID THE BAM CHANGE?

THE LAST

UPDATE WAS

2000 !!!!!!!

WHY DID THE BAM CHANGE?A. To Bring Clarity to Accounting

StandardsB. Provide Consistent Direction to District

PersonnelC. Update Prior Direction to Conform with

Current Accounting GuidanceD. To Give the Fiscal Standards

Committee a Project to focus onE. All of the Above

OVERALL REVISION CONCEPTS Provide for a open format for more

frequent change in the future Each Chapter is a separate document

which will allow changes to specific areas rather than wait for another 12 years for an update

Provide reference materials to allow District staff to research issues and questions

WHAT WAS CHANGED? Chapter 1 - Introduction

Specific websites for GASB, OMB and the Chancellor’s Office Guidance was included as a hyperlink to allow access for more review and research by District staff.

Included budgeting and other dates that are important in the financial reporting requirements

Requirements of Accreditation Standard 3 were included

References to the California CCR’s included

WHAT WAS CHANGED? Chapter 2 – Fund/Structure

References have been removed related to the General Fixed Asset and General Long Term Debt Account Groups

Added additional Funds in the Capital Project Fund Type to reflect the General Obligation Bond Fund (Fund 43) and Other Capital Project Funds (Fund 4X)

Provides references to possible Unrelated Business Income within the Enterprise Funds

WHAT WAS CHANGED? Chapter 3 – Revenue and Financing

Sources References to OMB Circular A-21 “cost

Principles for Education Institutions” Website reference for the Catalog of

Federal Domestic Assistance (CFDA) numbers

Provides some guidance on the Redevelopment Funds - - - information is still fluid

New guidance from GASB to recognize Bad Debt as a contra-revenue to student enrollment fees – NOT an operating expense

WHAT WAS CHANGED? Chapter 3 – Revenue and Financing

Sources References the Student Fee Handbook that

is included on the Chancellor’s Office website

Provides guidance for the Student Parking and Transportation Fees to be accounted for within the Restricted General sub-fund.

Provides guidance for the Prop 20 Lottery Funds to be included within the Restricted General sub-fund

WHAT WAS CHANGED? Chapter 4 – Expenditures and Other

Outgo Focus is on Activity Codes as well as Object

Codes Administrative and Support Activities

references language for Faculty reased from instruction

Language for Supplies and Operating expenses was clarified for Software and licensing agreements as necessary

Mirrors reference for bad debt to be included as a Contra Revenue

WHAT WAS CHANGED? Chapter 4 – Expenditures and Other

Outgo Updated Language for Capital Outlay

expenditures to conform to current GASB guidance related to non print media for Libraries and intangible assets such as software and licensing.

Updated threshold for an inventory for equipment purchases.

WHAT WAS CHANGED? Chapter 5 – The Balance Sheet

Provides greater guidance and information in defining Fund Balance Classifications in accordance with GASB Statement 54 “Fund Balance Reporting and Governmental Fund Type Definition”. This pronouncement requires fund balance designations for external reporting.

NonSpendable Restricted CommittedAssigned Unassigned

WHAT WAS CHANGED? Chapter 5 – The Balance Sheet

Provides greater guidance and information in defining Fund Balance Classifications in accordance with GASB Statement 54 “Fund Balance Reporting and Governmental Fund Type Definition”. This pronouncement requires fund balance designations for external reporting.

NonSpendable Restricted CommittedAssigned Unassigned

WHAT HAS BEEN ADDED?

Chapter 6 – Governmental Account And Reporting - - All new information within the Budget and Accounting Manual

WHAT HAS BEEN ADDED? Chapter 6 – Describes the GASB

Statement 35 reporting model. By placing this in the Budget and

Accounting Manual, the emphasis is that the external reporting of the Community College Districts under GASB Statement 35 is the responsibility of the District not the external auditors.

The specific guidance includes discussions related to . . . . .

WHAT HAS BEEN ADDED? Chapter 6 – Describes the GASB

Statement 35 reporting model. Management’s Discussions and Analysis

Introduces the financial statements. Provides an objective and easily readable narrative

of the financial activities, programs and services Statement of Net Assets Statement of Revenues, Expenses and

Changes in Net Assets Statement of Cash Flows

WHAT HAS BEEN ADDED? Chapter 6 – Describes the GASB

Statement 35 reporting model. Required Supplementary Information Reconciliations of Governmental

(modified accrual) Statements to the Entity-Wide (full accrual) Statements

Typical consolidation and Conversion Entries for financial statement reporting

WHAT HAS BEEN ADDED? Chapter 7 – Special Accounting

Issues Guidance related to Cash Accounts Guidance related to Lease Accounting Designed to be expanded when

needed

What other issues might be included here?

WHAT HAS BEEN ADDED? Subject Index Glossery Common Categorical Restricted

Programs for both Federal and State Reference to pertinent Fiscal and

Legal Advisories New reference to current guidance

from the Governmental Accounting Standards Board

WHEN IS THE BAM EFFECTIVE? The Board of Governors approved

the BAM July 9, 2012

Effective date Fiscal year 2011/12

Linkhttp://extranet.cccco.edu/portals/1/CFFP/Fiscal_Services/Standards/BAM/bam2012ed/complete BAM/Budget_and_Accounting_Manual_2012_Edition.pdf

Questions? myarber@cccco.edu

HEIDI WHITE, CPA PARTNERVAVRINEK, TRINE, DAY & CO., LLPHWHITE@VTDCPA.COM(909) 466-4410