Instruction for filling out the schedules


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Instruction for filling out the schedules

  1. 1. Commonwealth of Massachusetts Electronic Filing Guidance Instructions and Guidance for Institutions of Higher Education for FY2008
  2. 2. Commonwealth of Massachusetts Electronic Filing Guidance For Institutions of Higher Education for FY2008 Introduction To streamline the financial reporting process, the Commonwealth is moving toward electronic reporting and submission of data from Institutions of Higher Education and separately audited entities. This implementation is occurring in FY2008. Other states have done this successfully in the past and we are using some of the same techniques to streamline our reporting process. Items of Interest for FY08 General Questions Questions on this document should be addressed to BJ Trivedi, Director of Financial Reporting at (617)-973-2663. Templates Templates populated with your institution’s FY2007 results have been included for your reference. These Microsoft Excel templates should be returned to our office in Excel pursuant to the various due dates in this document and in the instructions. A Reminder About SAS 112 Statement on Auditing Standards No. 112, Communicating Internal Control Related Matters Identified in an Audit (SAS 112), became effective for FY07. SAS 112 states that the identification by the auditors of a material misstatement is an indicator of a control deficiency that should be regarded as at least a significant deficiency and a strong indicator of a material weakness in internal control. This includes misstatements involving estimation and judgments and prior year ending balance restatements due to errors. It is possible that significant errors resulting in financial statement template adjustments, including prior year ending balance restatements, could result in either material internal control weaknesses or even a qualified opinion on the Commonwealth’s Comprehensive Annual Financial Report (CAFR). Institutions and foundations must ensure controls are in place to avoid material misstatements, restatements (due to errors), and/or misclassifications in the financial statement template. GASB Statements to be Implemented in FY08 and the Future The following GASB statements are effective for FY08: - GASB Statement No. 45, Accounting and Financial Reporting for Employers for Postemployment Benefits Other than Pensions (OPEB). Most likely this statement will not require an institution to implement changes unless the Commonwealth changes general laws that would require the institution to separately manage OPEB. Please see draft GASB 45 footnote as a reference for your financial statement presentation.
  3. 3. - GASB Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues. This statement may effect institutional operations. Proceeds from the sales of receivables may be recorded as either a collateralized borrowing or a sale, depending on certain criteria involving future control of revenues from those receivables. The statement also discusses transfers of assets between entities. - GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations. This statement addresses accounting and financial reporting issues to address current and potential effects of existing pollution issues, excluding pollution prevention and control obligations. Once one of five potential events occurs, governments are required to estimate expected pollution remediation outlays and determine whether those outlays are liabilities or, if appropriate, assets held for sale, at the point of where goods and services are acquired. Future GASB Statements that may require activity in FY08, FY09 and FY10 include: - GASB Statement No. 52, Land and Other Real Estate Held As Investments By Endowments. This statement will directly impact institution foundations and similar entities. These entities may exist to invest resources for generating income. Pension plans and similar entities report land at fair value, rather than historical cost. This statement requires that all endowment type entities report land and other real estate held as investments to be recorded at fair value, rather than at historical cost. Changes in fair value are reported as part of investment income. This statement will be implemented in FY09. However, foundations and similar entities may need to start the valuation process in FY08. - GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets. This statement will directly impact institutions and the Commonwealth. Items that may be considered intangible assets include, but are not limited to, easements, water rights, timber rights, patents, trademarks and internally generated computer software. Statement No. 51 requires that all intangible assets, unless specifically excluded be reported as capital assets. Intangible assets are only reported if they are identifiable. Certain criteria are presented for capitalization milestones within the Statement, especially for software development. This statement will be implemented in FY10, however RETROACTIVE implementation is required for existing intangible assets. Preparation of Attachments Listing of attachments The column below titled “Complete for HEI” documents the financial information that must be reported on the attachments. In this section, the acronyms are defined as follows: • HEI: Higher education institution including any blended component units of the HEI
  4. 4. Attachment Complete for Attachment or Tab Name Due Date Number HEI HE-1 HEI Contact Survey Aug 1 HE-2 HEI Beginning Net Asset Reconciliation Aug 1 HE-3 HEI Federal Schedules September 15 HE-4 HEI Financial Statement Template and October 15 Footnotes HE-4A HEI Cash, Cash Equivalents and Investments October 15 as of June 30 HE-5 HEI GASBS No. 14 Checklist Modified to July 15 Reflect GASBS No. 39 Informational There are numerous comments within the Excel spreadsheets that provide clarification regarding information that should be provided. Many cells have validation features to ensure information is entered correctly. If information is not entered correctly, an error message will display. Some of the validation functions are as follows: only yellow highlighted cells allow for data entry, only enter whole dollar amounts, amounts on the financial statement template (FST) must agree to the applicable footnote tabs. Check figures are in red and provide total amounts and variance amounts that should help determine why an “ERROR” message appears in a cell. Certification The Certification tab requires all preparers and reviewers to type their name on this form. Please note that there should be a segregation of duties; therefore, the preparer and the reviewer should not be the same individual for any tab. By typing a name, the individual is certifying that all tabs of this attachment have been reviewed, the information is both complete and accurate, and the preparer and reviewer was not the same individual for any tab. FY2008 submission of information to the Office of the State Comptroller Except as noted on specific attachments, CTR requires the institution to e-mail the attachments, and / or supplemental information by email to the Financial Reporting Bureau at the Office of the Comptroller. CTR will e-mail a confirmation of receipt for each electronic submission. Institutions should follow-up with CTR if the institution does
  5. 5. not receive a confirmation. Institutions should not submit paper copies of e-mailed attachments. CTR will also notify institutions if submissions do not meet the specified standards. If a submission is deemed unacceptable and rejected by CTR, the institution will be provided a short window of opportunity to resubmit the information in a manner that adequately addresses the deficiencies noted by CTR. For audited financial reports, CTR will still require two bound copies. For auditors’ independence letters, submissions will be required by email on the auditors’ letterhead to KPMG LLP. If you need personal email address’s for the electronic submissions please call Ryan Prentiss (617) 973-2326 or Neil Gouse (617) 973-2418 Submission Dates Please note each instruction worksheet has a different submission date. Please adhere to this guideline. Additional Information Requirements CTR will notify institutions during the CAFR preparation and throughout the year if additional information is needed and provide a due date via e-mail correspondence to the persons who are designated by each institution in the templates.