focus fall 2005 november 17, 2005

FOCUSFall 2005November 17, 2005

Bill ColeDeputy Auditor of Public Accounts

Commonwealth of Virginia

Agenda• GASB 40 – Work to be done• NCAA Agreed-Upon Procedures – How

are “we” doing?• Timely Financial Statements – Is

Improvement Possible?• Update on Deferred Maintenance Project• Update on Auxiliary Enterprise Project• Senate Bill 934 – What is its status?

GASB 40 - Deposit and Investment Risk Disclosures

• Effective 2005 Financial Statements• Amends GASB 3, which focused primarily

on custodial credit risk• Requires more comprehensive risk

disclosures including custodial credit risk, concentration of credit risk, interest rate risk, and foreign currency risk

GASB 40 - Deposit and Investment Risk Disclosures

• Categories 1 and 2 are eliminated• Requires disclosure of authorized

investments and investment policies

NCAA Agreed-UponProcedures

How are WE (collective “we”) doing?

NCAA Agreed-Upon Procedures

• Replaces financial audit guidelines with agreed-upon procedures

• Report purposes:– Ensure CEO is aware of all financial activity (both

internal and external)– Assist institution in exercising control over financial

activity made by or all behalf of IA programs• Institution must submit financial data annually to

the NCAA covering all financial data, including those by affiliated or outside organizations

• Due date – January 15


• Revised financial reporting – Improves revenue and expense definitions – Includes data elements missing in prior

reporting• Development Costs• Academic Advising Costs• Other minor costs??

– Requires CEO approval– Reporting data through online system


• Supporting schedules for material revenues– Ticket sales– Student fees– Game guarantees, away game settlements– Contributions and gifts (including in-kind & on-behalf)– Other third party support (previously unreported)– Institutional support (i.e. transfers)– NCAA/Conference distributions– Broadcast and Internet rights– Advertising, royalties, sponsorships– Camp revenues– Endowment income– Total of 15 revenue categories


• Expenses– Student athletic aid recipients– Game guarantees– Salaries and benefits (supported by W2s)

• Paid by institution• Paid by third parties

– Severance payments– Recruiting and travel– Indirect support– Total of 19 expense categories


• Federal reporting requirement under the EADA has not changed

• Equity in Athletics Disclosure Act (EADA)– http://surveys.ope.ed.gov/athletics– Data must be available by October 15

http://surveys.ope.ed.gov/athletics

NCAA Agreed-Upon Procedures• Debt Repayment Schedules – Include in

Notes to the NCAA Schedule • Timing of audit procedures

– EARLIER, RATHER THAN LATER– Review of schedule – upon its completion

• EADA deadline (October 15)• NCAA deadline (January 15)

– Prepared by Client (PBC) listing – handout• New Auditor’s Report on Agreed-Upon

Procedures - handout


• Note Disclosures (mandated by NCAA)– Contributions that constitute 10% or more of

all contributions received– Schedule of athletic-related fixed assets

• Substantiated by the general ledger• Including description of policies and procedures for

acquiring, approving, depreciating, and disposing of these assets

– Debt Repayment Schedules


• Note Disclosures (General)– Basis of Accounting– Athletic Overhead Fees / Administration Fee /

Administrative Cost Recoveries– Endowments / Quasi-Endowments– Subsequent Events (if any)– Other


• So what is the answer to the question, “How are we (collective ‘we’) doing?”– Preparation of NCAA Schedule of Revenues

and Expenses– Supporting schedules– Support from outside parties (i.e. foundations)– Meeting the deadline

Timely Financial StatementsIs Improvement Possible?

Timely Financial Statements

• BOV questions about audit timing• Market pressures for timely reporting• Institutions material and non-material to

CAFR• Audit work at varying times during the year• Better use of technological capabilities• Use of web-based systems• Cooperation of institutions

Timely Financial Statements

• Improvement Possible? – Qualified “YES”– Systems Implementation Issues– Foundation Reporting – must continue to

emphasize the importance• (Also, NCAA reporting issues)

– Use of estimates, where possible– Commitment of resources to the project– Documentation of financial statement

preparation process

Deferred Maintenance Project• 2004 General Assembly directed APA to

conduct a review to determine amount of deferred maintenance and ongoing major maintenance needs

• To assist in determining amount of deferred maintenance, APA acquired a Facility Inventory and Condition Assessment System (FICAS) for agency and higher education use

Deferred Maintenance Project

• All institutions of higher education were required to participate under a very tight timeframe– Inventory buildings– Perform condition assessment

• Good cooperation from institutions

• We are now testing the information in the system– Are inventories complete?– Are assessments accurate?

Deferred Maintenance Project• Capital Assets Management Team visited

selected institutions• Questions concerning discrepancies were

emailed this week to contacts (with system access)

• Corrective action requested by December 31• Final report will be issued December 15• Contact DeAnn Compton or Sue Owens (Capital

Asset Management Team) for additional information

Auxiliary Enterprises Project

• Draft Report in Review Stage– Types of auxiliaries– Activities reported– Current guidance– Funding, balances, reserves

Tuition as a Percentage of Total Mandatory Cost of AttendanceFor the 2005-06 Academic Year

Tuition and E&G Fees

Tuition as a percentage of Total

Cost

Mandatory Non-E&G Fees

Fees as a Percentage of Total

Cost

Total Mandatory Cost of Attendance

VT $5,297 83% $1,081 17% $6,378

UVA 5,714 80% 1,466 20% 7,180

VCU 4,012 75% 1,373 25% 5,385

GMU 4,356 74% 1,524 26% 5,880

UMW 3,960 70% 1,674 30% 5,634

RU 3,235 63% 1,895 37% 5,130

ODU 3,542 63% 2,072 37% 5,614

VMI** 4,382 63% 2,606 37% 6,988

CWM 4,815 62% 2,963 38% 7,778

CNU 3,041 60% 2,040 40% 5,081

NSU 2,580 53% 2,300 47% 4,880

LU 3,666 52% 3,354 48% 7,020

JMU 2,998 51% 2,888 49% 5,886

VSU 2,317 48% 2,517 52% 4,834

Auxiliary Enterprises Project• DRAFT Recommendations

– Develop a more detailed definition of auxiliary enterprises

– Disaggregation of comprehensive mandatory non-E&G fees

• Athletics• Student Health

– Best practices of A/E management– Develop specific, consistent procedures for

preparing Schedule of A/E operations and reserves

Senate Bill 934Internet Database

• APA shall compile and maintain on its Internet website a searchable database providing certain state expenditure, revenue, and demographic information.

• Updated by October 15 (11/1 for ’05)• All departments, officers, boards,

commissions, and institution shall furnish information to the APA and cooperate to fullest extent


• Database shall contain the following for the 10 most recent fiscal years:– Major categories of spending by secretariat and major

agencies– # of full-time state employees– Revenues– Comparison with other states– Federal revenues and spending– Population– Student enrollment (K through 12)


• Database shall contain the following for the 10 most recent fiscal years:– Enrollment in public higher ed institutions– Enrollment in private higher ed institutions– Annual prison populations– VA AGI and taxable income by age groups– # of citizens receiving food stamps– # of driver licenses issued– # of registered motor vehicles– # of full-time private sector employees


• Database shall contain the following for the 10 most recent fiscal years:– # of households– # of prepaid tuition contracts and estimated liability– Other data the Auditor deems appropriate

• Distribute file to newspapers


• Status – Database was available November 1 through APA webpage– Not fully completed, updated as information is

available– Search engine not included but inevitable

• Disclaimer for information not provided• Future updates - Quarterly• DEMO !!!

QUESTIONS???

focus fall 2005 november 17, 2005

Documents

financial data

financial activity

ncaa deadline

rate risk

comprehensive risk disclosures

concentration of credit

timely financial statements

data elements