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The Texas A&M University SystemAnnual Financial Reporting WebEx Meeting

• Welcome to the meeting

• The presentation will begin at 8:30am

• Sound checks will take place 5 and 10 minutes before the presentation begins

• Audio Tip: Difficulty with audio? Try calling instead of using computer audio

• All attendees are muted

• Use the Chat panel to submit questions during the presentation

APS011 Benefits Proportional by FundTeresa Edwards, CPAControllerTexas A&M System Office

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Introduction• Benefit Appropriations• Prior Year Performance and Point Log Items• Updates to the APS011 White Paper for FY 2020• Details on the Process• USAS Entries• AFR Checklist Items• Deadlines• Internal Audit Findings• Questions

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Do we talk about this topic every year?• YES• WHY?oRules change a little each yearo Interpretation changeso Internal audit is required to audit every 3 yearso SAO audits some of our members periodicallyoDraws considerable attention

• Prepare yourself…need some coffee?

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Benefit Appropriations• In the GAA benefit appropriations are given to us with some flexibility

in the total appropriations, thus APS011 Benefits Proportional by Funding was put into place to help ensure the benefit expenses are being spent in comparison to the revenue

• We are given a budgeted estimate in the beginning from the GAA• Each Benefit process is a little differentoWe can ask for more benefit appropriations for OASI and ORPoGIP is appropriated a sum certain at the overall System leveloTRS we are not given the GR appropriation at all in USAS

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Zero Points on the APS011’s for AY 2019• PVAMU• TAMRF• TAMUC• TAMUCC• TAMUG• TAMUK• AgriLife Research (now the ACO is revisiting a 20 year old

interpretation)

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Why talk about the past?• Discuss prior year activity to help us learn from the past• There are many experts on this topic• Each institution and agency are a little different• Encourage every one for all of the good, hard work• We understand this is a challenging, time consuming, mind numbing,

project….we can see the hard work and improvement each year

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Polling Question #1• How many years do you have completing the APS011 Calculation?a. 0-2 yearsb. 3-7 yearsc. 8-15 yearsd. Over 20 yearse. I have never completed the APS011 calculation

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Common Prior Year Point Log Items• Fund 02xx Statutory tuition revenue does not match the IV-Fund

Operating Statement• Exclude license plate interest income from Fund 02xx Interest Income• Record expense accruals in FAMIS and USAS; this will ensure the

revenue matches expenses in the correct year and corrects the GR Recon website

• Do not use object code 1990-Benefit Expense to modify benefit expenses…it is too summarizedoOnly use this object code for moving between NACUBO functions

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Common Prior Year Points, cont.• Not tying the expenses by bank…very important to ensure we can tie

by the benefit bank which contains the AYoConsistent for the Desk ReviewoConsistent for the Internal Audit Staff

• TPEG exclusion in the revenue section does not match the TPEG workpaperoMust match

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Updates to the System Office White Paper• New document posted on our website at

https://www.tamus.edu/business/budgets-and-accounting/accounting/financial-reporting-resources/

• Legal Cites updated to match the General Appropriations Act (GAA)• Used a yellow/orange color for the edits• Biggest Process Change-Payroll CorrectionsoACO ando Internal Audit team

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Payroll Corrections, pg. 6-7• Each member’s management has a different view on payroll corrections. If payroll corrections are allowed on prior AY

state funds, then this calculation will change over time. Each member must determine if the payroll correction is deemed material. If deemed material the APS011 calculation will need to be recalculated and submitted to the System Office and to the Comptroller’s Office. Immaterial adjustments are allowed on this calculation and historically the ACO does not require immaterial adjustments to force the recalculation.

• The ACO’s have changed their interpretation for payroll corrections. The ACO’s are requiring all payroll corrections be recorded in the APS011 calculation. Each member will need to review the calculation periodically to ensure it is still accurate. The System Office is recommending the calculation be reviewed prior to September of the following year. September is the last month the prior AY can be impacted by payroll cost transfers. See APS011 Instructions in Section II. Higher education institutions are advised to periodically review benefit payments for proportionality and make correctionsas needed throughout the year. When GR overpays benefits for salaries paid from OE&G funds, a check for the overpayment must be drawn from the institution’s local bank account and deposited as a refund of expenditure to the institution’s appropriate benefit account. Use T-code 180, with the applicable COBJ (e.g., 7043 for Social Security state employer match). If GR underpaid benefit expenditures, a reimbursement should be processed to produce a warrant that can then be deposited to the institution’s local bank account. Use T-codes 246 and 903 or T-codes 247 and 904.

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Overview of the Process• Review the System Office White Paper• Review last year’s workpapers• Review last year’s AFR point log for potential issues• Begin pulling the reports together for the revenue and expenses• Post Accrual entries to ensure FAMIS matches USAS• Complete APS011 Workpaper..only includes AY 2020• Post correcting entries between the funds in FAMIS and USAS• Return benefit appropriations to the original source, back dating to 8/31 is helpful to the

Comptroller’s Office• Complete the GR Recon….benefit numbers will change based upon benefit expenses

changing…for all AYs

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APS011 Benefits Proportional by Method of Finance• Guidance provided by the Comptroller’s OfficeoLast update was November 1, 2019

• There are no known changes impacting higher education agencies• Second year for Updated formsohttps://fmx.cpa.texas.gov/fm/pubs/aps/11/aps011_forms.phpoThere are more rows to add funding sourcesoACO is interpreting the form very literally

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APS011 Revenue• General Revenue Appropriations match the GAAo Exclusion for Tuition Revenue Bond matches GAA (do not adjust for lapsed TRB)o Exclusion for Other Debt Appropriations

• GR-Dedicated and Appropriated Receipts revenue matches workpapers which reconcile to revenue reported on the operating statement

• For agencies, Federal Revenue and IDC revenue are 100% excludedo Update with updated legal cite

• Legal Cites for all exclusions are provided in the footnote, verify amounts reported in the footnote match the workpaper

• Compare proportionality percentages to PY for reasonableness

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ACO Change in Reviews• Interagency AgreementsoMore focus on these itemso If placed in GR, the Comptroller’s Office is requiring the agreement to cover

expenses, unless there is a legal cite stating the benefit expenses are not allowed or sometimes the text will state, funds must be spent on the program

• Other Fundso If the revenue is excluded in the revenue section, exclude the benefit expenses in

the expense section…must provide a legal cite to excludeo If the revenue is included, the ACO wants the benefit expenses to be isolated and

reported in the benefit expense section

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Fund 02xx Tuition Revenue• Ensure Tuition Revenue entries are complete• Calculate Revenues per Schedule IV-Fund (E&G column)

+ Tuition

+ Fees+ Other E&G Sales available to pay salaries+ Interest earned State Treasury(exclude License Plate interest-Fund 0802)______= Total Fund 02xx Revenue per APS011

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Fund 02xx TuitionBad Debt & Exclusions• Revenue total is reported net of Bad Debt Expenseo3rd party receivables include both Statutory and Designated TuitionoBad Debt Expense should be split between E&G and Designated

• Tuition & Fee ExemptionsoPer TANDF-TD schedule, Total Exemptions per E&G column

• List Exclusions for Exemptions and TPEG in Column 3, provide Legal Cites in footnote

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Texas Public Education Grant (TPEG) Workpaper• Ensure Tuition Set-Asides Resident plus Non-Resident equal the

exclusion on APS011 Benefits Proportional calculationoUnder Section II Total Transfers column, including transfers to Emergency Loans

• Match the III-1 reserve with this workpaper’s ending fund balance calculation

• FY 2020 blank workpaper• TAMU example from 2019

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Polling Question #2• What is worse?a. You run into a bear while out for a walk at lunch orb. A swarm of bees who attack right after you have eaten a peanut

butter and jelly sandwichc. Completing the APS011 Calculation

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TAMU AY 2019 APS011• Place the TPEG Exclusion in the Legal Cites and Documentation section

Benefit Expenses per FAMIS• Use Business Objects query to verify expensesoTAMUS Shared/AFR Reports/APS011 Benefits Proportional

• System Office Accounting team will use this query during review, Internal Audit also used this query for their audit

• Important expenses are captured by bank• Query may be submitted as the reconciliation of FAMIS to USAS• Expenses per FAMIS should match APS011 workpaper• Verify Retiree GIP reported in footnote (exclude Local)

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Benefit Expenses by Bank Is Important• Do not post correcting entries or APS011 adjustments with a screen 14

journal entry or screen 16 bank transfer• Must use FAMIS screens 12/13 with the proper bank and benefit subcode• Do not use subcode 1990, Benefits Paid by State, use the specific benefit

subcodes (some have still been using 1990 for TRS or UCI entries)• For each benefit expense, we need to tie expenses by subcode and bank to

help with the USAS reconciliation process• This will help the AFR desk review and will help the internal audit review

and review by the SAO

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Benefit Expenses in USAS• Verify benefits proportional expenses to check report from ACO, match by

benefit type (OASI, GIP, TRS, ORP)o Need to run several times, as entries are posted in USAS

• GR portion of TRS should match the report from the System Office• Expenses should match FY20 column, very little activity in FY21 column• Accrual entries will be needed to accrue for AY20 expenses paid in FY21• May have timing differences for PCT’s posted to FAMIS that have not posted to

USAS yet…only send USAS PCT file once a month• Could see negative amounts in FY21 column if accrual is posted and cash

impact has not occurred…this is fine

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USAS Entries• Each month FAMIS benefit files are created and send 246/904-Voucher

Payable Non-Payroll Reimbursement oWhen these entries impact cash, they then record t-code 386 Payroll

Reimbursement Cash Expenditures

• To establish the budget in the benefit appropriations, manual entries needed oCollected funds use t-codes 012/018 from agency 902-Comptroller’s Office with

Fund 0001-GR or Fund 0999-Misc.-Utility Fund or agency 323-TRS Fund 0999oGIP GR t-codes 012/018-Appropriation Transfers from agency 710-TAMUS

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USAS Correcting Entries• To move AY 2020 expenses to FY 2020, t-code 420 or 467/468, date 8/31o 420 t-code reverses with t-code 421…does NOT impact Cash in State Treasury, oro 467/468 reverse with 471/472 and impacts Cash in State Treasury

• To correct benefits between GR and other funds t-codes 467/468o Reverses with t-codes 471/472…this records an accrual and impacts

Cash in State Treasury in the current fiscal year

• To correct t-code 180-Refund of Expense

We do not lapse benefit appropriations, we send the budget back to the original agency with budget transfer t-codes…do not use t-code 036 or 039 Lapses

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APS011 Deadline/Submission• Submit APS011 Workpapers with your AFR package to the System

Office for reviewo Include workpapers/supporting documents for revenue calculation, exclusionsoLatest APS011 Check Report from the ACOoReconciliation of FAMIS expenses to USAS expensesMay use the business objects query for benefits by bank

o If there is a known variance…please let us know in the Notes to the Reviewer

• Each member submits their final APS011 form to the Comptroller’s Office, LBB and SAO on or before November 19th

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Polling Question #3• How would you explain this process to a 6 year old child?

a. It is like driving down a curvy road that never endsb. It is like a cool sip of lemonade on a hot summers dayc. It is like working 15 hours on a class assignment then when completed, the

teacher changes all of the rules for the assignmentd. It is like listening to your favorite song and dancing

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Internal Audit-AY 2017-2019• Excellent job, clean audit, minimal findings• 3-year audit requirement is listed in the GAA for 2020-2021 o System Internal Audit completed 2017 audit in their last reportoThey completed 2018 and 2019

• System Internal Audit is following the methodology prescribed by SAO• No materiality threshold…all pennies will be in the report• We will have some members who will need to work through the

recoupment process

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Internal Audit• NEW: Due to the questions regarding payroll corrections, Internal

Audit team looking at using a point in time approachoRecommended they use 11/19/20oThis would be a shift in the way they have been analyzing our data

• Internal Audit would prefer issuing a report AFTER the ACO has completed their review…not possible for AY 2019

• Results from the AY 2019 Internal Audit, $8,450 could have received additional GR Funding

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Questions• Keep up the good work• Let us know if we can help• Any additional insight your team would like to share?

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Fiduciary Financial Statements

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Tracy Crowley, CPAAssoc. Director, Fin. ReportingTexas A&M System Office

GASB Statement 84, Fiduciary Funds• Scopeo Establishes criteria for identifying fiduciary activities and guidance on reporting those

activities

• Effective Dateo Original effective date FY 2020o GASB issued Statement 95 in May, postponing the effective dates of certain authoritative

guidance, including Statement 84o TAMUS and State Comptroller continuing with implementation effective FY 2020

• Analysis to identify fiduciary activities, the criteria focuses on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists

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Polling Question #4• What does GASB stand for?a. Governmental Accounting Standards Boardb. Going After School Boardc. Government Accounting System Binder

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Identifying Fiduciary Activities• Type 1 - Fiduciary Component Unitso Pension and OPEB plans in qualifying trusts (TAMUS plans not held in trust)o Component Units that aren’t a pension or OPEB arrangement

o What about defined contribution plans? GASB 84, paragraph 7 - a primary government is considered to have a financial burden if it is

legally obligated or has otherwise assumed the obligation to make contributions to the pension plan……..does this include our ORP plan?

o GASB Statement 97 issued in June, clarified Statement 84 the financial burden criterion in paragraph 7 of Statement No. 84, Fiduciary Activities, is applicable

only to defined benefit pension plans and defined benefit OPEB plans that are administered through trusts

o Conclusion – no fiduciary component units to report

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Identifying Fiduciary Activities• Type 2 - Pension and OPEB arrangements that are not component unitso TAMUS plans are not in qualifying trusts, not fiduciary activities

• Type 3 - Other Fiduciary Activitieso Analyze balances in Agency Funds

• GASB 84 Fiduciary Funds1. Pension Trust Funds – none for TAMUS2. Investment Trust Funds – external investments pools, none for TAMUS3. Private-Purpose Trust Funds – none for TAMUS4. Custodial Funds – funds currently held in Agency funds that meet Fiduciary Criteria

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Criteria for Identifying Other Fiduciary Activities

Must meet ALL of the following criteria

PLUS any of the following…..

Assets controlled by the government(custody of the assets)

Assets held in a qualifying trust in which the government is not beneficiary, legally protected, and dedicated to providing benefits to recipients

Assets not derived from own source revenues

Assets held for the benefit of individuals without the government having administrative or direct financial involvement

Assets not derived from government-mandated or voluntary non-exchange transactions

Assets held for the benefit of outside organizations not part of the government’s reporting entity

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Business-Type Activities 3 Month Exception• May report assets with a corresponding liability in the statement of net

position as opposed to a Fiduciary Custodial Fund IF those assets are expected to be held for three months or lessoFederal Direct LoansoMost members disburse and get reimbursed

• If this exception is used, additions and deduction should be shown as cash inflows and outflows in the operating activities section of the Statement of Cash FlowsoThis does impact A&M institutions for Federal Direct Loans

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Polling Question #5• What’s the strangest thing you have completed while attending an

online meeting?a. Brushed your teethb. Worn pajamasc. Ordered some new masks from Old Navy (pretty nice)d. Eaten the messiest food ever…apple, orange, nachos

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• Analyze accounts to determine which meet the fiduciary criteria

• We have custody of the assets so the control criteria is met

• NonCurrent investments are mostly o Funds held for other Universities

(System Office only)o Endowments held for

Foundations/Alumni Associations (TAMU-C, WTAMU, TAMU-SA)

• Good news….very little activity for agencies

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Review FY19 Agency FundsMember Name Current NonCurrent Total

System Office 10,496,956.98 299,735,593.60 310,232,550.58 TAMU 18,623,364.35 18,623,364.35 TARLETON 2,288,267.83 2,288,267.83 PVAMU 13,111,005.36 13,111,005.36 AGEXT 20,461.82 20,461.82 TAMUG 1,332,785.29 1,332,785.29 TAMUCC 3,964,592.96 3,964,592.96 TAMIU 146,789.37 75,764.52 222,553.89 TAMUK 149,701.01 149,701.01 WTAMU 29,678,655.10 77,632,623.98 107,311,279.08 TAMUC 1,451,505.10 33,867,728.78 35,319,233.88 TAMUT 63,249.40 63,249.40 TAMHSC 119,626.16 119,626.16 TAMUCT 179,812.16 179,812.16 TAMUSA 3,617,268.89 2,360,542.98 5,977,811.87 TEES - 591,064.25 591,064.25

Total 85,244,041.78$ 414,263,318.11$ 499,507,359.89$

FY19 Agency Funds Held for Others Liability

Separating Fiduciary Activity • Analysis came down to just a few categorieso Student Organizationso Foundations/Alumni Associationso Public Private Partnerships (P3’s)o Other (consortiums)o Funds Invested for Outside Universities (System only)

• No separate account range established for Fiduciary• New AFR fund groups 94-98 added to build reports by column• Agency and Fiduciary accounts are in the same account range (090000-

999999)

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Multi-PurposeFund Balance-GL 3940• Next challenge….Fund Balance/Funds Held for Others LiabilityoFAMIS account numbers did not change, both Fiduciary and Agency are using the

same fund balance code (3940)oFor Fiduciary, fund balance must be reported as Net Position, true fund balanceoFor Agency, fund balance 3940 is reported as Funds Held for Others Liability

• Based on the AFR fund group, 3940 will be reported differently on the financial statements oThis solution allows the account numbers to remain the sameoDownside is the AFR Fund Group is the only field that distinguishes Fiduciary

from Agency

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2020 Two Separate Sets ofFinancial Statements

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Financial Statement Proprietary (Agency Fund Column) Fiduciary–Custodial FundsPresentation Agency funds remain on Proprietary,

AFR fund group 90New Fiduciary financial statementsAFR fund groups 94-98

Balance Sheet Fund balance 3940, Other Current Liability(removed from Funds Held for Others liability)

NEW Statement of Fiduciary Net Position,Fund balance 3940,Beginning Net Position(Restatement required for FY20)

Operating Statement Not applicable, zero net position(Assets offset by Other Current Liability)

NEW Statement of Changes in Fiduciary Net Position, categories slightly different than Proprietary

Cash Flow Statement NonCapital Financing section, or Operations section if funds remain in Agency due to 3-month exception

Not applicable, not required for Fiduciary, exclude Fiduciary from cash flow template

Fiduciary FY 2019Ending Balances Identified

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• We are restating the beginning balances as of September 1

• We are restating Cash and Net Position

• Significant Restatement reported on the Fiduciary Statements in 2020

Fiduciary Restatement by Member

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Post manual entry to reclassify from beg bal to restatement

Fiduciary Restatement Entry• AFR module Manual entry to reclassify Fiduciary Beginning Balance to

Restatement• Some members have already posted these entries• Exceptions where journal entry is required to record GL-4620

Restatement oFiduciary balance was not part of the Agency fund balance-GL 3940 as of

08/31/19, possibly reclassified to GL-2712 NonCurrent Assets Held for Otherso If the Fiduciary account fund balance was part of an account that includes both

Agency and Fiduciary, such as a year-end account for unrealized gains

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Example: New Manual EntrySchedule VII-5-A

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Reduce Beginning Balance (Column 7) and Increase Restatement (Column 11)

Example

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1. Select the row on screen 179 by placing an ‘x’ next in the Function (Fn) column to advance to screen 180

2. In the Amount field, enter a negative amount for Col 7 and a positive amount for Col 11

3. After entry, run schedule VII-5-A again to verify beginning balance is zero

Review Manual Entries on Screen 193

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FY 2020 Changes Fiduciary Statement of Net Position• Researched with the Comptroller’s Office• Current and NonCurrent designations not applicable for Fiduciary • Restricted and UnRestricted Categories do apply to Fiduciary o GASB Statement No. 34, paragraph 298, states fiduciary activities are excluded from

government-wide measures of operational accountability and are not available to support a government’s programs or other services. This definition should not be interpreted to mean that fiduciary assets are restricted assets.

o GASB Statement No. 34, paragraph 34, states restricted assets are defined as having their use externally imposed by an external party or by law. Fiduciary funds, although not available for government use, may have restrictions imposed on assets thus requiring a restricted assets designation on their balance sheet.

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Fiduciary Financial StatementsStatement of Net Position• Net PositionoRestricted for Individuals, Organizations, and Other Government

• Fiduciary Due To Other Funds = Fiduciary Due From Other Funds• Fiduciary Due To Other Members = Fiduciary Due From Other

Members• Rows added for capital assets, don’t anticipate any activity• System Office is reviewing PY column and calculating PY amountsoMember level?oConsolidated level?

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Fiduciary Statement of Net PositionJune 2020 - Assets

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Fiduciary Statement of Net PositionJune 2020 – Liabilities and Net Position

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Assets = Liabilities + Net Position

Polling Question #6• What is your comfort level with the fiduciary statements?a. I have run a few reports and the values are making senseb. I have NOT run any reports yet…hoping this comes togetherc. Our member does not have any fiduciary activity to reportd. I am not sure

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Fiduciary Financial StatementsStatement of Changes in Net Position• Separate section for Contributions • More focus on Investment Income to show the custodial

relationship• Subtotal for Investment Income net of Investment Feeso Expect to see interest incomeo Review how income and fees are allocated

• Additions & Deductions are more summarized, more items included in ‘Other’

• Review Transferso Allowed Between Agency and Agency, or between Fiduciary and Fiduciaryo Not allowed between Agency and Fiduciary, or any other fund groupso Transfers from Other Funds and Transfers to Other Funds must match

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Fiduciary Intra-System Transfers• Transfers From Other Members must match Transfers To Other

Members within the Fiduciary Statement of ChangesoLimited activity Example - System Office transferred Fiduciary funds to TAMU-CT for funds held on behalf of

their Foundation

• Transfers from System Endowment Fund Appreciation Reserve, quarterly and year-end transfersoReport as Realized Gains instead of Transfers from System OfficeoMay see a variance during the year for quarterly transfers (automated entries

record as transfers)oAdjustment entries needed to reclassify as realized gains

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Fiduciary Statement of Changes - Additions

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Fiduciary Statement of Changes - Deductions

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Fiduciary Statement of Changes in Net Position

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• Reclassify Beginning Balance to Restatement row

Questions• Are we ready to issue NEW fiduciary financial statements?• Is there anything else going on this year….yes, we totally understand

our worlds have changed• We are here to help• We have tried to help build a path…we really need each fiscal office to

help us ensure we have not missed anything• We got this!!

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15 Minute Break

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Cash Allocation ProcessTracy

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Review Cash Allocation Process• Cash & Cash Equivalent Categories• Changes to Statement of Net Position• Cash Concentration Pool Balance• Reconciliation of Assets Held by System Office• Allocate Assets Held by System Office – Short Term and Long

Term

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Polling Question #7• How many years of experience do you have allocating cash for your

member for the AFR?a. 0-2 yearsb. 3-6 yearsc. 7-15 yearsd. Over 16 yearse. This task is not on my list for the AFR

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Types of Cash & Cash Equivalent Accounts

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• Petty Cash, Reimbursements Due From State Treasury• AFR Fund Group Defined on GL AccountGL Accounts

• Reported by State Fund• Match Cash In State Treasury Report sent by System Office • AFR Fund Group Defined on FAMIS Bank Screen 28

State Banks

• “Cash Balance to Reclassify” includes CCP balance plus ZBA banks, eliminate this balance by allocating cash and investments

• Some members also have separate Federal BanksLocal Banks

Cash & Cash Equivalent Year-End Adj.Cash & Cash Equivalents How tracked in FAMIS? Year-End Adjustment

Cash on Hand (Petty Cash) GL Account None

Cash in State Treasury Separate banks for each State Fund, specific AFR Fund Group assigned(E&G or Designated)

• Adjust balance to match USAS• Column based on AFR fund group• Reclassify GR banks to Leg Appn

Reimbursement Due from State Treasury

GL Account None

Cash Equivalents Banks –Pooled investment accounts(System Office only)

Allocate on Combined Statement(System Office only)

Cash in Bank Banks - Wells Fargo banks that sweep to CCP and other operational banks or Federal banks that do not sweep to CCP

Reclassify CCP banks to Assets held by System

Assets Held by System Office Cash Concentration Pool Bank ORInvestments Held by System – GL-1206

Allocate by Fund Group, Current/NonCurrent and Restr/UnRestr

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SampleSchedule Three

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• Good news…some items require little or no year-end adjustments

• Assets Held by System requires allocations across Fund Groups, and between rows:

• Current/NonCurrent (breakdown provided by System Office)

• Restricted/UnRestricted (each member must decide)

Change to Proprietary Statement of Net Position-Cash & Cash Equivalent Rows

• In previous years, the Cash & Cash Equivalent rows were populated from the cash schedule (Three-A)

• For FY20, links to Schedule Three-A were removed

• Replaced with GL account controls for Cash & CE

• No change to Schedule Three-A, still populated by bank

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Comparison -Cash & Cash Equivalent Rows After Change

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Changes Description

III-FundStatement of Net Position Three-A Schedule of

Cash & Cash Equivalents

GL Account ControlUnRestricted Restricted

GL vs. Bank Claim on Cash 1100 1101 Cash by Bank

NoChange

Assets Held by System-Current(year-end allocations)

1110 1111 1110, 1111

NoChange

Reimbursement Due from State Treasury 1150 -- 1150

NoChange

Cash on Hand (Petty Cash) 1120,1125,1130 1121, 1126, 1129, 1131

Same as III-Fund

Before and After ComparisonCash & CE (Before Year-End Allocations)

• Beforeo Balance Sheet and cash

schedule match, neither are correct by column

• Aftero Balance Sheet correct by

column– both Proprietary and Fiduciary

o Allocations needed to spread the $50,000 bank cash between Proprietary and Fiduciary

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E&G Designated Restricted Agency TotalIII-Fund 50,000 50,000 Three-A 50,000 50,000

Before (FY 19)

Proprietary E&G Designated Restricted Agency TotalIII-Fund 5,000 20,000 12,000 3,000 40,000 Three-A 50,000 50,000

FiduciaryStudent

OrgFoundation/

Alumni P3's Other TotalVI-Fund 2,000 4,000 3,000 1,000 10,000 Three-F - - - - -

After (FY20)

Link

New Schedule Three-C - Combined• Schedule Three is no longer linked to Statement of Net Position• Schedule Three-C was added to verify Cash &Cash Equivalent line items

balance between cash schedules and Statement of Net Position

• After all year-end entries, variance column must be zero

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Polling Question #8• A unicorn is the national animal of what country?

a) Franceb) Brazilc) Scotlandd) None, that’s just silly

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Impact to Year-End Allocation Entries• Fiduciary Cash Schedule Three-F will be blank during the year until the

Fiduciary portion of CCP is allocatedo Year-End adjustment accounts need to be created

for Fiduciary

• For Restricted Cash in Bank, a new entry is needed to reclassify Restricted Cash (TAMU, TAMUG, HSC, TAMUCC, TEES, System Office)o Restricted Cash outside of pooled investments, such as Federal bankso Identified on cash Schedule Three by bank type, BC30 or BC31o Reclassify from GL 1100 Cash in Bank to GL 1101, Restricted Cash Screen 13, Debit GL-1101, offset is Restricted Cash Reclassification Bank (BC99)

o Add New local bank with Bank Type BC99 (Restricted Cash Reclassification)

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Cash Concentration Pool (CCP) Balances FAMIS Bank or GL Account by Member*

Bank Cash GL Account – Investment (1206)System Office TAMUAgriLife Research TAMU at GalvestonAgriLife Extension HSCTFS Tarleton State UniversityTTI Prairie View A&MTAMU - Corpus Christi TAMU - Central TexasTAMIU Texas Division of Emergency MgmtTAMU - KingsvilleTVMDLTAMU – CommerceTAMU – TexarkanaTAMU - San AntonioShared Services CenterTEES

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*Non-FAMIS members TEEX and WTAMU excluded from table

Why are there 2 options?• Decision to use a bank or GL was made

many years ago when the CCP was established

• CCP represents both cash and investments• Some members chose to use a bank to

report CCP balance as cash during the year• Others chose to use a GL to report as

Investments in the fund group where the majority of the balance is held, usually E&G or Designated

Assets Held for Investment by System Workpaper (“Asset Recon”)• Wanda Roof from the System Office sends out mid-September o Year-End Pooled Cash/Investments and System Endowment Fund balanceso Includes information needed for year-end cash and investment entries

• Record investment income/fees in Month 13o August CCP monthly investments income and manager feeso 4th quarter SEF income distribution (automated FAMIS entries)

• Record AFR Reversing Entrieso Fair value adjustmentso SEF appreciation reserve allocation (workpaper detailed by endowment)o Allocate CCP balances across fund groups, as well as categorize Current vs. NonCurrent

and Restricted vs. Unrestricted

• See AFR Instructions Chapter 4 for detailed instructions44

Cash/Investments Held by SystemYear-End Entries

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1. Complete all Local Bank Reconciliations2. List outstanding items for ZBA accounts (A/P, Payroll, Depository) as outstanding

items on the Assets Held by System recon to adjust to book balance3. Reconcile Schedule Three-A “Cash Balance to Reclassify”, plus “Assets Held by

System” rows equal Book Value per Asset Recon4. Analyze GL cash by Fund Group to determine how to allocate - both Proprietary

and Fiduciary 5. Record CCP Fair Value Adjustment6. Allocate CCP Balance by Fund Group

Where is the balance now and where does it need to go? Allocate from “Cash Balance to Reclassify” to Assets Held by System rows Use account controls to distinguish Current vs. NonCurrent and Restricted vs. UnRestricted

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Example - Current CCP (Cash & Cash Equivalents)

Enter ReconcilingItems

Record Income in Month 13

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Example - Non-Current Investments• Year-End Unrealized Gain (Loss) by Fund Group – CCP and SEF• Year-End Transfer for SEF Appreciation Reserve (workpaper provided by endowment)

Record Income in Month 13

Allocate CCP book value and unrealized gain

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Final Verification - Compare to AFR Reports• “Assets Held by System” rows must match workpaper

Reconciliation of Assets Held by SystemAFR Check Figure Tab• Calculate check figures to balances investment held by System activity • Three sections

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Section Instructions1 Net Increase/Decrease in Fair Value Exclude Agency portion

New: Exclude Fiduciary portionVerify to Proprietary Statement of Changes

2 Realized Gain/Loss Sale of Investments Same as Section 1

3 Statement of Cash Flows – Net Purch/Salesof Investments Held by System

Calculates change in NonCurrent Assets Held by System, exclude any purchases/sales for investments not held by System

Cash & Investment Allocation Tips• Wait until all other entries are completed • Use a spreadsheet to identify GL cash balances by Fund Group and

plan all entries before postingo Start with Total 1100 Cash by fund group, subtract State Funds, Legislative

Appropriation - any cash not held by the System oNet Amount should equal Asset Recon CCP totaloBalance to Asset Recon before posting allocations

• Correct negative Assets or negative Net Position by fund group before posting allocation entries by recording a Due to/from or Transfers between fund groups

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Example - CCP Allocation WorkpaperStep 1

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Calculate CCP Book Value by Fund Group, use as a basis for cash allocation entries

Think about Fiduciary allocation, the non-current portion is invested in the System Endowment Fund, the Fiduciary CCP allocation should all be current cash & cash equivalents, as shown in the next steps……..

Example – Steps 2-4

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Example – Steps 5-6

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• Verify workpaper matches Reconciliation of Assets Held by System• Take a minute to Celebrate! • Then get ready to post entries……

Fiduciary CCP AllocationIs all Current

Cash AllocationLast Step, Post Entries

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Polling Question #9• Why did you attend this workshop today?a. I want to learn new thingsb. Helps kick off the AFR seasonc. My boss made me

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Questions• A few modifications needed by the members to their cash allocation

spreadsheet• Need to setup Fiduciary AFR adjusting accounts• Need a little more time to think through the changes this year; we tried

to think through the changes…we are glad to work with each member, if needed

• Let us know how we can help

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Cash Flow StatementTracy

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Overview• Discuss processes for preparing Statement of Cash Flows• Changes for FY 2020• Using the Cash Flow template• Tips for analyzing the activity• Manual Entries for Exhibit V• AFR Desk Review

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Polling Question #10• How many years of experience do you have completing the Texas A&M

System Cash Flow Workpaper? a. 0-3 yearsb. 4-8 yearsc. 9-15 yearsd. Over 16 yearse. This item is not required in my current position

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Process• All other schedules and exhibits will need to be finalized• Need FTP downloads of the following:FBMR204T (ordered using prod card for 204T)IV-FundIV-3IV-3-A

• Import files into Cash Flow Template• Work any errors• Verify check figures

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Process, cont.• Evaluate activity by fund group, one idea is to start on the last tab

(Agency Funds, if applicable) because:oFewer transactions in the fund group oE&G and Designated are more involved

• Update the aqua blue sections, if need to move activity from one section to another

• After each fund group is completed, recheck your Summary tab – make sure check numbers are still zero

• Post manual entries in FAMIS AFR module

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Check Figures• Verify Summary by Fund tab:oCheck figures are zero after the FTP files are loadedoCash & Cash Equivalents-End of Year numbers tie by column to the III-Fund (add

together the Current Assets and Restricted lines)

• STOP NOW if the spreadsheet isn’t zero or the III-Fund numbers don’t tie…find out why/fix it

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Cash Flow Template –System Office Updates• Updated by the System Office and sent to each member oThe System Office reviews the Comptroller’s Office Reporting Requirements to

determine if new rows have been addedoThe instructions are updated for any prior year discrepancies

• The System Office uses a macro to pull in PY balances from PY cash flow templateoBalances are imported from the last year’s CY 204 tab, which has ending

balances by account control ( Receivables, Payables, etc.)

• The System Office also reviews for new account controls added during the year and places these in the template for the new year

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Cash Flow Statement Tools

• Cash Flow Template (from System Office)• Use macro to import FBMR204, IV-Fund, IV-3 and IV-3-A

reports• May need to adjust FBMR204 tab for any last minute

changes after the report is downloaded• FAMIS Screen 80 helpful to analyze balances• Business objects queries

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Cash Flow TemplateImport Files

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• On Instructions tab, click Import Worksheets

• Browse to find each of the files to import

• If changes are made, download files again or make adjustments in the cash flow template

• If adjustments are needed, it is recommended the change be made on these tabs:

• For Balance Sheet items, change the amount on the CY 204 tab

• For Operating Statement, update the amount on the IV-Fund or IV-3/IV-3-A for operating expenses

NewExclude Fiduciary Balances• Columns added to the CY 204 tab• Manual adjustments needed to EXCLUDE Fiduciary activity• Use Business Objects query to identify Fiduciary amounts to exclude by account control• Enter Fiduciary amounts to exclude…the sign is important

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Business Objects Query Identify Fiduciary Balances

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TAMUS Shared Folder, Fiduciary and Agency Cash Flow - Current Balance by Acct Control

New Queries – Cash Flow StatementAgency Funds• In Business Objects TAMUS Shared/AFR reports folder, there is a new folder

titled Fiduciary and Agency – Cash Flow1. Agency Fund Activity – review cash inflows and outflows2. Beg Bal by Account Control – use to determine Cash restatement (FY 20 only)3. Current Balance by Acct Control – identify Fiduciary balances to exclude

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New QueryAgency Fund Activity

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• Review inflows and outflows, should the activity be reported in Operating?

• Net Revenues and Expenses should equal the change in 3940 fund balance

• Restatement to cash and fund balance required for Agency funds……requires analysis

New QueryBeginning Balance by Acct Control

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• Cash restatement needed for beginning Fiduciary balance moved to Fiduciary financial statements• Sample query for System Office, restatement equals beginning Fund Balance for Fiduciary

Agency Cash RestatementSystem Office Example

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• Enter Restatement to Beginning Cash & Cash Equivalents• Formula will adjust 3940 balance by the same amount• After Restatement is entered, change in 3940 should match CY

Revenues/Expenses for Agency funds

Cash Restatement – Agency Funds• FY 20 transition year • Analyze the activity for your member, scenarios may vary• Agencies with no, or very little, Agency activity are not impacted• Use the new queries to help• Reach out to System Office

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Polling Question #11• What is your favorite month of the year?

a) January - Cheers to new beginningsb) March – because my favorite color is greenc) June – Summer Fun!d) September – working on financial statements can’t be beat!

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Template Adjustments• Legend at the top of each spreadsheet – helps to know what to expectoLight blue cells will auto-populate to another cell…follow this amount and

ensure it lands where expectedoDark blue cells (column G) are additional adjustments..within a fund group,

these cells should total zero…both sides need to be entered or you’ll be out of balance

• Review PY template to see what adjustments are made• Typically adjustments are made in both CY and PY column

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Analyze Balance Sheet Changes• Review amounts in Orange cells, and when needed reclassify them

using the light blue, or dark blue cells, examples:oPrepaid Expenses: 1500 comes in as Payments to Suppliers, may be from

Scholarships, Payments to Other OperatingoAccounts Receivable: 1300/1312 /1395 comes in as Proceeds Received from

Customers, may be other types of A/R here. oDue from other Members: 1801-1827 comes in as Proceeds Received from

Customers, may be Grants & Contracts, Shared Cash, Debt Proceeds (PUF), etc.oAccounts Payable / Due To’s

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Verify by Fund Group• After each fund group is analyzed, verify the check figures on the

Summary tab:oCash & Cash Equivalents-End of Year cell ties to the III-FundoOperating Classification Differences row should be zero – rare to report a

number hereoTransfers tie to the IntraSystem Transfers (see Cash Flow tab of IntraSystem

Transfer schedule)oProceeds balances are positive and Payments balances are negative

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Non-Cash ActivityDirect Borrowings• Non-Cash section, Borrowing Under Capital Lease Purchase• Amount must match Total Additions reported in Note 5, Long Term

Liabilities for:oNotes from Direct Borrowings – Capital LeasesoCapital Lease Obligations

• Adjustment was made at the consolidated level for FY19• This year members will need to fill in this row on the Cash Flow

Statement and verify to the amount reported in Note 5

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Items Need Special Attention• Analyze Receivables and Payables where there are no

related revenue/expenses, by fund groupoExample - Unearned Revenue in Restricted, reclassify

from Tuition & Fees to Sponsored Programs• Adjust for Prepaid Expenses related to Scholarships • Payroll/Benefit accruals should be spread across fund

groups• Review accrual amounts that have not changedoExample - Deferred Comp liability

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Almost Done• Access screen 180 in the AFR module to record manual entries • On the Summary tab, use the Report V column to identify the

exact Section, Header, and Subsection to use in the entry• Enter the Total amount column by row• Print AFR module report and verify the numbers match the

Summary tab, Total amount column

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Cash Flow StatementDesk Review• Verify Exhibit V amounts match cash flow template (all

manual AFR entries)• Verify ending cash equals Schedule Three• Intra-System transfers match amounts per the Cash Flow tab

of Due To/From Transfers workpaper • Review for negative proceeds or positive payments, reclassify

as needed• Classification difference should be zero (reconciliation

section)• Verify template balances by fund group

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Polling Question #11• Does the AFR checklist help your member review and edit your Cash

Flow Statement analysis?a. Yesb. Noc. Not sure

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Questions• NEW: There are manual steps needed by each member who has

fiduciary activity which was moved off of the proprietary statements and onto the fiduciary statementsoLeave yourself a little more time to think through this changeoRestatement of Cash is Required

• NEW: If the member has direct borrowing liabilities must adjust the NonCash section

• Other Items are minimal changes from last year• Any questions?

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Thank you• Have a good afternoon• See you tomorrow

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