Excel erating the CAFR

Size: px

Start display at page:

Download "Excel erating the CAFR"

Jordan Hopkins
5 years ago
Views:

1 Excel erating the CAFR Practical Tips for Speeding up Production of the CAFR Friday, Oct. 23, :25 12: CPE Speaker: Jon Munch, CPA; Director of Finance, Fauquier County Government & Public Schools

2 2 The Problem: One of the most common complaints about state and local government financial reports (AFRs) is that they are not issued soon enough after the close of the fiscal year to meet the needs of financial statement users. A recent study by the GASB has shown that while 72% of state and local governments issued AFRs within six months of the end of the previous fiscal year, 28% issued reports past that benchmark date.

3 3 The Numbers: GASB Research Brief, The Timeliness Of Financial Reporting By State And Local Governments Compared With The Needs Of Users Percentage of Total AFRs (Larger Governments) Type Total States 1.4% 64.6% 23.8% 8.8% 1.4% 100.0% Counties 2.5% 78.6% 15.2% 1.8% 1.8% 100.0% Localities 2.0% 72.1% 20.4% 3.7% 1.7% 100.0% Independent School Districts 0.7% 73.9% 16.2% 4.2% 4.9% 100.0% Special Districts 18.9% 73.5% 6.8% 0.8% 0.0% 100.0% All Governments 4.1% 73.3% 17.1% 3.6% 1.9% 100.0%

4 4 The Numbers: GASB Research Brief, The Timeliness Of Financial Reporting By State And Local Governments Compared With The Needs Of Users Percentage of Total AFRs (Smaller Governments) Type Total Counties 9.2% 33.6% 26.7% 16.8% 13.7% 100.0% Localities 7.7% 52.3% 27.7% 7.7% 4.6% 100.0% Independent School Districts 23.1% 53.8% 19.2% 3.8% 0.0% 100.0% Special Districts 11.1% 49.2% 23.8% 9.5% 6.3% 100.0% All Governments 10.9% 45.5% 25.5% 10.6% 7.4% 100.0%

5 The Picture: 600 500 400 300 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 More

5 5 The Picture: More States Counties Localities Independent School Districts Special Districts

6 The Picture: 600 500 400 300 200 100 0 1 2 3 4 5 6 7+ States

6 6 The Picture: States Counties Localities Independent School Districts Special Districts

7 7 GFOA Data: GFOA Certificate Program CAFRs Received - FY2013 4,000 3,500 3,000 2,500 2,000 1,500 1, CAFRs Received ,780

8 8 GFOA Recommendation: Based upon this experience with the Certificate Program, GFOA feels that the sixmonth deadline is predominantly viewed as the standard for timely reporting. GFOA prefers that governments not view it this way and issue reports earlier.

9 9 What Are the Causes of Delays? Delays Related to Component Units Procuring Data from Overlapping Governments Gathering Complex Data from Consultants Action Required by Governing Body New/Complex GASB Standards Internal Breakdown in Communication Turnover of Key Staff Manual CAFR Production Last-Minute Changes or Adjustments

10 10 Component Unit Delays Separate year-end closing process and timeline; Different auditors and audit schedule; Different ideas as to what constitutes timely financial reporting.

11 11 Overlapping Governments Many of the same issues related to component units apply to overlapping governments; Working relationship may not be as strong as with component units can lead to additional issues.

12 12 Consultant Data Actuarial valuations; Inventories; Pension plan data; Data expected from consultants does not always arrive in a timely manner to allow for continued progress on financial reporting.

13 13 Governing Body Action Year-end budget adjustments; Carry-over adjustments; Commitment/assignment of fund balance(s).

14 14 GASB Standards New standards may be complex, and take time and effort to implement; There may be disagreement or debate with auditors about how to implement; Could require data from other entities which puts more required elements of the CAFR in the hands of an outside entity.

15 15 Internal Communication Larger staffs working in silos without constant communication of delays or other issues not knowing the impact on the rest of the process; Smaller staffs coordinating major components of CAFR not in constant communication with management.

16 16 Turnover of Key Staff Personnel responsible for completing significant portions of the CAFR separate close to year-end: Loss of institutional knowledge; Additional time required to recruit, hire, and train new personnel.

17 17 Manual CAFR Production Production of CAFR in Excel/Word can lead to numerous issues: Late identification of major funds; Late identification of other issues; Footing and rounding problems; Statements, notes, tables and other parts of the CAFR which may not reconcile;

18 18 Last-Minute Changes Audit adjustments; Subsequent disbursements testing; Changes requested at various levels of review;

19 19 Year-End Planning Debriefing from prior year what went well vs. what went wrong; Focus initially on the big picture, then work down to the granular details; Begin by establishing an achievable goal for completion, and work backwards; Identify key milestones, with necessary completion dates to stay on schedule; Involve all parties who play a significant role (auditors, component unit management, etc.).

20 20 Working with Outside Entities Involve management personnel of component units in the initial planning phases; Have clear understanding and agreement about expectations for component unit staff, and how their completion dates fit into the overall timeliness of the CAFR.

21 21 Working with Outside Entities Develop an inventory listing of all items needed from overlapping governments, and the personnel responsible for providing it; Send letters requesting information well before the deadline; When possible, gather schedules that will provide information into the future (e.g. amortization schedules related to overlapping debt); Monitor activities of overlapping governments and record key events (e.g. adoption of tax rates).

22 22 Working with Outside Entities Establish key deadlines as part of contracts with consultants; Ensure that engagements begin early enough that deliverables can be obtained on a timely basis; For larger engagements, have a planning meeting prior to fieldwork to ensure that enough time is being provided to allow for completion of deliverables by deadlines.

23 23 Project Management Create task lists in Excel with assignments and deadlines (use filters to create status reports); Consider use of a Gantt chart to assist in visualizing task dependencies and the impact of slippage. Schedule regular status meetings for the sole purpose of updating the team on project status.

24 24 Automating the CAFR External Data Connection importing directly from financial accounting system; Data sheet(s);

25 25 External Data Connection Work with your IT Department or Financial System Administrator to set up a data connection to the accounting system within Microsoft Excel. This will allow Excel to connect directly with the accounting system to download and refresh data.

26 26 Data Sheets If a data connection to the accounting system within Microsoft Excel is not feasible, consider writing a report within the accounting system that returns the raw data necessary to query the results into the CAFR exhibits and schedules.

27 27 Data Sheets

28 28 Excel Query Functions Use query functions to organize raw data into CAFR exhibits and schedules; =DSUM =VLOOKUP / =HLOOKUP =SUMIF

29 29 DSUM The DSUM formula has three components: database - the table from which you are pulling data; field - the column containing the data you wish to sum; criteria - the factor(s) determining whether or not to select certain rows within a column for summation.

30 30

31 31

32 32 SUMIF The SUMIF formula has three components: range - the range of cells being evaluated for summation; criteria - the factor determining whether or not to select certain rows within a column for summation; [sum_range] the range of data from which to sum.

33 33

34 34 Excel Query Functions Use logical functions to automate captions such as Fund balance/(deficit) ; =IF =AND =OR

35 35

36 36 Excel Query Functions Use data filters in conjunction with logical functions to automate the display / hiding of rows based on data.

37 37 Excel Query Functions Use non-printing area to allow for rounding and other types of adjustments that are not made in the accounting system.

38 38 More Excel Uses Create worksheets for information that goes elsewhere in the CAFR: MD&A tables and graphs; Tables for footnote disclosures; Major fund determination worksheet; Others. Conditional formatting can be used to highlight troublesome data (e.g. budget overages which need correction, reversed balances, etc.)

39 39 Other Strategies Debt in many cases, debt can be done early in the process. If so, complete all debt-related schedules as soon as the final debt service payment for the fiscal year is made.

40 40 Other Strategies Turnover of Key Staff Cross-training; Staff rotation; Thorough documentation of procedures;

41 41 Conclusion

42 42 Questions? Thank you for your attention!

Audit Preparation Best Practices

Audit Preparation Best Practices Jeffrey L. Straus, CPA Kyle R. Schafer, CPA Audience Poll How many have been through an audit? Multiple times? Why do you have an audit? Bylaws Loan covenant/grants Member/customer