Audits and Financial Statements
Statement Preparation and Audits Panel
Agenda ❖ 3-5 minutes Introductions ❖ 5-7 minutes sharing information related to how Kuali Financials supports Financial Statement Preparation and the annual audit. ❖ 10-15 minutes Q&A
2
Panelists ❖ David Ryan - Colorado State University ❖ Kim Yeoh - Cornell University ❖ Nicole Salazar - University of Arizona ❖ Susan Lin - University of Hawaii
3
David Ryan - Colorado State University 4
Topics ❖ Kuali Structure and Setup ❖ External Reporting ❖ Closing Schedule ❖ Audit Access
Kuali Structure and Set Up ❖ Created separate chart code (CR) for reporting purposes only (no GL activity) ❖ Provides ability to roll up object codes from individual agency chart codes into common reporting elements required for financial statement reporting. ❖ CR chart code has its own object code, level code and consolidation code ❖
Object codes in CSU chart code report to CR object codes
❖
CR level code and consolidation code roll data up to appropriate financial statement line and category/group.
❖
When CR object code “DBEX” is assigned to a CSU object code, logic will look to the NACUBO Higher Ed. Function code assigned to the CSU account used to consolidate expenses by function.
CSU Reporting Structure
Balance Sheet Roll up
8
Operating Revenue Roll up
Expenditure Roll up
CSU Financial Statement Excerpt
11
Reporting Tool ❖ Prepare year-end financial statements with Microsoft Reporting Services (Report Manager) ❖ Set up in Kuali will drive the financial statement presentation ❖ Some programming in Report Manager required: ❖
CSU allows Agency Funds to utilize any object code. Report Manager looks to the Agency Fund to determine if the activity is required to be reported as “Deposits Held for Others”
Closing Schedule ❖ CSU closes and rolls opening numbers by July 31st ❖ Ensures campus has opening numbers in the current fiscal year in a timely manner and budgets can be loaded. ❖ Since balances are not rolled until the end of July, campus constituents are unable to see activity for inception to date projects (primarily Sponsored Programs and Plant Accounts). ❖
Balance forward jobs are cloned and run nightly in July prior to the actual balance forward job being run so campus can view up to date opening data.
❖
Entries “post” as pending entries until the final year end job is run.
Audit Process ❖ Significantly improved since CSU converted to KFS. ❖ Auditors are given access to KFS ❖ Pull their own samples and documents for testing
Kim Yeoh - Cornell University 15
Cornell: Institutional Background ❖ Independent research university founded in 1865 ❖
Federal land-grant institution of New York State
❖
Member of Ivy League
❖ Campuses ❖
Ithaca, NY: 7 undergrad and 4 grad/prof colleges
❖
NYC: 1 grad; 2 medical grad/professional school
❖
Qatar: 1 medical school
❖ ~22,900 students ❖ ~5,000 academic workforce ❖ $3.7 billion annual operating budget
16
Cornell: Chart Structure ❖ Seven charts: ❖ One for management – main campus (Ithaca) ❖ Six for consolidation and financial statements ❖ Medical college (convert and load SAP trial balance) ❖ Subsidiaries (enter subsidiary financial statements) ❖ Eliminations (for all intercompany transactions) ❖ External organizations (all map to liability) ❖ Financial statement (for adjusting entries) ❖ One “CU level” with no accounts; object consolidations tie to statement lines ❖ Account Type attribute for reporting 4 colleges to State University of New York (SUNY); Jacobs Institute (separate 501(c)(3) organization)
November 6, 2015
1
Cornell: Financial Statement Preparation ❖ All entries are made in KFS in period 13, using the appropriate chart ❖ Added parameter to close charts at different times ❖ Created YE Journal Voucher; added required approval ❖ produces all necessary closing and balance forward entries ❖ Created special roles to provide access to ~10 users during financial statement production (normally only ~3) ❖ Trial Balance, Statement of Financial Position and Statement of Activity produced weekly using OBIEE dashboard
November 6, 2015
1
Nicole Salazar - University of Arizona 19
University of Arizona – Institutional Background ❖ Independent research university founded in 1885 (before AZ was a state) o Land Grant institution ❖ Campuses o Tucson, AZ o Phoenix, AZ ❖ Students o Undergraduate students: 32,987 o Graduate and professional students: 9,249 ❖ Number of majors offered: More than 300 ❖ More than $580 million in research investment research
20
Chart Structure ❖
Accounting requirements: GASB, GAAP etc.
Chart Structure ❖ 1 transactional “UA” ❖ 1045 object codes ❖ 1 reporting “AZ” ❖ 83 object codes ❖ Other Chart Structure set up for reporting ❖ HEFC/AICPA code ❖ Fund/ Sub-fund ❖ Account Number (for one off exceptions) ❖ All of these items flow through a sorting “GRID” which produces a report in our external reporting software (Oracle Business Intelligence, “OBI”) ❖
21
Preparation of Audit Back up ❖ All entries are made in KFS in period 13, using the UA chart ❖
Created YE Documents for Department use (YEDI, YEGEC, YESET etc.) on “normal Accounts”
❖
produces all necessary closing and balance forward entries for departments
❖
Documents used to create entries on central following departmental close with the additional JV document which is always limited to Central
❖
Created special permissions for “YE” docs access
❖ Statement of Net Position and Statement of Changes Revenue Expenditures and Net Position produced at each batch interval using OBIEE dashboard ❖ Financial System Data to OBIEE Data is verified by transaction no less than monthly, and in total by object code in the Trial Balance.
22
Statement Preparation & Audit: Auditor Role Access ❖ Auditor requested detail data ❖ At 9mos, 11mos, “13”mos for Labor Ledger and Rev/Exp transactional detail from KFS ❖ Access granted to specially created Auditor Role for view only into the system two version “UA External Auditor” and “UA IT Auditor”
23
Susan Lin - University of Hawaii 24
25
UH Operational Charts for Consolidation and Campus Schedules Financial Statements and Schedule Preparations
Audits and Financial Statements ❖ Reduced audit fee by 6% in fiscal year 2014 and another 10% in fiscal year 2015 ❖ Completed fiscal year 2014 yearend close and audited financial statements at the earliest time in the recent history of University of Hawaii ❖ Generated consolidated financials statements that include component units and individual campus financial schedules from KFS
Our Auditor’s Words… ❖ Because of the KFS Implementation, ❖ We had better insight into the financial transactions ❖ It is much easier to select targeted transactions for audit ❖ We had access to the supporting documents for the transactions audited ❖ The workflow provided good audit trails, which we relied on for controls, instead of paper trails ❖ We were able to perform analytic reviews at different levels, such as by campus, school, department, etc. ❖ The reporting tool allowed us to capture transactions for audit ❖ UH was able to provide us more timely financial statements and schedules for review and audit
Questions
29
Agenda ❖ 3-5 minutes Introductions ❖ 5-7 minutes sharing information related to how Kuali Financials supports Financial Statement Preparation and the annual audit. ❖ 10-15 minutes Q&A
2
Panelists ❖ David Ryan - Colorado State University ❖ Kim Yeoh - Cornell University ❖ Nicole Salazar - University of Arizona ❖ Susan Lin - University of Hawaii
3
David Ryan - Colorado State University 4
Topics ❖ Kuali Structure and Setup ❖ External Reporting ❖ Closing Schedule ❖ Audit Access
Kuali Structure and Set Up ❖ Created separate chart code (CR) for reporting purposes only (no GL activity) ❖ Provides ability to roll up object codes from individual agency chart codes into common reporting elements required for financial statement reporting. ❖ CR chart code has its own object code, level code and consolidation code ❖
Object codes in CSU chart code report to CR object codes
❖
CR level code and consolidation code roll data up to appropriate financial statement line and category/group.
❖
When CR object code “DBEX” is assigned to a CSU object code, logic will look to the NACUBO Higher Ed. Function code assigned to the CSU account used to consolidate expenses by function.
CSU Reporting Structure
Balance Sheet Roll up
8
Operating Revenue Roll up
Expenditure Roll up
CSU Financial Statement Excerpt
11
Reporting Tool ❖ Prepare year-end financial statements with Microsoft Reporting Services (Report Manager) ❖ Set up in Kuali will drive the financial statement presentation ❖ Some programming in Report Manager required: ❖
CSU allows Agency Funds to utilize any object code. Report Manager looks to the Agency Fund to determine if the activity is required to be reported as “Deposits Held for Others”
Closing Schedule ❖ CSU closes and rolls opening numbers by July 31st ❖ Ensures campus has opening numbers in the current fiscal year in a timely manner and budgets can be loaded. ❖ Since balances are not rolled until the end of July, campus constituents are unable to see activity for inception to date projects (primarily Sponsored Programs and Plant Accounts). ❖
Balance forward jobs are cloned and run nightly in July prior to the actual balance forward job being run so campus can view up to date opening data.
❖
Entries “post” as pending entries until the final year end job is run.
Audit Process ❖ Significantly improved since CSU converted to KFS. ❖ Auditors are given access to KFS ❖ Pull their own samples and documents for testing
Kim Yeoh - Cornell University 15
Cornell: Institutional Background ❖ Independent research university founded in 1865 ❖
Federal land-grant institution of New York State
❖
Member of Ivy League
❖ Campuses ❖
Ithaca, NY: 7 undergrad and 4 grad/prof colleges
❖
NYC: 1 grad; 2 medical grad/professional school
❖
Qatar: 1 medical school
❖ ~22,900 students ❖ ~5,000 academic workforce ❖ $3.7 billion annual operating budget
16
Cornell: Chart Structure ❖ Seven charts: ❖ One for management – main campus (Ithaca) ❖ Six for consolidation and financial statements ❖ Medical college (convert and load SAP trial balance) ❖ Subsidiaries (enter subsidiary financial statements) ❖ Eliminations (for all intercompany transactions) ❖ External organizations (all map to liability) ❖ Financial statement (for adjusting entries) ❖ One “CU level” with no accounts; object consolidations tie to statement lines ❖ Account Type attribute for reporting 4 colleges to State University of New York (SUNY); Jacobs Institute (separate 501(c)(3) organization)
November 6, 2015
1
Cornell: Financial Statement Preparation ❖ All entries are made in KFS in period 13, using the appropriate chart ❖ Added parameter to close charts at different times ❖ Created YE Journal Voucher; added required approval ❖ produces all necessary closing and balance forward entries ❖ Created special roles to provide access to ~10 users during financial statement production (normally only ~3) ❖ Trial Balance, Statement of Financial Position and Statement of Activity produced weekly using OBIEE dashboard
November 6, 2015
1
Nicole Salazar - University of Arizona 19
University of Arizona – Institutional Background ❖ Independent research university founded in 1885 (before AZ was a state) o Land Grant institution ❖ Campuses o Tucson, AZ o Phoenix, AZ ❖ Students o Undergraduate students: 32,987 o Graduate and professional students: 9,249 ❖ Number of majors offered: More than 300 ❖ More than $580 million in research investment research
20
Chart Structure ❖
Accounting requirements: GASB, GAAP etc.
Chart Structure ❖ 1 transactional “UA” ❖ 1045 object codes ❖ 1 reporting “AZ” ❖ 83 object codes ❖ Other Chart Structure set up for reporting ❖ HEFC/AICPA code ❖ Fund/ Sub-fund ❖ Account Number (for one off exceptions) ❖ All of these items flow through a sorting “GRID” which produces a report in our external reporting software (Oracle Business Intelligence, “OBI”) ❖
21
Preparation of Audit Back up ❖ All entries are made in KFS in period 13, using the UA chart ❖
Created YE Documents for Department use (YEDI, YEGEC, YESET etc.) on “normal Accounts”
❖
produces all necessary closing and balance forward entries for departments
❖
Documents used to create entries on central following departmental close with the additional JV document which is always limited to Central
❖
Created special permissions for “YE” docs access
❖ Statement of Net Position and Statement of Changes Revenue Expenditures and Net Position produced at each batch interval using OBIEE dashboard ❖ Financial System Data to OBIEE Data is verified by transaction no less than monthly, and in total by object code in the Trial Balance.
22
Statement Preparation & Audit: Auditor Role Access ❖ Auditor requested detail data ❖ At 9mos, 11mos, “13”mos for Labor Ledger and Rev/Exp transactional detail from KFS ❖ Access granted to specially created Auditor Role for view only into the system two version “UA External Auditor” and “UA IT Auditor”
23
Susan Lin - University of Hawaii 24
25
UH Operational Charts for Consolidation and Campus Schedules Financial Statements and Schedule Preparations
Audits and Financial Statements ❖ Reduced audit fee by 6% in fiscal year 2014 and another 10% in fiscal year 2015 ❖ Completed fiscal year 2014 yearend close and audited financial statements at the earliest time in the recent history of University of Hawaii ❖ Generated consolidated financials statements that include component units and individual campus financial schedules from KFS
Our Auditor’s Words… ❖ Because of the KFS Implementation, ❖ We had better insight into the financial transactions ❖ It is much easier to select targeted transactions for audit ❖ We had access to the supporting documents for the transactions audited ❖ The workflow provided good audit trails, which we relied on for controls, instead of paper trails ❖ We were able to perform analytic reviews at different levels, such as by campus, school, department, etc. ❖ The reporting tool allowed us to capture transactions for audit ❖ UH was able to provide us more timely financial statements and schedules for review and audit
Questions
29
