[Cobo] FW: Late Appropriations -- 6/30 Audits

[Mauck, Sheri]

 All- please find the email from Matt Clarkson of OMES Financial Reporting with guidance concerning the posting of the FY16 appropriations reconciliations you received notice of on September 9th.  Please use in discussion with your auditors for consistency in reporting for the financial as of 6/30/2016.  The figures should not be reported as FY16 receivables and you may use your professional judgement whether to include a "subsequent event" footnote disclosure or not.

From: Matt Clarkson [mailto:Matt.Clarkson at omes.ok.gov]
Sent: Wednesday, September 21, 2016 8:09 AM
To: Campbell, Karla
Subject: RE: Late Appropriations

If you could pass it on to any institutions who have a similar question, I would appreciate that.



From: Matt Clarkson [mailto:Matt.Clarkson at omes.ok.gov]
Sent: Tuesday, September 20, 2016 11:28 AM
To: Campbell, Karla
Cc: 'Billy Swindell'
Subject: Late Appropriations

Karla,

I have not heard back from SAI, but after doing some research on the matter, this is the position I am taking on the FY16 surplus appropriations:

Based on this revenue recognition table provided in GFOA's Blue Book, the handling of the appropriations is determined by the category they belong under.

[cid:image001.png at 01D213DF.5F75DC00]

The stance I understand your auditors to be taking appears to be treating the appropriations as "imposed nonexchange revenues." Those would be recognized when the claim to the money is legally enforceable AND at the start of the period they are intended to finance, in this case fiscal year 2016. However, I don't believe that appropriations belong in that category because the imposed part of the transaction happens at the primary government. For instance, the taxes collected were not receivable by the higher education components, but by the State of Oklahoma's general revenue fund.


[cid:image002.png at 01D213DF.5F75DC00]

Instead, the nature of appropriations seems to be a better fit under the category of "voluntary exchange transaction" because the legislature determines how the general revenues are split out.

[cid:image003.png at 01D213DF.5F75DC00]

Based on this assessment, the revenues would be receivable when the "eligibility requirements are met," and the way state appropriations are handled, the only eligibility requirement would be the legislature releasing the funds. As such,  I do not believe the appropriations of the FY16 surplus were receivable by the higher education component units until the legislature determined the amount. Because this did not happen until well into FY17, it would not be receivable until FY17.

As to whether a disclosure in the subsequent events note is necessary, I would say that it is a matter of professional judgement. Our policy with the State CAFR is pretty conservative, and generally we do not to disclose something unless it would have a negative impact on the financial statements.

If you would like any further assistance, please let me know,

Matt Clarkson | Financial Reporting Supervisor
p. 405-521-2759 | f. 405-521-2001
Central Accounting and Reporting | OMES
omes.ok.gov<http://omes.ok.gov>
[cid:image004.png at 01D213DF.5F75DC00]

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.onenet.net/pipermail/cobo/attachments/20160922/3c3a2b34/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 97559 bytes
Desc: image001.png
URL: <http://lists.onenet.net/pipermail/cobo/attachments/20160922/3c3a2b34/attachment-0004.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.png
Type: image/png
Size: 31406 bytes
Desc: image002.png
URL: <http://lists.onenet.net/pipermail/cobo/attachments/20160922/3c3a2b34/attachment-0005.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.png
Type: image/png
Size: 30004 bytes
Desc: image003.png
URL: <http://lists.onenet.net/pipermail/cobo/attachments/20160922/3c3a2b34/attachment-0006.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.png
Type: image/png
Size: 10724 bytes
Desc: image004.png
URL: <http://lists.onenet.net/pipermail/cobo/attachments/20160922/3c3a2b34/attachment-0007.png>