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Chapter 18

SCO GAAP Submission

Overview

The CSU provides information to the State Controller’s Office (SCO) annually to aid in the preparation of the state’s Comprehensive Annual Financial Report, also known as the CAFR. The CAFR is presented on the GAAP basis of accounting. The information CSU provides allows the SCO to convert data campuses submit in July of each year on the legal basis of accounting (defined in Chapter 1 of the Legal Accounting and Reporting Manual) to the GAAP basis.

To meet its obligation to the SCO, the Chancellor’s Office (CO) uses, to the extent possible, financial data submitted by the campuses through mechanisms such as the GAAP Reporting Package (TM1) and GAAP FIRMS. However, supplemental data that only the campuses possess are also necessary for a complete submission. The purpose of this chapter is to detail the SCO’s GAAP submission requirements and to describe the supplemental information required from campuses each year.

Please note that the GAAP FIRMS data is used not only to prepare the GAAP adjustments for the SCO, but also to provide the breakdown of unrestricted net position for the Management’s Discussion and Analysis (MD&A) in the CSU’s system-wide financial statements, and for the management analysis prepared for the Board of Trustees. Therefore, GAAP FIRMS data must tie to the GAAP Reporting Package and report accurate amounts in each state fund and in each CSU fund within state fund 0948.

Data Submitted to the SCO

A.System-wide financial statements

The CO provides a copy of the financial statements to the SCO. The CSU employs the business-type activities (BTA) reporting model in presenting financial results as indicated in Chapter 1, Part III, of this manual. The State of California, on the other hand, uses a different reporting model requiring the presentation of fund financial statements. The SCO, therefore, asks the CSU to provide a breakdown of its financial statements by state fund. The CO accomplishes this by extracting the GAAP-basis data submitted by campuses to FIRMS and reconciling that data to the financial statements. As long as each campus’s GAAP FIRMS submission is in agreement with its reporting package, the CO is able to successfully provide the fund breakdown to the SCO without further input from the campuses.

B.Breakdown of the consolidated cash flow statement between governmental and enterprise funds

This is generated through entries made by campuses in the TM1 software (go to the SCO folder in TM1) and will produce the consolidated report needed by the SCO. A copy of the TM1 template is provided in this chapter as an example only. It is not to be used for actual preparation and submission.

C.Reconciliation of transfers and due from/to other funds accounts

The SCO requires a demonstration that these transactions zero for the CSU as a whole because the SCO needs to eliminate them within the enterprise (non-governmental) fund group. The CO provides templates to campuses on which will be entered, by state fund, the amounts due from or to another state fund and transfer information.

D.Detail of capital assets, accumulated depreciation and depreciation expense

The SCO requires for each funding source (the state funds that provided the funding for the acquisition or construction of fixed assets) the beginning balance, additions, deletions, transfers, and the ending balance for both capital assets and the related accumulated depreciation. This data is retrieved by the Chancellor’s Office from Asset Management, the PeopleSoft module which creates the capital asset sub-ledger. Campuses arerequired to updatedirectly in Asset Management asset and accumulated depreciation data entered through June 30 for transactions pertaining to the reporting year, but not posted in the system prior to closure of the legal-basis financial records. The module provides the Chancellor’s Office with a consolidated report in the format required by the SCO. Campuses are required to separately submit a depreciation expense schedule in Excel format.

E.Legal to GAAP reconciliation of governmental funds

The SCO requires a reconciliation of data presented on the legal basis of accounting to data presented on the GAAP basis for the General Fund. The CO provides campuses with a template to facilitate completion of the reconciliation. Campuses must fully describe each adjustment needed to convert from the legal to the GAAP basis. Adjustment descriptions must be clear, concise and understandable to a person not familiar with campus operations.

The reconciliation template lists the standard entries typically entered for the conversion. Campuses are encouraged to use these standard entries to the extent possible as it facilitates data consolidation by the CO.

F.Net Investment in Capital Assets

The SCO requires a calculation of Net Investment in Capital Assets by funding source (i.e. the state fund that provided funding for the acquisition or construction of the fixed assets), though all fixed assets are in state fund 0997 (CSU fund 501). The calculation begins with Capital Assets, Net of Accumulated Depreciation/Amortization, and backs out capitalized lease and long-term obligations, adjusted for the unspent portion of these liabilities, by funding source. Entries to create this schedule are made by campuses in the TM1 software (go to the SCO folder in TM1), which produces the consolidated report needed by the SCO. A copy of the TM1 template is provided in this chapter as an example only. It is not to be used for actual preparation and submission.

G.Detail of other liabilities

The detail of other liabilities as presented in the system-wide financial statements is provided by campuses through completion of a schedule in TM1 (go to the YESfolder in TM1). A copy of the TM1 template is provided in this chapter as an example only. It is not to be used for actual preparation and submission.

H.Detail of pollution remediation obligations

This schedule is a sub-set of the detail of other liabilities (i.e., pollution remediation obligations is a component of other liabilities (see item G above). The required detail will be provided by campuses through completion of an Excel worksheet for each state fund recording such liability.

Templates

Listed below are the templates that must be completed by campuses so the CSU can fulfill its GAAP reporting obligation to the state. Each template includes an Instructions tab that provides the purpose of the schedule and provides step-by-step completion guidance. The due date for submission of these templates is established annually by the CO to meet the SCO’s requirements. Campuses need to consult the Master Timeline, to determine each year’s submission deadline.

Campuses are required to submit the below listed templates via the State Reporting SharePoint site at

  • Reconciliation of Due To/From Accounts
  • Reconciliation of Transfers To/From Other Funds
  • Depreciation Expense Schedule
  • Legal to GAAP Reconciliation (General Fund only)
  • Pollution Remediation Obligations Detail

The following templates must be completed in TM1:

  • Breakdown of Statement of Cash Flows
  • Calculation of Net Investment in Capital Assets
  • Other Liabilities Detail

Capital assets and accumulated depreciation data residing in the Asset Management module is updated by campuses for transactions pertaining to the fiscal year ended June 30, but which were not posted in the system prior to that date. A sample of the Asset Management form used by campuses for this update, and the associated instructions, are included in this chapter. The sample schedule is not to be used for actual preparation and submission. Campuses need to complete their updates by the date specified in the Master Timeline for submission of all SCO GAAP templates. The Asset Management module provides to the Chancellor’s Office a consolidated asset and accumulated depreciation schedule in the format required by the SCO.

The templates completed by campuses are a part of this chapter and follow this page.

The following should be noted when completing the templates:

  • Numbers entered on all templates MUST be rounded as indicated in the instructions for each template. Generally, numbers entered on Excel templates are rounded to the nearest penny and numbers entered in TM1 are rounded to the nearest dollar.
  • Schedules MUST tie to each other and rounding issues MUST be resolved.
  • Schedules MUST tie to FIRMS GAAP and TM1 entries as specified in the instructions for each schedule.
  • ALL abnormal balances need to be explained via footnote on the schedule reflecting the abnormal balance.

All standards that the completed templates must meet have been summarized in a list at Section 18.09. Campus management should use the document as a checklist when reviewing the templates before giving them their approval and submitting them to the Chancellor’s Office.

Certification of Data

Campuses are required to certify the quality and completeness of all data submitted on the GAAP basis, including the data reported on all templates required by this chapter. The certification form is located in Chapter 11.01 of this manual and is fully described in Chapter 11.

It remains important that the campus management thoroughly review the schedules described in this chapter to ensure the accuracy of what is being submitted by their staff. The CO has a very short period in which to consolidate the campus data and to prepare other required schedules. It cannot perform in-depth reviews of the submissions and comparisons with other available data. In the event the CO identifies an unacceptable level of errors, the submission will be rejected and returned to the campus with those errors noted. Re-submissions, when necessary, need to be given high priority by the campus so the CSU’s filing obligations with the SCO can be met.

Revision Control

Document Title:Chapter 18 – SCO GAAP Submission

Revision and Approval History

Section(s) Revised / Summary of Revisions / Revision Date
18.0-2 / Item D of the section “Data Submitted to SCO”, relating to the templates for capital asset, accumulated depreciation and depreciation expense detail, has been updated due to a change in what information campuses will provide to the Chancellor’s Office and the vehicle for doing so. / April 2014
18.0-3 / Item H has been added to the section “Data Submitted to SCO” to describe a new reporting requirement: provision of detail of pollution remediation obligations. / April 2014
Template A / A new requirement has been added to the Instructions tab of the template for Reconciliation of Due To/From: confirmation that each due to or from recorded in a given fund matches the entry in the corresponding fund. / April 2014
Template B / A new requirement has been added to the Instructions tab of the template for Reconciliation of Transfers: confirmation that each transfer in or transfer out recorded in a given fund matches the entry in the corresponding fund. / April 2014
Template C / A new template has been developed to capture the required capital assets and accumulated depreciation detail needed. It leverages the data available in Asset Management. The Excel workbook in the GAAP Manual includes a new set of instructions and a sample of the template that will be provided for completion by the Chancellor’s Office to the campuses. / April 2014
Template H / A new template has been added: Pollution Remediation Obligations Detail. This is in response to a new SCO requirement. Instructions are at the first tab of the Excel workbook. / April 2014
Data Submitted to the SCO (in text) / Item D updated for change in manner of campus submission of capital asset and accumulated depreciation data. / April 2015
Templates (in the text) / Deleted bullet for the capital asset and accumulated depreciation template from the section pertaining to Excel templates submitted via the State Reporting SharePoint site and added paragraph at the end of the section concerning the preparation of updated capital asset and accumulated depreciation data in the Asset Management module. / April 2015
Templates (in the text) / New requirements added; see 4 bullets at end of section. / April 2015
18.03(a) / Added sample of Asset Management form used to provide updated information as of June 30 for capital assets and accumulated depreciation. / June 2015
18.00-4 / Added language Re: rounding / February 2017
Templates / Added language Re: rounding / February 2017
18.00-1 / GAAP Manual | SCO GAAP Submission | June 30, 2018