In Black & White (5)

GASB Statement No. 87 – Leases

Amy Manthey
Automating Financial Reporting
minute(s)Did you miss the recent GFOA webinar on GASB 87 Implementation Guide? Here are the highlights… Effective Dates: The reporting requirements are effective for reporting periods beginning after June 15, 2021 and should be applied retroactively with prior periods restated as appropriate. GASB 87 will be effective for year ends of December 31, 2022, June 30, 2022, etc. Terminology: Previously, there were operating and capital leases. Now, there are “Leases” or “Leases under 87”. Under GASB 87, leases are considered a financing activity for the right to use another entity’s asset(s). GASB 87 defines specific reporting requirements for short-term leases and contracts that transfer ownership of the underlying non-financial asset. The definition of “short-term” remains as an initial term of 12 months or less, including any options to extend. Contracts that transfer ownership are identified by the transfer of ownership of the underlying asset at the end of the lease contract. The standard defines specific exclusions for leases for: Intangible assets Biological assets Inventory Service concession arrangement as defined in GASB 60 Paragraph 4 Underlying assets that are financed with outstanding conduit debt – unless both the asset and debt are reported by the lessor Supply contracts, such as power purchase agreements Lessee and Lessor value calculations are similar to each other as well as how the value was calculated for “capital leases." Lessee – recognize a lease liability and an intangible (right-to-use lease) asset at present value. Liability reporting is similar to how debt/financing is accounted for – which is different for full accrual versus modified accrual Lease asset value starts as the lease liability value, plus any payments made prior to the contract, less any lease incentives, plus any initial direct costs Lease asset amortization should be calculated based on the shorter of the life of lease or the underlying asset Re-measurement of lease only needed in specific circumstances Lessor – recognize lease receivable and deferred inflow of resources at present value (generally the same as the lessee amount). Deferred inflow is calculated at the beginning of the lease as the present value of lease payments less provision for estimated noncollectable amounts Subsequently, recognize deferred inflow of resourced and inflows of resources (revenue) over the term of the lease Subsequent periods amortization of the discount on the lease receivable and inflow of resources (interest revenue) is recorded Payments should first be allocated to accrued interest receivable and then to the lease receivable Lessor should keep underlying asset on the books Exception for leases of assets that are investments as defined in S72 and for leases that are subject to external laws, regulations or legal rulings (like Federal Aviation Administration) Note Disclosures: Lessee - The notes to financial statements should include a description of leasing arrangements, the amount of lease assets recognized, and a schedule of future lease payments to be made. Lessor – The notes to financial statements should include a description of leasing arrangements and the total amount of inflows of resources recognized from leases. Other items covered in GASB 87: Lease incentives Contracts with multiple components Contract combinations Lease modifications and terminations Sale-leaseback transactions Lease-leaseback transactions Intra-entity leases The Implementation Guide No. 2019-3, Leases is now available from GASB. Register for our Implementing and Automating GASB 87 Disclosures Webinar

Effective for reporting periods beginning after December 15, 2019; the GASB 87 pronouncement changes the way leases are calculated and reported.

An Interview with The City of Rock Springs

Jamie Black
Success Stories
minute(s)Home of the infamous outlaw Butch Cassidy, The City of Rock Springs a.k.a the City of "56 Nationalities" attracted emigrants from far and wide to the Union Pacific Coal Mines in the late 1800s and early 1900s. With a population of 23,350, it's the 5th largest City in Wyoming. The Challenge The City was using multiple, inefficient solutions to prepare their annual financial statements, which was very time consuming and labor-intensive. When their solution, CAFR Unlimited discontinued support for the software they knew it was time to find a new solution. The Interview 1 What was your business process to tackle the Annual Financial Statements previously, and how much time did it take? What product were you using before and why did you want to switch? Prior to using CaseWare, we were using a software called CAFR Unlimited as well as Microsoft Office/Microsoft Excel to prepare and draft our report. To start, we would extract the financial information from our accounting software and import into CAFR Unlimited. Once the information was in CAFR Unlimited, we would make any necessary journal entries, after which we would extract the information from CAFR Unlimited into Excel tables. Once the information was in Excel we would write our financial and compliance report using Microsoft Word and linking with Excel to “pull” the tables into the report. This was quite time consuming, and if there were any major changes Microsoft Word can be difficult to work with regarding formatting. While this whole process is very manual and a pain, it was all we had, and we really were unaware of anything better until we were forced to switch from CAFR Unlimited as the software was no longer supported by the vendor. 2 Did you look at other solutions and if so, what was the key factor(s) in choosing our solution? Besides CaseWare we briefly looked for other options (Opengov, CAFR Online, and a software option through Harris as we currently use some of their software) but really were unable to find anything that suited our needs as many weren't tailored to governmental financial statements and others lacked data. In addition, our auditors use CaseWare as their primary auditing software, so in theory we could provide the auditors our CaseWare file and they could audit from that point. We also really like that CaseWare has a document library (content) that is specifically tailored to governmental entities. Another big plus is that the City’s senior accountant came from a public accounting background and was fairly familiar with the CaseWare software which allowed for an easier transition for the City. Furthermore, CaseWare is a big software company so we didn’t have to worry as much about support ending for it. 3 Were you concerned about working with someone other than the software vendor for implementation? Working remotely? Working with a Canadian company? We were not concerned about working with a consultant. We’ve done similar types of implementations many times previously. In addition we had no concerns about working with a Canadian company. 4 What process did you follow to implement CaseWare? Perhaps provide a summary of the process? We elected to do a self-implementation to help keep costs down. We initially took two 16 hours classes with F.H. Black to learn how to work with the software. Once the classes were complete we started our implementation. We met with F.H. Black weekly to discuss progress, address questions/concerns and to receive direction on what to do next. We elected to implement using the FY2017 report (as it was audited and complete) so we had something to work towards. Once we had rebuilt the FY2017 report in CaseWare, we were able to start work on the FY2018 report. 5 From your perspective, how is the City in a better position now as compared to with your old solution? Is the process faster? Could you estimate the time savings or provide any examples? For the implementation we elected to start using the FY2017 report, we chose this as it gave us an audited statement to work towards rebuilding in CaseWare. For the current year report (FY2018) it was hard to see exactly how much time we will be saving, as we were still working on the implementation of FY2017 while working on the FY2018 report. Going forward we feel that the overall process will be faster for report preparation. We can say for sure that preparing the current year report was much quicker than the process has been in the past. 6 What are the biggest benefits of the CaseWare tool vs. your old system? The biggest pro is that now we are able to prepare the adjusted trial balance and prepare the compliance and finance report all in the same program. The CaseWare tool allows for us to draft the financial statements in a much more automated fashion. Previously we were using Microsoft Word and Excel to prepare the statements which was a very time-intensive process, especially when the auditors had changes/adjustments. 7 What was your experience with FHB like? Specifically, can you speak to our knowledge of: Technology generally and CaseWare specifically Year end processes & GASB requirements We feel that FHB had an excellent understanding of the CaseWare product and its capabilities. FHB was very easy to work with and was able to help us navigate questions/issues we had with CaseWare. We also feel that FHB had a comprehensive understanding of GASB requirements and the process needed to build a compliant report. FHB was able to provide great suggestions as to format as well as ensure we were able to keep the spirit of the report we provided previously. 8 How did the self-implementation go? Did you feel like you were adequately equipped to do it with our training and project management? Were you able to meet your deadlines timely without excess effort? Would you do it again? We feel that the self-implementation process went really well. We were able to meet our current year audit deadlines which was very important to us. We also feel that we were well equipped due to 1) the required FHB CaseWare classes, and 2) the weekly status meetings with FHB. We both feel that we would do it all again if given the option. 9 Is there anything you wish you knew at the beginning of this process that you know now? Advice for others considering a similar automation project? We think it is important to try and keep the end goal in mind when setting up statements and other report content. FHB had mentioned it to us; however, it really hit home with us and set in when we were in the latter stages of the report and were glad that we had taken the time to set things up correctly. Additionally, we would suggest that other clients not underestimate the time commitment to implement, this is something that needs to be properly planned out; however, it is well worth the time and effort. 10 Would you recommend self-implementation of CaseWare to other state or local government finance departments and why? We would wholeheartedly recommend the self-implementation process to another government. We feel that it really helped us to gain a better understanding of how CaseWare really works as well as the overall process. When working on the FY2018 year report it was much easier to make changes to the templates since we were the ones who created them in the first place (with FHB’s help). We just cannot imagine gaining the same depth of understanding with having FHB perform the implementation for us. In addition since the initial implementation of CaseWare, the City implemented a budgeting software that is compatible with CaseWare (Questica Budget) and we are currently working with FHB to automate the process of our budget book and it is going great. Watch this space With a successful implementation under their belt, the City is now working with FHB and CaseWare to automate their budget book. Once implemented, we will interview them again for more valuable insights. To be notified when this and other finance-related articles are released Subscribe to our Blog.

The City of Rock Springs automated their financial statements. We interviewed them about the process and their experience. Here's what they had to say.

CaseWare Working Papers 2019 - Infrastructure Requirements

Waldo Nell
Tips and Tricks
minute(s)Back in 2015, we gave you 3 tips for how to ensure maximum performance from CaseWare Working Papers. With the recent release of Working Papers 2019, we revisit the topic and update our recommendations. Operating System Working Papers runs on the Microsoft Windows operating system. Windows 8.1, and 10 can both be used. Users with Apple macOS or GNU/Linux cannot run Working Papers natively; you will need to run a Virtual Machine system with one of the supported versions of Microsoft Windows installed in it. Hardware At the date of writing, CaseWare International lists these as the minimum technical requirements of the program: 1 GHz 64-bit (x64) processor; 2 GHz recommended for improved performance Minimum 2 GB of RAM; 8 GB recommended for improved performance Program requires 1 GB free hard drive space. A monitor with 1024 x 768 resolution or higher. Internet access is required during the installation of Working Papers. Additional Components Microsoft Internet Explorer 11.0 or higher, as per the Internet Explorer life cycle. Adobe Acrobat Reader version 10.0 or higher. Microsoft Office 2010 or later, or Microsoft Office 365 (Desktop version, Cloud is not supported) Security and permissions Installation requires local administrative rights to the workstation. Use of Working Papers requires read/write access to the program folder and any folders containing client files. You want maximum performance so these minimum specifications should be taken with a grain of salt as they may provide poor performance in some circumstances (large files, many users, etc.). Key Factors in Better Working Papers Performance The following are key considerations for performance of Working Papers: 1) Location of the Data File Many people work with their CaseWare Working Papers file located on a remote, networked file system. This has many advantages, most importantly the ability to backup and protect the files. However, accessing networked storage is often much, much slower than the hard drive located on your computer. For users working on their files located on a remote file system, the number one thing you can do to improve performance is to move the file on to the computer that is running Working Papers. This can be accomplished either by: Using CaseWare SmartSync. Using a Thin Client solution. Using CaseWare's Sign-Out feature. 2) Processor CaseWare Working Papers is not written to take advantage of multiple cores in your computer's CPU. Frequently, modern processors are designed with many lower-speed cores, and Working Papers does not perform well on these chips. For optimum Working Papers performance, focus on maximizing single-core speed. 3) RAM As a 64-bit application CaseWare Working Papers is able to make use of a large amount of RAM. For this reason, we recommend at least 8 GB of memory. Plan for the future. Considering the low cost of RAM, follow the "More is Better" rule. Hardware specifications for IT If you were asked to choose all new hardware and were just thinking about maximizing CaseWare speed, we would recommend the following. Desktop Configuration: To maximize the performance of large / complex Working Papers files running on the desktop: 64-bit version of Windows 8.1 or Windows 10 Get a current generation i5, i7 or i9 processor with a base clock speed of 3.2 GHz or higher Order 16GB or more of RAM Ask for a SSD (solid-state drive) if the Working Papers data file is going to be on the local computer Thin Client Configuration: If you will be using a thin client approach to providing large / complex Working Papers files to end users, recommendations become a little more complicated. Below are our recommendations for configuration of the Thin-Client server, assuming 20 concurrent CaseWare users: Opt for Windows 2012 R2 Standard or better. Get a Xeon E5-xxxx v4 or newer processor with at least 8 cores, no slower than 3 GHz in a dual processor setup. Order 64GB or more RAM. Ask for an enterprise-grade SSD (solid-state drive) in a RAID array Locate all Working Papers data files on this server directly. Some assumptions about these Thin Client recommendations: As user count increases, systems resources must also increase. No virtualization is anticipated in the above specification. If virtualization is to occur, more RAM may be required. Network interface must be at least Gigabit.

Maximizing CaseWare Working Papers 2019 performance requires both the right hardware and the right configuration.

4 remote work benefits that should not be overlooked

Jamie Black
Efficient, Effective and Reliable
minute(s)We work with finance & budget departments in organizations of all sizes. Even in very large organizations, these teams tend to be small (and getting smaller). The apparent trick for small groups is how to enable them to do more with less, do it better and do it faster. It can be challenging to think of creative ways to drive these efficiency gains. Our firm feels this pressure too. Our whole company is small. The skills we require of our professionals are hard to find, develop, and maintain. It's a special combination of accounting, technology and extensive finance department business process understanding, earned by decades of experience working IN public sector finance. We are always looking for ways to increase efficiency. Nearly a decade ago we implemented a remote work strategy for our company with this aim in mind. We invested heavily in technology to enable it: all meetings & training sessions are conducted online and recorded, we host the recordings of our meetings/training so clients can play them back at will, we use transcription services to facilitate easy searching of recorded meetings, we use online project management tools to keep our clients apprised of project status at all times, all of our systems (servers, phones, etc.) are remotely accessible. Today we are a 100% remote work organization and our team is spread out across North America. In the last few years we have seen articles about companies reversing the trend of allowing remote work (Yahoo, Bank of America, Aetna —and, most recently, IBM). For us, the last 10 years have only served to increase our belief in remote work. Why? Here are 4 big benefits. 1) Flexibility Benefits for our Team: From spending a month at the beach in Mexico or Gulf Shores, Alabama to a few weeks in Japan, relocating temporarily does not necessarily mean you are eating into your vacation. As long as you have good office space and excellent internet, the world is your oyster. Further, permanently relocating for your family (for example my wife recently took a new job on the other side of the country) does not mean having to leave a job you love. We hear from our teammates regularly how much they appreciate the flexibility. Here are some pictures of what our teams work environments have looked like over the last year. Benefits for our Clients: Being remotely enabled means we can quickly jump from helping one client in Florida at 9 am to one in Oregon at 11 am and then provide 4 hours of training to clients from Ontario in the afternoon. Here's what our client, Washington County had to say about working remotely with us to automate their budget book: 2) Efficiency Every organization cares about maximizing output. We REALLY care. It is what we help our clients do everyday after-all. Even though there's a lot of evidence for increased general productivity, with remote work, consider the time savings from commuting alone. The average commute time to the office in Canada and the US is about 26 minutes. You could reasonably expect similar results on the trip home. It's a waste to you personally as there are a lot better things you could be doing with 52 minutes a day (working out, walking the dog, playing with your kids, sleeping, we could go on forever here). Further, it's a waste to the economy in general and the organization you work for in particular: At an average of 26 minutes each way to work, five days a week, 50 weeks a year, that works out to something like a total of 1.8 trillion minutes Americans spent commuting in 2014. Or, if you prefer, call it 29.6 billion hours, 1.2 billion days, or a collective 3.4 million years. With that amount of time, we could have built nearly 300 Wikipedias or built the Great Pyramid of Giza 26 times -- all in 2014 alone. Washington Post February 25, 2016 Clearly not all the time savings from the commute are a gain for the organization. But if even 10% accrues to our company, that is an extra 20+ hours per person each year, and that is a great benefit. 3) Happiness Think of the frustration that traffic causes. The stress of being late and rushing. Rushing to work, rushing home to make dinner or take kids to after school sports. For example, as I write this' I am watching my kids jump through the sprinkler on our front lawn. This benefit is not just anecdotal either. Longer commutes are linked with increased rates of obesity, high cholesterol, high blood pressure, back and neck pain, divorce, depression and death. At the societal level, people who commute more are less likely to vote. They're more likely to be absent from work. They're less likely to escape poverty. They have kids who are more likely to have emotional problems. Washington Post February 25, 2016 Now it should be said that there can be other challenges related to remote work. The primary ones being burnout and loneliness. For us, the loneliness component is partially mitigated as we are working together on projects for clients continuously. We have a full staff meeting online weekly with webcams turned on catching up, discussing requirements, deadlines, and providing training which results in lots of human interaction. Finally, we attend, speak and teach at a dozen or more conferences per year. Usually, several of us attend and have a chance to spend in-person time with clients and other teammates. 4) Recruitment If we were a traditional, office-locked company, we would recruit in our city and be largely constrained by the talent pool available locally. Or we would need to convince a candidate to relocate. Unlike some of our competitors, we can avoid these twin constraints. We have the luxury of drawing from a much larger pool (the world) and have no need to upset anyone's life with relocation. The geographic constraints of hiring is an often overlooked problem and can lead to selecting less qualified candidates from a pool of neighbors, friends, or, god-forbid, family. As we expected, the strategy has been paying off for years. This year alone we were approached by 2 CPAs with decades of experience in government and the auditing of governments who were looking for a change. One is located in a small town in Ontario. He loves where he lives but was looking for a more challenging, rewarding career. The other is located in the mid-west US with the very same goals. These new hires give our small company an out-sized competitive advantage that allows us to do better work for clients. We understood that in order to grow and thrive, we needed to think differently. Remote work was one of our strategies and it continues to provide exceptional ROI for us, enabling us to stay far ahead of the competition and provide the best service to our clients.

Finding ways to improve finance & budget department efficiency is challenging. We implemented a remote work option for our team. Here are 4 big benefits.

Answers to the 5 Big XBRL Questions

Jamie Black
Automating Financial Reporting
minute(s)In Florida and California, XBRL is set to become a requirement for filing of your Comprehensive Annual Financial Report. If you are a finance officer in government, the term XBRL may be new to you. If you work in the finance department of a publicly traded corporation, you may have some familiarity with the term. This article answers the 5 biggest questions about XBRL for those in finance that will be required to utilize it and for those who have been required to file in XBRL but may not know a lot about the technology. 1) What is it? eXtensible Business Reporting Language (XBRL) was created by CPA Charlie Hoffman in 1998 as a way to transform business reporting. Sometimes referred to as "bar-codes for reporting," XBRL allows the facts which appear in a report to be "tagged" with a name which is centrally defined and managed. Those facts and tags can then be used to represent the contents of financial statements or other kinds of compliance, performance and business reports. In a typical finance department XBRL may be used to create, analyze and exchange financial reporting information including financial statements, general ledger information, and audit schedules. This allows XBRL encoded reports (called Instance documents) to be machine-readable. Inline XBRL (iXBRL) is a development designed to render the data in a visually appealing format. iXBRL takes the same data as an XBRL report and embeds it into an HTML document that can be viewed in a web browser. In other words, it is a way of tagging reports making them readable to both humans and machines. Since 2006 XBRL International has operated as the not-for-profit organization to "develop specifications to support the collection, sharing and use of structured data for data reporting and analysis". 2) Where is it used/required ? Today millions of XBRL documents are created annually in more than 50 countries and it is spreading into government in the United States: Passed into law in 2014, the Digital Accountability and Transparency Act (DATA Act) is a law that aims to make information on federal expenditures more easily accessible and transparent. It mandates that federal agencies report to U.S. Treasury using XBRL. More recently, the State of Florida is finalizing legislation that requires financial statements be filed in XBRL and meet the validation requirements of the relevant taxonomy. This will affect more than 400 Municipalities, all of which produce Comprehensive Annual Financial Reports today. This is set to begin for fiscal years ending on or after September 1, 2022. The State of Florida is likely to be just the first of many who adopt this legislation for greater reporting transparency. California introduced the Open Financial Statement Act, SB-598, in late February 2019. The proposed legislation would replace both the current State Controllers Office (SCO) report and the current PDF Comprehensive Annual Financial Report with iXBRL statements. 3) Why is it used? Currently, government departments submit their financial reports in a somewhat ad-hoc way within stated guidelines (Comprehensive Annual Financial Report/PSAB/OCBOA). The ability to compare and analyze how varying governments operate is essential to good decision-making and community planning. Aggregating and comparing the data from these reports from one organization to the next however can take countless hours. Even then, the flexible nature (professional judgement) of these reports can inhibit direct comparison. To better aggregate on an comparable basis, some states/provinces have attempted to solve the challenge more locally by requiring submission of another report (SCO in California / AFR in Florida / MFIR in Alberta / FIR in Ontario/ LGDE in British Columbia ). These reports can be directly compared and analyzed, but require lots of manual work both by local government to populate and the state/province to aggregate and analyze. This is what drives the requirement for financial information to be submitted in XBRL. It allows for standardized, apples-to-apples aggregation, analysis and comparisons by computers across multiple entities based on an industry-recognized standard. 4) How do I apply it to my Comprehensive Annual Financial Report? Some government finance departments use report automation software that enables generating iXBRL tagged reports. If this is your finance department, that's good news, as preparing reports in iXBRL format may be as simple as assigning tags to your documents. For those still using spreadsheets, XBRL will be more difficult and will involve engaging a 3rd party to do the tagging for you for a fee. A 2018 study by the AICPA & XBRL US on small reporting companies (not governments): Average price for XBRL preparation was $5,476 / year, 69% of the companies paid $5,500 or less annually, 12% of the companies paid annual costs of between $5,500 to $8,000 annually, 13% of companies paid more than $10,000 / year, Higher annual fees were due to complexities in their financial statements and rush charges imposed given the many last minute changes to the filings. Given the above numbers relate to small companies, we expect that fees for a government encoding a large, complex Annual Report would be on the very high end of this range. 5) When should I start working on this? The short answer is as soon as possible. If the rate of successful compliance with the 2014 Data Act is any indication, you will need significant time to get prepared. Whether you are required to file in XBRL already or are preparing for the day it is required, the time to begin preparing is here: If your current system supports iXBRL, begin planning to tag your Comprehensive Annual Financial Report with the appropriate XBRL taxonomy within the next year or so. If your current system is spreadsheet-based, you have a longer road to travel. We recommend you start by implementing a solution that automates your reporting AND allows for tagging your Comprehensive Annual Financial Report. You will benefit immediately from reduced workload and fewer errors. Then when XBRL reporting begins, you save again by avoiding 3rd party tagging fees. These savings alone could easily cover the cost of the reporting automation software.

In Florida & California, XBRL is becoming a requirement for annual filing. If you are a finance officer in government, XBRL may be new to you. In this article we answer What is XBRL, Where is it used, Why it's useful, How do you apply it to your Comprehensive Annual Financial Report and When should you start tagging and testing.

Why a Comprehensive Annual Financial Report beats OCBOA for school ...

Jamie Black
Automating Financial Reporting
minute(s)If your School District prepares Other Comprehensive Basis of Accounting (OCBOA) financial statements, you are not alone. Preparing financial statements on this basis is the industry 'norm' in many states. But why? A growing number of School Districts are now preparing Annual Comprehensive Financial Reports (Annual Reports) for reasons that, when critically examined, are persuasive. This blog examines the differences between these two reports, the reasons why School Districts may opt for the lesser option and how to save time regardless of approach. Why is a Annual Comprehensive Financial Report better than OCBOA statements for School Districts? The Association of School Business Officials International (ASBO) cites four key reasons: Demonstrates that your district is committed to transparency and accountability. Makes district financial information more accessible to all members of the school community. Is viewed as a positive decision-making factor by credit rating agencies. Can be useful for meeting continuing disclosure requirements for bonds. Given the above, why do so many school districts still choose to prepare OCBOA reports? It is simple. They are easier for a lay-person to understand and easier for finance to prepare. The Annual Report is undeniably a more complex, time consuming report (both to prepare and to understand). In many ways the extra level of complexity is the underlying reason that it is a more accurate and useful report. Many school district finance departments are stretched to capacity with their current workload and may feel they just don't have the capacity to tackle an Annual Report. If you are like many other finance professionals who say the benefits of the Annual Report do not outweigh the extra work, there is another element to consider: Automation. If you are using spreadsheets and word processing tools to prepare your OCBOA reporting today, converting to an Annual Report while simultaneously implementing a report automation tool will likely reduce total workload below your current levels. Bonus tip: Implementing report automation tools with your OCBOA reporting (should you resist the urge to change) will save you a ton of time too! Conclusion It is more difficult to produce the Annual Report, but the right technology will allow you to have the best of both worlds - world class reporting without department-breaking time investment. Get started today. Here are some great resources: ASBO Certificate of Excellence in Financial Reporting Resources. A guide for what to demand in your Annual Report automation solution. Note - these requirements will apply for automating your OCBOA reports too!

In many states, lots of school districts issue OCBOA statements, not Comprehensive Annual Financial Reports. In our article, you will learn why OCBOA statements are so popular, four reasons an Annual Report is better, & how to produce an Annual Report with less work than OCBOA statements.

An Interview with Washington County: Budget Book Automation

Jamie Black
Success Stories
minute(s)Washington County is the second largest of 36 counties in the State of Oregon. As of the 2010 census, its population was 529,710 and its largest city Hillsboro had a population of 91,611. With a $1.2 billion total budget proposed for 2018-19 to include investments in infrastructure, transportation and affordable housing to name a few, the county's budget department has 'its work cut out for it.' The Challenge The county's budget book spans more than 300 pages. It took four of the team's six staff members approximately 75% of their time from March through the end of June to prepare. Links to Excel in Word documents would routinely break or malfunction randomly; these errors plagued their processes as they would change numbers in multiple locations unexpectedly. The Interview We interviewed Washington County to learn their thoughts on the budget book automation project we completed with them in 2018 (see the book that resulted here). Here are the highlights: 1 What was your business process to tackle the Budget Book previously, how much time did it take and why did you want to switch? Our process was to download information into an Excel Spreadsheet after the information was entered in Questica, open a series of Word Documents by our Functional Area’s then link the spreadsheet that pertained to a specific Org Unit to the correct page in the Word Document, write the budget analysis and present to the Deputy County Administrators for their review and input. As the Deputy County Administrators recommended changes, the changes would be entered in Questica, downloaded into Excel, update the links, reprint the page for further review. At the end of all the changes then the summary sheets would need to be redone with new downloads, the prior links were updated, the budget analysis sections would need to be proofed to verify the words and numbers matched the linked tables. Then after the Budget Summary Book was completed for the public hearing it would need to be re-done after the year-end changes and impacts changed by the budget committees before it was produced as an Adopted Budget Summary in July. This took four staff members approximately 75% of their time from March through the end of June. The desire to switch to a different process was generated as a result of the Excel links in the Word Documents continued to break or malfunction randomly, the mistakes that would plague the process due to changing numbers in multiple locations and a desire to automate some of the processes, standardize language and writing style and have increased confidence in the final numbers in all reports. 2 What other solutions did you consider? How did you hear about FHB, and what were the key factors in choosing our solution over the others? We looked at a few other solutions that were more of a publication software style and did not link to Questica or provide number checking abilities. Two staff members were able to attend the Questica conference two years ago and watched a demonstration from FHBlack on the ability to link Questica to preparation of the Budget Summary Book. In addition, Questica sales representatives assisted us with finding other agencies who had implemented CaseWare as a Comprehensive Annual Financial Report solution. The key factors for our selection were the interface ability to link CaseWare to Questica and the standardization of programmed sentences and fonts. 3 Were you initially concerned about working remotely or working with a Canadian company? We had very limited experience working 100% remotely on software implementations so yes, we did have some reservations at the start. We had no concerns about working with a Canadian company. 4 What process did you follow to implement CaseWare and how did you feel the implementation went? Perhaps provide a summary of the process? We used the consultant for all implementation of the software and preparation of the past year Budget Summary Book. We met weekly during the development and provided results of queries from Questica that the consultant built. The consultant was given access to our systems or was able to direct us on what was needed during our webinar sessions. All sessions were attended by the County team so that we were all learning about the software, provided the consultant information on how our budget process worked, accounting structure, how the software used the data to provide the summary pages, spreadsheet view, pictures, and how other outside the system documents were added. We were then able to work more independently when putting together the new year budget summary with the assistance of the consultant. The consultant was very knowledgeable about CaseWare and was an invaluable partner in the successful implementation of the software. He was very adept at learning our account structures, setting up what was needed and provided a best practices approach to how the book went together. He was great at problem-solving and thinking outside the box to find solutions that benefited our project. The implementation was successful and the experience was one of the best we have encountered. 5 How many team members at the County worked with the CaseWare Budget Book Solution? We had six staff members on the County team, a Project Manager, Chief Financial Officer, Controller and three other budget analysts. 6 From your perspective, how is the County in a better position now as compared to with your old solution? Is the process faster? What are the biggest benefits? Could you estimate the time savings or provide any examples. We are just now about ready to begin our second actual year of preparation of the Budget Summary book. Our process starts with getting the budget into Questica before we can begin using CaseWare. We envision that the process to interface the needed information from Questica to CaseWare will go smoothly. The interface is required in order to prepare the first draft of the summary pages with the financial information linking smoothly. We do plan to use the consultant to assist us with the initial conversion to the new fiscal year so that we have clear written directions to complete the process. We believe that the time staff use to put into downloading information into spreadsheets, unhiding rows, adding new organizational units etc. will be better spent providing additional analysis, and free up time to work on other projects that often get delayed during this budget preparation time. One budget analyst is also having time re-directed to assist in the implementation of CaseWare for our Comprehensive Annual Financial Reporting implementation project. I would estimate that we are saving about two of the FTE who were working on this part of the budget development. 7 What is your perception of our expertise? Specifically, can you speak to our knowledge of: Technology generally and CaseWare/Questica specifically Budget Book process & requirements Our consultant was very knowledgeable on both CaseWare software and Questica information and queries. The consultant we used was great and his knowledge of the Budget Book process and requirements was outstanding. He was able to build our document to meet our needs, troubleshoot issues that arose and make many great suggestions to assist us in this process. The software is complicated enough that I am not sure we would have been successful without his direct work and interventions when we had difficulties. 8 What was our client service like? Did you feel like we carefully managed the project, knew and met your deadlines? Did you feel like you were well taken care of by your consultant and that your concerns were heard, and your questions answered etc. Client service was great. Some interim project deadlines were allowed to slip by the Chief Financial Officer. However, the overall project deadline was met. The consultant was dedicated to making sure the project was completed and we were happy with the final product. All our concerns and questions were answered by the consultant and his level of patience and willingness to provide additional training were excellent. From a project perspective, F.H. Black exceeded our expectations. From day 1, their project manager (Darryl Parker) made us believe we were his one and only client. With his deep knowledge in governmental accounting, he had a clear understanding of our practices and challenges. Also, project timelines were clearly communicated. When challenges arose, Darryl seemed to do magic getting us back on track! A true pleasure to work with! 9 Would you recommend FHB and specifically the CaseWare Budget Book solution to other state or local government finance departments and why? Yes, we would recommend both FHB and CaseWare Budget Book to other jurisdictions. We believe the time savings going forward will more than offset the annual cost for access/licenses. The ability to customize the look and feel of the book to match our prior books, add our own other documents that did not make sense to build into CaseWare including charts and graphs are key to the successful build of our Budget Summary Book. 10 Do you have plans to tackle any other automation projects (Comprehensive Annual Financial Report, monthly, quarterly, state-mandated reports etc.) with CaseWare and FHB? If so, please discuss them and why you feel the county will benefit from these automation projects. We have just begun the implementation project to automate our Comprehensive Annual Financial Report. In addition, we have two other departments within the County who are interested in automating some of their quarterly or annual financial reports. The automation of the Annual Report is anticipated to save a great deal of staff time chasing down numbers that change during the development of the Comprehensive Annual Financial Report. Every time a number changes in the current process causes additional time to find and make the changes in all places impacted. CaseWare will carry through the changes to all needed tables/pages so that this additional review time will be saved. The other departments see the value of this software and are excited to develop projects to assist them with meeting their reporting needs.

Washington County automated their budget book with the help of F.H. Black & Company Incorporated by implementing the Questica Budget Book powered by CaseWare solution, drastically streamlining the processes while producing a more reliable report.

What is your Bitcoin strategy? Accept / Invest / Avoid

Waldo Nell
Tech for Execs
minute(s)Most people have heard of “Bitcoin”. It was all over the news about a year ago with massive increases in value, which lead some to ponder if Bitcoin would become the currency of the future. Much has happened with Bitcoin in the last year (both positive and negative) and we thought it was time to consider the opportunities of Bitcoin from a Finance Department perspective. As you all likely know, Bitcoin (BTC) is one of many types of cryptocurrency. Other well known cryptocurrencies include Litecoin (LTC) and Ethereum (ETH). Bitcoin is the oldest and most well-known of the cryptocurrencies. It has been around for almost a decade, but only recently began to experience significant increases in value. This increase lead organizations around the globe to wonder if / how they should take advantage. 1) Should your organization accept Bitcoin? For most finance departments, there are 3 reasons that they should not rush to accept Bitcoin (or any digital currency): Low Demand - There is little consumer demand to pay with Bitcoin. This is driven by significant appreciation hopes by those that hold Bitcoin, and high transaction fees. Perceived Legal Risk - Digital currencies are treated as 'commodities' not currencies. This can lead to difficulties with your legal options in the event of theft. Increased Administration - The steps required to accept digital currencies are not the same as accepting traditional currencies. While straightforward, it is one more barrier to moving forward. Further, given price fluctuations, (discussed below) you may want to quickly convert from Bitcoin to cash. This is an additional administrative task that likely further discourages adoption. The result is Bitcoin Acceptance is Low and Getting Lower. I'm not certain at this date what would compel Finance to prioritize its acceptance. 2) Should finance invest in Bitcoin? The answer for nearly all finance departments is holding significant amounts of Bitcoin today is too risky. In just the last few years (from Q3 2016) Bitcoin value began growing exponentially. In Q2 2016 a single bitcoin was valued at approximately $590. Approximately six months later in Q1 2017, the value jumped to $1,400, and in Q4 2017 it peaked at $25,000, before falling to today’s value of $8,200 (CAD). This exponential growth followed by a rapid decline in value highlights the volatility and uncertainty inherent in this modern currency. This volatility likely makes significant holdings by finance in Bitcoin unwise. Some look to Bitcoin futures to bring Bitcoin into the mainstream financial markets. On the prospect of these futures, JP Morgan set their Bitcoin evaluation to "Bullish" as an investment asset. Some analysts believe that the recent advent of these Bitcoin Futures contributed to the major valuation gains that were seen in late 2017. Largely however, this futures market has been disappointing. “Institutional players have stayed on the Bitcoin sidelines, and as long as they are, the futures contracts are likely not to generate substantial amounts of volume.” Craig Pirrong, a finance professor at the University of Houston The future of Bitcoin and its underlying blockchain is definitely something to keep an eye on, but given all the above finance should view Bitcoin like any very risky investment; only invest amounts that you can afford to lose.

12 months ago, Bitcoin was all over the news with meteoric valuation gains. The last year has seen the value drop considerably. What should your finance department do in 2019 with Bitcoin? We answer the two biggest questions.

Important Notice: CaseWare Financials Template (GASB)

James Goligher
What's New
minute(s)We have learned of a bug affecting CaseWare's GASB Financials Template. Issue: On installing the 2016 patch customized schedules are lost from the content library. CaseWare International has already resolved this issue. On September 24th, 2018 Patch 2016.00.335R6 was released. If you have already updated to Version 16, it is important that you immediately take action to ensure your Schedules are not lost. If you are yet to update, ensure you install the latest version. Templates should always be backed up before installing a patch. To backup use the 'Repackage' option. Only users who have added customized content to the schedule libraries of the template are affected. Unfortunately, that includes many of FHB's clients using the GASB Template. Our clients are invited to book a support call with one of our consultants who will be happy to discuss the issue with you and assist in taking the appropriate steps to ensure that your content is protected.

We have learned of a bug affecting the 2016 version of CaseWare's GASB Financials Template.

Comprehensive Annual Financial Report Automation Success - State of ...

Jamie Black
Success Stories
minute(s)The State of Maine is thrilled with its new automated approach to preparing the Comprehensive Annual Financial Report (see the resulting document here). We interviewed them to learn more, and share their insights with others considering a Comprehensive Annual Financial Report automation project. Read the full interview: The Interview 1 What was your business process to tackle the Comprehensive Annual Financial Report previously and how much time did it take? We import a trial balance from our accounting system that is formatted for use by our reporting application using Excel. We request information from numerous state agencies and other sources for the purpose of posting adjustments (over 300 manually entered adjustments and over 100 "auto-reversals") to account balances and compile other information for note disclosures, required supplementary information and statistical information. Our previous Comprehensive Annual Financial Report reporting software generated only numerical financial statements in Excel format. Narrative information was generated with Word. Desktop publishing was a completely manual process that involved converting multiple documents into PDF format and compiling numerous PDF documents into one published document. The entire process began with some "prep" work in August, with the full commitment of all five members of the financial reporting team beginning in September. Draft financial statements typically were issued by approximately the second week in December and often the Auditor's Opinion letter would not be received until the last week of December, with the deadline to qualify for a Government Finance Officers Association Certificate of Excellence being December 31. A significant amount of time involved in generating the Comprehensive Annual Financial Report requires the compilation of information, making calculations, documenting, reviewing and filing workpapers for review by our Auditors. Additionally, we are the reporting entity for several component units, who must complete their financial statements before we can include their information in our statements. Thus, it would be difficult to push the timeline back further than approximately December 1st. 2What product were you using before and why did you want to switch? We used "CAFR Unlimited." The product was a Microsoft Access based application that was originally developed by a lone developer and sold to a software development company. The company discontinued support for the original application and planned to convert the application to a networked, SQL server platform, but discontinued support for that product as well. The product was simple to use and worked well for us. But, it had no desktop publishing capabilities. The reports that CAFR Unlimited produced were all Excel based reports. Thus, we switched, number one, for the lack of product support; and two, we wanted a more robust product that provided publishing and workflow capabilities. 3Did you look at other solutions and if so, what was the key factor(s) in choosing our solution? We were provided with demonstrations of other products, but none of them had all the capabilities that CaseWare offered. We also liked the staff at FHB and felt comfortable that they would provide excellent customer service. After a demonstration of CaseWare, we were instantly intrigued by the product. When we asked the presenter "will CaseWare do this?", the answer was in most cases "Yes, this is how that is done." The decision to go with CaseWare was easy. 4Were you concerned about dealing with someone other than the software vendor for implementation? No, not at all. In fact, after the implementation, we had a couple of minor "glitches" to resolve and in a least one case, F.H. Black resolved the problem quicker than CaseWare International's support staff. So, we're very happy we have the support of FHB. 5What process did you follow to implement CaseWare? We installed CaseWare on our computers and received four days of training from an F.H. Black consultant in two separate 2-day sessions. We provided the consultant with the prior year Comprehensive Annual Financial Report and our previous trial balance "crosswalk" or "rollup" codes. The consultant recreated the prior year's statements, notes, and various schedules based on Governmental Accounting Standards Board (GASB) templates. Through online "Goto Meetings" we met with the consultant at least once per week to discuss questions we had and offered our comments about changes that needed to be made. During this process, the consultant maintained the "master copy" of the CaseWare Working Papers file. Once the prior financial statements had been substantially recreated, the consultant performed a "roll-forward" to create the current year (new working papers file) financial statements; and control of the master copy was handed off to us. We entered adjustments to account balances as usual during the report compilation period. During this period, we continued to make editorial improvements to the Comprehensive Annual Financial Report with the help and support of FHB. The final step of publishing the Comprehensive Annual Financial Report merely involved "hitting the print" button. 6How did the implementation go? It was a lot of work and required the effort of five of our staff as well as three of F.H. Black's staff. Considering that our Comprehensive Annual Financial Report is an extremely complex and detailed 250-page document, the process went quite well. 7From your perspective, how is the State in a better position now as compared to with your old solution? Is the process faster? Could you estimate the time savings or provide any examples? We believe we are using a much better tool than before. We are comforted in the fact that we have support of a company with knowledge and expertise in financial reporting and supports mature industry-leading software with an international presence. It's difficult to measure "fast" in our circumstance. CaseWare's strength is with its desktop publishing capabilities. But, in terms our timeline, since we are a relatively large governmental entity, we post numerous adjustments (approximately 300 plus), that must be processed through our rigorous documentation and review process. This takes a tremendous amount of time regardless of the tool(s) used. CaseWare does save us the time and tedium of having to manually enter every adjusting journal. At the end of the reporting process, we used to compile numerous Excel workbooks and Word documents, send files to a "PDF printer" and import many PDF files into the final published version. Since individual documents came from so many different sources there was no consistency in page margins, page numbering, fonts and font sizes, etc. CaseWare is "heads and shoulders above" our previous software in terms of the quality of the published report. We also believe the overall integrity of the report to be much better and the risk of errors and omissions is less than before. 8What are the biggest benefits of the CaseWare tool vs. your old system? The biggest advantage is the desktop publishing and the ability to reference values between statements to ensure that all values agree. Our prior reporting application had no desktop publishing capabilities. The exceptional feature of CaseWare is that anyone can see a real-time view of the draft report at any time during the report compilation period. You don't have to wait until the end of the process to view a compiled "camera ready" draft product. CaseWare provides the ability for the user to formulate unlimited diagnostics and analytics to ensure the completeness, accuracy and integrity of the final product. CaseWare allows the user to easily generate customizable reports using its "automatic document" functionality. These reports were invaluable in establishing and verifying account rollup balances during the implementation phase and the reports were extremely useful for auditors as well during the first year of our Comprehensive Annual Financial Report reporting. Our old system did not allow the user to save customized worksheet reports; whereas CaseWare allows users to create as many "worksheet" reports as desired and organize them anyway they want. Our prior tool allowed for the import of the trial balance only. CaseWare allows user to import trial balances, budgets, revenue forecasts, performance measures, and even adjustment data from properly formatted Excel workbooks. The import functionality is extremely convenient as it eliminates the time and tedium of entering data that we've already "crunched" in our complex Excel spreadsheets. The import functionality also limits or eliminates data entry errors. 9What was your experience with FHB like? The consultant assigned to our project has over ten years of experience, his combined background in accounting and computer programming and technical acumen makes him an invaluable resource for us and FHB. 10Did you feel like we carefully managed the project, knew and met your deadlines etc? Yes. We were very clear in communicating our timeline to FHB. We had established a reasonable timetable at the beginning of the implementation project. We believe that effective planning and communications by all parties was key to the success of the project. 11What was our client service like? Did you feel like you were well taken care of and that your concerns were heard, and your questions answered etc? We believe FHB's customer service is "top notch." The team made a concerted effort to understand our requirements and concerns. We participated in periodic "how's everything going" meetings. We got the sense that FHB strives for continuous improvement in servicing its clients; and is genuinely concerned about its clients' opinions and satisfaction with FHB's products and services. 12How well did we communicate? Were we clear and concise, were we readily available to discuss your concerns? Did we do a good job of setting expectations and keeping you updated each step of the way? The consultant assigned to our project was extremely knowledgeable, helpful, easy to work with, and explained every detail of the technical, "under the hood" aspects of CaseWare whenever we had specific questions about how the application works. 13Is there anything you wish you knew at the beginning of this process that you know now? Advice for others considering a similar Comprehensive Annual Financial Report automation project? We can't think of anything that we wish we knew at the beginning of the process. However, as one would expect, the more complex the set of financial statements, the more lead time an entity should provide itself to implement CaseWare. Our Comprehensive Annual Financial Report is 250 pages that includes introductory information, management discussion and analysis, basic financial statements, notes to the financial statements, required supplementary information, notes to the required supplementary information, combining and individual financial statements, and statistical schedules, all prescribed by GASB standards. We started our implementation project in April of 2017 with training. The recreation of the prior year's financial statements, to be used as a template, took place from May through August. The generation of the current year's financial statements occurred during the usual time frame from September through December. We completed the published report approximately two weeks ahead of the usual timeframe. As with any project, proper planning, delegation of tasks, and adherence to deadlines is important to achieving a successful outcome. 14Would you recommend CaseWare to other state or local government finance departments and why? Absolutely...Yes. Based on our research and experience, CaseWare appears to be the most comprehensive reporting application on the market - the one tool that "does it all."

The State of Maine automated their Comprehensive Annual Financial Report with the CaseWare solution and are thrilled with the results. We interviewed them to find out more about what they did before, the implementation process, and where they are now.

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