How to improve CaseWare performance by 20%
- Darryl Parker
- Tips and Tricks
- minute(s)During our introductory CaseWare training sessions, we focus on the fundamentals. To move users beyond these basics and ensure an even faster year end, we regularly provide CaseWare tips & tricks in this blog series. Our advice in this article is simple: eliminate unnecessary groupings from your file. It nearly always means better performance and less confusion! Why Purge? Why should you care about cleaning up (purging) your mapping and grouping codes? You want as comprehensive a grouping structure as possible - initially.That way you know you have an appropriate location for every G/L account. Once you have grouped all your accounts though, a typical file will have a large number of groupings that are not necessary. Those unnecessary groups slow down the file. They also slow you down, as you have to scan through long columns full of zeros and determine whether they are noteworthy. $0.00 of "Fishing Revenue" might be expected for your statements, but what about $0.00 of Account Receivable? That's why purging the map numbers or group numbers in any file can be a significant improvement. It moves the file from a generic setup to one tailored exactly for this year-end. In large, complex files we see dramatic results: Opening large financial statements: up to 10% faster. Opening group assignment window: up to 10% faster Opening grouped lead sheets and trial balances: up to 60% faster. In one of our large IFRS client files, cleaning up the groupings resulted in a more than 20% improvement in speed across a simple set of tasks (opening the file, reviewing the consolidation and mapping, and looking at automatic documents and the financial statements). Note - in a very simple file, the speed improvements may not be noticeable but the benefits of a file that is easier to navigate remain. We’ve posted recently about the standard Mapping Purge feature in CaseWare Working Papers. Read that article for an understanding of the built-in features, and then get ready for a more advanced map purge that addresses the limitations of the standard one. The Advanced Purge tool Perhaps you tried the regular map purge in your own Working Papers files. Or maybe you read about the problems that the built-in mapping purge has (can only work on mapping, cannot check account assignment, required knowledge of dBase filters) and thought it was not a good fit for your organization. We want you to be able to quickly and easily clean up the unneeded grouping numbers in your file so you have an even faster year-end. So, we built a tool to allow you to do just that. And we are providing it to CaseWare users for free. The Advanced Purge Tool will: Allow you to choose any of the mapping or 10 grouping structures to clean up. Never delete a map/group number with any adjustments related to it. Never remove a map/group number with any account allocated to it or any of its child map/group numbers. Check three years of historical balance data to determine if prior year adjustments should preclude deletion of a map/group number. Allow you to choose whether calculated map numbers should always be saved, or should apply the balance-checking logic to them. Define a “root” or “base” map number length that will not be deleted under any circumstance. BEFORE YOU START - A Word of Warning!!! The Advanced Purge tool will delete group numbers out of your Working Papers file, and there is no undo button. You must take a backup before running a purge. Even better, take a disposable copy of your file and thoroughly test a purge and verify its effects before running it in your live file. And even then, you should take a backup of that live file in advance of running your thoroughly tested purge! To use the tool: Download the tool. It is a compressed (Zip) file so you will need to extract it after downloading. The tool is a single CaseView document. After extracting, drag and drop this document onto the Document Manager of the file to be improved. Launch the CaseView document. Confirm you understand the risks of purging groups. Choose the grouping mechanism from which you wish to eliminate zero balance. Choose what balance type to examine for balances and if Other Basis entries should be considered. Specify if you want to keep calculated group numbers. Specify if you would like to keep base group numbers. If selected, you must also note how many digits are represented in your definition of a base group number. Once completed, select Perform Purge. When finished (it may take awhile), you will get a confirmation of how many unused groups have been eliminated. You can get a copy of the tool to see how it will simplify and streamline your own data files. All you have to do is click the image below! Consider our more advanced CaseWare training if you want your CaseWare Black Belt!
Our tip in this article is simple: purge unnecessary groupings from your file to improve CaseWare Working Papers performance by up to 20%READ MORE
CaseWare Feature Spotlight: Diagnostics
- Darryl Parker
- CaseWare Feature Spotlight
- minute(s)CaseWare's financial reporting solutions provide massive benefits to finance professionals. How? By providing the most sophisticated features in the industry. We've developed this article series to outline many of these features to: help prospective users appreciate all of CaseWare Working Papers' power, and encourage existing users to maximize their utilization of the software. "Tick & Tie" for hours & hours All of us know the pain of manually footing and cross-footing and cross-checking a large financial report. It's time consuming and the risk of error is significant. Even worse, as soon as you have an adjustment or update to the numbers, you've got to do it all over again. That's why the ability to automate the diagnostic tests for correctness in your reports is so important. One professional we respect greatly (Joy Richardson) explains the power of this feature set as follows: In addition to making the import of data simple and providing tons of grouping flexibility, Working Papers allows the user to define and enforce rules about their data. We have already discussed one example of this; Automatic Rounding. Diagnostics is a broader - and in some ways, a more powerful - feature that users can and should take advantage of. Rules-Based Data Management When data is imported, we define the nature of accounts that have been imported. This is done by assigning group codes to each account. CaseWare's understanding of accounting principals allows it to perform validation and testing of the resulting financial reports. For example, when we assign an account to a group called "Allowance for Doubtful Accounts", CaseWare is able to automatically determine: this account belongs on the balance sheet (or statement of financial position if you prefer), normally the balance is a credit, this account should be netted against our Accounts Receivable accounts when we present A/R Net of Allowances, If I define these as rules within Working Papers' groupings, Diagnostics will monitor my data and find any examples of where these definitions are violated. What happens if someone modifies these assignments? As you see in the following clip you will be notified: Working Papers also notifies end-users of common issues that might occur inside your reports: Finally, Working Papers' Custom Diagnostics feature allows end-users to define their own rules within their reports - without the help of a programmer! If these rules are broken, you will know about it immediately: Diagnostics are another example of the features that enable CaseWare users to dramatically reduce the time spent on the creation of complex reports while eliminating errors.
CaseWare's diagnostics significantly reduces time spent to generate CAFRs, annual financial statements, budget books and other complex reports.READ MORE
Is Self-Implementation right for you?
- Jamie Black
- Efficient, Effective and Reliable
- minute(s)In order to make the most of tight budgets, efficiency is key for government finance officers. The RIGHT tools and technology can aid significantly with improving efficiency. This is of course assuming you can fit that technology into your tight budget. Many of our clients are looking to find ways to implement technology as inexpensively as possible. For some tools, this can mean self-implementation. How do you know when this approach is right for your finance or budget department and when it is a mistake? This article examines the criteria that determine if you are likely to be successful self-implementing a particular new finance-related system (ERP, payroll, Comprehensive Annual Financial Report or financial statement automation etc.). Over the last 20 years we have implemented hundreds of technology solutions for clients: Comprehensive Annual Financial Report and financial statement automation systems, custom designed mobile applications, ERP systems, local and wide area networks, servers, and of course continuous monitoring systems. During the course of these implementations I think we have tried every possible model: 100% delegation of implementation tasks to client's staff 100% retention of implementation tasks by our team Every task-sharing split possible We have had major success with each of these options. Frankly, we have also had some disappointments. This has given us a wealth of experience and allowed us to come up with the following guidelines for determining which approach to take. Self-implementation Requirements: When you engage consultants / vendors to help with the implementation, there are really two major benefits that they provide: relevant expertise and time to dedicate to the project. As you consider if your organization can self-implement a particular system, assess your team to see if you have the "right-stuff" in these categories. 1) Expertise: An objective assessment of your team's expertise is critical to ensure you are capable of taking on the implementation yourselves. Technology: The initial configuration of some systems require considerable technology knowledge that is not necessary for their day-to-day operation. Server setup, database configuration & optimization, custom code for integration with existing tools are some common areas of required expertise. Do you have team members with this expertise already? If not, you should carefully consider whether it is a wise investment of your time and money to develop this expertise internally for the self-implementation project. On the other hand, some systems do not require this sophisticated technological expertise about the support systems. All that may be necessary is strong knowledge about that particular application and its day-to-day features. In some cases, a strong user of Microsoft Windows and Microsoft Office could have all the technological expertise required for a self-implementation project. Questions for the software vendor: What technology does your system rely on? Are there servers to set up or databases to administer? Is there any programming or scripting required to implement this system? Specific subject-matter: Subject-matter expertise depends upon the system you are implementing. If you are implementing a new ERP system, are you expert in the functioning of your current system? Have you worked with many different systems? Have you ever been responsible for administering a new ERP system? If you are considering self-implementing a year-end reporting automation tool (Comprehensive Annual Financial Report / financial statements), does your team have a lot of experience preparing these reports today? Do you understand how these balances come together and know what G/L accounts get grouped in each number on your statements? Or is this your first year-end and you do not have any support from the people who prepared prior year reports? Questions for the software vendor: What subject-matter skills do you require of your implementation consultants? What experience is essential for a successful implementation? When you have seen implementations fail, what skills were missing from the implementation team? Project management: The size and complexity of the project will determine how sophisticated your project management skills will need to be. For example, if the project requires collaboration from a large team over many months / years, with many individual milestones, lots of complexity and great risk should the project fail, you want a very seasoned, professional project manager. On the other hand if the project will only involve one or two people, is reasonably straightforward and you have a great fall-back plan in the event of delay or failure, basic skills may suffice. At a minimum we recommend candidates who have good attention to detail, strong organizational and communication skills. That might be sufficient to guide the self-implementation of some systems. Questions for the software vendor: How long and complex is a typical implementation project? Do you offer project management services if we deem it necessary? What guides or checklists can you offer us to assist in managing a self-implementation? 2) Staff Availability: One of the many reasons organizations pay for professional implementation is not due to a lack of expertise but a lack of available staff time. Being short-staffed or just overloaded with work likely means that you will not be able to prioritize the implementation tasks and you will wind up with a system that is never fully / properly implemented. For many systems, considerable time is required to successfully implement the tool. The tasks may or may not be complex from either a technology or subject-matter perspective but, they may take considerable time. You need a clear understanding of both how much time is required and how much time your team has available. Consideration should also be given to how frequently you will need to break-off from the project to tackle your other duties. The more frequent the interruptions, the more difficult it will be maintain momentum, remember training etc. Questions for the software vendor: How much time would you allow for your consultants to implement this system for our organization? How much more time should we allow given we do not have your experience? Should we multiply the vendor's time estimate by 2? By 3? Measure Your Options As you obtain answers from your vendor, score and plot the responses on a graph like the one pictured here. Projects that fall into the green zone are obvious "self-implementation" candidates. If you plot your project in the yellow or orange zones, it becomes apparent that the demands of the project are higher and careful consideration of your availability and / or expertise is warranted. Should you determine that the project falls into the "red zone" it usually means that it would be wise to abandon self-implementation and investigate other options. Joint Implementation This is not an all-or-nothing decision between self implementation and fully outsourced implementation. Another option to consider is to share the workload with the vendor in a joint or guided implementation. You may be able to do major portions of the work yourselves which will yield significant fee savings and make use of their professionals' expertise and time strategically. Use their team to provide oversight, to remedy any expertise weaknesses or to supplement for any resource availability issues you may have. By balancing the use of your time, your expertise, and your budget for external services, you can often develop an implementation plan which provides the highest return on your technology investment.
To implement technology as inexpensively as possible many governments consider self-implementation. How do you know if this is right for your organization?READ MORE
Lipstick on a Pig: 6 Spreadsheet-based Financial Reporting Tool Flaws
- Jamie Black
- Automating Financial Reporting
- minute(s)You may be familiar with the expression "Lipstick on a pig". Variations of the expression date back nearly 130 years but the meaning has not changed; Superficial improvements that do not change the underlying nature of something. Spreadsheets by any other Name We have seen an increasing number of spreadsheet-based reporting automation tools promoted as ultimate solutions for Comprehensive Annual Financial Reports & Budget Books. This is ironic considering many organizations are using spreadsheets today and are looking for a better approach. Sometimes these solutions are desktop add-ons to enable better connections to a source of data. Sometimes these are cloud-based solutions that rely on spreadsheets to maintain their data and develop their reports. Hard to Tell They are Spreadsheets The fact that these are spreadsheet-based tools may be hard to tell on initial review. You can spend hours reviewing their websites and sitting in presentations and still not recognize it. It's not surprising they don't advertise their reliance on spreadsheets given the scientific evidence of their weaknesses and the numerous stories of very public disasters caused by spreadsheets. The Lipstick In fairness, these tools often have improvements over the desktop spreadsheets you are used to, such as: Better collaboration abilities for sharing comments, tracking changes or assigning tasks. Better audit trails and change management. Ability to tie supporting documents to a given value / cell. More granular security / permissions. The Pig But the core of these products are still spreadsheets. That means they suffer from the traditional spreadsheet weaknesses: No database - All data resides in spreadsheets / workbooks not in a database. This means you must build all your own personalized systems to: ensure your G/L balances identify the 100 - 1000 new G/L accounts added each year No processes/workflow - There is no structured system that you can leverage to support industry best practices. What steps should be followed and in what order? You must develop all of these processes on your own and maintain them separately from your reporting environment. No grouping mechanisms - The G/L accounts that sit in your spreadsheet must be summarized in numerous different ways (by object, by fund etc.) to power your Comprehensive Annual Financial Report or Budget Book. If you use spreadsheets, formulas must add the right accounts together. This is fragile and susceptible to error. Moreover, unless you interrogate every formula, there is no way to know what is being included in a given number; there is no legend. Assuming you do get this right in year one, all the new accounts next year means these formulas must all be updated. Tons of custom formulas - All values are derived by "linking" - which is to say writing spreadsheet formulas of varying complexity. Any mistakes you make means errors in your report. Consistency in how these formulas are written or maintained is entirely dependent on the user's expertise, accuracy and completeness. No content libraries - Reporting standards are continually evolving. There are new GASB pronouncements all the time and keeping up with them and what new statements, schedules or footnotes are required this year can be daunting. Spreadsheet solutions do not come with any content. It is entirely up to you to figure out what must be presented and how. No adjusting journal functionality - Adjusting or changing balances is an absolute requirement for financial statement /Comprehensive Annual Financial Report production. In spreadsheets you are left with no tools for the following: The values in your G/L are typically maintained on a modified accrual basis. For many of your statements, you need full accrual. Debit balances in A/P accounts or credits in A/R are just two examples of balances you need to reclassify. Prior year adjustment / restatement caused by changes in accounting policy. Our message in this post is not that the additional features - the "lipstick" - have no value, or that there is no situation when spreadsheets should be used. We are saying that when finance & budget officers evaluate possible solutions for their most complex reporting tasks (Comprehensive Annual Financial Reports & Budget Books), they must exactly match the critical requirements of their processes to the solution's abilities. If they do this carefully, they will find that spreadsheet-based "solutions" are only marginally better than their own collection of desktop-based spreadsheets.
Comprehensive Annual Financial Reporting and Budget Book tools based on spreadsheets are all the rage. Don't overlook their considerable weaknesses.READ MORE
5 Best Practices for Updating Critical Software
- Waldo Nell
- Tech for Execs
- minute(s)Finance officers, accountants and auditors are expert in a very specific field of knowledge. Generally speaking that does not include great depth related to IT systems and best practices. Yet finance officers, accountants and auditors rely on software (and hardware) to allow them to complete their work, often under very tight deadlines. This article will layout the case for finance involvement in the process and provides 5 key steps for finance. Running with Scissors Almost certainly all of your critical applications (ERP, budget, HR, financial reporting, payroll etc.) get updated from time to time. For many of our clients, finance leave this process entirely in the hands of IT. Often finance does not even know updates have occurred until they come in Monday morning and detect that something looks different. This is a very dangerous approach. Updates are risky. Kind of like running with scissors. You may have done it a hundred times with no problems, but one little misstep and it can be disaster. You may appreciate this if you ever lived through a failed update. To give you a little more control and allow you to better mitigate this risk, we recommend our clients follow a 5 step process to manage their updates. 1) Work with IT - Make sure IT knows that they need to include finance in all critical update processes. This does not mean sending an email to finance when the job is done. It does mean advising finance before anything happens (ideally when updates are first made available) so you can work collaboratively to ensure everything works well. 2) Know the benefits - Ensure you have a clear idea of what the benefit to the organization of the upgrade will be. Amazing new features that you have been dying for? Major bug fixes that will prevent lots of errors? If not, the right answer may be to sit this upgrade out, unless the upgrade is required to improve upon network security for example. 3) Don't upgrade during critical periods - Now that IT is communicating with you when updates are pending, you can advise IT when a good time for finance to do the update is. For example, in the middle of year-end is NOT a good time for just about anything, let alone an update to your Comprehensive Annual Financial Report / financial statement software. Now some processes never stop (payroll for example). For systems that relate to these processes, look for the least-bad time periods to do upgrades. 4) Test first - Develop a testing plan to ensure that all features function acceptably in your environment with your data, before you roll them out to the live system. This will involve several steps: Install in a test environment first or take full backups of all data before installing the new versions, and plan for some downtime if you need to roll back in the latter approach. Get key system users to test all functions that they rely on to ensure they perform as expected. Note - if you used the backup live data option above you will need to notify users that the system will be unavailable while testing is occurring. If the new version passes all testing, take a backup of the live data and update the real / live server or environment. If you did not have a test environment and took backups of data before testing, you have no more work to do other than advising users they can use the application again. 5) Plan for failure - Develop a plan to deal with failed test results. If you followed steps 3 & 4 above, even with failed tests you are safe, no harm done. If you took a backup and then installed over the previous version of the software, now is the time to recover from the backup. Next, communicate the problem with the vendor about the problem. If it takes the vendor a month to resolve your issue, day-to-day operations have not been effected and while not optimal it is survivable. When they give you a new update version, start at Step 1 above and repeat. Following this simple 5 step approach is guaranteed to limit your stress, and avoid the vast majority of problems that haunt the dreams of finance officers everywhere.
You rely on your key applications but updates and upgrades can be risky. Here are 5 steps to mitigate risk and guarantee better outcomes.READ MORE
What You Need to Know about 64-bit Working Papers
- Darryl Parker
- What's New
- minute(s)Recently CaseWare International sent out notification that a new version (2016.00.115) was released in both a 32-bit version and for the first time ever, a 64-bit version. Likely, two questions immediately arise for you: Should I upgrade to 2016 at all? Which version (32- or 64-bit) should I upgrade to? The answers to both of these question need a bit of consideration. 1) Should I Upgrade to Working Papers 2016? If you are in the middle of year-end / quarter-end or other significant reporting period - do not upgrade now. Otherwise, the short answer is yes. There are 3 major reasons why: CaseWare Working Papers 2016 has a variety of improvements and enhancements over the prior versions of the software. You should review the Enhancement tab of the Working Papers page on CaseWare's web site and determine if anything there is a real game changer for the way you use the software. Another important consideration is what other products from CaseWare International you use. Their latest versions may require you to have Working Papers 2016. For instance, users of the Financials Template who want to upgrade to version 14 must have Working Papers 2016 as a technical prerequisite. Finally, all Working Papers users should keep in mind CaseWare International's technical support policy, which only extends back one major version. If you are currently using Working Papers 2014 or earlier, you cannot receive technical support. You should strongly consider upgrading as soon as possible. 2) 32-bit or the 64-bit Version? As we recently told you want to be using 64-bit. However, some of you may not be able to with your current computer. The first step is to check whether you can run the 64-bit version. If you are not sure how to check yourself - ask one of the FHB consulting team or your own IT department. Now, if you are able to run 64-bit software, Stop. Your current version of Working Papers is 32-bit. That means when it was installed it was almost certainly saved in a 32-bit directory (likely C:\Program Files (x86)\CaseWare). If you install the 64-bit version into this directory, the upgrade will run as expected. Your IT department may wish to install it in 64-bit location (C:\Program Files\CaseWare). If they do this, the 64-bit version will not replace your 32-bit version. You will wind up with a second version of Working Papers alongside the existing version. That can be confusing! Further, all your templates are installed in the 32-bit version directory and don't get moved to the other directory. If IT wishes to install into the 64-bit location the approach is simple: Repackage all templates Uninstall all templates after verifying your CWP files Uninstall 32-bit version of Working Papers Install 64-bit version of Working Papers Re-install templates into 64-bit path If you have any questions or concerns about the upgrade procedure, contact the FHB consulting team and we'll be happy to discuss!
CaseWare has released a 64-bit version of Working Papers. This is excellent but some consideration is required for a smooth upgrade.READ MORE
Navigating PSAB: Asset Retirement Obligation Standards
- Bill Cox, BDO
- minute(s)Could Be Some Big Changes - And Some Unexpected Ones How Did We Get Here? The relatively new Public Sector Accounting Board (“PSAB”) standard “PS 3260 Liability for Contaminated Sites” turned out to not have much of a financial statement impact for most governments and government organizations. Certainly the Federal, Provincial and Territorial Governments ran into some of the most significant challenges. But most others were not faced with hugely significant liabilities to report. Likely the most significant reason for this is that PS 3260 applies, for the most part, to assets that are not in productive use. It was a logical progression for PSAB to consider whether standards were required for Asset Retirement Obligations (“AROs”). That is, standards that apply to assets that are in productive use. In addition to being a logical progression, many government organizations that moved to Public Sector Accounting Standards (“PSAS”) recently  had been applying ARO standards pursuant to the previous accounting framework they had been following. It was time for PSAB to look to see what, if any, standards were required in this area. An ARO project was set in motion, a task force put to work, and a Statement of Principles issued in August 2014. The main features of the Statement of Principles were: Legal, constructive and equitable obligations could create an ARO. The carrying value of the tangible capital asset is increased by the ARO and expensed through amortization of the asset. Subsequent remeasurement of liability would require adjustment to carrying value of the asset if it is still in use. Post-retirement operation, maintenance and monitoring form part of the ARO. A present value technique is often the best method with which to estimate the liability. In the period since the issue of the Statement of Principles the task force has been reviewing responses and developing a proposed standard. Expect an exposure draft in December 2016. Does It Make Sense To Have Different Standards For Similar Types of Liabilities? When the ARO standards arrive there will be three PSAS standards that deal with items that, at least on the surface, appear to have some similarities. These will be: - the pending ARO standard - the recent PS 3260 Liability for Contaminated Sites standard - and long-existing PS 3270 Solid Waste Landfill Closure & Post-closure Liability standard Each of these standards deals with situations related to clean up of land. On closer review though, it might be reasonable to consider Contaminated Sites as the odd one out. This standard deals with existing contamination as opposed to the other standards which deal with anticipated future costs. But, the requirements for closure and post-closure activities and monitoring of a landfill are identical concepts to those of AROs. Should they not then have the same accounting requirements? Accounting for Landfill Obligations The current Landfill Liability section has some similarities and some differences to the ARO proposals. Likely the most significant difference is that estimated liability amounts are not capitalized to an asset. Why is that? Quite simply the standard came into play in 1998 - a full 11 years before the adoption of PS 3150 Tangible Capital Assets. Capitalization really was not an option at that point. It is only logical that the ARO Task Force will consider whether there should be harmonization of the ARO and Landfill Liability standards. What Would a Harmonized ARO/Landfill Liability Standard Look Like? At first glance, one might expect that the liability amount would not change by the applying ARO concepts to landfill liabilities. After all, both standards suggest that you may want to look at present value techniques to account for future obligations. Yet, there could be a distinct difference in one area. Change could occur in accounting for costs that will be incurred regardless of the level of activity of the landfill. A portion of capping, closure and monitoring costs will be incurred whether the landfill contains 1,000 tonnes of waste or 100,000 tonnes. These “fixed” costs would likely be immediately capitalized at the time of opening the landfill under an ARO standard. Under the current Landfill Liability standard these costs, like those related to volumes, are accounted for as the capacity of the landfill is used. The impact of this different treatment would be an increase in a government’s Net Debt. Net Debt is an important indicator, and one that is watched by many, including bond rating agencies. This possible outcome is one that should be considered so that it does not come as surprise to watchers of the government. Explanations should be made in budget documents, annual report Financial Statement Discussion and Analysis, and other relevant reports and communications. Landfill closure and post-closure costs that are variable to volumes would likely be accounted for similarly under an ARO standard as they are under the current Landfill Liability standard. The liability related to these costs increases proportionate to volumes. But, of course, as the volume housed in the landfill increases the future life of the landfill decreases - it is becoming more full. Thus it does not make sense to capitalize these costs to the asset. Instead such amounts would be expensed as the capacity is used - exactly analogous to the current Landfill Liability standard. A Rudimentary Example It is always difficult to discuss accounting results using just words, so it may be best to look at a rudimentary example. Consider the following fact pattern: Assumptions Item Cost/Factor Cost of closure $10,000,000 Portion of closure costs not impacted by volume $4,000,000 Annual post-closure monitoring $50,000 Monitoring period 15 years Life of landfill 10 years Discount rate 5% Engineering cost inflation 3% Capacity usage Evenly over life The resulting differences in approach between possible ARO treatment and current Landfill Liability standard can be significant in impact to liabilities and net debt. Impact at Different Points Item Current Standard ARO Treatment Difference Year 1 Liability $920,572 $4,039,254 $3,118,682 Year 5 Liability $5,594,807 $7,700,794 $2,105,987 Year 9 Liability $12,240,941 $12,752,909 $511,968 Year 10 Liability post closure $841,933 $841,933 $0 Year 15 Liability $681,423 $681,423 $0 Year 1 Expense $920,572 $920,572 $0 Year 5 Expense $1,332,097 $1,377,762 $45,665 Year 10 Expense $2,040,157 1,874,709 ($165,448) Year 15 Expense $36,050 $36,050 $0 Year 1 TCA $0 $3,118,682 $3,118,682 Year 5 TCA $0 $1,732,601 $1,732,601 Year 10 TCA $0 $0 $0 The Exposure Draft is Coming! The take away from all this is that those governments with landfills should be paying particularly close attention to the development of the ARO standards. As before noted, the first Exposure Draft is expected in December 2016 and this will create an excellent opportunity for interested parties to closely review the proposals. Most importantly, interested parties should respond with their critiques and suggestions. Even a response that supports the Exposure Draft without reservation is appreciated by PSAB because there is often a relatively low response rate to Exposure Drafts from those that will actually have to implement the proposals. Effective for fiscal years beginning on or after April 1, 2014 ↩ Government not-for-profit organizations, for example, generally adopted PSAS for their 2012 fiscal year. ↩ Provided as a Guest Post, by Bill Cox Bill Cox is a Partner in Audit and Assurance and has been with BDO Canada LLP for over 20 years. Bill’s practice is focused on work with government, not-for-profit organizations and financial institutions. He also maintains a significant small/mid-sized business client base.
When the Asset Retirement Obligation standards arrive there will be three PSAS standards. Bill discusses what you can expect from these standards.READ MORE
In Control: Why Monitor When We Know it is Broken?
- Holly Ueland
- In Control
- minute(s)In part 1 of this series, we discussed how continuous controls monitoring is incredibly valuable for management. In this installment of the series, we address a recurring question we hear. When chatting with clients we hear "Listen, I know our processes is broken. Why waste time monitoring it when we could spend that time fixing it? Aren't we checking the pulse of a dead patient?" This statement does seem to have some logic to it. But it over-simplifies the situation. The reality is that monitoring your control activities is an integral part of the effort to fix them. When we say "broken" we typically mean that the process is failing to achieve its objective. Translating this into Internal Control terminology we mean the control activities are failing to mitigate risk. Business processes are often very complex with many steps, risks, controls, stakeholders and participants. When we say "the process" is broken we mean one or more risks are not being controlled. But which controls? Why? That information is going to be critical in determining how we fix "it". Monitoring controls that we suspect are not functioning can tell us which controls are failing and why. This information is critical to making good decisions about how to resolve the issue: Further, once we resolve the issue (Repair, Implement, or Remove) we will want to monitor to ensure new problems don't crop up or old ones reocur. If you go in for heart surgery, Doctors want to keep a close eye on you for some time thereafter! How does your organization determine what expected controls are for various processes and determine which ones to monitor? Through best practices, which we discuss in part III of this series.
The importance of Monitoring is often overlooked in internal control systems. Even when processes are"broken", it turns out monitoring is essential.READ MORE
6 Key Fraud Findings for Government Finance Officers
- Holly Ueland
- In Control
- minute(s)The Association of Certified Fraud Examiners (ACFE) 2016 Report to the Nations on Occupational Fraud and Abuse had several findings that will be very interesting to finance managers in local government. The 2016 report is based on the results of the 2015 survey. As part of the survey, respondents were asked to provide a detailed narrative of the single largest fraud case they had investigated since January 2014. Respondents were then presented with 81 questions to answer regarding the particular details of the case, including information about the perpetrator, the victim organization, and the methods employed, as well as fraud trends in general. While the report is very interesting from many respects, there are 6 points we want to highlight. 6 Findings relevant for Government Finance Officers The most prominent organizational weakness that contributed to the frauds in the study was a lack of internal controls, which was cited in 29.3% of cases, followed by an override of existing internal controls, which contributed to just over 20% of cases. Government and public administration experienced the third highest incidence of losses due to error and fraud, with a median loss of $109,000/ incident. Small organizations had a significantly lower implementation rate of anti-fraud controls compared to large organizations. Small government organizations are more susceptible to fraud. Out of all the government bodies included in the report, from federal to local, small organizations (those with fewer than 100 employees) accounted for the greatest number of fraud occurrences overall. In addition, of the fraud occurrences in small organizations, those involving cash occurred over twice as frequently. The presence of anti-fraud controls was correlated with lower fraud losses. ACFE compared organizations that had specific anti-fraud controls in place against organizations lacking those controls and found that where controls were present, fraud losses were 14.3%–54% lower Anti-fraud controls also correlated with much faster detection. Frauds were detected 33.3%–50% more quickly if the organization used such controls. The report also notes that total losses represented in the study were actually significantly higher. However, to conservatively report loss amounts, the top and bottom 1% of results were excluded from the total loss figure. Even viewing the losses reported through a conservative lens, a typical loss of $108,000 per fraud can be devastating to many organizations, especially when combined with the indirect fallout that often accompanies a fraud scheme. Join us for a free webinar and see how CaseWare's Continuous Controls Monitoring will improve your organization's internal control. We’ll examine the ever-evolving risk profile that governments experience and also demonstrate the significant benefits available (timeliness, accuracy, and cost-effectiveness) of automating monitoring and enforcement of internal control (Continuous Monitoring) using CaseWare solutions.
2016 ACFE Report outlines several key points for government finance officers interested in internal control and eliminating fraud.READ MORE
Financial Statement Automation Saves Time & Money for Lethbridge
- Jamie Black
- Success Stories
- minute(s)Lethbridge, is a commercial, financial, transportation, and industrial centre with a population of 89,000. The City of Lethbridge provides both essential and nonessential services to its residents, from fire and emergency response to museum and library operations. The City’s Financial Services department is staffed by a team of professionals charged with bringing efficiency, accuracy, and transparency to the organization. CaseWare Working Papers and Financials are the tools the department relies on to fulfill that goal. More and More Spreadsheets As the PSAB (Public Sector Accounting Board) requirements changed, organizations like the City of Lethbridge were forced to change the presentation of their financial statements. Many turned to spreadsheets to accommodate the changes. Municipal governments within the province of Alberta are required to file a Municipal Financial Information Return (MFIR), which must be submitted to the Municipal Affairs office along with audited financial statements by May 1 of each year. At the City of Lethbridge, preparing it involved a multitude of spreadsheets and the dedicated work of one of the City’s most tenured employees. The City of Lethbridge has been using CaseWare Working Papers for many years, although in a limited capacity. “We were just using CaseWare for our balance sheet items,” recalls Tricia Fraser, Financial Reporting Supervisor for the City. “Essentially it was serving as a document holder only. We created our financial statements and other financial reports in Excel®. We needed a better way, as it was just too manual and time consuming.” Embracing Efficiency The City engaged F.H. Black & Company, a CaseWare certified consultant, to help it gain efficiency and reduce manual data entry tasks. “F.H. Black has been a tremendous resource,” says Fraser. “Their knowledge and experience with CaseWare has helped us make more strategic use of the product.” Financial Statements Completed in Record Time Using CaseWare Financials the City tackled financial statement automation. Now the City’s annual financial statement is completed substantially faster than before. “In fact, I had staff asking me what we had forgotten because they were so surprised that we were done so quickly.” That time savings is being put to productive use, Fraser says. “We used to spend so much time preparing documents and assembling the report, that we had little time to analyze the data and look for improvements. CaseWare buys us strategic planning time, time where we can consider what didn’t work, what worked well, and what we can do better. That’s priceless.” Three Weeks Saved in Production of MFIR F.H. Black showed the City how to use CaseWare Working Papers and CaseWare Connector to populate the MFIR report directly. “As a test, we prepared last year’s MFIR both ways, the old way and using CaseWare for the portions we automated,” says Fraser. “Both ways produced the exact same result, only CaseWare did it instantly. Now, instead of handing our auditors a series of spreadsheets and a binder of supporting documentation, we will hand them a CaseWare file.” Fraser says this single change will likely result in lower audit fees, and enables the City to complete its MFIR three weeks sooner than in the past. Improved Accuracy and Security Another benefit the City is realizing through CaseWare is increased accuracy. In the past, personnel would be assigned to troubleshoot and validate the Excel spreadsheets. “Now, when something is out of balance, we can easily follow the trail to the source and make the corrections,” says Fraser. “And because there is no manual input, the opportunity for errors is greatly reduced.” The move to CaseWare Financials has led to improved data security. “I used to be scared to give anyone else access to the spreadsheets, fearing someone would change something and I wouldn’t know who did it or why,” Fraser explains. “In CaseWare, I’m able to set up security so that I can control who has access to what. Now, we have 20 people working in CaseWare, and the data is accessible, auditable, and secure.” Leverage the Investment The City is leveraging its use of CaseWare by using it to produce other financial reports, including sections of its unaudited financial statement that is sent to council prior to the publication of the audited report. “This report is due during our busiest time of the year,” notes Fraser. “We were able to put it into CaseWare and the time savings is unbelievable. Frustration levels of staff during this crunch time are dramatically reduced.” Fraser and her family are relocating soon, and as she discusses new employment opportunities with potential employers, she is certain to ask one question: “I always ask if they use CaseWare. If the answer is no, the conversation is over.”
The City of Lethbridge uses CaseWare Working Papers to automate annual financial statements and the MFIR, driving significant time savings and reducing cost.READ MORE