Advisory Committee on Financial Management

MDE Advisory Committee on Financial Management, Accounting and Reporting

Approved Meeting Minutes – February 19, 2014

Members Attending: Willie Larson, Chuck Herdegen, Julie Cink, Kelly Benusa, Jeff Yeager, Lorrie Larson, Janet Halonen, Jenny Charles, Tracey Fiereck, Nancy Schulzetenberg, Dianna Groskreutz

Members Absent: David Peterson, Heide Miller, Tiffany Rodning, Greg Hierlinger

MDE Staff Attending: Karen Dykoski, Shannon Grindell, Sarah Miller, Patti Scott, Margaret Sullivan, Mary Weigel

Guests: Jay Willms, Legislative Staff

Call to Order: Dianna Groskreutz called the meeting to order at 12:07 p.m.

Introduction of New Members: Julie Cink and Kelly Benusa were introduced as new members.

Election of new Vice-President: Willie Larson volunteered his services for this position. Thank you Willie.

Agenda Approval: Five new items were added to the agenda. Tracey Fiereck asked that Fund balance-OPEB Bonds and UFARS program code 630 be added to the agenda. Karen Dykoski requested the following items be added to the agenda: legislative staff attending the meeting to discuss sales tax exemption, UFARS finance code 741 and one new balance sheet code for charter school lease payable. The new items were discussed after Item #16 on the agenda. Chuck Herdegen motioned to approve the updated agenda and Tracey Fiereck seconded the motion.

Approval of the October 9th, 2013 Meeting Minutes: Janet Halonen made the motion to approve the October 9, 2013 meeting minutes. Lorrie Larson seconded the motion.

UFARS Budget Submission Update: Karen Dykoski proposed beginning the process of submitting budget information with the FY 2014 UFARS submission. The budget information being submitted would be for the FY 2015 fiscal year. There was much discussion among committee members about the submission process, validity of data submitted so early in the fiscal year and what the data was being used for. It was noted that the legislature is asking for data earlier in the fiscal year and MDE is acting as the intermediate source between the districts and the legislature. One committee member asked if this requirement is in statute. Karen Dykoski and Mary Weigel said they will check into the statutes.

Another point that was brought up during the UFARS budget submission talk was the seventeen digit user field from the data file header which is being submitted by the districts. Karen Dykoski turned it over to Patti Scott for clarification. Patti pointed out that MDE would like to start using the seventeen digit user field on the UFARS submission header as a place holder for districts and charters to enter information regarding their current software vendor and management company (if applicable). Discussion from the group focused on the necessity of having to submit this data. The committee wondered if there was a better place to gather the information from, possibly the single sign on.

IPads: Karen Dykoski spoke with the Attorney General’s Office regarding the issuance of iPads and at this time they are declining to offer any guidance.

Back Packs: Several districts and charter schools have created programs where they provide food and school supplies to low income children. This has been an ongoing discussion regarding the use of these funds and supplies. MDE staff made it clear that once the funds or supplies have been donated to the school district they fall under public purpose. Karen Dykoski suggested an article be placed in the next School Business Bulletin on the best practices surrounding donations made to LEA’s. The article would encourage the LEA’s to find a local non-profit organization to manage such donations.

Check Endorsement: Karen Dykoski has contacted Greg Hierlinger at the OSA; however, she is waiting for a response for MASBO’s inquiry about compliance with MS §471.391 Subd.1 and 2 regarding check endorsement.

Finance Code 741: Karen Dykoski stated that George Holt (MDE Special Ed) would like finance code 741 to be discontinued from the grid because the information can be captured in tuition billing. This would be effective in FY 2015. There were no objections from the group.

PCORI: Jeff Yeager would like to know how the fees, which are tied to the upcoming Affordable Care Act (ACA), would be coded for the self-insured LEA’s. There was group discussion about the possibility of proposing a new code. It was determined at this time that there would need to be research done and further discussion at the next meeting. Tracey Fiereck and Jeff Yeager volunteered to gather the data and report back.

GASB Deferred Inflows and Outflows: Nancy Schluzetenberg stated that these changes will be implemented this year; however, there will be no edits needed within the UFARS manual. These changes will be noted on the financial statements of the LEA’s.

District Type 82 and 83: Jeff Yeager stated district types 82 & 83 are not run in the edit process. He does run an edit for district types 82 and 83 at the region level. He has asked if this is something that can be changed for the future.

Reserve for General Fund 01 Certificates of Participation (COP): Karen Dykoski stated that there has been an inconsistency with the treatment of these COP’s. Some districts may be asking for more funds than what the project actually costs, which leaves a balance in Building Construction Fund 06. The question was how should these left over dollars be treated. There was a discussion about moving the dollars into a reserve/restricted balance sheet account. Discussion from the group brought up the following question:

1. How will the funds be used after they have been reported in the General Fund 01, balance sheet account 413 Restricted/Reserved for Building Projects Funded by Certificates of Participation/Lease Purchase (COP/LP) Agreement with Related Lease Levy Authority ?

The committee felt that more discussion was needed and Karen Dykoski volunteered to gather more information and send it out.

Fund Balance on OPEB Bonds: Karen Dykoski suggested updating the UFARS manual so that the wording would be the same as the wording that included for debt.

Program 630 Technology Operating Capital: Tracey Fiereck stated grid is limited; only allowing UFARS program code 630 with organization code 005. Tracey proposed to open it up to all other organization codes. Karen Dykoski said that this would be an easy fix in the UFARS manual.

New Balance Sheet Code-Charter School Lease Payable: MDE staff proposed the setup of a new balance sheet charter school lease payable code which would be implemented for fiscal year 2014. The committee agreed with this recommendation. Jeff Yeager asked for the new account code. MDE would need to look for an available code.

MAFA Manual Subcommittee: Mary Weigel asked if anyone is interested in joining the MAFA manual subcommittee. Please contact David Day and/or Sarah Miller. It is the hope of the subcommittee that when the updates are done the manual will be more straightforward. MDE has been asked to present a MAFA manual update at the MNCPA Audit Conference on June 2, 2014. The MAFA subcommittee was notified that there has been a tentative meeting scheduled for March 11, 2014.

Guest Jay Willms (Senate Staffer): A bill is being proposed to simplify current sales and use tax exemption applicable to certain construction materials. Mr. Willms was curious about the procurement process for School Districts. The committee overall agreed that it was typical to allow the general contractor to secure the building materials and pass the costs of the sales tax onto the school. Only one committee member (Julie Cink) has worked directly with vendors to buy construction materials rather than go through the general contractor. She did say that this process saved her district a significant amount of money with the sales tax exemption. But there are costs a district should consider such as, securing and storing the materials, liability insurance and other costs.

Call for March Agenda Items: PCORI, COP’s, MAFA Update, Check Endorsement and Alternative Facilities course code

Calendar for Advisory Committee Meetings: The 2014 meeting schedule was adopted. The meetings will be held at MDE from noon until 4 p.m. on the following dates:

a. March 26th

b. May 28th

c. July 23rd

d. September 24th

e. November 18th

Adjournment: Janet Halonen made the motion to adjourn the meeting and Julie Cink seconded the motion. The meeting was adjourned at 2:12 pm.

The next Advisory Committee Meeting is scheduled for March 26, 2014 in room CC 8.