Advisory Committee on Financial Management

Advisory Committee on Financial Management, Accounting and Reporting Committee

Approved Meeting Minutes – November 17, 2010

The Advisory Committee met on November 17, 2010. Members in attendance: Pat Morphew, Nancy Schulzetenberg, Tracey Fiereck, Lori Mohs, Jeff Yeager, Janet Halonen, Angie Manuel, Rita Poulton, Cindy Longhenry, Sue Nelson, Dianna Groskreutz and David Peterson.

MDE Staff: Audrey Bomstad, Mary Weigel, Sarah Miller, Greg Hein and Karen Dykoski.

The meeting was called to order by Jeff Yeager at 1:30 p.m.

The committee reviewed and unanimously approved the minutes from the October 5, 2010, meeting.

Audrey Bomstad discussed the consideration of the addition of an Enterprise Fund to the UFARS fund categories. It appears that many school entities have been utilizing the Agency Fund in the place of an Enterprise Fund. Audrey mentioned that in the past, it was believed that we did not have the authority to establish an Enterprise Fund. Audrey referred to the Minnesota Rule 3545.0900 in regards to Fund Accounting. The Minnesota Rule referenced that the Enterprise Fund must be maintained. Jeff Yeager mentioned that the Regional Management Information Centers (RMICs) and Coops were structured in a way to utilize such a fund. Presently, they are reporting those operations in the General/Agency Funds. Karen Dykoski stated that in FY 08-09, a reporting entity had $80,000,000 of expenditures in the General Fund. This was an insurance pool and would have been more appropriately reported in an Enterprise Fund. Audrey stated that there may be further coding within an established Enterprise Fund. Jeff inquired whether a sub-committee would need to be formed. Audrey explained that it would not be necessary to go that route but that we should pull together the regional centers for further discussions. During GASB 34 implementation, there was a discussion about classifying the Food Service into an Enterprise Fund. The Food Service would have had to bear its own debt. Current legislation does not allow for that provision. MDE currently had a review and comment situation with a Joint Powers entity which could have utilized an Enterprise Fund for more accurate/transparent reporting.

Audrey discussed the usage of Finance Code 791 – projects funded by Certificates of Participation/Lease Purchase (COP/LP) Agreement with related Lease Levy Authority. The original intent was to establish UFARS code 791 for COP and levy supported Lease agreements. These activities are reported in fund 6. Minneapolis, St. Paul, Duluth and Rochester are exceptions and may report COP/LP activity in fund 1 (integration, computers, etc.).

Audrey addressed the status of the UFARS Redesign Committee recommendations to the Commissioner. The recommendation from the Advisory Committee stated that implementation of proposed UFARS coding would not take affect before 2012. In conversations with IT Director Cathy Wagner, it was concluded that there were no resources for reprogramming the main frame at this time. The system is too “brittle” and until the state has a new platform, it is unlikely that changes will be implemented for 2012. The Commissioner was in agreement with the addition of new digits to the UFARS codes. Currently, there is less demand for the addition of new finance codes. Existing object codes are sufficient until State Special Education is integrated into SERVS. According to Audrey, SERVS will need to be in better shape before other programs are incorporated. A review of the SERVS structure may introduce the inclusion of other program tracking – levy, state aids, student data. Before moving ahead on any changes, it is necessary to be in “sync” with MDE’s new leadership and administration platform.

Audrey informed the committee of a future job posting for a SERVS Manager. This is a high-level position to efficiently manage SERVS programming needs and business requirements (i.e. federal programs, teacher licensing, contracted placements). Tracey Fiereck expressed concern over state/federal reporting confusion and where to locate current reports. Now when districts have questions, calls are directed to Minnesota Management and Budget (MMB). According to Angie Manuel, emails are sent from MMB when vendor payments are made. Tracey posed the idea of combining the state and federal reports for easy accessibility.

The committee discussed the benefits of ideally having one reporting system for all data. Currently, there are no big plans to combine state and federal reports. The committee discussed the familiarity with the IDEAS reports. Audrey confirmed that Aid Confirmation Reports would still be available. An interim and long-term solution may be data input from the SERVS system to MFR which is public. The committee decided to email suggestions for reporting ideas/solutions to Mary Weigel. Centrally located reporting access would be ideal.

The meeting was adjourned at 3:00 p.m.