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Home My WebLink AboutAgenda - 12-03-2001-8fORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 3, 2001 Action Agenda Item No. $-f SUBJECT: Govemmental Accounting Standaks Boats (GASB)Btatement 34 mpementatlOn DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Ken Chavious, 245-2453 Engagement Lefler TELEPHONE NUMBERS: Hillsborough ]32$181 Chapel Hill 908.4501 Durham 688-]331 Mebane 338-22]-2031 PURPOSE: To wnslder hiring the Countys autlttors, Cherry, eekaert 8 Hollantl, tp assist County staff with the accounting work required kr the implementation of GA58 aatement 34 BACKGROUND: Last June, Me Board approvetl a contract with Cherry, Bekaert 8 Hollantl to pertomi both the annual audit and a neetls assessment to determine procotlures requietl in oNer for the County to implement GASB Statement 34 accounting antl Onancisl reporting requirements. During the presentation of the Annual Financial Report at the November 19, 2001 BoeM meetlng, the County Finance Director informetl the Boats the[ the eudltprs hetl completed [he GA$B 34 neetls assessment in conlunction with the Countys autla. The Finance Direcbr also mentioned 5hal County ateff hetl met with tM1e autlitors to tliswss the procetlures associated with the implementation of this new accounting inhiative antl that a report on the eeeociatetl vests woultl be provided at a future Boats meeting. As the BoeM Is now aware, GASB 39 is an accounting requirement that will oblige local governments throughout the United Stetea b report their fnandal activttles accouning to a format that looks more like the way the aaounting for a private corporation woultl be presented. I[ was tlirt:ctetl by the Govemmental Accounting StandaMs BoeM, but rip footling was provltled to affected entltles to meet its expanded repcdin9 requirements. The Finance Director has received the attached engagement letter from Cherry, Bekaert 8 Hollantl that outlines the assistance to be provitletl b Ne County in this major a~nunting undetlaking. Sfaff has reviawetl the engagement letter antl is in agreemerH the[the procetlures ou[linetl ere ell necessary for the full and complete implementation of GASB 34. It is important to note that these proc~uree are not all that is required and that staff will perform a number of acwunting pmcadurea assocated with the implementation. z FINANCIAL IMPACT: Per the attached engagement letter, the anticipated wst of GA$E 34 implementation is $40,000. Funtls to cover the costs are included in the cwrant year General Funtl budget RECOMMENOATION($(: The Manager recommends that the BOaM approvetl the engagement letter with Cherry, Bakeed 8 Holland and authorae the Chair to sign. Mr.Km ChavOUS, FWavee Ulmeme gauge Cwu~y PanrOPlw Pox BIBI IlJlsbomugh, 5onh fueotrm]y2"/e WcmjbYCd tlw op nwiry to meet wiNyou ava the oWermmntm o[Ibe Cowry's 6ASH341mplemmmtiav lwm m aiacuaa Nc wtivnplan tint wos identi(ed in nw're ently enmple¢d GASF3 34 smma assessment Dated on Ws meeting endow suisegvwl tliscuseiona, du cuomy Ms requested ow assislmce w dse following or av. participating mlbe Cowry's sottware vendor selecnonproceee • eoalyzmg FVUd 61 • nalyzinE progmmand gwersl zevmuo • nanlideting mdlvidusl dapmlmevt spmadshwss fm autmmation egvipmen5 orllw egwpmmt and other vquipmm • developmEadamil a[Imd named using availaFle deed pfvons • developmgamelhadoloEy fm allocating hismneel coAfm buildiugsfin wchpropcrLy • wmblishipg the dales each pixe ofreal esm&waz Plazed in scrviu: • onsavctiag missing dnmfram yow cunmt capiml asset recoNs • doaxmhingtha eanmeadusePol lives Rr eaoh oeregory ofwpilal assala • omputing azcumWakd deprxianw as of lone 3U, 2001 • msppwg Go Fend • ompuling begimting oftM1e year wnvw'sim adjnsvnrnts • compudng thewrtevt YearrefuvdmE COn wadjustmeas • computing begwdng nRFeywrne[assetaera • dmlWtg begumiag ofthe year ~Oke tv tlrc geneal purpoao Gtuncialsmtemenm preparing pro-fum~a Govemmwt Wide Finenciel5latemmm as ofJUU J0.21p1 • preparing aprelimmary Management's Discussion &Anelysis using lone 3U, 2001 dab the following proposM process wtlines um uvexall apgmch as well ap deunbing [he iMividuel elemenh entl ou¢omes ofeucbP leer, Wevxpectro wnducr many of then ProJectsmpatallcl ¢ac'ka. Svrtware reactor seleetlav proeer's we will auwd.eh,cmammd~a as aexmwed by me aeiwdm wmminee. we wiP aainm me mtan;ewprrccsa of eazh vendor m~dasaiet the (:aunty in delertniumE tharfhe sotrvmtevrndor selected u GASB 34 wmplimt. Mvlysis o[FLna fit (County Capital Prolecb FuvdJ We will nerst the couvrym apalyzinE the venous projects end activity shat is currently beinEtworded in fund 61. the primaryobjmtive aCOtis analysis will b: b usisl Ne cowry in elosinE doom [hie Rsd and relttelw6 exialin6 pzojecm, mmuq expe~wee end balmce shell accowrs to orbs [wds. Anvlysls of a0 mennee We will assis[ me Cows m cwrylelmg sh<GASD 34Arelysis ofRevenues lemplakthat was developwldusing om GA5994 storm amassment The delnremM1le fa fhismojectwill he Ihecornp!eled sempam `sevlcirg wt v9 ro=enuus betwaev5rvuzl avd pmgam. Comoktlatlon of iodivltloal deparhnenl spreadsheals Dwing ow uliliel GASG 34 mwssmwl our mnew liioa[ed ket the GOwly didnotbuve mpiml vssdsaccumnlamd into ane document. Om revinv indicated thus evpiml vseem were being mvinmined on axed eprcedehe<m by indiv~dosl dcperunwm. The delivmable for Mis prOjeIX wi11M the cooaolidatiw ofall dapastmemal capital asttb spcwdshcaa isle enc dowmcvs plus thevddilien o[theland wdbuildivg detail. Development of lantl delvl antl mmb4ahmm[o[pnrchaae dam Our review of oapiml aeecm indicated that land lM1n is amrently ownetl by the Cepnty is nos mcorEed In [he celnml saetrecoNS. The COwty has rcovitletl ma with a tlelvl N all lwd tM1a[is owvedby Me COnnty as ef]we3Q 2110E Tha tlel{vervbk frn tMS pryers will be to go Ihrovgb the reeordo 4TMOVIAeA by the Convry avd iisospomse all oFIM1e lend cwnadby Ne Cowt lab lM1C wpilal assns reamds. Baeetl upon ow review of ILC dwd of kuns we will also eamblisM1 original wstvalma andthe date land wac plazedin service. Allocation oNUJdiuR mst and ertablishmeul orpm<hase date Oorrc woRM1<cepiml asenrcepw indicated that the CnwrydidrotM1eve ademil listin6ofM1uildinga named. The uielwg recede had a lump eum balance fm all buildwge slut have hem purchaeetl ovm the years. ILC Cwnry lue provided us wishe detail of all buildings oxmedby the Cowry as eCJwe 30, 2001. The dehvasble Cm I)us mojoct will be w gu ttwugh WerecoNs muvided by Ne Cowt and allocate the existing cos[rexorded in she capial asset xoNaM1Mmm all nfine baildinga. We will alsoreviewtM1e deed efbuah avdwill esvblisT tM1e date eachbwldwg wasPmeN in service. necomvneupn armiaainR capita, assn renpma Omrtvicwofcapiml zest,rcemda indicatN that the COUmy M1ed lmnp sore bvlmma foreapiml maeb acgwrd prim to a specific date. Our d<tivenbl< wJl be to ge trvoapp slss capial sore records sod allomk sMec Iwip swr M W cm betwew exsting assns. Eamb4bhmealof eelimaletl uae1L11Wes Once sll alma capial asaeb mcordslmve been esmbtished, we will assist she Cowry iv esmblislting she r_aimemd useful lives for each category of ease. Utce a policy bas hem esmblish<d, we will mcmporak due data mw the capital assess eubaidiary 1Wger. Compum4on ofbegwoiug of she yesseeeumomtW deprenetlon Onm axbave accumulamdall oftlss dam rmuved Im die mPiml sssn subsidivy ledgm,.wc wW calculme endrwnd begiwing afshe y®r wcumulatal depreciefionbelwc<s. Go Pond mapplnl9 (Snttware Reed by Auditors) Since the Cowty is m fie process of selecsivg anew genersl ledge acww[ing system, tk Cowry hm elmsed a sae GU FmWinshe inlmmWaccumomk dle dam necemvsybproduce dse govemmmtwid<f cial amtcmmb, Olv del{vnablefm rM1G pro]mt will beta go tlueugh Me ]orm 30, ]AOI Visl balance wdmap tM miadug geugal I~gm accowm vo Ihal the detail iNmmaYw can be sorrM as required to produce me govemmens wide f enciel stamm<nb for Swe 30, 2002. Compmamv oehogivpivg prroe yem aan.mevn adjnnmwm ' nAS-3a 1 an:1F~unee , P- a ,-gals l (_fteye.r 1 rte 3n.2 This is Kvivg m require lhet [he Counry~wlculete pnd ttwN beginning nfd,e v w Ier hoc gm vmlfwds. Thee iequisdwCl be am ndmy uLa,x'vumsac:i,vblq oapihl osseq longm cebt, nulelai dgrteviatlvn, and the elinrsafivv vfinRmalservice fund~Ow dehvemM1lemll bethe ocaumvle,iou W lhesa colries as oflwe3q 2001 inm n umplem that can beosed al Ione 30, 2002 Co,vputmiou of current year retuntlivgco vera,vn atlJustment Lhe Cvvnty did v Nbvd~ en gm;ml nblifmlion bvvds in Inty of 20q L GAS- 3v rcgabrea that vll grnwal fvnL refiindings vccummg v(ter Me imPlemenmtlon dnm be covvcnW tv tha pmpriemry besix of sWVtfmg iv tfie gov;rmven[widc financial smtwnmtz Ou<ddiverablcwill be to gv tluvvgh tlm bvvd documenn end rslevlsletlds wljcsting miry fm lheyeaz coded Iwe 30, 2002. flnmPU[atlmi oP beCinninK of the year vet assets CAS- 3J requires Nntve[ osseGbe presented vv govuumwrt wide financial sptemev[s iv tie follox5vg oategones, vesm,ent k eepimt emels, nw oL mlawl debt, rwtrided wd mvestnded. Ow deliverable will include 1ha OwGgpmcat v(a Icrt~lalewticM1 Wcvla&s Meae bvlwces as of lwe 3U, 2001 that vev be Paad sl year end. DraPHV g of vvhs m fhe g®eral4mpove Gnmrial vlatementa 'Che new repvmng mndcl will requucthat additiv®1 disclosluv. be included in tfie voles m the genemlyurpvse f ancul amtemmrs. OVr delivcrablc(m thisprojxtxillbem dmftthese edeiliwalnom disclosures basetl vpontlu Iwc 30, 21101 lnweial smmmenrs end Provide Nem tv you m a wvrtl docvtvrnt. Yreparatiov olpro-forma Govervmmt Wide FWeveial Bmmmenta We willpreParePro-fvtma6ovennnevt widelvuvcial smlvnmtchnswpav tl,e lave 30,2COl finmciel slatemtnle. fhc elaNmu dmbaiwlvded ll betM1e erntemm[o[ne[assete end statcmrnl of acfivitiaa.'Ihe statement ofvet ears will report w all of the inn-famiary ectivitrce of We Ceuvry wd its component wits. TFe s6mmmt of activities will re1M me degnx Iv which the dvxt expenses of a given [wmipv m segment are oD'eet by prpgmm revmvee. All of Nis intwmatiwwill M1epmvidetl to ynu on a mmPmm. Preparellan vIa pre4miuary HavagemevPa Dixmaiov & Analysis Wowill Prepare a prvlimsmry ma,agemrnPe Elacnavav and am1Y45 baxd upm the Iwe30, 20018meml~upvae anm,dm ammmmta xnathe mo-mrina Kn.~wwnenl wise finwcial amtemwrs.Areaamhe aeemaaea in mia ~,pn includes financial bi61di8firs,wovwview of 0c! ul smtemevm, an walyeia of the govramnmtwidc Cwwcul stammwm, a discussiw ofbud8etazy lu8hlsehts, and adiacunaipn afcapiml case[ mtl debt admivistratlw. The wmkm8 PaPw'e for tM1C rngsyuvm! are the pmperry o! ('Ferry, Bekeert & Hollnvd, L L P. ens com[imte onfdentisl iafomutwn. Fuent azAacuevM below anyrequea4 (aacaar tv onr working}npaswJlbe dixuasW xiN yvu pnm m miming them eaaileble b rcU V Catiob parties. pw Fbm, xx well sa all vthmm jor acepormngf ,parpcipatesma'peerrevieW'pmgmm, evvenng our evdit wd ac owtmg practices. 7b;s prvgmm rwluires that once every tbrx years w subjeq ow 9wliry ass pmeecesm en examisaliw by avvdcrmcowfing firm. Aapart nl,he proccrt, tho other fitmwill rtriew a smnple ofow wink. L upvsvbleduttM1eotM1a firm fa Meir revlewmay selecnhe work we perfim [oryov.I[ilis, they me bowd by prokssiotml atmdaraamkeep all Wmmativn cvnfdmtial.lfyvu objecttohavmg tie wink we do fm youtcviewed byow penmviewn, plevse notify vs in wriliuK. fi ]n rbe evrntwe are requcared w autMnzed byyou w rwluiredby govervmen[ragulatiwl, subpowa, wolMalegal pmcess [o pmdvice ow wmkingpepas m owpemormel as wih~esses with reryx[fn ow rngegemrn[ for you, you will, w long es we arc not a parry ro the prac[edmg in wM[F tF[ infvrmaHtm is sough[, r[imbwse ug for our pnfcnla rl t_. a.J aH.ss s.~]I O_dc C~v _ - cs of a+'~c I md'nx ,wrM1a request If eny dicpuS, mul:oarery orclaim arise. iv wnueciiou wills the performance or breacM1 o`Ihlr ogeemnq ti:F r pvrty mvY= o wrlttrn mace w the other party, rrywst Met rM suvwf be medieled. Suoh mWiatiwl would be cnJwkd by a mudialw appninL:d by acd pussavnt to the Rnlti of Ific Amrncm Arbitration Assnciafon or such erber neubnl le liramr acveprable ro boM parties. BoM parties would exert Meirbesl efibtlsro diswss with rneh orwr M good &fN their rcspwliveposiLiovs In an attemy[ [o [lrelly rwolvcawh displne or covtrovemy. Ifauy dispvrq [maonway,wclaimafising outofwin enaction with Ma pwformavm wbaacF o[Mis upmnmt amrot be cev~Medby me&anov, Mevrfie dispute, covtro~emy, or Jahn wouldbe serledby vrbitrvrim in vsordvme wiM Me miss oftl:e Amerioen Arbio-alinn Aavmisaon (AAA] far Ih[Resoluion oClht ACCOUVNnG Yirmllispulcs. TheaweN imuul by Ifie arbimfiovpmel may bs coufirtneJ m a)ndgmmlby ~ feAaal w stele wwl of wmpe[ent jwisdic[icn. 'fhc charges C rounvodarebmeJ m Ificlimc apmt, evJ calculn¢J st unrmgolw houely mLes m effect 6om lime b EmSplvs dimot expms[a.OwmfesNay avomdivy to Medegree ofrespovsblity involvM andlbeskill re3uirzd Ow fee for services, including our ofpocke[ expenses is esamatedmHO exceed $00,W0. All iuvoiws arc payablewirbin thirty days fmm invoice dax. A service charge moll be added ro post due account cyusl la 1-12% per monW (IS%awwlly) on the previous movM's balance lass peymenrs reoeivad diving Ilu month, wiM amiwnwn chage of 53.00 pw mmM. If rha IbmgoWg la m accwJance wiW your uvdatalarWlvg, please elgv the origlwl oP Mia lertar Iv Lha apace provided and rewcw iup ua. Very tnly yaws, CHLBRY, BRKABRT & HOLLAND, L.L.P. Wdie T. Burke. CPA ParWer RESPON58: - lhs lemr cwrecdy seen fwdr Lhe uvdwaraMing Of Omvge OwwY SlgOawtt: Tirk: