Prepared by Client (PBC) List - Part 1

Chapter 9

Presented by KPMG LLP and CSU

KPMG LLP

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PBC List – General Update

The PBC list is preliminary As the audit progresses, more items will be requested

If new items are added on a systemwide level, they will be added to the end of the list. No re-numbering

The list was reviewed extensively by a task force Coordinated with IT audit

Clarified PBC items

More exhibits added to aid campuses Mandatory formats are indicated, otherwise format is

optional

Duplicate or obsolete items were deleted

Reorganized by area

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Let’s Go Green!

Campus binders should have a labeled divider tab for every single PBC item

Provide PBC items to the audit team electronically on the flash drive handed out today, when possible

Electronic PBC items – label refer to the file on flash drive on the divider tab

“ORIGINAL, DO NOT REMOVE” should be clearly marked

All files and schedules provided should be clearly labeled and cross-referenced to the PBC list

Example: General #1

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Sample Selections and Coordination

Sample selections will be made by the audit team within the first week of fieldwork

Campuses interested in receiving selections earlier should contact and coordinate with their manager/senior

Potential sample expansions if errors found

Interviews with the Auditors Audit team will communicate the list of individuals that

they will need to interview within first 2 weeks

PBC items related to interviews have been deleted from the PBC list

Please ensure that the meeting time is agreed to by both parties

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The PBC List – General

#1 – Completed and Campus approved Reporting Package, including comprehensive analytical review

Analytical review explanations should not be entered into YES

Submit a separate Word document following the format in Exhibit 27

#2 – Trial balance of CMP/CSU/GAP for periods 1-12

The outcome should line up the three campus business units ledger data to show that the derived data in the xxGAP ledger is a complete population

A write up is included in Exhibit 29 that shows multiple methodologies to gather the data to create the schedule

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The PBC List – General (cont.)

#4 – Supporting documentation for YES, Note 14 Transactions with Related Entities

The Chancellor’s Office (CO) will pre-populate amounts for interagency charges to the campus (e.g. state pro-rata)

Auxiliary amounts must be entered and reconciled with the auxiliary note input sheet, Note 8

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The PBC List – General (cont.)

#5 – Detail and supporting documentation for nonexchange transactions included on the SRECNA

#6 – Access to original GAAP journal entries with attached supporting documentation

Do not make a separate copy of GAAP journal entries for the audit team (indicate “ORIGINAL, DO NOT REMOVE”)

Where applicable, refer to the GAAP journal entry number in exhibits and schedules provided to the audit team

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The PBC List - General (cont.)

#7 – Prior Period Adjustments Restatement adjustments to beginning net assets must

be entered in YES, Note 15

A separate Excel file must be provided of any prior period adjustments being pushed through the current year SRECNA and any prior year reclassifications for comparability to current year financial statements

Two separate tabs in the workbook for each type of adjustment

Supporting source documents for all adjustments must be provided in the binder

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The PBC List – General (Cont.)

# 8 – Analysis of all non-GAAP accounting policies and procedures

Exhibits 28 and 30 illustrate an acceptable write-up

Each campus will need to evaluate and quantify the impact of each non-GAAP accounting policy used to prepare the financial statements

Supporting source documents to be included in the binders and/or flash drive

#9 – Detail of all legal expenses (excluding CSURMA)

#10 – Completed GAAP Financial Reporting Checklist Part A -due on the first day of fieldwork

Part B -due with the submission of the revised reporting package on 10/6/2008

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The PBC List – General (cont.)

#11 – Completed MD&A Checklist Checklist is found in Chapter 7

#12 – Supporting calculations and source documentation for all amounts/percentages disclosed in the MD&A

#13 – Completed Draft Financial Statements, including MD&A and all footnotes

Submitted version of the Draft Financial Statements should be the FINAL DRAFT

All levels of management should have approved this version before submission to the audit team

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The PBC List

#14 – #17 General FS Reporting Auxiliary Orgs Contact information for independent auditors of each of

the campus’ auxiliary organizations

Copy of all auxiliary organizations audited financial statements and completed Financial Reporting checklist for each auxiliary

Auxiliary Organizations consolidating and individual YES print outs that tie to the audited auxiliary financial statements

Reconciliation of YES, Note 14 to the Auxiliary Consolidated Workbook (Generated from YES)

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The PBC List – Entity Level Controls

#28 – Access to view minutes from meetings of the President/Vice President

#29 – Access to view accounting policies and procedures manual

#30 – Most recent FISMA report – draft if not issued

#31 – Campus budget to actual analysis for 2007-08 - select dept and months

#32 – Campus Risk Assessment Annual Report – Per EO 715 prepared and presented to each campus president annually

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The PBC List – Entity Level Controls (cont.)

#33 – Organizational Charts Two charts requested:

1 -President down three levels

2 -Finance department detail from VP down

#34 – Access to view Employee Handbook

#35 – Access to view Code of Conduct

#36 – Job Descriptions of 2 newly hired accounting personnel – (IRM PBC 208)

#37 – Job Description/list of responsibilities of finance department personnel – (PBC #33 organizational chart)

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The PBC List – Entity Level Controls (cont.) & Misc.

#38 – Employee turnover statistics or analysis by department or classification of employee

Do not create this schedule if it does not exist

#39 – 1 contract for a newly hired employee –(IRM PBC 208)

#40 –1 goal setting form and 1 evaluation form for a finance department individual – (PBC #33 organizational chart)

#41 –1 completed hew hire form/packet, including references, employment contract –(IRM PBC 208)

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The PBC List - Cash

#43 – Listing of cash accounts broken out by CSU fund as of 6/30/2008

The Cash Leadsheet shown in exhibit 1 is the required format to be used by all campuses. This will help with the SRB audit and reduce the number of questions to the campuses

Legal balances must tie out to SAM07, and GAAP balances must tie out to Reporting Package

#44 – Understanding of (nature of restriction) and supporting documentation for restricted cash

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The PBC List - Investments

#47 – Investments leadsheet as of 6/30/2008 - YES, Note 3.2 and 3.3

#48 – Access to original June 2008 investment statements or other supporting documentation for any investments not managed by US Bank/SWIFT pool

#49 – Confirmation for non-US Bank investment balances

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The PBC List – Investments (cont.)

#50 – Consolidated rollforward by type of investment, investment purchases and sales with supporting documentation - Exhibit 2. CO will provide SWIFT investment rollforward information.

#51 – Detail leadsheet of investment income and accrued interest receivable as of and for the year ended 6/30/2008 that agrees to the SRECNA and SNA - Exhibit 18 (Requested Format). If using different format, provide CSU funds needed for SRB audit.

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The PBC List – Accounts Receivable

#52 – Leadsheet of accounts receivable with 6/30/2008 and 6/30/2007 balances - YES, Note 4.1

#54 – Reconciliation of the SCO Tab Run Report 6/30/2008 balances to the state appropriations receivable balances - Exhibit 3a and 3b

#55 Listing of students and vendors with their outstanding balances at 6/30/2008 (aging report). Must agree to leadsheet.

#56 – Detail of accounts receivable from the CO

#57 – Detail of other accounts receivable as presented in YES, Note 4.1

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The PBC List – Accounts Receivable (cont.)

#58 – Detail of accounts receivable by invoice due from grants and contracts

#59 – Policy for establishing allowance for doubtful accounts and writing off uncollectible receivables - Exhibit 5

#60 – Allowance for doubtful accounts leadsheet and detailed supporting documentation - Exhibit 4. Must agree to YES, Note 4.1

#61 – Calculation and analysis of the 6/30/2008 allowances established for each type of receivable.

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The PBC List – Leases/Notes Receivable

#62 – Copies of new lease or note agreements Campus is lessor.

Include all operating/capital entered into during the fiscal year.

#63 – Schedule of lease/note income - Exhibit 6. Must provide future minimum lease income for operating leases in YES, Note 4.2

#64 – Detail of lease/note payments received during the year

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The PBC List – Student Loans Receivable

#65 – Student loans receivable aging and reconciliation (review for collectibility)

#66 – Student loans receivable leadsheet. Include loans by type (e.g. Perkins) at 6/30/2008 and 6/30/2007 and related allowances by type - Exhibit 8. Must agree to YES, Note 4.4

#67 – Calculation and analysis of the 6/30/2008 allowance for uncollectible student loans receivable

#68 – June 2008 ECSI Report. Must agree to item #66

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The PBC List – Prepaids

#73 – Detail of prepaid expenses and other assets at 6/30/2008 - Exhibit 7

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Questions