September 2017's DFL Forum Recap

Divisional Finance Leaders,

Thank you again for engaging with us at this morning's DFL Forum. These are the slides we reviewed and below are key follow-ups from the session.

New quarterly controls process - effective first quarter
As Delphine outlined today, financial reporting and system access reviews are important control activities required for external and internal audits. They provide assurance that operating results are complete, accurate, and valid, and that there are no material misstatements to the financial statements. To improve the effectiveness of campus' key controls and alignment with annual fiscal close certifications, the Controller's Office is instituting changes to our key controls effective for the first quarter of fiscal year 2017-18:
  • The organization level at which the controls are performed will be at the division rather than department;
  • The frequency of the review will be changed from monthly to quarterly;
  • A new CalPlanning Reporting report (GL Summary Monthly Comparative Actuals) and a new BAIRS Compensation Report have been developed for use in performing the financial reporting review;
  • System access review (Identity Management) will be performed within BFS;
  • Division Finance Leaders (DFLs) will be required to:
    • For the financial reporting review, upload the reports with explanations and comments to a Box share site within 30 days of the fiscal quarter end. Work can begin on the financial reporting review now, and we'll keep you posted on the due date via the DFL weekly update email.
    • For the system access review, approve system access reports in BFS within 30 days of the fiscal quarter end. The due date will be included in the DFL weekly update message when the reports are available.
We will notify you when it's time to perform this quarter's controls via our regular weekly DFL Update email. In the meantime, you may visit the Controller's Office website for instructions and more information.

BOE sales and use tax audit - charging fees to divisions on a prorated basis
As we reviewed today, the California State Board of Equalization (BOE) recently concluded an audit of the campus' payments of sales and use tax for the period of July 2009 through September 2012. We were able to contest many of the BOE's claims or identify overpayments that significantly offset the $2 million tax liability for the in-state and out-of-state contracted and invoiced purchases. Despite considerable effort, we were unable to defend against BOE's claims regarding missed tax accruals on blu-card purchases; campus departments could not produce backup documentation for the sample set of blu-card transactions. We recognize that the time gap between the purchase and the audit was considerable and that there have been impactful organizational changes that may have contributed to the situation.

Nonetheless, without the supporting details, we were left with the only option of accepting the error rate of 4.43% of spend from the previous audit (2006-09) and extrapolating that across all 2009-2012 blu-card spend. Therefore, we will be charging these fees to Level 3 organizations on a prorated basis; review the P Card cost allocation spreadsheet for division charges. We determined the amount to charge by calculating each organization's 2009-10 blu-card spend as a percentage of the total and applying that percentage rate against the total cost amount. Only transactions without a sales/use tax entry were included. Comparable data for 2010-12 was not available.

Please refer to the Controller's Office website for more information.

Reserve Analysis - templates released and labs announced tomorrow
Look out for an email tomorrow with the reserve analysis templates and working lab availability. In the meantime, please contactFinancial Planning & Analysis Business Process Driver Maya Woodson Turman with questions at mwoodson@berkeley.edu.
Finance Literacy - coming soon
We're excited to announce our first session on October 31 taught by Chief Audit Executive Wanda Lynn Riley titled "GAAP vs GASB and Why Do I Care?" This course will provide an overview of key accounting rules and standards, while blending in interactive exercises to reinforce the most relevant definitions, concepts, and principles. We'll send you a registration link soon to the Learning Center, and we encourage you to forward the invite to any campus colleagues you know who would benefit from the class. Please contact Financial Planning, Analysis, & Engagement Lead Kevin Mack at kevinkmack@berkeley.edu with questions.

Our Berkeley - coming soon
The first release of the Our Berkeley data digest site is planned for late October/early November, followed by regular releases each quarter. Please contact Office of Planning & Analysis Institutional Research Analyst Russ Acker with questions at racker@berkeley.edu.

Video training course - coming soon
In response to frequent requests for video tutorials, the Controller's Office is offering a 12-hour video program to teach the fundamentals of video creation. Classes will be two hours long and presented twice a month. The program will last three months and there will be a limited amount of participants per course, to allow for individual attention. We'll distribute information about course topics and sign-ups soon. Please contact Digital Communications Specialist Rob Cannon with questions at rcannon@berkeley.edu.

Thank you,
Office of the Vice Chancellor of Finance