Information received on September 16, 2018 from Mr. Cameron Gulley:
    I apologize that I’ve had to make a new release of version 4.5 so soon after version 4.4 was sent to you on Thursday night. However, after building financial statements for the first time I realized that I needed to add a few more things to make the worksheet more beneficial especially because of the accrual necessary for the negative GASB 75 NECE on-behalf activity.
    The following video is for the revisions for version 4.5 that came about due to the negative on-behalf accrual that will be necessary for the GASB 75 information. The video link to those changes is as follows:
    Finally, the following video is for use with the data files in converting to use with the Audit LEA software. I’ve still not made a video for use with AuditWare but should have that one ready soon.


    Let me know if you have any problems or questions.

    Thank you,

    Cam Gulley (cgulley@txol.net)



    Information received on September 13, 2018 from Mr. Cameron Gulley:
    Version 4.4 of the TRS GASB 68_75 worksheet includes a major interpretive change to incorrect guidance given by TRS. Following is the narrative regarding the legwork I did to uncover the error and the authoritative guidance provided to me by GASB.
    One of the numbers in the GASB 75 Allocation of Non-Employer Contributing Entity On-Behalf Payments schedule provided by TRS has caused much confusion. In that schedule, the OPEB Expense column reports a negative expense of ($8,504,163,580) which is confusing if only because the number is negative. TRS’ original guidance in their instructions was to disregard the negative amount in that schedule and to report the on-behalf accrual of that column as a debit to expense and credit to grant revenue.
    A little background for the reason why that number is negative in the first place is probably warranted. The State Legislature significantly reduced the benefit terms of the plan during the 84th legislative session. The effects of their actions caused material changes in actuarial assumptions that affected the measurement year. GASB 75 specifically states that changes in actuarial assumptions should be treated as a current period expense. The reduction in benefit terms had a positive effect on the OPEB liability and, therefore, resulted in a negative current period expense.
    NECE on-behalf activity is required to be recorded by cost-sharing entities in a special funding situation. Nowhere in any of the GASB pronouncements does it discuss recording contra (or negative) revenue and expenses. The presumptions in GASB Statements No. 24, 68, 75 and 85 all refer to on-behalf revenue accruals and corresponding expense accruals at the government-wide level as they relate to the on-behalf activity of the NECE. Thus, it made sense from that perspective to record the negative expense as a positive expense and increase revenue from the support provided by the NECE.
    However, that raised the question of why to continue increasing an expense when that wasn’t truly the case. Discussions regarding this ultimately led to me to call GASB directly for a definitive answer to this unusual situation.
    GASB debated the issue for the better part of a week and finally called me back today to issue their dictum. They ultimately determined that the essence of the on-behalf accrual for entities in a special funding situation was to record the NECE on-behalf activity regardless of whether the net effect is positive or negative to naturally-presented revenues and expenses. They conceded that this was not an expected situation when the pronouncements were written. They stated that on-behalf accruals will be revisited and an omnibus correction may be issued in the future as a result of this discussion and conversation.
    Therefore, the original guidance provided by TRS to ignore the negative expense is incorrect. The proper reporting of the NECE on-behalf activity at the government-wide level will be to debit grant revenue and credit expenses for the proportionate share of the NECE OPEB expense. It may result in total grant revenues being negative amounts on the Statement of Activities (especially for smaller school districts). But, GASB assured me that is the correct reporting even though total grant revenues may be negative numbers on financial statements this year.
     know this may not make sense, but GASB emphasized to me that even though not ideal that it is the correct way to treat this negative expense.

    Let me know if you have any questions.



    Cam Gulley (cgulley@txol.net)

Last Modified on September 17, 2018