You’re managing through the disruption caused by the COVID-19 pandemic and addressing the most obvious needs — cash flow, personnel matters, operation continuance strategies, and many more. But are you aware of these other high-priority items?
Sure, you’re addressing the most obvious needs such as cash flows, personnel matters, operation continuance strategies, budget requirements, and others. But when you get a chance to come up for air, let this short list help guide you to some of the higher priority items that may not currently be on your radar.
When your organization established its accounting procedures and internal controls, including segregation of duties, you probably didn’t expect what’s happening today. With reduced staffing, remote work environments, and third-party service providers being impacted by similar disruptions, these procedures and controls are likely a bit different now than originally designed. Depending upon how long you anticipate our “new normal” to last, you may want to pause to assess whether any changes you’ve made to these policies still adequately protect the organization. There may be simple ways to strengthen your revised controls, including considering whether your organization continues to provide adequate checks and balances over its accounting functions. And while none of us want to think about it now, be sure to document changes to procedures and controls during this period so you can explain what was done when audit time comes.
There may be simple ways to strengthen your revised controls, including considering whether your organization continues to provide adequate checks and balances over its accounting functions.
When you first receive a grant, you likely spend a significant amount of time developing processes to ensure all grant requirements are met. The more grants your organization receives, the more and varied requirements there are with which you need to comply. With all of the changes over the last few weeks, minimize the potential for disallowed costs by ensuring no shortcuts are taken on documentation needed to fulfill requirements and that no actions have occurred that would keep you from fulfilling grant obligations.
With the anticipation of forthcoming federal assistance to help defray certain expenses being incurred as a result of this pandemic, you likely need to establish general ledger tracking mechanisms to appropriately capture these costs. There may be other documentation requirements to consider, depending upon the funding agency. While this is not a consideration that you need to address today, , your organization will need to address the appropriate reporting of these costs under generally accepted accounting principles at some point.
You'll likely need to establish general ledger tracking mechanisms to appropriately capture these costs.
Potential delay in GASB implementation
Until a few weeks ago, your organization has likely been keenly focused on the implementation of several new GASB standards, including Statement 84, Fiduciary Activities. With the announcement by the GASB of a potential one year across the board delay in the required implementation of these new standards, in order to provide continued resource focus, your organization will need to decide how to respond to the delay. If you’re far enough along in the implementation process, you may want to move forward with adopting these standards. Other organizations that have not yet addressed some of these pending standards may want to take advantage of the implementation delays.
Municipal securities disclosure obligations
If your organization has issued municipal securities and entered into a continuing disclosure agreement, as the issuer, you’re committed to provide certain information to the MSRB on an ongoing basis. Each bond issue has its own continuing disclosure requirements in addition to those related to certain specified events. Those collective disclosure requirements could be triggered, for example, if annual financial statements are delayed or if an event has occurred that could have an effect on bond repayments. Because disclosure of specified events must be submitted no later than 10 days after the occurrence of an event, it would be critical for organizations subject to these requirements, under SEC Rule 15c2-12, to understand your specific disclosure obligations.
Deadlines are a part of life and, up until now, you’ve done a great job understanding and managing them. With the current disruptions, many of those deadlines may now be extended. Understanding the relevant extensions, how they are being granted (automatically or via request), and establishing mechanisms to track the various new due dates are critical for meeting all applicable deadlines. Many organizations had previously established calendars noting all the various filing requirements, and their respective due dates. Walk through those filing requirements for the upcoming months, and note the new due dates and any actions required to take advantage of any changing due dates, such as the request for extension of the submission deadlines for GFOA’s Certificate of Excellence in Financial Reporting (CAFR) and other awards programs.
Reliance on third-party providers
Like you, other organizations you rely on for information, such as actuaries, investment advisors, valuation firms, and various types of payment processors, are also adjusting to this “new normal.” You can’t assume that previously established deadlines for things like actuarial valuations, SOC reporting, or investment reports will continue to be received in the time frame originally established. Understanding the trickle-down impact that various office closures and remote work settings might have on this timing will enable you to plan more effectively.
As you continue to forge through this “new normal,” if we can help in any way, we’re here! Please visit our COVID-19 resource page for more information.