TCA Reporting Policy Update -...

V05 1 October 11, 2017 | Presentation

Calgary: TCA Reporting Policy Update October 11, 2017

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Agenda

2 October 11, 2017 | Presentation

•  Tangible Capital Asset (TCA) reporting policy

•  TCA reporting structure

•  TCA reporting system

•  Lessons Learned

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Overview: What We Worked On


2015 2016 2017

Step 1: TCA policy updates

Machinery & equipment

Buildings

Engineered structures

Land improvements

Land

Vehicles

Step 2: TCA structure changes

Step 3: TCA system implementation

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Step 1: Water’s TCA Policy / Asset Hierarchy


Common Feedback Re: TCA Policy and Asset Hierarchy TCA Environment

50 Profile IDs

“Asset hierarchy is too detailed.”

$100K/component

“Capitalization threshold is too

low.”

Manual disposal

“Disposals are time consuming.”

Amount of Costs

$300M of capital additions, >100

projects

Timing of Costs

40% of invoices received in Nov. &

Dec.

Tracking of Costs

Use of Excel spreadsheets

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Discussion Area


What are some common concerns that your

jurisdiction has re: TCA policy and/or asset

hierarchy?

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Step 1: TCA Policy / Asset Hierarchy


1.  Asset hierarchy •  Focus: how much level of detail needs to be captured? •  End result: 50 profile IDs to 15 profile IDs

2.  Capitalization threshold •  Focus: how are costs managed by Operations? •  End result: $100K/component to $250K/project value

3.  Disposal method •  Focus: how can we simplify the calculations? •  End result: automated calculator that uses present value

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Discussion Area


If you could change your area’s policy/hierarchy, what would it look like?

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Step 2: Changes to Reporting Structure


What Were the Changes? •  Established centralized TCA reporting team in Finance

•  Responsible for The City’s TCA reporting activities •  Collaborates with Operations and other areas of Finance

•  Goal: •  Develop TCA reporting experts in Finance •  All team members apply the TCA reporting policy in the same manner •  Share resources among Finance •  Have Finance be accountable for TCA decisions

•  Out of scope: •  Alignment of asset management with financial reporting •  Integration of project management activities in the new system •  Budgeting and management reporting activities

Why Were the Changes Needed? •  Misaligned roles and responsibilities led to:

•  Duplicated work •  Inconsistent TCA processes and reporting •  Accounting errors

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Step 2: Changes to Reporting Structure


How Were the Changes Developed? •  Task force – performed current state analysis and designed options

•  Required collaboration between Finance and Operations personnel

•  Use of change management and communication strategy Updated Reporting Structure:

Finance Business Unit Finance Finance Finance

Develop Policy

Provide Asset Info

Prepare TCA Info

Reconcile Accounting

Manage Audit

TCA Transition

Feedback Loops

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Discussion Area


Could a centralized model work for your jurisdiction?

Why or why not?

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Step 3: Implementing a New System


Cost reconciliations are difficult. It takes a long time to review invoices. There’s high staff turnover.

Governance and reporting changes will not be sustainable if no system changes are made.

The City relies on manual processes and has no dedicated cost tracking tool.

BU

TCA Project

Auditors

Why Was a New System Needed?

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Step 3: Implementing a New System


What Was The City’s Solution? •  Implemented PeopleSoft’s Project Costing (PC) module

•  Aligned with existing PeopleSoft products (e.g. Asset Management) •  Allowed project team to leverage their knowledge/experience with the module

•  Introduced: •  Requirement use PC module specific chartfields to identify capital projects •  Process to request for Project IDs (to track projects)

•  Built to accommodate additional functionalities, such as Hyperion and project management tracking

Supply (Req., PO)

AP (Invoices)

GL (Journals)

PC Module (Project cost)

Asset Mgmt. (Assets)

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Discussion Area


What kind of change management strategy was used at your municipality when implementing new

systems?

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Summary: Where We Are Today


We use a uniform strategy to maximize consistency.

One process:

All asset categories have now been

assessed.

One team:

Our team is in place working with Finance

& Operations.

One system:

The module was launched in April and

is operational.

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Lessons Learned


General •  Engage Operations and Finance •  Ensure management will champion the changes •  Use a change management specialist •  Have open and ongoing communications with stakeholders •  Keep the external auditor up-to-date System Implementation •  Be vigilant and avoid scope creep •  Choose your project team wisely •  Identify resource requirements as soon as possible •  Determine if a paradigm shift is needed •  Establish a dedicated IT team to resolve system issues

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Questions?


TCA Reporting Policy Update -...

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