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I ' CITY OF ROSEVILLE EMERGING ISSUES December 31,2014 COSO PROJECT—INTERNAL CONTROL INTEGRATED FRAMEWORK(CONTINUED) 1 Control Activities: 10. Selects and develops control activities that contribute to the mitigation of risks. ' 11. Selects and develops general controls over technology. 12. Deploys control activities through policies that establish what is expected and procedures that put policies into place. ' Information and Communication: 13. Uses relevant information to support the functioning of other components of internal control. 14. Communicates information internally, including objectives and responsibilities necessary to support the internal controls. 15. Communicates with external parties regarding matters affecting internal control. ' Monitoring Activities: 16. Conducts ongoing and/or separate evaluations to ascertain whether the components of internal control are present and functioning. ' 17. Evaluates and communicates deficiencies to those parties responsible for corrective actions. The updated framework also has additional examples relevant to operation, compliance and reporting objectives added. While COSO integrated internal control framework is very extensive, this is only a short summary of some of the changes of the updated framework. The updated framework superseded the original framework beginning January 1, 2015. ACCOUNTING STANDARD UPDATE—ACCOUNTING FOR PENSIONS GASB Statement No. 68 replaces the requirements of Statement No. 27,Accounting for Pensions by State and Local Governmental Employers and Statement No. 50,Pension Disclosures, as they relate to ' governments that provide pensions through pension plans administered as trusts or similar arrangements that meet certain criteria. Statement No. 68 requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. GASB Statement No. 71 —Pension Transition for Contributions Made Subsequent to the Measurement Date—is an amendment of GASB No. 68. • GASB 68 will require presentation of the local government's proportionate share of the pension plan's Net Pension Liability to be reported on the government-wide statement of net position and the proprietary fund statements of net position—based on last year's employer ' contributions • The Net Pension Liability is measured as the total pension liability less the amount of the pension plan's fiduciary net position—Public Employee Retirement Association(PERA) currently estimating this around $6—7 billion each • Governmental Funds will present pension expenditures equal to the total of 1) amounts paid by employer to the pension plan and 2) the change between the beginning and ending ' balances of amounts normally expected to be liquidated with expendable available financial resources (i.e. No Change) 1 18