New CSBA service helps districts with new GASB rules 

To help school districts plan for sweeping changes in the accounting rules for reporting costs and obligations for post-employment healthcare and other related expenses, the California School Boards Association has launched a GASB 45 Solutions program.

The new program provides a “one-stop” solution to the complex job of complying with the recently enacted Government Accounting Standards Board Statement No. 45.

The new GASB 45 Solutions program offers districts and county offices:

• Actuarial services
• Strategies and funding approaches to address any unfunded GASB 45 liabilities
• Access to a trust administrator, administrative and compliance support, and a financial advisory committee
• Investment and trust reports and a broad selection of investment options

“While implementation of GASB 45 does not occur until fiscal year 2007-08, districts and county offices must start planning today to identify what the financial impacts are and begin to manage the obligation,” said CSBA Executive Director Scott P. Plotkin. “That’s why CSBA partnered with leading professional companies to provide members with a comprehensive one-stop GASB 45 Solutions service.”

Adopted in 2004, GASB 45 requires public agencies, including school districts and county offices of education to report their costs and obligations for post-employment healthcare and other post-employment benefits, referred as OPEBs, much like they now report pension plan obligations. The costs of these post-employment benefits will now be recognized as a current cost during the working years of an employee, similar to CalPERS or STRS pension, rather than when they retire. OPEBs include medical, dental, vision, hearing, prescription drugs, life insurance, long-term care, long-term disability and death benefits.

Districts and county offices must begin now to identify OPEB liabilities and perform actuarial valuations to determine the amount of any unfunded liability. Once these two steps are met, they will then be able to address how to manage any liabilities for the future.

“If districts or county offices do not take adequate steps to manage their obligations, it will have an impact on future borrowing costs, credit ratings and the overall financial health of the organization,” said Plotkin.