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Regents’ audit committee kicks off FY25 audit plan; auditors flag new GASB standard that could raise liability estimates
Summary
Auditors and university leaders outlined the FY25 audit timeline and risk assessment process and warned that upcoming GASB guidance on compensated absences (lowering the probability threshold to 'more likely than not') may increase reported liabilities; the provost described a senior leadership group monitoring federal policy changes.
The Audit & Compliance Committee heard the FY25 external audit plan and a warning about two emerging Governmental Accounting Standards Board requirements that could affect presentation and liabilities in the university’s consolidated financial statements.
CliftonLarsonAllen outlined the FY25 timeline: planning and strategy from February through May, risk assessment in May–June with governance input, bulk testing in August–October, and financial statement assembly and issuance by October to meet state requirements. Daniel Persad said auditors will use a risk‑based approach and adjust testing based on developments during the year.
Engagement manager Mike Anderson described two GASB changes the university must implement. The first revises guidance on compensated absences (paid time off, sick leave, vacation) by lowering the threshold for recognizing liability from a 'probable' standard (roughly 75%) to 'more likely than not' (about 51%). Anderson said that change ‘‘may result in an increased liability’’ and urged proactive analysis and coordination between management and auditors. The second standard expands disclosures for concentrations and constraints when events materially change their importance to the financial statements.
Regent Davenport asked whether units would estimate liabilities differently if retirements spike in a particular unit; auditors replied the university will perform a consolidated, predictive analysis but will consider unit‑level patterns as part of that process.
Vice Chair Goline asked about possible near‑term financial impacts from federal policy changes. Provost Carlson said a senior leadership group meets three times weekly to track executive actions, evaluate university positions, and coordinate communications; the university has also re‑activated planning procedures used during the COVID period to enable rapid pivots as needed.
Auditors and university leaders emphasized that governance input into the risk assessment is important and that auditors will consult committee members during interviews and planning sessions to set materiality and areas of focus for FY25.
