Local government organization reduces lease accounting errors with EZLease
Clark County, Washington, a local government organization with 1,500+ employees serving over 526,000 people, wanted a GASB 87 software solution with built-in auditing for data import and calculations to reduce the likelihood of basic errors.
Clark County, Washington, a local government organization with 1,500+ employees serving over 526,000 people, began its early implementation of GASB 87 using Excel and TValue Amortization to manage their 27 lessee, lessor, and future GASB 96 SBITA subscriptions. They quickly found their approach to be error-prone and decided mid-project to begin searching for a solution that would reduce or eliminate these mathematical errors.
They wanted a software solution with built-in auditing for data import and calculations to reduce the likelihood of basic errors. They were also looking for a solution that would handle implicit method discount rate calculations for their building leases where a fair market value (FMV) for the underlying asset was available through public information from the county assessor office.
"There is no way we could analyze our portfolio, create our annual journal entries, and gather the details for the notes to the financial statements by doing all that work by hand (or with Excel) without added staff. With EZLease, no additional staff was needed."
After conducting research in the market, Clark County narrowed their selection down to two choices. After using EZLease’s free trial version, they realized it was a good fit and moved forward with implementation, as the other solution lacked the implicit rate calculation and the journal entry report. “The price was very reasonable in comparison to the features offered,” stated David DeGroot, Senior Management Analyst at Clark County.
Despite having a very decentralized team and process which made it challenging to locate every lease, Clark County was able to implement EZLease in five months with one dedicated resource and help from two others in Real Estate and Accounts Receivable, as needed, to locate contract documents. Additionally, with the help of their CPA firm, the County was able to create a lease policy to determine the dollar amount of leases and SBITAs they could omit through their capitalization threshold selection, and still publish correct financial statements – all within EZLease.
Clark County currently uses EZLease for financial analysis and reporting across their $28M lease and SBITA portfolio. This includes 8 lessee leases, 11 lessor leases, and 8 SBITAs. Based on inputs made in EZLease, the County’s auditors accepted the solution’s mathematical calculations along with the annual reclassification entries.
By using EZLease’s 20 user-definable fields for analysis and ERP journal entry uploads, the County can analyze their portfolio, create annual journal entries, and gather notes for their financial statements without adding additional resources. User intervention is only needed for uploading journal entries for lessee leases accounted for in governmental-type funds. All other functionality is available right out of the box.
Additionally, the future debt requirements reporting that includes the weighted averages of outstanding debt in years and interest rates, both add meaning to their note disclosures.