How City of Aurora Uses a SaaS Management Platform to Comply with GASB 96

With the introduction of new accounting standards by the Governmental Accounting Standards Board (GASB), state and local governments—alongside public colleges and universities—are required to track and report their subscription-based IT, including Software as a Service (SaaS). This standard – GASB 96 – went into effect on June 16, 2022. If you work for a government entity or university, you need to start reporting with this new standard. 

I recently spoke with Larry Hibbs, the Technical Program Manager at City of Aurora, Colorado to understand how his team is using SaaS management to comply with GASB 96. Watch the full Q&A session with Larry, or read on for insights.

GASB 96 Q&A with Larry Hibbs

What is GASB?

In Larry’s words, GASB is “a way to standardize reporting and allow cities and government agencies to report on an even [standard].” This allows the federal government to ensure that local and state governments, agencies, and universities are all reporting to a standard of quality and uniformity which allows for verification of accounting.

He further explained that GASB comes out with new pronouncements every few years. GASB 96 is the newest one – meaning you need to report to 96’s standards, not an earlier one.

What does GASB 96 entail?

The biggest change Larry noted with GASB 96 is the mandate that SaaS and IT hosting must be reported as assets. He explained that “SaaS or a hosted solution can give you access to hardware and software that could be in your control as an asset,” so the government wants to “get down to that minutia of reporting so that every contract has to have some kind of asset statement.”

While there are some other minor changes – which we covered in our GASB 96 overview here – the SaaS report changes are the largest by far.

What are the risks of noncompliance with GASB 96?

The risk of noncompliance with GASB 96 is how it impacts your agency’s annual audit. Larry explained how all government agencies go through annual audits and, “If you’re not reporting on a GASB standard, your audit will not be clean.”

If your federal audit isn’t clean, you could lose out on federal grants and debt issuing like credit stands. Larry specifically said, “So yeah, it’s a big deal.” We agree.

What steps is the City of Aurora taking to comply?

Larry explained that the biggest thing the City had to do was gather all of their SaaS information. He explained that they cataloged what they needed to report then, “We started looking at all of our SaaS products in Zylo and said, ‘What’s the criteria? What contracts do we have to get?’”

He emphasized the amount of work necessary to gather all of this information for the reports. He compared it to doing taxes, saying, “You don’t have all your paperwork with you are one time, so you got to dig and you got to hunt and you got to look at everything.”

What criteria does the City of Aurora follow?

Larry walked us through the standards set by GASB 96 and talked about whether or not individual entities have any leeway in the criteria therein. He explained, “There’s some latitude on your criteria as long as you’re consistent on it.” He walked us through the City of Aurora’s process of setting their own criteria for the report, and how they measured them against GASB 96’s standards.

He explained that with GASB 87, City of Aurora “looked at products that were over $10,000 and contracts that were hosted” by the City. But, with GASB 96, they’ve begun to open that criteria up some and upped the bar for what contracts and SaaS apps they’re checking more rigorously, like comparing hosted IT versus multi-tenant SaaS products. The hardest part, Larry mentioned, is just getting all the contracts together and organizing them.

What is your internal process for compiling the report, and what cross-functional participation is there?

Larry explained that the process starts with accounting. They go into their SaaS management platform and gather products, contracts, and costs. 

With this set of data gathered, the IT department has way more information to work with, which in turn means that IT can create a more robust set of data by looking at the apps and their contracts. 

Larry explained that, “There may be some round cycling of data sets [between accounting and IT] to say, ‘Oh, you don’t want that one in there. You don’t want this one in there.’ And then what we’re looking at in the future is keeping track of [contracts] in Zylo as we reported on those in 96.” 

He emphasized how much this process of categorization and data management in their SaaS management platform helps City of Aurora keep things streamlined, especially going into future years.

Ben expounded on this idea, clarifying how City of Aurora uses Zylo’s SaaS management platform as the central truth and bookkeeper of the City’s SaaS inventory and contracts. This centralized system of data management helps attain compliance with GASB 96 by making reporting so much easier.

Is GASB 96 hard to comply with?

Larry explained how, with their SaaS management platform and other management tools, achieving compliance with GASB 96 wasn’t all that bad. It seemed daunting at first because they had 200 contracts to look at. However, by setting criteria in Zylo, they were able to filter through and set thresholds for costs and contracts.

This let them easily filter out what they needed to report and what they didn’t. In fact, they managed to trim 200 products down to only 5 that needed to be reported!

What is the City of Aurora’s ideal future state for reporting?

Larry emphasized that the first year is always the hardest for getting new systems and standards set up. Thus, the City of Aurora seeks to keep streamlining their annual reporting to make it easier and easier year-over-year. 

He explained, “The cycle we’re looking at is finding [SaaS products] this year in Zylo, tracking them in Zylo, flagging them…we can see that this is a GASB reported product.”

Through their SaaS management platform, City of Aurora is able to flag certain products as GASB 96 reportable. That means they can easily add new products to this filter and see which products need to be reported each year. Because of this, it will get easier each year as they work to keep their Zylo SaaS management platform up to date.

Final Thoughts: Larry’s Advice on GASB 96 Report

Larry emphasized that the most important thing for GASB reporting is to keep your SaaS products categorized in a list. He said, “If you’re not on Zylo, you probably need to be on Zylo to get your list, or else you’re going to be doing this onesie, twosies, ‘Hey, did we pick up that product that’s over in fleet?’” Having a SaaS management platform enabled the City of Aurora to handle GASB 96 compliance with confidence and carry that confidence into the future.

If you’re an organization that must comply with GASB 96, start with complete visibility into your SaaS applications. To learn how a Zylo’s SaaS management platform can help, request your personalized demo today.