Zylo

Larry Hibbs

Technical Program Manager, City of Aurora

Ben Pippenger

Co-founder & Chief Business Strategy Officer

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

The Governmental Accounting Standards Board (GASB) recently released GASB 96, which sets forth a new standard for how governments and public higher education track and report their subscription-based information technology arrangements (SBITAs), including SaaS. We sat down with Larry Hibbs, Technical Program Manager at City of Aurora, Colorado, to discuss what you need to know about GASB 96 and how a SaaS management platform is helping them comply with this new requirement.


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Ben Pippenger: All right. Well, welcome everyone. I'm really excited today to kick off a conversation around something that I honestly didn't know too much about called GASB, which is a government accounting principles and standards. Sort of got on my radar here recently because they're coming out with a new statement called GASB 96 that has some new requirements for locals and state governments as well as public universities to be tracking software and subscription- based software specifically around some of their accounting rules and principles for those specific entities. So as I was digging into it, and we were starting to think about, man, how do we learn a little bit more here? How do we understand if this has an impact? And if there's something that we can do to help, we immediately turn to some of our customers who know this world the best, one of them being the city of Aurora and Larry Hibbs over there at the city of Aurora has been a long time customer of Zylo. I think you signed up back in 2018, 2019, something like that. So you've been along with the SaaS management ride for sure. Larry's a technical program manager over at city of Aurora and has made some good progress so far with GASB. So Larry, super excited to have you and to jump in here.Larry Hibbs: Thanks for having me. It's going to be a fun conversation.Ben Pippenger: Oh, yeah. Yeah. I think you just as we were getting ready here, you called it the great GASB, so I think that's exactly what we're looking at. So I imagine a lot of people probably listening to this probably know what GASB is, but a lot of people don't, too. So maybe just to kick things off, can you just help us understand what GASB is, and then we'll jump into the specifics around the statement 96 after that?Larry Hibbs: Yeah, so GASB is a, well, they're called pronouncements from the general accepted accounting principles. And what it really does is it is a way to standardize reporting and allow cities and government agencies to report on an even keel, an even standard I should say. And by doing that, it allows the government surety that you're reporting the right things the same way as everybody else. So it's a good standard for everybody to report against, and every so often they come out with these new schedules or new pronouncements, and 96 is a new one, and it starts in June of 2022 when you go back to, and then you start reporting now so.Ben Pippenger: Yeah. So it's a new standard way that you need to be reporting some sort of accounting metric back as you're thinking about reporting your financials into the government. And it's really officially started last year, but those reports and things start to need to be handed in here now that books are closing for the year and you're starting to report back, is that right?Larry Hibbs: That's right. So everybody's starting to gear up to do their reporting.Ben Pippenger: Great. And then when you think about the 96 statement, statement 96, so GASB 96, what are some details? What is it? What the high level, what is the statement? What's the new requirements?Larry Hibbs: The largest new requirement is how to report hosting and SaaS services as assets. What little piece of it is really an asset that they need to report on. So a SaaS or a hosted solution can give you access to hardware and software that could be in your control as an asset. So they want to get down to that minutia of reporting so that every contract has to have some kind of asset statement.Ben Pippenger: Okay. So before we get into sort of how you're doing it at city of Aurora, what happens if you don't do this? I mean, what sort of impact is there if you don't comply with GASB, how does that impact your organization?Larry Hibbs: It really comes down to every agency goes through audits, annual audits. If you're not reporting on a GASB standard, your audit will not be clean. And if you don't have a clean audit, you could lose out on federal grants and also debt issuing like your credit standards and stuff like that. So yeah, it's a big deal.Ben Pippenger: Yeah, potential for, I mean, big impact. If you fail an audit all of a sudden you can't get grants. You can't get grants, you can't do the things that you're trying to accomplish within your local government or your city. Right.Larry Hibbs: Yeah, there's a lot of money in grants.Ben Pippenger: Yeah, for sure. For sure. Okay, so now when we think about you helped us with the definition of what GASB 96 is, we understand it's for the impact if you don't comply here. What sort of things are you thinking about at the city of Aurora? How are you approaching compliance with GASB 96? As you're looking at what that statement says, how are you identifying the things that you need to be tracking appropriately? What are the steps you're taking from an approach perspective at city of Aurora?Larry Hibbs: We are starting to gear up by looking for contracts. Last year we started kind of a practice round with GASB 87, and we wanted to look at what do we have to report. So we started looking at all of our SaaS products in Zylo and said, what's the criteria? What contracts do we have to get? And it's a process. I mean, you never have all the information. It's like doing your taxes. You don't have all your paperwork with you at one time, so you got to dig and you got to hunt and you got to look at everything. So that's where we started right now.Ben Pippenger: How did you define, what criteria? What did you look at? What were the things that you had to consider, and is that a standard or is that up to each individual organization to define what that criteria looks like?Larry Hibbs: So there's some latitude on your criteria as long as you're consistent on it. Last year we looked at products that were over like $10, 000 and contracts that were hosted only because we were really looking at the 87 standard. Now this year with 96, we'll open that up and probably up the number a little in our contract and start looking at what's hosted, but what's also not multi- tenant type SaaS products. So yeah, we're working pretty hard right now on gathering contracts for everything.Ben Pippenger: Are you working cross functionally, like how does that function? Are you thinking about, is this something that you're going to be handing over to your accounting team or what's that sort of, what's that look like inside of the city of Aurora?Larry Hibbs: So what we're looking at, we've started with is first getting our accounting people into Zylo so that they can start looking at products and contracts and numbers. But it'll help us work with the accounting people to come up with that subset of data. What products do they really want to report on? What do they feel like has a potential to be reported on? So we're looking at creating our data set and then giving it to the accounting, really look at and scour and then there may be some round cycling of data sets 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 those in Zylo as we reported on those in 96. Now next year when we have to report, what do we report on? So it helps.Ben Pippenger: Yeah, that makes a ton of sense. So thinking about Zylo as your central system of truth for all these different SaaS applications that the city of Aurora is buying and using, and then you're working within your world, and then also with your accounting counterparts to identify which of those subscriptions should be reported according to GASB 96. And then you're making sure that you got all the documents, all the information that you need, flagging that as something that you're reporting via GASB 96 and Zylo. So now you have a consistent system of record going forward and then handing a lot of that information over to your accounting teams.Larry Hibbs: Yeah, that's really it.Ben Pippenger: Okay.Larry Hibbs: We're working with the group.Ben Pippenger: Yeah. What about, you had mentioned, I think when we were doing some prep, you had talked a little bit about the number of apps specifically to GASB 87 that the team thought they were going to have to report on using some of the data that you had available to you. You sort of had an insight that uncovered like, actually, this may not be as big of a thing as we once thought it was. Talk a little bit about that, and as that correlates into 96, some of the insights you're able to help derive by using Zylo and other tools you have at your disposal.Larry Hibbs: Last year was our first foray in GASB in a while, and our accounting crew said, Hey, we need a report on software. So we need to know all of your SaaS products and what are we going to report on? So we gave them a list of 200 report or subscriptions. Well, that freaked them out a lot. They were like, oh, this is going to take all summer. And so I said, well, what is the criteria you're really looking for? So in Zylo, we were able to whittle it down and what's the threshold for cost? What's the typical product are you looking for? And we were able to get it down from 200 down to five products that they had a report on, and when I sent them the next dataset, they were like all happy and like you just saved us a whole month and a half of work. And it was like, well, as long as we know what you need to report on, we can give it to you. And they were very, very happy. So I was on their Christmas card list that year.Ben Pippenger: That's our goal, is to make sure all of our happy customers are on their cross- functional teams Christmas card list every year. I love that, Larry. So okay, great. So you helped us give some visibility and some thought into what it is, how are you doing it, how you're leveraging Zylo and really creating this centralized system of truth now and then ongoing for continual reporting into the future on these different statements. Sounds really powerful. When you think about, this is year one of this reporting back in, when you think about year two, year three and in the future really, what does an ideal state look like for you, which you guys will be working towards as it relates back to these different accounting standards and specifically GASB 96?Larry Hibbs: So going forward from here, the first year is always the hardest and getting a system in place and started. The cycle we're looking at is finding those products this year in Zylo, tracking them in Zylo, flagging them with some custom fields that when the lifecycle of that product comes around and we start doing renewals in the middle of the year, we can see that this is a GASB reported product. So during the renewal, we can go to the vendor and say, we need this reported on and we need these numbers from you at the renewal time. So then when GASB reporting time comes at the end of the year, we already have those numbers and it's now just hopefully year two, year three, year four will be just, here's your filter in Zylo for GASB reporting and do an export and there's your target items to report on. It's that whole life cycle. So when we onboard a new product, we can talk with the accounting group to say, does this have potential to be a GASB product reported on? And we can then flag it at that point and start the whole cycle with that product. And hopefully it will just keep kind evolving into more information and more information provided during the year and not just at year- end like we are now. Gather all your contracts, gather all your stuff, and start figuring out numbers. What we want to do is in Zylo, be able to have those numbers come to us and be able to just making a source of record for those products that are being reported on every year in GASB so.Ben Pippenger: Yeah, that makes a ton of sense as well. So it's sort of like, even though you've been trying to get this up to speed here since the last GASB 87, now we're at 96. So you've got some process in place and things, but it's still sort of getting everything together end of year, providing that over to your accounting teams team so they can report accordingly. You're wanting to get to more of that lifecycle approach. So as new apps are being purchased by the city of Aurora you know right away, okay, this is a GASB related application. I'm going to flag it as such inside of Zylo to make sure we have all the right content and materials and documents and things. And so then when it hits this time of year, again, it's just your accounting team has access, they log in, everything's there for them, they can get their jobs done, and little or no sort of hands- off approach, I guess, from Larry and the team.Larry Hibbs: Yep. That's,Ben Pippenger: That sounds great.Larry Hibbs: That's a happy path. Yes.Ben Pippenger: It is. That is. And it sounds like you're well on your way to that happy path, which is great. So maybe just to round it out here for our conversation for today, thinking about other groups, other teams, other cities, states, other governmental entities that need to comply with GASB, what advice or recommendations would you give to them as they're trying to get in front of this and thinking about what their audit looks like for this year?Larry Hibbs: First thing you have to know is what is your SaaS product? What is your list and what do you know about those products? You got to organize that first. That was where we went straight to Zylo last year to say, here's our list and now what do we do with it? So the next iteration is we know our list, now what's our contracts? And that information is now in Zylo, and now our next step is renewals and reporting. For other entities who are using Zylo, they have that list already. Now they have to make sure they're filling in the blanks in Zylo so that they can get to that point where the lifecycle management is providing that data as you go forward. 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? And you're going to be looking everywhere for everything, and it gets really confusing and it gets really overwhelming fast. So know what you know, know what you have and move forward.Ben Pippenger: Yeah, I love that. And obviously appreciate the plug for those that aren't on Zylo, we're here to help if we can, but it sounds like even without Zylo, it's starting to get your house in order here and create that list of subscriptions and make sure you have everything you need for any audit activity. And then going forward, it might be a challenging year after year to do that over and over again where a system like Zylo can come in and help have that system of record for maintenance. And like you said, that's a continual ongoing updated list of what needs to be reported back.Larry Hibbs: Yep.Ben Pippenger: Awesome. Well, hey, Larry, thank you so much. I can tell you I definitely have learned a thing or two as we were getting ready for our conversation today and then even in the conversation today as well. So thanks number one for being a customer and being an advocate, but number two, helping all those that are listening on what they need to do to be ready and prepared for GASB. If they're not started now, they should get going because September is going to be here before we know it, I guess. So thanks again.Larry Hibbs: Thanks for having me. It's been a pleasure.