YEAR-END CLOSING WORKSHOP. District Financial Services

Transcription

1 YEAR-END CLOSING WORKSHOP District Financial Services

2 2 Goal of the Year End Closing Workshop To familiarize personnel new to school business with the year-end closing process. To review year-end closing entries and transactions. To help ensure that the district s financial statements are accurate and ready for an audit.

3 Year-end Closing Workshop Agenda 1. General Accounting Information 2. Closing Schedules 3. Checklists 4. Entries Made Prior to Closing 5. Closing Entries & Accruals 6. Payroll Accrual 7. Indirect Costs 8. Interfund transfers 9. Accounting Updates 10. Demonstrations Interest Calculator Fund Reports

4 SECTION 1 General Accounting information

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6 6 TITLE Add text

7 7 TITLE Add text

8 8 TITLE Add text

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10 Business Advisory Consultants 10

11 SECTION 2 Closing Schedules

12 12 Important Dates- 17/18 Closing June 26 th by COB All Deposits to Wells Fargo June 28 th by 10 a.m. Auditor s Transfers to FA June 28 th by 12 p.m. Submit approved vouchers to commercial warrants June 28 th Last day to cancel warrants

13 13 Important Dates- 17/18 Closing July 9 th by 5 p.m. Finalize all 1617 PO s Enter goods received by June 30th July 10 th Financial Accounting: Receipt Accrual PO Rollover July 31 st Education Business Systems: Post Payroll Accruals

14 14 Important Dates- 17/18 Processing July 1st New FY activity begins July 6th First day commercial warrants are issued for FY 18/19 July 16 th Period 12 closes at 5 p.m. September 4th Last day to post to period 998 Send completed district closing checklist and TRC to Financial Accounting September 15th Unaudited Actuals due to County Office of Education

15 15 Customer Resource Center (CRC )Training Support Sessions for Year End Closing Purchasing Inventory Finance Open Labs CRC Website

16 SECTION 3 Checklists

17 17 Year End Calendar Development Determine what the key SDCOE deadlines are (include the treasury deadlines, etc.) Determine internal deadlines and create year end planning calendar Board Agenda date Work backwards School vs. Department vs. Internal business deadlines Understand key processes and reasons for decisions Communicate deadlines

18 18 District Closing Checklist Posted on the Financial Accounting website under Quick Links Run FAR queries, and check by fund/resource: Suspense objects (7999XXX & 8999XXX) are zero Contributions (8980s & 8990s) net to zero by fund Suspense resource 9999 is zero (Pre) Encumbrances are zero 50% of objects have been transferred to 8691 Debit(+) 8089 Credit(-) 8691 Object 9140 cash collected awaiting deposit is zero All Prior year accruals are zero Object 9910s payroll holding accounts is zero

19 19 District Closing Checklist (continued) Run FAR queries, and check by fund/resource: Asset accounts have debit balances Objects Liabilities have credit balances Objects Verify expenditures in resource 8150 meet requirements For through Greater of: a) Lesser of 14/15 amount or 3% of total GFE b) 2% of total GFE

20 20 District Closing Checklist (continued) How to manually clear encumbrances, if needed.

21 21 District Closing Checklist (continued) SACS Technical checks are passed Review explanations with your district s Consultant or Financial Accounting

22 22 Charter Schools- Closing the Books Authorizing agencies should review the charter school s Alternative Form or SACS data for appropriate coding and ensure object code 8096 (transfers to charter schools in lieu of property taxes) nets to zero between the charter and authorizing agency

23 SECTION 4 Entries Made Prior to Closing

24 24 Closing Steps Before June 30th Clear prior year accruals Receivables Liabilities Clear prior year Due-to (object 9610)/Due-from (object 9310) - Must be repaid in same fiscal year or following fiscal year if transfer takes place within last 120 days of fiscal year Clear Suspense through June Post Audit Adjustments

25 25 Closing Steps Before June 30 th Continued Inventory Conduct physical count Adjust G/L to match Actual Inventory For stores inventory, see CRC Training Guide IN2 Inventory Count & Reconciliation

26 26 Use Journal Source PAJ Recommended steps Payroll Adjustments 1. Download & save PEDR each month 2. Filter for adjustments a. Suspense b. Funding changes c. Year-end adjustments (ie. EPA) 3. Enter PAJ journal a. Journal Header Description: justification for payroll adjustment b. Journal Line Description: Employee name c. Journal Line Reference: Employee ID 4. File for auditors along with copy of applicable PEDR lines

27 27 Payroll Adjustments- continued Interfund Payroll Adjustments (transfers that cross funds) Recommended steps 1. Download & save PEDR each month 2. Filter for adjustments a. Suspense b. Funding changes c. Year-end adjustments (ie. EPA) 3. Enter PAJ journal a. Journal Header Description: justification for payroll adjustment b. Journal Line Description: Employee name c. Journal Line Reference: Employee ID d. Offset: Due to/ Due from other funds (9310 & 9610) 4. Enter AT journal to clear DTF entries 5. File for auditors along with copy of applicable PEDR lines

28 28 Review Balance Sheet o Query objects o o o Pivot table by fund & object to view balances FAR_GL_ACTUALS_2_FD_OBJ Pivot table by fund, resource & object for more details FAR_GL_ACTUALS_3_FD_RES_4OBJ PS GL Trial Balance Excel o Starting with Tab 5 GL by Fund

29 29 Review Due to Due from Balances E.C The governing board of any school district may direct that moneys held in any fund or account may be temporarily transferred to another fund or account of the district for payment of obligations. The transfer shall be accounted for as temporary borrowing between funds or accounts and shall not be available for appropriation or be considered income to the borrowing fund or account. Amounts transferred shall be repaid either in the same fiscal year, or in the following fiscal year if the transfer takes place within the final 120 calendar days of a fiscal year. Borrowing shall occur only when the fund or account receiving the money will earn sufficient income, during the current fiscal year, to repay the amount transferred. No more than 75 percent of the maximum of moneys held in any fund or account during a current fiscal year may be transferred. Object 9310: Due from other funds Object 9610: Due to other funds

30 Due To/Due From 30

31 Clear Prior Year Due to Due from Balances Query objects & for all funds 2. Identify prior year balances a. Are they cleared to zero? b. If not, enter an Auditor Transfer 3. Identify current year transactions a. Are they cleared to zero? b. If not, can they be cleared? i. Is there enough cash in the fund?

32 32 Clear Prior Year Due to Due from Balances 1. If balances to clear, run detail queries for ranges & (ie. M_GL_DETAILS_PO) 2. Paste queries together in to one sheet, and create pivot table to identify balances by fund a. Use period in filter to determine prior year balances Beginning balances from prior year Current outstanding balances

33 33 Clear Prior Year Accruals (A/R & A/P) Sum of Sum A Column Labels Row Labels Grand Total ,556, , , , ,706, , , ,892, , , , , , , , , (33.08) , (210,388.00) (210,388.00) 9690 (92,597.00) (92,597.00) 9791 (2,815,679.46) (448.86) (360,274.84) (1,107.30) (13,810,475.21) (127,532.34) 123, (16,992,404.38) 9910 (75,751.01) (878.61) (2,376.32) (79,005.94) Grand Total 760, , , (98,815.45) (27,902.48) 47, ,479.69

34 34 Clear Prior Year Accruals (A/R & A/P) 1. Run query for prior year to identify all accrual lines 2. Run query for all transactions for current year 3. Paste in to one spreadsheet to quickly analyze by fund & resource a. Delete the beginning balance entry in Period 0 4. Identify outstanding amounts a. Are there amounts remaining to be received or paid? a. Follow up with vendors b. Note to set up as new accrual b. Are there variances in accrual and amount received or paid? a. Write off the variance to the revenue or expense account b. If the amount is large, or creates a negative balance in a revenue or expense account, contact auditor and/or SDCOE consultant c. Post adjusting entries

35 35 Clear Prior Year Accruals (A/R & A/P) 1. Run query for prior year to identify all accrual lines

36 36 Clear Prior Year Accruals (A/R & A/P) 2. Run query for current year to identify all transactions to clear accruals

37 37 Clear Prior Year Accruals (A/R & A/P) 3. Paste both queries in to one spreadsheet to quickly analyze by fund & resource Delete the Period 0 lines to compare only detail transactions Period Date Source Journal Amount Fund Resource Object Line Descr JE Header Description 998 6/30/2017 FA th Quarter Interest Accrual Interest Accrual 4th Quarter /30/2017 DO , Accounts Receivable recieablesfund /30/2017 FA Q Interest Accrual-2nd Distr Interest Accrual 4th Quarter /30/2017 DO , Accounts Receivable recieablesfund /25/2017 FA (4.89) Qrtr Interest Interest 4th Quarter c 1 7/28/2017 AR ARD0454 (8,866.94) AR Direct Cash Journal AR Direct Cash Journal 2 8/3/2017 FA (0.37) Q Interest nd distr Interest 4th Quarter C 2 8/25/2017 AR ARD0469 (2,990.00) AR Direct Cash Journal AR Direct Cash Journal

38 38 Clear Prior Year Accruals (A/R Example) 4. Identify outstanding amounts a. Research to determine if amounts were recorded as current year, but should have been to prior year accrual b. If amounts will not be received, write off the difference Source Journal Amount Fund Resource Object FA DO , FA DO , FA (4.89) AR ARD0454 (8,866.94) FA (0.37) AR ARD0469 (2,990.00) Accrued more than received Journal entry to clear remaining balance in A/R: Debit: Credit: (7.85)

39 39 Clear Prior Year Accruals (A/P Example) 4. Identify outstanding amounts a. Research to determine if amounts were recorded as current year, but should have been to prior year accrual b. If amounts will not be received, write off the difference Source Journal Amount Fund Resource Object DO (1,852.18) DO (27.51) PAC (3,695.44) PAC DO , DO PAC (37.51) PAC , AP AP Not accrued in the prior year Journal entry to clear remaining balance in A/P: Debit: Credit: (136.70)

40 SECTION 5 Closing Entries & Accruals

41 41 State Aid Accruals 1. Clear PY Accruals: LCFF February June Financial Accounting posts PY recomputations & adjustments to suspense Clear to PY accrual (A/R 9290 or A/P 9590) Difference goes to object EPA PY Adjustment posted to suspense in March AT A /22/18 Clear to object 8019 Don t forget to post the EPA Expenditure report on your district website

42 42 Year-end Calculation: LCFF Accrual- Receivable Receivable from the State: Res Goal Func Obj DR CR Due from Grantor Governments $3,000 LCFF $3,000

43 43 Year-end Calculation: LCFF Accrual- Liability Liability due to the State: Res Goal Func Obj DR CR LCFF $8,000 Due to Grantor Government $8,000

44 Accrual Journal Entries in PeopleSoft 44

45 Reversing Journal Entries in PeopleSoft 45

46 46 Receipt Accrual & PO Rollover PURPOSE: To accrue the liability for items received by June 30 th and roll PO s from 1718 to 1819 By July 9 th at 5 p.m. 1. Enter receipts with June date 2. Close all PO s that should not roll to 1819 On July 10th, Financial Accounting will run two processes: 1. Receipt Accrual 2. PO Rollover

47 47 Receipt Accrual & PO Rollover Receipt Accrual Opt-out option please Financial Accounting by Friday June 29 rd with request to opt-out PO Rollover NO opt-out option CRC Finance Year End & Purchasing Year End Closing Guides

48 48 Liability Accruals- Receipt Accrual Important Notes: Applies to districts with receiving required Purchase Orders Applies to PO s with line items (physical goods to be received) Applies to items physically received by June 30, but not paid by June 30 For all items received at a district location by June 30 th, enter receipts in PS with June date (ie. 06/30/2018) Must be completed by July 9 th at 5 p.m. Financial Accounting will run the Receipt Accrual process on July 10 th and report to districts with results

49 Liability Accruals- Receipt Accrual 49

50 Liability Accruals- Receipt Accrual 50

51 51 Liability Accruals- PO Rollover Important Notes: Applies to PO s in Approved or Dispatched status Process identifies all PO s ready to roll Closes encumbrances in PY Closes PO s in PY Opens encumbrances in CY Requires valid budget (chartstring) to be set up in new fiscal year Opens PO s in CY Payments can now be applied in new fiscal year

52 Liability Accruals- PO Rollover 52

53 53 Requisitions & POs for 1819 Option to input REQs & POs for in fiscal year See CRC PS YE Closing Guide for Purchasing v5.0 page 31 for requirements SDCOE Financial Accounting to open period

54 Chartfield Configuration 54

55 SECTION 6 Payroll Accruals

56 56 Payroll Accruals Districts will enter payroll data in July Any FY 1718 time MUST be entered with a combo code (ie. June hourly, overtime, adjustments, VPO, etc.) July payroll runs All time worked prior to July will be posted to June as an accrual This entry will automatically reverse in July The accrual reversal entry will clear the expenses in July and move them to

57 57 STRS, PERS, SUI Accruals STRS, PERS, & SUI AT s are part of post cash process District accrues amounts in June as a reversing entry Debit 9910XXX Credit

58 58 Liability Accruals District enters journal entry with June 30 date and period 998 for outstanding STRS and PERS amounts. June 30 Accrual JE FD Res Obj Debit Credit 0100 xxxx STRS Suspense 2, xxxx PERS Suspense 1, xxxx Current Liabilities 3,000 Reverse the entry on July 1 st July 1 Reversing JE FD Res Obj Debit Credit 0100 xxxx Current Liabilities 3, xxxx STRS Suspense 2, xxxx PERS Suspense 1,000

59 SECTION 7 Indirect Costs

60 60 Indirect Costs Definition: General management costs consist of administrative activities necessary for the general operation of the agency, such as accounting, budgeting, payroll preparation, personnel services, purchasing, and centralized data processing Indirect Cost Rate (ICR): percentage of an organization s indirect costs to its direct costs and is a standardized method of charging individual programs for their share of indirect costs Purpose: standardized, efficient way to recover a share of general management costs from individual (restricted) programs

61 61 Indirect Costs Approved rates are posted on the CDE web site: Must use the lesser of the CDE approved rate or a grant stated max each year Food Service programs: use the lesser of the districts approved rate or the statewide average rate of 5.25% for FY 2017/ must net to zero by function & object at the fund level 7350 must net to zero by function & object between funds

62 62 Indirect Costs Title I Total Exp $ 10,500 Less Obj 5100 (500) Adj Exp. $ 10,000 ICR 6% Indirect Cost $ 600 Sample entry $ $ 600

63 Indirect Costs 63

64 SECTION 8 Interfund Transfers

65 65 Interfund Transfers In & Out The total of all Interfund Transfers In must equal the total of all Interfund Transfers Out Use Goal 0000 and Function 9300 to record the Transfers Out Transfers In do not need the Goal or Function fields

66 SECTION 9 Accounting Updates

67 67 STRS On-Behalf Contributions STRS On-Behalf Journal Entry - Resource 7690 Required entry in the District s books before closing CDE created Excel template to create journal entry New Financial Reporting Requirements for Pensions (Dated 02-Jul-2015) Required entry in the District s books before closing Various methodologies of calculating CalSTRS Mock Calculation Updated April 2018 Follow your district s accounting policies and/or your external auditors recommendations

68 CalSTRS On-Behalf Contributions Mock Calculation Based on GASB 85 Methodology frequently-asked-questions Calculation based on GASB 85 68

69 CalSTRS On-Behalf Contributions Mock Calculation Based on GASB 85 Methodology 69

70 70 CalSTRS On-Behalf Contributions Mock Calculation Based on GASB 85 Methodology *16-17 OPI Report: CAFR:

71 STRS On-Behalf Contributions Methodology Utilizing Creditable Compensation 71 STRS reports on SDCOE s Retirement Reporting website: Creditable Compensation Revision Letter: attachments/revision_of_cc_fy _joint_leg_budget_mitchell.pdf

72 72 Every Student Succeeds Act (ESSA) Reauthorizes the Elementary and Secondary Education Act of s1177enr.pdf Effective for 1718, except the per pupil expenditure information will be reported beginning report cards must provide brief description of the steps the SEA and LEA are taking to ensure that the per-pupil expenditure information is included on 1819 report cards

73 73 Routine Restricted Maintenance Contribution Prop 51 Funding Required 3% contribution should be made in year that the funds are received Previous guidance in the year following receipt of funds Guidance will be updated in 18/19 Audit Guide All LEAs will be required to make 3% contribution with full implementation of LCFF in FY 19/20

74 74 OPEB GASB 75 GASB 75 supersedes GASB 45, effective fiscal year Determine whether your district has a qualifying trust Criteria for a qualifying trust: Contributions from employers and nonemployer contributing entities to OPEB plan and earnings on those contributions are irrevocable OPEB plan assets are dedicated to providing OPEB to plan members in accordance with benefit terms OPEB plan assets are legally protected from creditors of employers, nonemployer contributing entities, plan administrator and plan members Administration through a qualifying trust versus non-qualifying trust drives how OPEB is measured and recognized on employer financial statements

75 75 Fund financial statements OPEB GASB 75 Qualifying trust Direct charge (3751/3752) up to amount of service cost (normal cost). Any remainder expenses, if any, allocate to 3701/3702. Non-qualifying trust Allocate OPEB expenditures to 3701/3702. Government-wide financial statements Qualifying trust Recognize Net OPEB Liability Net OPEB Liability = Total OPEB Liability OPEB Plan s Fiduciary Net Position Non-qualifying trust Recognize Total OPEB Liability

76 76 OPEB GASB 75 Other considerations include the following: Actuarial valuation annual or biennial basis New Terminology Additional Note Disclosures & RSI SACS Updates Object 9664 changed from Net OPEB Obligation to Net/Total OPEB Liability Fund forms Form DEBT Criteria and Standards Government-wide conversion entries and reports

77 Questions? 77