Denise Wolff, Director School Finance CR ESD Business Manager Conference, Vancouver WA

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1 Denise Wolff, Director School Finance CR ESD 113

2 Objectives Learn practices to use throughout the school year to increase efficiency for the year-end process Understand issues involved in closing the fiscal year Understand reports and documents that are part of the year-end close process Understand all the requirements needed to complete your year-end Be prepared when the auditors arrive

3 To Do List Balance your system to the treasurer Claim all grants Verify staff is coded correctly Verify proper recording of transactions Be aware of Accounting Manual Changes Get items you need from co-workers Rough out the SEFA finances before submitting the F-196 Year-End document Notes to Financials

4 To Do List Balance your system to the county treasurer report - Monthly balancing using the F-197 Balancing Tool will keep your records accurate. Claim all grants - Claim monthly, review time and effort quarterly, adjust for budget revisions as needed. Verify staff is coded correctly - Compare to S-275 for adjustments if necessary. Check your duty codes. Verify proper recording of transactions If you aren t familiar with the transaction, check chapter 7 of the Accounting Manual.

5 To Do List Be aware of Accounting Manual Changes Review Accounting Manual Revisions before closing your books. Get items you need from co-workers Remember that lack of planning on your part will not constitute an emergency for them! Let them know, in advance, what items you need i.e. sick/vacation leave report run at the end of August. Rough out the SEFA finances before submitting the F-196 Year-End document Frequently, errors in grant claiming are detected while working through the Schedule of Federal Awards document. Avoid having to request your F-196 document for correction.

6 To Do List The Notes to Financials Download the appropriate set of Notes each year that is a appropriate to your district. The Notes tie to your F-196 Year End Financials document. Notes to Financials are due to SAO before audit begins.

7 Start a Year-End Binder or File at the Beginning of the School Year Collect any information you will need to record at year-end Use the Fund Balance Reporting Tool (OSPI/Tools) Year-end F-196 Sick Leave/Vacation Report for compensated absences reporting Schedule of Long-term Liability F Include your calculations including Medicare and FICA Legal fees relating to interpretation of WACs and RCWs and board policy (F- 196 Indirect reporting) System support (WESPaC)-do not include student fees (F-196 indirect reporting) Audit costs (F-196 indirect reporting) Documentation for anything that would become a distorting item on the F- 196 (unusual occurrence with financial consequences)

8 Keep a Year-End Binder or File Values of Commodities Shipped Letter from OSPI (frequently your food service receives this) Journal entry F-196 Special Education Cooperative Journal entry for F-196 Capital Leases Schedule of Long term Liabilities and Notes to Financials Pension Reporting Tool F-196 and Notes to Financials KCDA Letter Notes to financial Projected costs from pending legal actions Notes to Financials Attorney letter for outstanding litigation Notes to Financials

9 Keep a Year-End Binder or File Maintenance of Effort Sheet Mid year check to verify you are on target (NEW SHEET on OSPI s Tools) To/From Transportation Spreadsheet Journal entry costs unrelated to transporting students to and from school to appropriate accounts on a regular basis (Area of Focus for Auditors) Inventory Information requires a journal entry Taxes receivable information requires a journal entry Copy of Fire District Invoice entered in supplemental section F-196 Report of e-rate received entered in supplemental section F-196

10 Keep a Year-End Binder or File Insurance Coverage Letter for Assets Notes to Financial Amortization Schedules Schedule of Long-term Liability in the F-196 and Notes to Financials Keep a copy of reports generated for year end SEFA Include back-up documentation Notes to Financials Include back-up documentation

11 Keep a Grants Binder or Grant Files Include the Grant Profile Page from OSPI/igrants Keep a copy of each month s claim and back-up for claims There is a Grant Workbook tool posted on the Business Manager Toolkit at CR ESD113 under Templates and Tools Any journal entries should have supporting documentation attached Federal Grants Time and Effort and certifications

12 Keep a Journal Entry Binder Include: Month end journal entries Direct Receipts Local Receipts Code corrections/adjustments/accrual entries Include Back-up behind each journal entry Balancing to treasurer reports Initial and have an independent reviewer initial on each journal entry Have monthly tabs for quick look-up

13 Questions to ask in April & May If any of the ASB account are in the negative, ask to be on the agenda so you can review the items with the student representatives. Do ASB officers want to vote to transfer funds from the ASB general account to offset the negative amounts so that no clubs close with a negative balance? Are plans in place to use state & federal funds to avoid recovery? Use the Recovery and Carryover spreadsheet (for state revenue) and review all grants.

14 Useful Processes or Procedures to do Periodically Crosswalk process make sure accounts are closing appropriately Verify the payroll log is balanced quarterly Clean up any loose ends (voids/cancelled checks) Balance & replenish monthly your petty cash and imprest funds When you make your adjusting entries, rerun the trial balances to make sure you still balance!

15 Useful Sites to Visit - OSPI Go to the menu to the left on the apportionment page OSPI/Tools Recovery and Carryover, SPED MOE, Fund Balance Reporting, Transportation To-From, Federal Excess Cost, Pension Reporting spreadsheets OSPI s Instructions/ABFR Manual Chapter VI F-196 with items numbers, explanation of edits, Q & A Sections, OSPI s Instructions/Accounting Manual (Chapter VII) has the sample journal entries you will need to make and the latest Accounting Manual updates Every Year Ramona Garner does a recording on the F-196 Process that is available from the WASBO ABC/SS Committee

16 Useful Sites to Visit OSPI continues Schedule of Expenditures of Federal Awards Chapter XI ABFR Manual Guidance and Sample Template and Notes to the SEFA Q & A The template for your Notes to Financials are in Chapter VI of the ABFR Manual Be sure to download the correct notes: Cash, Modified Accrual, or GAAP Do not simply update last year s notes-the template is updated yearly Do the notes after the F-196 process while everything in fresh in your mind

17 Useful Sites CR ESD113 Business Mgr. Toolkit F-196 Checklist and Tools Grant Monitoring Workbook Template for monitoring Links (ex: recovery and carry over spreadsheet) Instructions F-197 Balancing Workbook Template Instructions See the section on Year End Close for additional instruction Sample PowerPoint for School Board Report on Year End Close

18 The F-196 Annual Financial Statements The F-196 is a required financial report submitted by your school district. It reports the district s financial condition, actual revenues and expenditures for the fiscal school year. The F-196 is used by school districts to comply with the requirements of financial reporting for OSPI and the State Auditor s Office (SAO), the regulatory agencies. OSPI relies on data presented in the F-196 to do analysis and provide reports to the Legislature, state and federal governments.

19 The F-196 Due Dates Notice is hereby given to school districts and ESDs, in accordance with WAC , that failure to adhere to the due dates below shall result in a delay of apportionment payments. The final date for filing or forwarding will be considered as having been met if the postmark or other evidence indicates shipment prior to the due date or the next workday if the due date falls on a weekend. Final Date October 25 School Districts - Final date for submission of completed F-196 data from the school district to the local ESD. The data will be submitted electronically and/or on an F-196 manual form. Districts not able to submit by the October 25 due date may request a waiver by or written notice to the ESD. November 1 November 8 November 15 ESDs - Final date for the ESD to review and forward the certification page back to the school district for signature. School Districts - The signed certification page is due from the school district to the ESD. ESDs - Final date the signed certification page by the ESD is due at OSPI, School Financial Services.

20 Before Finalizing August Month End Enter and commit/batch all JE s, Direct Receipts and Local Receipts for the school year (should be done monthly) Commit/Batch Accounts Payable and Receivable in the appropriate year for accrual districts Post Payroll in the appropriate school year Complete grant claiming for the school year odo your Recovery Sheet from the OSPI site and prepare your SEFA Verify that your F-197 Report is balanced (should be done monthly) Final S-275 adjusting entries - Deadline September 30 Make adjusting entries

21 Before Finalizing August Month End Field trips and extra curricular trips should be removed from program 99. Special education may require journal entries. Inventory Revenue and expenditure accrual entries Deductible revenue USDA Commodities: Dr Cr Enter taxes receivable

22 Coding Fund Balance Use the OSPI Tool for coding fund balance. Keep a printout of your tool in your year-end file. Be aware of the GASB 54 SAO interpretations for: restricted outside entity legally authorized. committed board resolution as set aside for specific identifiable purpose. assigned board appoints authority to an individual to assignments of specific identifiable purpose. Maintain records of such assignments and adjustments. make

23 Entries on the EDS Side Import your financial data to EDS. On the certification page: the maximum number of days should be 180, the basis of accounting populates from budget. Remember to enter Private Purpose or Other Trust Funds. Be sure you pick up the correct beginning fund balance figures for all funds (restatements apply). If you made a change to last year s F-196 that resulted in a change to fund balance, you MUST enter it as a prior period correction.

24 Trouble Spots to Double Check Duty Codes - districts that coded staff under duty code suffix 4, for the purposes of recording the costs of innovative activities included in supplemental contracts, will submit a brief description of these innovative activities with the district s F-196. Review the duty codes before you close the books. Did you pay Fire District? Are you balanced? Is the Resource to Program Expenditure Report Balanced?

25 Resource to Program Expenditure Report For each program the total of the State, Federal, and Other resources must equal (to the penny) the program direct expenditures. Total of resource by category should equal revenues in category plus or minus change in fund balance. Other Resources in Program 21 is used in the Special Education MOE calculation.

26 Resource to Program Expenditure Report For each program the total of the State, Federal, and Other resources must equal (to the penny) the program direct expenditures. Total of resource by category should equal revenues in category plus or minus carryover or recovery. Other Resources in program 21 is used in the Special Education Maintenance of Effort (MOE) calculation. Pay attention to the resource category (state, federal, other).

27 Expenditures automatically draw in from the program matrices. Resources are manually entered. State & Federal resources should tie to revenues (plus or minus carryover or recovery)

28 Schedule of Long-Term Liabilities Both the voted and non-voted figures should match what is on the F- 197 if payments flow through county treasurer QZABs and QSCBs are reported as either voted or non-voted bonds depending on the capacity used when issued Report known claims and judgments Refer to the Accounting Manual for clarification on leases and contracts payable Compensated Absences Amount due within one year column Only report the principal amount of debt

29 Compensated Absences Method for calculation of compensated absences should be vesting or termination. Report accumulated vacation unless in excess of maximum. Include FICA and Medicare in both sick leave and vacation leave calculation. Sick leave buyout requires a sick leave buyout policy. If the district has no policy, do not report. Keep your written calculations for numbers reported.

30 Supplemental Reports Enter the e-rate amount, learning improvement days, impact fees, and mitigation fees. Hit the yes on Cost-of-Living Increase Certification Enter the Fire District Payment. Enter Distorting items for programs 01-89, 98 & 99. Enter Indirect Expenditures for program 97. In EDS, if you click the arrow in front of the item entry cell, there is an explanation of what should be entered.

31 Indirect and Distorting Items Both distorting item entries and indirect entries affect the calculation of your district allowable indirect rate. Making these entries ensures that you are only charging your grant with allowable administrative fees. The F-196 is programmed to calculate the indirect rate based on the data you enter. There is a two year lag in the calculation.

32 Indirect and Distorting Items Distorting items are unusual or rare occurrences that distort your expenditures for the year. Indirects allow the district to charge administrative costs relating to grants. The allowable charges reported from program 97 must be district wide administrative costs. Examples: legal costs relating to board policy and legal interpretation of laws (not student or staff issues).

33 Maintenance of Effort Only one positive result is needed to pass MOE but it is best to verify using the calculation from the website. Refer to OSPI/Tools for the New Special Education Maintenance of Effort test. As soon as any amount increases in the four test categories increases, the threshold rises to the new amount. This is a preliminary test. OSPI will run the final test in January and districts failing MOE will receive notification. Districts have the opportunity to provide acceptable reasons for failing MOE by letter.

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35 Compare your General Ledger to the F-196 document to verify totals match. Notify appropriate staff that no changes can be made to the year. Before submitting the F-196, run your edits. Research and understand why the edits are triggered. Correct issues in the system, import to EDS, rerun edits. Write explanation for your edits on the edit report and submit them with the document for ESD review Business Manager Conference, Vancouver WA

36 The school district must also submit the following, when appropriate, pursuant to WAC : If total actual expenditures exceed total appropriated expenditures in any fund, a written explanation on district letterhead must be sent with the certification page. The explanation should contain a confirmation that the over-expenditure exists and the action taken to prevent a recurrence. The superintendent or official designee should sign the letter. Any comments on computerized information messages. A copy of the State Board of Education waiver for a district operating less than 180 days. If the ending total fund balance is negative in any fund, a written explanation on district letterhead must be sent with the certification page presented as described above. The explanation should contain a plan which portrays how the district will eliminate the existing deficit fund balance.

37 The Review Process It is the district s responsibility to ensure the accuracy of the data submitted in the F-196. ESD reviews the document for reasonableness. Maintenance of effort, coding changes, fund balance, transfers, schedule of long term liabilities, etc. OSPI does an overview. Certification page days operated, lock date, match total fund balances throughout document, supplemental page entries, preliminary vocational education, federal cross-cutting, maintenance of effort, etc.

38 If OSPI has not closed the data file (late November), you can make your corrections as follows: Send an to ESD requesting the file be unlocked. Make the corrections in your school district's data. After your ESD has told you that the file has been unlocked, electronically transmit the corrected data to your ESD and notify them it is ready. ESD will review and forward to OSPI. Rerun your copy of the F-196 for your files. If any ending fund balances have changed, adjust your current year beginning figures. A prior year adjustment entry may be needed. Submit a new certification page.

39 Concerns Signs of material weakness in internal control structure Does the presentation of financial data follow the Accounting Manual guidance? Federal guidance review Ties to the F-197 Treasurer Report Transparency Financial stability

40 When Will I Ever be Done With Year-End? Finalized S-275 Submitted - Due September 30 th F-196 Annual Financial Statement Due to your local ESD by October 25 th Finalized version to ESD with signature pages November 8 th Finalized and signature pages due to OSPI by November 15 th (ESD submits) Schedule of Expenditure of Federal Awards Due November 15 th to SAO Notes to Financials due to SAO before audit begins * Note: Dates are adjusted when they fall on the weekend

41 You ve Submitted Everything, Yet You Still Feel Tense It ain t over til the auditors leave! Your Year End Binder should have most of the answers needed from you Your Grants Files/Binder should have all the grant backup (signatures) Your Journal Entry binder should have back-up for system entries(signatures) Your F-197 Workbook proves that your are balanced (signatures) Remember that there are things that may come out in the audit that you have no control over.these are called learning opportunities

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