End-of-Year Finance Procedures Region One ESC Region One ESC Finance Advisory Council Meeting May 9, 2014
Getting Started Select a CPA Firm Select a firm as early as possible in the fiscal year Request for Qualifications FASRG: Module 4 - Appendix 1 Considerations in selecting a CPA Firm Cost Expertise, # of staff, # of hours, P/Y Findings and Selection Timeframe Obtain & Follow-up with References Board Policy requiring change every X years
Getting Started Select a CPA Firm Read the Engagement Letter carefully Auditor Independence Gone as the days that the external CPA firm can prepare journal entries.. They can t prepare the financials and audit them, too
The Client-Prepared List The CPA Firm s List Planning Phase Confirmations Field Work
Auditor s List. Client Prepared Documents
Auditee s (ISD) List. Audit Things to Do Audit Checklist with Supporting Documents
Audit Planning Calendar Develop an Audit Planning Calendar Start with the Board Approval date and work backwards Sample Calendar Planning Field Review Board TEA Work Final Draft Approval Submission
Planning Phase
Audit Confirmations i Cash & Investment Verifications Bank confirmations All bank accounts, including sweep account, if any All CD accounts Confirmation of depository securities ii Depository Contract Confirmation
Audit Confirmations i Determining Risks Confirmation from board members Legal confirmation to each attorney used during year Run a 6211 inquiry to verify attorneys used Equal Employment Opportunity Commission
Audit Data File ASCII file Finance system extract as of 8/31 With all final EOY general journal entries Remember that t any additional changes will have to be entered by you in the finance system and by the auditor in their system
Preparing for p g Audit Field Work
Accounts Payable Determine what is and what isn t an Accounts Payable Were the goods received by 8/31? Was an invoice received by 8/31? What is your accounts payable cut-off (except for material items)?
Sample Accounts Payable List
Sample Accounts Payable List FUND CK/JV VENDOR ACCOUNT AMOUNT DATE PD 199 CK 34582 HOME DEPOT 199 51 6319 02 997 199 $ 47.78 9/8/2011 CK 34616 T. OSBURN 199 11 6499 00 001 19911 001 $ 120.0000 9/15/2011 CK 34609 A.GREENESS 199 36 6411 00 001 191 $ 57.60 9/15/2011 CK 34624 SCHOOL CENTER 199 11 6299 09 996 199 $ 451.06 9/15/2011 CK 34729 FT. SAM 199 93 6492 00 999 123 $ 99,450.08 10/5/2011 $ 100,126.52 240 CK 34631 BEVIX 240 35 6341 01 994 199 $ 298.00 9/15/2011 266 CK 34604 DFAS 266 51 6259 00 999 199 $ 16,733.89 9/15/2011 CK 34604 DFAS 266 51 6256 00 999 199 $ 838.49 9/15/2011 CK 34604 DFAS 266 51 6257 00 999 199 $ 2,147.78 9/15/2011 $ 19,720.16 699 JV 1686 CONSOLIDATED EL699 81 6629 01 999 199 $ 20,580.85 10/13/2011 DBR Engineering 699 81 6619 00 999 199 $ 3,092.49 10/13/2011 $ 23,673.34 Grand Total $ 143,818.02
Accounts Receivable Determine what is and what isn t an Accounts Receivable Was is owed to the district as of 8/31? Is the amount collectible? If it s collectible, what is the timeframe?
Accounts Receivable The revenue accrual policy should be disclosed in the notes to the financial statements. Example from Lackland ISD Financial Audit Note A. The District considers all revenues reported in the Governmental Funds to be available if the revenues are collected within 60 days after year-end.
Accounts Receivable FUND DUE FROM ACCOUNT NO. AMOUNT DATE PAID AMT PAID 199 TEA Settle Up 199 00 5812 00 000 199 $ 152,146.00 9/16/2011 $ 152,146.00 TEA Aug Accrual 199 00 5812 00 000 199 $ 430,940.38 9/25/2011 $ 430,940.38 BOA INT. 199 00 5742 02 000 199 $ 4.14 Sep 11 $ 4.14 DUE FROM PARENT 199 00 5749 00 000 100 $ 75.00 19 Sep $ 75.00 DUE FROM PARENT 199 00 5749 00 000 100 $ 124.00 9/19/2011 $ 75.00 INS AUTO DAMAGE 199 00 5749 06 000 100 $ 1,056.11 10/10/2011 $ 1,056.11 DUE FROM PARENT 199 00 1290 06 000 100 $ 99.00 Subtotal $ 584,444.63 240 SYSTEMS DESIGN 240 00 5751 01 000 100 $ 5,270.10 9/9/2011 $ 5,270.10 TEA Aug Claim 240 00 574X 00 000 100 $ 5,252.13 Subtotal $ 10,522.23 266 ARRA TTL XIV SFSF 266 00 5929 00 000 100 $ 135,332.25 9/20/2011 / $ 135,332.25 289 DODEA 289 00 5949 00 000 100 $ 176,531.72 9/27/2011 $ 176,531.72 DODEA 289 00 5949 00 000 100 $ 12,479.10 9/27/2011 $ 12,479.10 NCS PEARSON 289 11 6399 10 996 199 996 99 $ 700.00 Subtotal $ 189,710.82
Activity i Accounts Centralized & Decentralized Activity Accounts must be recorded on the general ledger by year-end end Campus Activity Account (Fund 461) Student Activity Account (Fund 865)
Fixed Assets Purchases 66XX Surplus Sales? Category Beginning Balance Ending Balance 9/1/2010 Additions Deletions 8/31/2011 Buildings $ 30,088,275.93, $ 103,186.00 $ 30,191,461.93, Equipment $ 838,643.92 $ 122,923.17 $ 961,567.09 Vehicles $ 883,060.48 $ 95,654.00 $ 978,714.48714 48 Subtotal $ 1,721,704.40 $ 218,577.17 $ - $ 1,940,281.57 Total $ 31,809,980.33 $ 321,763.17 $ - $ 32,131,743.50 Const IP $ - $ 440,627.54 $ 440,627.54 Grand Total $ 31,809,980.33 980 33 $ 762,390.71 71 $ - $ 32,572,371.04 371
Fund Balances Detail for any budgetary fund balances (3700) Detail for any assigned, committed, or restricted fund balances Provide copy of board resolution(s), if any Copy of Board Minutes
Inter-fund Transfers Inter-fund receivables and payables should be in balance PY balances should be cleared out 126X 217X
Payroll Calculate and post TRS On-Behalf expenditures to the general ledger Object code 6144 should match revenue code 5831 Calculate and post all accrued wages (earned but not paid) Object code 2161 Reconcile payroll liability accounts such as object codes 215X
PEIMS PEIMS Edit Reports Statement of Revenues, Expenditures, and Changes in Fund Balance Mid-year collection for prior fiscal year Verify that the PEIMS report matches the Financial Audit, Schedule C-2 Prior to submission of Mid-Year PEIMS in January
Prepaid Expenses Costs applicable to future accounting periods are recorded as deferred (prepaid) expenditures. Object code 141X Example of prepaid p expense: Payment of 1 year of software maintenance (Jan 1 Dec 31) Post 6 months to expense account 6249 Post 6 months to prepaid expense 141X
Pre-Paid Items FUND CK#/JV# VENDOR ACCT. # AMOUNT 195 34358 NCS PEARSON 195-11-6399-00-001-124 $ 550.00 199 JV 1599 NMSA 199-11-6495-00-001-111 $ 500.00 199 33787 STARS 199-41-6249-00-750-199 $ 95.42 199 34398 THE CHAMBER 199-41-6495-00-702-199 $ 642.50 199 34057 RCI 199-41-6299-00-750-199 $ 233.36 199 34186 TIMECLOCK 199-41-6249-027-750-199 $ 1,928.66 199 34403 GENERAL ASP 199-41-6249-01-749-199 $ 541.68 199 34452 SCHOLASTIC 199-11-6399-34-001-111 $ 21.95 199 34453 STARS 199-41-6249-00-750-199 $ 199.00 199 34485 TASC 199-11-6495-00-001-111 $ 70.00 199 34389 STUDY ISLAND 199-41-6299-00-750-199 $ 8,099.00 199 34430 NAFIS 199-41-6495-00-702-199 $ 4,957.00 199 34258 CCAT 199-36-6495-00-001-191 6495 001 191 $ 67.50 199 34502 RESOURCE FOR E 199-31-6399-00-001-199 $ 414.00 199 34540 ATT 199-51-6258-00-999-199 $ 514.65 199 34541 AMEX 199-41-6495-02-701-199 $ 499.00 199 34556 NEOPOST 199-23-6249-02-101-199 $ 525.80 199 34556 NEOPOST 199-23-6249-02-001-199 $ 444.50 199 34556 NEOPOST 199-41-6249-00-750-199 $ 557.80 $ 20,311.82
Revenues Reconcile all local, state and federal revenues Object codes 57XX, 58XX, and 59XX to source documents Object codes 231X deferred revenues For example, CNP claim reports should match Fund 240, object code 59XX Hint: The revenue (59XX) and expenditures (6XXX) for grants must match
Revenues - State 5812 5811 Month Foundation (199) Per Capita Total September 681,011.00 6,756.00 687,767.00 October 431,807.00 37,085.00 468,892.00 November 429,962.00 32,059.00 462,021.00 December 447,554.00 6,663.00 454,217.00 December - TxVSN 80.00 80.00 January 447,466.00 37,392.00 484,858.00 February 217,648.00 37,392.00392 255,040.00 00 March 435,786.00 37,085.00 472,871.00 April - 29,166.00 29,166.00 May 434,998.00 29,166.00 464,164.00 June 435,648.00 28,399.00 464,047.00 July 435,635.00-435,635.00 August - 13.00 13.00 Total 4,397,595.00 281,176.00 4,678,771.00
Revenues - State Total 4,397,595.00 281,176.00 4,678,771.00 Reverse P/Y Receivable - Reverse P/Y Receivable (287,445.84) (287,445.84) Prior Year 09-10 Revenue 14,911.00 14,911.00 Prior Year 09-10 Revenue 103,284.00 103,284.00 Due from State (Aug 10) 430,940.38 430,940.38 Due from State per NF SoF 152,146.00 152,146.00 SubTotal 4,811,430.54 281,176.00 5,092,606.54 Prior Year State Revenue - - Other Grants: AEP, Rider 38 646.00 State Matching, Food Svs 2,505.83 TRS On-Behalf - Fund 199 599,671.42 TRS On-Behalf - F 199 Medicare TRS On-Behalf - Fund 240 13,477.58 Accelerate Reading/Math 3,239.72 Technology Allotment 15,931.77 Pre-Kinder Grant 114,206.60 HS Allotment - Fund 428 6,251.25 - Grand Total 4,811,430.54 5,848,536.71 GL 5,848,536.71 Difference 0.00 AP/IB Campus Aw ards F397 -
Revenues Federal - CNP Federal Revenue Month Breakfast Lunch Total NSLP Sept $ 992.00 $ 12,452.00 $ 13,444.00 Oct $ 970.00 $ 12,543.00 $ 13,513.00 Nov $ 677.00 $ 10,879.00 $ 11,556.00 Dec $ 574.00 $ 9,428.00 $ 10,002.00002 00 Jan $ 728.00 $ 13,589.00 $ 14,317.00 Feb $ 743.20 $ 13,062.00 $ 13,805.20 March $ 827.58 $ 12,597.62 $ 13,425.20 April $ 832.30 $ 14,630.50 $ 15,462.80 May $ 875.94 $ 15,017.60 $ 15,893.54 June $ 108.82 $ 1,827.50 $ 1,936.32 August $ 369.32 $ 4,882.81 $ 5,252.13 Total $ 7,698.16 $ 120,909.03 $ 128,607.19 Commodities $ 26,095.77 Grand Total $ 154,702.96
Revenues Federal -CNP RECAP: Local Revenue 159,536.30 Federal 154,702.96 State 15,983.41 Subtotal 330,222.67 Transfer from General Fund 113,794.31 Grand Total 444,016.98 Post 79XX and 89XX Entry
Other Items District and Campus Plans Might be on the district s website Reference material Internal Control Procedures Employee Handbooks Fiscal Manual, if any Organizational Chart
Review Financial i Audit Draft Read it carefully.auditors auditors can make mistakes, too The Notes are only as good as the information that we give them.example: District Insurance Contribution C th fi i l t t t t th Compare the financial statements to the prior year for reasonableness
Approval & Submission of Audit Report Submit the Audit Report for review and approval by the Board of Trustees Allow plenty of time for their review Obtain the Board signature on the Board Certification Electronically submit the audit data to TEA prior to the deadline 150 th day after end of fiscal year
Best Practices
Start t the Year Off Update and distribute all policies, procedures, forms, and internal controls Annual training of administrative staff and campus secretaries is recommended
Daily Oversight Monitor cash balances & collateral pledged Adhere to procedures document exceptions Seek accounting guidance as needed External CPA may be a great resource! Every expenditure should be perfect because every expenditure is subject to random selection for audit review.
Monthly Oversight End-of-Month Procedures How do you eat an elephant? One month at a time! Sample EOM Checklist Sample EOM Procedures
Be honest with your Auditor.Tell Them What s New New staff New processes and procedures Pending litigation or other threats IT/Technology Changes Software, Infrastructure, lost data, etc. And, especially if any Fraud or Theft occurred High focus on fraud due to recent events!
Questions
Presenter Contact Information Rebecca Estrada Executive Director of Finance Lackland ISD 2460 Kenly Ave., Bldg. #8265 Lackland Air Force Base San Antonio, Texas 78236 estrada.r@lacklandisd.net