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welcome 2013-14 YEAR END CLOSING WORKSHOP

San Diego County Office of Education District Financial Services Financial Accounting/Reporting. welcome 2013-14 YEAR END CLOSING WORKSHOP. Goal of the Year End Closing Workshop. To review changes to the closing process due to LCFF. To review year-end closing entries and transactions.

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welcome 2013-14 YEAR END CLOSING WORKSHOP

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  1. San Diego County Office of Education District Financial Services Financial Accounting/Reporting welcome2013-14 YEAR END CLOSING WORKSHOP

  2. Goal of the Year End Closing Workshop • To review changes to the closing process due to LCFF. • To review year-end closing entries and transactions. • To help ensure that the district’s financial statements are accurate and ready for an audit. • Demonstrate the automated CAT form

  3. 1 Section 1General Accounting Information

  4. Who to call protocol – pg. 1.4-1.7 • Financial Accounting & Reporting • Staff list for Business Advisory Services • Warrant Processing List • County Treasury – pg. 1.8-1.34 • Contacts • Resolutions for Fund set up • District Funds Conversion Report • Lists Funds and Oracles assigned to your district General Accounting Information

  5. Money Processes & Forms – pg. 1.36-1.45 • Deposits • GAPS Direct Deposit • WARP (Wire Administration & Request Portal) • ACH Transfers • Report Ordering – pg. 1.46-1.51 • Month-end & Year-end • Chart of Accounts & District Dictionary Rollover • Budget Rollovers • CY Revised & Working to Next Year’s Working Rolls can be done now • Any other rolls for 14/15 have to wait until Friday, July 4th. • This is an overnight process - you will see data on Monday, July 7th General Accounting Information

  6. 2 Section 2 Closing Schedules

  7. Important Dates (pg. 2.2-2.4) • Friday, June 27 – • Final date for all deposits to Wells Fargo Bank by 2 p.m. • Friday, June 30 – • Last day for Auditor’s Transfer requests to Financial Accounting by 10 a.m. • Thursday, August 22 – • Final day of system access to input FY 2013-14 activity

  8. 3 Section 3Checklists

  9. Closing Checklists • Make sure you balance the following prior-year accounts: • Account receivable • Due-to/Due-from • Liabilities • Suspense • Fiscal Year-end closing checklist (p3.5-3.8) • Inventory (p3.9) • Make necessary adjustments to agree with the physical count

  10. Closing Checklists • Before you call in to close: • Make sure District Closing Checklist is done (p3.11-3.14) • SACS FORM RL & CAT FORM are completed • Do not send in a SACS DAT file until after the board meeting

  11. 4 Section 4Entries Made Prior to Closing

  12. Prepaid Expenditures (p4.2) Step 1 - Reverse prior year closing entry: Res Goal FuncObj DR CR Insurance xxxx xxxx xxxx 5400 1,500 Prepaid Exp. xxxx 9330 1,500 Step 2 - Establish current year closing entry: Res Goal FuncObj DR CR Prepaid Exp. xxxx 9330 2,000 Insurance xxxx xxxx xxxx 5400 2,000

  13. All expenditures must be accounted for in the proper fund • 9311 – Due From • 9611 – Due To • 9311 must equal 9611 • If transferring expenditures after June 30, you must use Due To/Due From as the offset instead of cash, see page 4.5 for an example Due to/Due From (p4.4–4.6)

  14. Due To & Due From GL account numbers rolling over into the next fiscal year will change (FIS only): • Account 9311 will become 9312 (PY) • Account 9611 will become 9612 (PY) • Districts that still have 9312 and 9612 on their books must be clearing these accounts prior to June 30 • When posting a temp. loan between funds see EC 42603 on page 13.2 for limits Due to/Due From (p4.4–4.6)

  15. PY AR & AP balances rolled into the current fiscal year: • Account 9201 DR balance • Account 9510 CR balance • Districts should post the related receipts and payments into 9202 & 9511 during the current year • At year end, research any difference • Write off or post final difference to current year object Due to/Due From (p4.8–4.9)

  16. Fund Check (p4.7-4.9) • Check GL accounts and suspense accounts • Must check all accounts by resource • Sample fund check form for all your funds before you close the books (p4.9)

  17. Clearing Apportionment Suspense(p4.10–4.13) • Financial Accounting posts principal apportionment PY recomputations & adjustments to suspense • Suspense must be cleared before closing the year • Check prior year accrual. Difference must be charged to current year account.

  18. 5 Section 5Closing Entries & Accruals

  19. A/R & A/P objects must be ZERO before you accrue for the closing year: FD Res Obj DR CR xx xxxx 9202 9,750.64 xx xxxx 9201 9,750.64 FD Res Obj DR CR xx xxxx 9510 10,475.87 xx xxxx 9511 10,475.87 Research differences and determine if activity was charged to a current year object or write-off due to accrual estimate was different than actual. Close out PY C/L and A/R (p5.2)

  20. Expenses have to be accrued if goods or services were received by June 30 • Debit the expenditure account line & Credit 9510. • District will want to set a deadline to submit accruals • District might want to set a materiality limit Expenditure Accruals (p5.3 -5.4)

  21. Example B(p5.7) Unpaid invoices of $20,000 for merchandise or services received by June 30: Res Goal FuncObj DR CR Books & Sup xxxx xxxx xxxx 4000 6,000 Services xxxx xxxx xxxx 5000 4,000 Cap Outlay xxxx xxxx xxxx 6000 10,000 C/L xxxx 9510 20,000

  22. Income Accruals(p5.5–5.6) • Income earned in this fiscal year but not received by June 30 needs to be accrued • Can only accrue revenues that are collectible within one year • Some revenues are not accrued • Examples: property taxes, developer fees, mandated cost reimbursement & deferred maintenance

  23. Example(p5.7) Recalculate LCFF using actual data and accrue the difference between recalculated state aid & receipts Fund Res Obj DR CR A/R 03 xxxx 9201 100,000 State Aid 03 xxxx 8011 100,00 • Gap Funding was 11.78% now 12.00169574% use the new rate when calculating your LCFF accrual • EPA is now 21.0317% • 12/13 Annual adjustment in Feb s/b 8019 • Post the expenditure report on your website

  24. 6 Section 6 Payroll Accruals – 9910’s

  25. Payroll Accruals/9910’s Payroll Holding Accounts 9910-000 Payroll 9910-311 STRS 9910-312 STRS CB Plan 9910-321 PERS 9910-322 PERS EPMC 9910-331 Social Security 9910-332 Medicare 9910-333 ARS 9910-340 H&W 9910-350 SUI 9910-360 W/C 9910-370 Retiree H&W 9910-371 OPEB Allocation 9910-375 OPEB Direct 9910-380 PERS Red 9910-390 Other Benefits

  26. Payroll Accruals/9910’s – SUI(p6.5) Step 1 - Current FY General Ledger - SUI expenses for quarter ending 6/30: FD Res Obj DR CR 06 xxxx 3501-000 2,000 06 xxxx 9910-350 2,000 Step 2 - District Journal Entry to set up Current FY accrual: Fund Res ObjDRCR 06 xxxx 9910-350 2,000 06 xxxx 9510 2,000

  27. Payroll Accruals/9910’s – SUI(p6.5) Step 3 - FA will post auditor’s transfer for quarter ending 6/30 to suspense in Subsequent FY: FD Res Obj DR CR 06 9999 7999 2,000 06 9999 9110 2,000 Step 4 - District Journal Entry to clear suspense accrual in the Subsequent FY: FD Res Obj DR CR 06 xxxx 9511 2,000 06 9999 7999 2,000

  28. Payroll Accruals • Same process for STRS & PERS • 9910-371 & 9910-375 OPEB accrual process is under Section 12 GASB

  29. 7 Section 7Direct/Indirect Costs

  30. Expenses that can be separately identified and charged as part of the costs of a program • Transfers of costs normally change the function of expenditures • Examples: Catering, print shop, transportation & field trips • 5710 must net to zero at the fund level • 5750 must net to zero between funds Direct Costs (p7.2-7.3)

  31. NCLB School Choice (intrafund): DR 06-00 3010 1110 3600 5710 Title I CR 03-00 0000 0000 3600 5710 Transportation Catering charges (interfund): DR 03-00 0000 0000 2140 5750 Professional Dev CR 13-00 5310 0000 3700 5750 Food Services Print shop (interfund): DR 12-06 XXXX 0001 XXXX 5750 CDC CR 03-00 0000 0000 7200 5750 Undistributed Admin. expenses to developer fees (interfund): DR 25-19 0000 0000 7200 5750 Developer Fees CR 03-00 0000 0000 7200 5750 Undistributed Direct Costs – Sample Entries (p7.2-7.3)

  32. Agencywide costs for general management that are not readily identifiable with a particular program but are necessary for the overall operation • Examples: Accounting, budgeting, payroll, personnel, purchasing & warehousing • TABS Workshop available on web cast at http://www.sdcoe.net/business2/dfs/?loc=materials&m=88 • Multiply expenditures in objects 1000 – 5999 less object 5100 by the approved indirect cost rate Indirect Costs (p7.5-7.11)

  33. Approved rates are posted at the CDE web site at: • http://www.cde.ca.gov/fg/ac/ic/ • In manual on p7.6 – 7.10 • Must use the lesser of the CDE approved rate or a grant stated max each year • 7310 must net to zero by function & object at the fund level • 7350 must net to zero by function & object between funds Indirect Costs (p7.5-7.11)

  34. Sample entry (intrafund): DR 06-00 3010 1110 7210 7310 TITLE I CR 03-00 0000 0000 7210 7310 GF Sample entry (interfund): DR 13-00 5310 0000 7210 7350 Food Services CR 03-00 0000 0000 7210 7350 GF Indirect Costs (p7.5-7.11)

  35. 9 Section 9 Categorical Programs

  36. Federal • State • Pass-Through Sources of Categorical Funding (p9.2)

  37. Grant (Deferred Revenue – D resources) • Entitlement (Fund Balance – F resources) • Difference is how revenue is recognized • See SACS Resource Code Query to find out which applies to each resource • http://www.cde.ca.gov/fg/ac/ac/ Grant or Entitlement? (p9.3–9.4)

  38. Example 1 - Lottery funds transfer Fd Res Obj DR CR 03 1100 9110 1,000 03 1100 8782 1,000 066300 9110 100 06 6300 8782 100 Example 2 - Step A ROP funds (non-lottery) transfer Fd Res Obj DR CR 06 9025 9110 1,000 06 9025 8782 1,000 Step B flex/sweep ROP Fd Res Obj DR CR 06 9025 8990 1,000 06 902591101,000 0300009110 1,000 03 000089901,000 SDCOE Transfer of Funds (p16.7-16.8)

  39. Use CAT Form to track your federal, state and local categorical programs • Calculates deferred revenue, receivable, ending balance • On-line video training available Form CAT

  40. Entries to Make After Completing the CAT Form(p9.13-9.14) Step 1 - Closing Entry Unearned revenue: Res Obj DR CR Title I 3010 8290 10,000 Def. Rev 3010 9650 10,000 Step 2 - Entry in the Subsequent Year Clear unearned revenue: Res Obj DR CR Def Rev 3010 9650 10,000 Title I 3010 8290 10,000

  41. Entries to Make After Completing the CAT Form(p9.13-9.14) Step 1 - Closing Entry Accounts Receivable: Res Obj DR CR Acct Rec. 6300 9201 5,000 Lottery 6300 8560 5,000 Step 2 - Entries in the Subsequent Year Clear Suspense: Res Obj DR CR Suspense 9999 8999 7,500 Lottery 6300 9202 5,000 Lottery 6300 8560 2,500 Clear Accounts Receivable: Res Obj DR CR Lottery 6300 9202 5,000 Lottery 63009201 5,000

  42. Entries to Make After Completing the CAT Form(p9.13-9.14) Step 1 - Closing Entry Accounts Payable: Res Obj DR CR Spec Ed 6535 8590 3,000 Acct. Pay. 6535 9510 3,000 Step 2 - Entries in the Subsequent Year Accounts Payable: Pay Invoice: Res Obj DR CR Spec Ed 6535 9511 3,000 Spec Ed 6535 9110 3,000 Clear Payable: Res Obj DR CR Spec Ed 6535 9510 3,000 Spec Ed 6535 9511 3,000

  43. Section 10Deferred Maintenance 10

  44. Funding previously received for the Deferred Maintenance (DM) program is included in LCFF • The Deferred Maintenance Fund, Fund 14 in SACS, is classified as a special revenue fund • GASB 54 specifies that use of a special revenue fund is appropriate only if a substantial portion of the fund’s inflows are restricted or committed revenue sources and expected to continue • Many LEA Boards committed the DM revenue and appropriately recognized it directly in fund 14 using object 8091 • Can no longer be recognized in 8150 and interfund transferred to fund 14 Deferred Maintenance (p10.1–10.14)

  45. LEAs who receive funding from the State School Facilities Program must contribution 3% of total general fund expenditures including Other Financing Uses to the Restricted Maintenance Account (RMA) 8150 • EC 17070.766 allows LEAs to reduce RMA contribution to 1% (temporary flexibility) • Effective July 1, 2015, flexibility ends & districts must deposit a least 3% • EC 17070.75 allows an LEA’s contribution to its RMA over 2.5% to be counted towards its DM contribution • If DM contribution goes directly to fund 14 then does not count Deferred Maintenance (p10.1–10.14)

  46. If DM is moved back into general fund then general fund expenditures will increase and so will the reserve requirement • CDE sees some possible solutions: • Change statute 17070.75(b)(1) Establish a restricted account within the general fund • Reclassify the fund 14 to be a capital projects fund so interfund transfer are ok Deferred Maintenance (p10.1–10.14)

  47. Section 11Reserves 11

  48. Reserves are accounts earmarked for a portion of a fund balance to indicate that it is not available for other expenditures • Revolving cash 9130 = 9711 • Stores 9320 = 9712 • Prepaid expenditures 9330= 9713 • Restricted program balances 9740 • Economic uncertainty 9770 • Other Designations 9780 • Reserves could also be designations by the Board Reserves (p11.1–11.8)

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