Business User Group

1. Business User Group February 12th, 2009 9:00 AM – 11:30 AM

2. Announcements • Presentations~ Cash Flow & Accounting 102 ~ COSO (Committee of Sponsoring Organization Plan ~ Work Instruction Refresher – Tips & Tricks ~ Using Sub-Ledgers ~ Posted not Paid Report ~ Close Out Old POs • Questions and Answers Today’s BUG Agenda

3. Opening Remarks Paul Carlson

4. Announcements Website (Lynda) Reconciling Payroll to the G/L (Lynda) Next BUG – End of Year Issues – Please Plan To Attend (Paul) Audits (Paul)

5. Cash Flow & Accounting 102 Paul Carlson

6. Cash Flow & Accounting 102 • CASH FLOW • Determine which agency funds you want to analyze. • Determine what period of time you want to show. • Use a report or query? • Which reports/queries will you need? • Which accounts will you have to analyze? • How does fund balance come into play?

7. Cash Flow & Accounting 102 • CASH FLOW • Example of State’s Daily Cash Flow Statement • Demonstration of how to compute cash flow • Example of a Cash Flow Statement

8. Cash Flow & Accounting 102 Accounting 102 (and a review of Accounting 101) What are the three main statements that accountants prepare for management and the readers of the statements? What is the difference between a Statement of Changes in Fund Balance and a Cash Flow Statement? What is the purpose of preparing a Cash Flow Statement? Regarding the Cash Flow Statement, what is the biggest change going from cash basis statements to accrual basis statements?

9. Cash Flow & Accounting 102 Accounting 102 (and a review of Accounting 101) What do you call a payable account that has a debit balance? Why would you have this situation? Why would you have an accounts receivable account with a credit balance? What do you call a fund that has a debit fund balance?

10. COSO (Committee of Sponsoring Organization) Plan Lynda Roesler

11. COSO Plan Internal Controls Where they come from Why we need them Where we are going

12. COSO Plan Where Internal Controls Come From • COSO – Committee of Sponsoring Organizations of the Treadway Commission • A private-sector initiative, formed in 1985. Its major objective is to identify the factors that cause fraudulent financial reporting and to make recommendations to reduce its incidence. COSO has established a common definition of internal controls, standards, and criteria against which companies and organizations can assess their control systems. • COSO is sponsored and funded by 5 main professional accounting associations and institutes; American Institute of Certified Public Accountants (AICPA), American Accounting Association (AAA), Financial Executives International (FEI), The Institute of Internal Auditors (IIA) and The Institute of Management Accountants IMA).

13. COSO Plan Background • The Sarbanes-Oxley Act of 2002 (“SOX”) requires publicly traded companies to document the safeguards they have in place to prevent errors and fraud – known as internal controls • The GAO (United States General Accounting Office) issued Standards on Internal Control in the Federal Government in November of 1999. • Updated OMB Circular A-123 effective in FY06 – defines management responsibility for internal controls. The Circular provides updated internal control standards and new specific requirements for conducting management’s assessment of the effectiveness of internal control over financial reporting

14. COSO Plan Currently - • Many government organizations have already implemented requirements for internal controls • At meetings/conferences, staff from OMB (Federal Government Office of Management & Budget) are letting States know they may be putting their grant money at risk if they do not implement an internal control plan at the State/Agency level.

15. COSO Plan Why we need Internal Controls • Internal controls will give reasonable assurance the Agency can meet it’s mission and goals. • Internal controls are the checks and balances that help managers detect and prevent problems. • Internal controls must become a broadly understood and important element of the corporate culture in which they operate.

16. COSO Plan COSO’s 5 Inter-related Standards Control Environment

17. COSO Plan Where we are going • Each Agency will designate an Internal Control Coordinator • Training will be provided on developing an internal control plan • State Accounting will provide Resources to assist agencies in developing the plan • Agencies will Respond to a set of internal control questions about their operations on an annual basis

18. COSO Plan COSO’s 5 Inter-related Standards Control Environment

19. COSO Plan COSO Cube

20. Work Instructions RefresherTips & Tricks Lynda Roesler

21. Work Instructions Refresher – Tips & Tricks

22. NDE Uses of Sub-Ledgers Paul Haas

23. NDE Uses of Sub-Ledgers • Used on Expense Reimbursement Documents to track individual employee’s travel expenditures. The sub-ledger we use for employees and Board Members is their Address Book Number. • Particularly important for tracking our State Board Members expenses. • Use it on Direct Billed items, such as lodging to get a full cost of each individuals travel costs.

24. NDE Uses of Sub-Ledgers • Used on payment of independent contractors. We use the NDE assigned contract number. • Important to track all expenditures associated with a contract if the contract allows for certain items (lodging) to be Direct Billed to NDE. Because we are not directly paying the contractor for those expenditures and that amount is not included in the procurement portion of NIS we still needed a way to track the direct billed expenditures to the contract.

25. NDE Uses of Sub-Ledgers • Used on payment of independent contractors. We use the NDE assigned contract number. • Important to track all expenditures associated with a contract if the contract allows for certain items (lodging) to be Direct Billed to NDE. Because we are not directly paying the contractor for those expenditures and that amount is not included in the procurement portion of NIS we still needed a way to track the direct billed expenditures to the contract. • Used for payment of employee/employer relationship contractors. Use NDE assigned contract number. • Payroll purposes • Regular payroll costs • Includes use for Workers Compensation costs

26. NDE Uses of Sub-Ledgers • Use structured sub-ledgers for single business units that different teams or offices within a team make payments. • Vocational Rehabilitation team has several large federal grants that they administer throughout the State. They have about 12 offices throughout the State that administer the grant. Instead of creating 12 business units for each grant with authorization for each business unit, we use one business unit for each grant with 12 sub-ledgers. This allows us to track all of the expenditures (payroll and operations) by site.

27. NDE Uses of Sub-Ledgers • Early Childhood team has several grants that they administer with the Special Education team. The Early Childhood team consists of staff at the State Agency as well as staff located in Omaha at the Early Childhood Training Center. Again, we set up one business unit with 3 structured sub-ledgers.

28. NDE Uses of Sub-Ledgers • Cash funds • Early Childhood Training Center charges a nominal fee to entities and individuals for the training\conferences that it provides. The receipts are tracked using a sub-ledger and the expenditures for the training (contracted trainer, room rent, etc) are coded with the same sub-ledger so that we can make sure that the Training Center is not making a profit on any particular training. If other funds other than the cash fund are needed to cover the cost of a particular training, it is also coded with that sub-ledger.

29. NDE Uses of Sub-Ledgers Cash Funds continued • Nutrition Services Section has a cash fund for recovery of over-claim payments received for prior fiscal year audits. NS administers several federal USDA programs that require claims to be audited. Typically that auditing is completed well after the grant for that fiscal year has been closed and a repayment agreement exists that cover more than one year. Only one cash fund is used with several business units (for each type of federal program) with structured sub-ledgers for the fiscal year of the over-claim.

30. NDE Uses of Sub-Ledgers Cash Funds continued • Receipt of grant funds from non-federal outside sources. Use the sub-ledger to receipting and expending the funds.

31. NDE Uses of Sub-Ledgers Reports -G/L with Subledger Totals • Accounting • Inquiries and Reports • Accounting Reports • General Ledger Reports • G/L with Sub-ledger Totals

36. Open Payables, Posted Not Paid Report Bruce Snyder

37. Open Payables, Posted Not Paid Report • What is this new report? • CSV Report, too many columns to format as pdf • Lists open, posted vouchers by Agency • Where due date < current date and > 60 days in future • Report will help agencies identify why vouchers are not paid • Will run in MREPORT daily beginning week of 2-23-09 37

38. Open Payables, Posted Not Paid Report Reasons for a Voucher not being paid • Voucher is not posted • Insufficient cash in fund • Future Due Date (Discount Due Date) • Vendor in pre-note status • Voucher on hold • Warrant vendor with multiple vouchers totaling more than allowable warrant amount (currently $75,000, will be lowered) • Warrant vendor with “T” payment instrument

39. Open Payables, Posted Not Paid Report • How do I use the report to determine why vouchers are not paid? • Future Due Date • Use the Due Date and Discount Due Date fields to see if a date is in the future –voucher will not pay until this date. Change using Special Handle a Voucher. • Vendor in pre-note status • A future date in the Pre-Note Date field indicates that the vendor is starting to receive electronic payments or has changed bank accounts. Voucher will pay on this date if Pay Instrument field is “T”. 39

40. Open Payables, Posted Not Paid Report • How do I use the report to determine why vouchers are not paid? • Voucher is on hold • An “H” in the Pay Status field indicates the voucher is Hold Status. • Warrant vendor with multiple vouchers totaling more than allowable warrant amount • Use Open Amount and Payee Total fields to determine if this is the reason. Open Amount field is the document total for the vendor. Payee Total is total open amount for the vendor. 40

41. Open Payables, Posted Not Paid Report • How do I use the report to determine why vouchers are not paid? • Insufficient cash in fund. • Fund field is the fund for the first line of the document. This can help determine if this is why a voucher is not paid before an agency is contacted by State Accounting. • Warrant vendor with “T” payment instrument • Payee Number and Pay Instrument fields provide information to determine if this is a reason for not being paid. 41

42. Close Out Old POs Amy Wilson

43. PURCHASE ORDER CLEAN UP Allotment Status Report - R5509146A - MREPORT Check the Encumbrance Column Allotment Status Encumbrance Detail – R55097 NIS Menu: General Accounting, General Accounting - Agencies > Inquiries and Reports > Accounting Reports > Allotment Status Encumbrance Detail Report Open PO Detail by Branch/Plant – R43632 NIS Menu: Purchasing – Agencies > Inquiries & Reports > Purchasing Reports > Procurement Reports > Open PO Detail by Branch/Plant Close Out Old POs

44. PURCHASE ORDER CLEAN UP (Cont.) PA Commitment Inquiry NIS Menu: Role – Procurement, Purchasing - Agency > Inquiries & Reports > Purchasing Inquiries > PA Commitment Inquiry In the QBE Account Number column - *Business Unit.Object* Find Highlight first line of PO Row / Order Entry Close Out Old POs

45. Close Out Old POs

46. Close Out Old POs

47. Close Out Old POs

48. Close Out Old POs

49. Close Out Old POs

50. STATE ACCOUNTING IS SEEING Close Out Old POs • POs open that should be cancelled – Agency is not going to receive the goods or services • Purchasing tables that are not the same • Cancel date in the future • Rounding