YEAR END CLOSE - JUST ANOTHER MONTH!

1. YEAR END CLOSE -JUST ANOTHER MONTH! FOA Conference NAPA, April 15-17, 2007

2. AGENDA • Background • Why, What, Where? • Issues that this won’t resolve • Preparing and Planning • Campus perspectives • Year-End Checklist and Timeline • Includes RMP issues and guidelines • Discussion and Q & A

3. Background: Why Is This Needed? • Frequently asked questions: • Why isn’t this written down anywhere? • Do you have a year-end checklist we can look at? • What is new about this year (besides almost everything)? • Importance of month-end to year-end success • New campus staff

4. Background: What are we trying to Change? • Overtime and Stress • Lack of communication • Lack of time for Management Review • More Standardization & consistency in reporting • Make Year-End just another Month!

5. Background: Where did this information come from? • Compilation of different Year-End presentations and/or checklists. • Year-End closing schedules for several campuses reviewed • Similarities in approach, if not in detail • RMP Interim Operating Guidelines • Yr-End Checklist prepared by CO

6. Background: What has Changed? • SCO Deadlines • CO Deadlines • Focus on timeliness and importance of GAAP Reports • Revenue Management Program • CSU Interim Operating Guidelines

7. Background: Issues We Can’t Solve Here • Lack of standardization • Campus policies vary • Campus procedures for implementing CSU policies vary • This represents a framework • Some Items ARE required • Others suggested to assist in meeting deadlines • One size may not fit all so plan ahead and customize

8. Kicking It Off – Prepare Early • Monthly recons – Keep ‘em current and resolve factors • Preparation begins in January and February • What is changing on YOUR campus? (PS Student Finance, GL issues, PS AR/BI, Asset Mgt) • Look at last year, how did you do?

9. Kicking It Off – Prepare Early • Key Deadlines • Work backwards from these dates when planning • June 15 - SCO Cut-off for Claims\PFA’s\Transfer Requests • July 15 – FIRMS Submission COMPLETED (24 hour review backs this up a day) • All SCO required reports per legal manual • May change slightly with 2007 final dates

10. Campus Perspectives – Cal Poly • History • June 30, 2002 July 29th • June 30, 2003 July 28th • June 30, 2004 July 20th • June 30, 2005 July 14th • June 30, 2006 July 7th

11. Campus Perspectives – Cal Poly The First Year: • New CSU deadline – July 15th • Can’t just work faster • Examined Month-End close – unresolved issues impact Year-End (a lot!) • Re-engineered the year-end close calendar • Re-examined all campus deadlines • Reviewed staff assignments – spread the tasks • Examine all processes • Materiality • Timing • Impact on departments • Executive Sponsorship

12. Campus Perspectives – Cal Poly Preparing Campus Departments • Year end deadline memo from Associate Vice President • Cover page calls attention to important changes • Schedules address all finance year end deadlines • Purchasing • Accounts Payable • Budget • Payroll • Accounts Receivable • Travel • Cashiering

13. Campus Perspectives – Cal Poly • Kick-off with staff in early May • Update last years year-end internal checklist • Weekly meetings beginning mid May • Daily beginning mid June • Approximately 1 hour • All players attend • About 25 people

14. Campus Perspectives – Cal Poly • Campus budget policy: “roll forward” all unexpended balances to the depts in the subsequent year • Any obligation that did not get accrued as of year end are processed as a current year transaction in the subsequent year

15. Campus Perspectives – Cal Poly Backing up the Calendar: • CSU Acceptance by July 15th • 24 hours for CO manual review of FIRMS • Campus Management need 24 hours for review • 4 hours for close process & derivation • Actual close 2 ½ day before the 15th • Legal books can realistically only be open 7 working days after June 30th • Most AP documents received after this • Positive Payroll not available in PIMS until July 7

16. Campus Perspectives – Cal Poly Summary of major deadlines: • Chargebacks cut-off May 25 • Some deadlines now go later • AP/PO will hard close on June 29 • Run the GL15 on July 1 or the evening of June 30 • Invoices received in AP BY July 5th may be accrued in legal based on materiality • Any invoices received by Aug 31 will be accrued in GAAP based on materiality

17. Campus Perspectives – Cal Poly • Since no payroll accruals for legal closing • Positive pay redefined as June thru May • All payroll accruals recorded in GAAP • By not accruing any payrolls in legal, GAAP process can be streamlined • All Prior year payroll accessed electronically for a GAAP accrual journal – no picking and choosing

18. Campus Perspectives – Sonoma • History • June 30, 2002 July 30th • June 30, 2003 July 28th • June 30, 2004 July 28th • June 30, 2005 July 15th • June 30, 2006 July 12th • 06/07 will be our third year to “close early”

19. Campus Perspectives – Sonoma The First Year – Creating New Standards • New CSU deadline – July 15th • Primary Considerations - External • Revised Deadlines for Campus Customers • Reconfigured year end deadlines for end user requests, submissions and processing • PO, AP, AR, Chargebacks, Travel • Notified Departments of early deadlines in February • Communicated with key customers regularly from February thru June

20. Campus Perspectives – Sonoma The First Year – Creating New Standards • Primary Considerations - Internal • Budget and Accounting must work hand in hand all year long • Close Clean every month to minimize year end issues • Implement pre close SAM99, Revolving Fund and Bank Recons • Aggressive monthly resolution of Recon Items • Full 12 month cycle for Chargebacks and payroll • Standardize June to May schedule for Chargebacks and positive payroll • Test PS configuration and set up early and often • Internal Close deadlines start May 1

21. Campus Perspectives – Sonoma Summary of Key Internal deadlines: • Load SAM99 accrual reversal file as soon as available • Set up Closing Trees and CFV’s and begin to test in May • Ensure that all Recon Items and FIRMS issues are current (30 days old or less) and a clear path to prompt resolution is identified • Enabling Tools – SAM99 mid and month end files loaded into PS for query and analysis, WF CEO can be reviewed as the month progresses to resolve Bank Rec issues before close • Apply year end patch(es) in May • Start running the GL15 in report mode in early June • Close out/finalize as many PO’s as possible • ALL subsystems must hard close on June 29 • Work with subsystem teams closely during “crunch time” • After June 29, it’s all about the GL! • Run GL015 in final mode on July 1 or during the evening of June 30

22. Campus Perspectives – Sonoma Backing up the Calendar for 06/07: • CSU Acceptance by July 15th • 24 hours for CO manual review of FIRMS • Key Goals for Sonoma: • Close subsystems by June 29 • Have SAM99 balanced, Bank Rec complete and all JE’s posted by July 9 • Close the GL • Clone PRD, Derive FIRMS for final analysis and review • Resolve all FIRMS issues and derive and submit by 7/10/07

23. Considerations for first RMP Close - More to Come… • Two Bank Recons – STO and WF • CO Pullback of $5K prior year payroll “subsidy” • Close GF without accruals or current year BBA • No GF Revolving Fund closure • Entries for Investments, Cash, unpaid Claims, Student Health Services fees • Do not accrue Payroll, CSURMA, SUG • Prepare for designated Fund Balance entries for Fund 0948.485

24. Year-end Closing Checklist – March & April • Year end cut-off schedule to campus users • Reconcile 101001-Cash in State Treasury and 101006-Cash in Agency Accounts • Run preliminary data quality review • Begin to move accruals out of GF • If needed, develop a plan to migrate Student Health Service fee activity from Fund 948.451 to Fund 948.485 for year end

25. Year-end Closing Checklist - May • Finalize year-end schedule and distribute to staff • Load SAM99 Accrual Reversal Tape • SAM99 should be run with Accrual Reversal checkbox marked from this point forward • Analyze data dependencies for month and year-end entries • Meet with departments or contact third-party providers to determine dates information will be ready or potential cut-off of activity to meet deadlines

26. Year-end Closing Checklist - May • Develop strategy for reclassification of investment income to 499 • 101006 balances will be re-mapped to 108090 – investments • Campus can use 101006 or 108090 – both mapped to FNAT 108090 • All investment income posted to Fund 499 • Collect data and analyze capital leases, capital projects & other potential complex transactions • Develop strategy for booking to ledger

27. Year-end Closing Checklist - May • Review reverting funds • Clear any remaining assets and liabilities • CY revenues and expenses will close to fund balance clearing • Review closing rules and trees • Update for reverting/reverted funds • Confirm all of 0948 fund closes to 305002 • Chancellor’s Office pull back of $5,000 in reverting General Fund year (in 2007, pull back 2003)

28. Year-end Closing Checklist - Early June • Close and reconcile May data • Notify Auxiliaries of Year-End Deadlines • FIRMS/GAAP/IPEDS • Request Contingent Liabilities list • June 15th SCO MUST have final 2006/07 Claims/PFA/Transfer Requests in Hand for guaranteed processing • Consider if enough 0948 balance available to meet June 30 payroll

29. Year-end Closing Checklist - Interdependent Tasks • Tasks listed for the last week of June and first week of July are largely interdependent • Planning and performance is critical to meeting close deadline

30. Year-end Closing Checklist - No later than June 23rd • Review and Adjust A/R Reserves • Clear all SAM99 reconciliation issues identified in May month-end or June mid-month review • Clear all known FIRMS error messages

31. Year-end Closing Checklist - No later than June 29th • Record all chargebacks • All Requisitions must be sourced to a Purchase Order or cancelled • Final Student System feeds to A/P completed, prep for final fiscal year check run

32. Year-end Closing Checklist - June 29-30 • Post/Reconcile Payroll • Post Final ProCard from June statement • Receiving Completed • Close Purchasing • Close Cash Receipts • Final Check Run/Claims • Close Accounts Payable

33. Year-end Closing Checklist – July Week 1 • Fixed Assets and Retention Entries Complete • Run and Post GL 15 process • Manually liquidate Reimbursed Activities remaining Encumbrance Balance • Complete Manual Obligations • Final Reimbursed Activities Billing Completed/Confirm RA in Balance by CSU Fund • Reconciliation of all subsystems to ledger complete: ARBI, Student, etc.

34. Year-end Closing Checklist – July, Week 1,Continued • Complete routine month-end journal entries • Load Bank Recon/Paid Claims (CD102)/SAM99 Files • Bank Reconciliation Completed – Negative Cash Balances Resolved through reclass/remap to investment account • All investment income reclassified/posted to 499 only

35. Year-end Closing Checklist – July, Week 1,Continued • SAM99 Reconciliation Completed – All SAM99 Reconciling Items Cleared • Reclassify FBC for claims filed to Due To Trust for DVP • SCP goes to claims filed • If needed, accrue FBC entries created by LCD

36. Year-end Checklist – July, Week 2 • All entries at this point under the supervision of Campus Budget Office • Clear any remaining FIRMS errors • Final review of program/ledger balances • Clear any remaining deficits • Final preliminary Data Quality Review • Reserve entries to CSU Fund 485 – 304015-304016 and 304018

37. Year-end Checklist – July, Week 2 • Close xxCMP Business Unit to prevent further entries • Generate Final SAM 99 File • Final FIRMS derivation • Prepare Manual Reporting Package for Mgt Review

38. Year-end Checklist – July 12 and 13 • July 12 - Management Review/Approval • July 13 – FIRMS submission to CO’s SFSR group • 24 hour review may still be in effect • July 16 – FIRMS Submission completed, pre and post close • Transmit Final SAM99 file to SCO

39. Year-end Checklist – July and August • Submit all required SCO reports per instructions in year-end legal manual • Reports 14, 18 and 19 • GAAP Adjustments to SCO • Auxiliary Organizations FIRMS • Final dates available at CSU Year-end Training

40. Discussion and Close • Other campus perspectives • Questions? Contact Info: • John Hayes, Sonoma • john.hayes@sonoma.edu • Lorlie Leetham, SLO • lleetham@calpoly.edu