Welcome to the Business Users Group

1. Welcome to theBusiness Users Group Wednesday, August 8, 2007 9:00am – 11:00am

2. Today’s Agenda • Announcements • Presentations • Entering Budgets in NIS • Internal Controls • Accounting 101 • Questions and Answers 2

3. Announcements • Communications with the Auditor’s Office • CAFR Update • Introduce Julie Heyen – new position • Tools Update • Password Resets (NDS) • Encumbrances 3

4. Encumbrances - Key Dates • July 2 – August 31 Enter Vouchers and Manual Encumbrances • July 9 Run Encumbrance Detail to ensure accuracy • August 2 State Accounting runs 7-31-07 Biennial Carryover Report for review purposes. This should agree with the 7/31/07 Encumbrance Detail. • August 31 State Accounting runs 8-30-07 Biennial Carryover Report for review purposes. 4

5. Encumbrances – Key Dates • September 4 8/31/07 Certified Biennial Carryover Report available for review • September 11 Agency Director signed copy of Certified Biennial Carryover Report due to State Accounting • September 2 – 28 State Budget and Accounting review of encumbrances • September 28 State Budget Re-Appropriation October 1 State Accounting Load Budget Status with Re-Appropriations 5

6. Entering Budgets in NIS Presented by Ann Martinez, Central Finance

7. Entering Budgets in NIS • Why? • Section 81-138, Reissue Revised Statutes of Nebraska, 2003, requires all agencies to provide an estimate of fiscal year expenditures to the Director of Administrative Services. • Section 7 of LB 321, 2007, directs all agencies, boards, and commissions to establish their detailed Budget Status Reports in NIS. 7

8. Entering Budgets in NIS • Navigation: State of Nebraska > Agency Budget Menu > Agency Budget Management > Enter/Revise Final Approved Budget • Work instructions for Enter/Revise Final Approved Budget can be found in the Budget Training Manual: http://www.das.state.ne.us/nis/trainingmanuals/810_training_manuals/bu/index.html 8

9. Enter Fund to work with • Or, leave blank and work with each business unit individually • Enter current Fiscal Year (ex. enter 07 for FY beginning July 1, 2007.) • Enter “BF” in Ledger Type field 9

10. Enter Subledger Type: • BUAPPROP – new appropriation • BUREAPPR – re-appropriation • BUTRANSF – transfer • BUENC – encumbrance rollover • Note: a budget must be entered for each subledger type as needed. • Click Find to view all Business Units associated with the Fund entered. Enter S in the Subledger Type field. 10

11. Choose a Business Unit for which to enter a budget. • Click Select. 11

12. Click the Requested radio button. Click Go-to-end button to see all object codes. 12

13. Click the drop-down arrow and choose 1-200 to go back to the top of the list. 13

14. When finished entering budget amounts for all object accounts, click OK. Click in the Requested Amount field to enter the budget. Reminder, all revenue budget amounts must be entered as a negative dollar amount. All expense budget amounts must be entered as a positive dollar amount. 14

15. Entering Budgets in NIS • Total amount of budgeted PSL (object codes 511100-512800) must equal the PSL Status Report. • Use MREPORT or run the PSL Report • The Appropriation to Budget Comparison Report must equal by program, fund type, and in total appropriation. • It is important that the budget entered by subledger equal how the appropriation – spending authority was given through statute. 15

16. Navigation: State of Nebraska > Agency Budget Menu > Agency Budget Management > Inquiries & Reports > Accounting Reports > Financial Reports > Other Budget Reports > Appropriation to Budget Comparison • Work instructions for the Appropriation to Budget Comparison report can be found in the General Accounting Training Manual: http://www.das.state.ne.us/nis/trainingmanuals/810_training_manuals/ga/index.html 16

17. Complete the following fields: • Agency Number • Program number • Budget-FT (Fund Type) • Or, enter agency number and delete rows 2 and 3 to run report for entire agency. 17

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19. Internal Controls Presented by Lynda Roesler, State Accounting

20. Internal Controls What are they? Why should I care?

21. What is Internal Control? • Internal control is a coordinated set of policies and procedures, effected by State Accounting, agency administration, management and employees, designed to provide reasonable assurance regarding the achievement of Agency objectives in the following areas: • Effectiveness and efficiency of operations • Reliability of financial reporting • Compliance with applicable laws and regulations 21

22. Five Components of Internal Control • Control Environment • Risk Assessment • Control Activities • Information and Communication • Monitoring • http://www.das.state.ne.us/accounting/nis/internal_control_guidelines.htm 22

23. Want some examples? 23

24. Think about what YOU do • You lock your home and your vehicle. • You keep your ATM/debit card pin number separate from your card. • You review bills and credit card statements before paying them. • You don’t leave blank checks or cash just lying around. • You expect your children to ask permission before they can do certain things. 24

25. Your Agency internal controls are similar • Offices, buildings, and state vehicles are kept locked when unoccupied. • Payroll is reviewed and certified to State Accounting • Checking management reports and purchase card charges against source documents. • Locked cash drawers and secure storage for checks. • Authorizations required for certain activities. 25

26. Internal controls are meant to: • Protect assets • Ensure records are accurate • Promote operational efficiency • Encourage adherence to policies, rules, regulations, and laws. 26

27. Internal controls are usually either PREVENTIVE or DETECTIVE • Preventive - let’s stop an unwanted outcome before it happens. Detective - let’s find the problem before it grows. 27

28. Examples of Preventive Controls • Reading and understanding applicable State and Agency Policies to learn the right way to do something. • The review and approval process for disbursements or purchase orders to make sure they’re appropriate before the payment or purchase. • The use of computer passwords to stop unauthorized access. 28

29. Examples of Detective Controls • Cash counts and bank reconciliations • Reviewing payroll reports or, on a personal level, your pay check or advice • Comparing transactions on monthly management reports to agency source documents • Monitoring expenditures against budgeted amounts 29

30. Considerations • The cost of a control should not outweigh the benefit. • Assigning two guards to follow someone around to make sure neither the person nor the other guard takes anything isn’t reasonable. Some controls cost little. For instance having a supervisor countersign a void receipt to protect the cashier from being accused of pocketing the money. 30

31. Considerations (cont.) • You can’t pick and choose which “official” controls you want to comply with. • If a procedure doesn’t seem to make sense or appears unnecessary, check it out with management and get it changed. Don’t stop complying until the change is official, you may not have the full picture. • Controls are there to protect you as well as the agency and the State. 31

32. Who is Responsible for Internal Control? EVERYONE 32

33. All DAS Administrators Are responsible for establishing State Policies for all agencies. By State Statute, they are charged with issuing policies and procedures that govern the security of state assets. These policies are the basis of the State’s internal control system.

34. Agency Boards, Commissions and Directors • Are responsible for designing and implementing control systems for their agency. • Are responsible for executing DAS control policies and procedures. • These responsibilities should come with the authority needed to see that controls are implemented. • With responsibility comes accountability. 34

35. All Employees • Read and understand the policies and procedures which affect you and your job. • Comply with the controls established to protect both you and you agency. • As you do a job, if you notice a control weakness point it out to your supervisor or manager or submit it to State Accounting. 35

36. Why don’t they always work? • Inadequate knowledge of State or Agency policies or governing regulations. • “I didn’t know that!” • Inadequate segregation of duties. • “We trust ‘A’ who does all of those things.” Remember, in general only people we trust can steal from us, we watch the others. • Inappropriate access to assets. • Passwords shared, offices left unlocked, cash not secured… 36

37. Why don’t they always work? • Form over substance • “You mean I’m supposed to do something besides initial it?” • Control override. • “I know that’s the policy, but we do it this way.” “Just get it done, I don’t care how.” • Inherent limitations • People are people and mistakes happen. You can’t foresee or eliminate all risk. 37

38. Let’s work together to get the job done. (and have a good night’s sleep!) 38

39. Upcoming things to look forward to: • Pre-audit training • Pre-audit certification • Internal Control questionnaire • Additional tools to assist agencies 39

40. Accounting 101 Presented by Paul Carlson, State Accounting Administrator

41. Accounting 101 • Discussion of accrual accounting and balance sheets. 41

42. Questions

43. Thank you for coming!Please remember to fill out an evaluation!