1 Fiscal Year 2007 CAFR Debriefing. 2 Summary Thank you all for your assistance. Vavrinek, Trine, Day & Co., LLP auditors were happy with the year- end.

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Fiscal Year 2007Fiscal Year 2007

CAFR DebriefingCAFR Debriefing

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SummarySummary Thank you all for your assistance. Vavrinek, Trine, Day & Co., LLP auditors were happy with the year-

end schedules, especially when backup documentation was attached.

Audit was completed 2 weeks earlier than prior year. Audit findings:

– Accounts Receivable-System (112100) No Aging report supporting the backup documentation No internal departmental spreadsheet supporting the GL

balance.– Credit Balances in Asset Accounts

Certain asset accounts with credit balances, without proper documentation. Overall, immaterial, but deficiency in controls.

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Frequently Asked QuestionsFrequently Asked Questions

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Accounts PayableAccounts Payable

The ACO posted additional Accounts Payable for vouchers entered from July 1 through August 31 for services incurred prior to June 30. Can my department revise the prior year revenue accruals in September as a result of the additional AP posted?

Question 1:Question 1:

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Accounts Payable:Accounts Payable:

No. You should estimate your future AP No. You should estimate your future AP accrual when preparing the Revenue accrual when preparing the Revenue Accruals. The year-end schedules are due Accruals. The year-end schedules are due the 3rd week of July. At that point, estimate the 3rd week of July. At that point, estimate your receivables based on prior year AP your receivables based on prior year AP vouchers which are either reimbursable by vouchers which are either reimbursable by 3rd parties or other departments which will 3rd parties or other departments which will be received subsequent to June 30.be received subsequent to June 30.

Answer 1:Answer 1:

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Accounts PayableAccounts Payable

How should I estimate AP as of June 30, for How should I estimate AP as of June 30, for purposes of revenue accrual and/or year purposes of revenue accrual and/or year end encumbrances if the vendor invoices end encumbrances if the vendor invoices have not been received prior to the Year-have not been received prior to the Year-End Schedules due date?End Schedules due date?

Question 2:Question 2:

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Accounts PayableAccounts Payable

Determine an appropriate valuation based on Determine an appropriate valuation based on that vendor’s invoice history. For example, that vendor’s invoice history. For example, estimate based on the average of the past 11 estimate based on the average of the past 11 invoices paid, May’s total invoice paid, or invoices paid, May’s total invoice paid, or the project manager’s knowledge with the the project manager’s knowledge with the contract and/or vendor.contract and/or vendor.

Answer 2:Answer 2:

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Question 3:Question 3:

Accounts PayableAccounts Payable

The department does not have sufficient remaining budget for additional AP vouchers paid from July 1 through September 30 for goods/services received prior to June 30. Therefore, the AP will not be posted against the prior year’s budget.

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Accounts PayableAccounts Payable

False. Vouchers paid from July 1 through False. Vouchers paid from July 1 through September 30 will be posted to the prior fiscal September 30 will be posted to the prior fiscal year, if the goods/services were received prior year, if the goods/services were received prior to June 30, regardless of remaining to June 30, regardless of remaining appropriations in the department. Generally appropriations in the department. Generally Accepted Accounting Principles requires to post Accepted Accounting Principles requires to post expenditures in the year incurred.expenditures in the year incurred.

Answer 3:Answer 3:

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Revenue AccrualsRevenue Accruals

My department has a reimbursable grant My department has a reimbursable grant with the State of California. At year-end, with the State of California. At year-end, we estimated accounts receivable of $3 we estimated accounts receivable of $3 million dollars. However, the state notified million dollars. However, the state notified us in September that $1 million is not us in September that $1 million is not allowable. Should I revise the year end allowable. Should I revise the year end schedule?schedule?

Question 4:Question 4:

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Revenue AccrualsRevenue Accruals

Yes. Provide a revised year-end Yes. Provide a revised year-end schedule, with a revised Journal Entry schedule, with a revised Journal Entry and all supporting documentation. If the and all supporting documentation. If the amount is material, the journal will be amount is material, the journal will be posted prior to the final June 30 closing posted prior to the final June 30 closing process. If immaterial, the revision may process. If immaterial, the revision may not be posted.not be posted.

Answer 4:Answer 4:

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Revenue AccrualsRevenue Accruals

Our department has prepared a clean-up Our department has prepared a clean-up reconciliation and found additional reconciliation and found additional billings to other departments for the billings to other departments for the previous fiscal year. Can we prepare a previous fiscal year. Can we prepare a journal in September to bill those journal in September to bill those departments as of June 30?departments as of June 30?

Question 5:Question 5:

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Answer 5:Answer 5:

Revenue AccrualsRevenue Accruals

No. Billings should be posted by July 31 No. Billings should be posted by July 31 for all services provided prior to June 30 for all services provided prior to June 30 to other departments. If needed, estimate to other departments. If needed, estimate amounts. Period 998 is not a cleanup amounts. Period 998 is not a cleanup period.period.

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Account ReclassificationAccount Reclassification

I have reconciled my project cost and/or I have reconciled my project cost and/or expenditures accounts and need to post various expenditures accounts and need to post various reclassifications as of June 30. Can I prepare reclassifications as of June 30. Can I prepare and post the journal at the end of August to clean and post the journal at the end of August to clean up the accounts?up the accounts?

Question 6:Question 6:

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Account ReclassificationAccount Reclassification

No. Period 12 is open through July 31. No. Period 12 is open through July 31. Please prepare all clean up entries, Please prepare all clean up entries, including reclassifications from July 1-July including reclassifications from July 1-July 31. Period 998 is not a clean up period. 31. Period 998 is not a clean up period. Period 998 is only for audit adjustments.Period 998 is only for audit adjustments.

Answer 6:Answer 6:

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Balance Sheet Clean-upBalance Sheet Clean-up

My department is responsible for reconciling My department is responsible for reconciling revenues and expenditures. The ACO is revenues and expenditures. The ACO is responsible for reconciling all balance sheet responsible for reconciling all balance sheet accounts.accounts.

Question 7:Question 7:

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Balance Sheet Clean up:Balance Sheet Clean up:

False. Each department is responsible for reconciling False. Each department is responsible for reconciling the balance sheet accounts such as assets and the balance sheet accounts such as assets and liabilities. To ease the process, consider cleaning up liabilities. To ease the process, consider cleaning up odd variances in balance sheet accounts (i.e.: credit in odd variances in balance sheet accounts (i.e.: credit in assets and debits in liabilities) throughout the year. At assets and debits in liabilities) throughout the year. At a minimum, reconcile balance sheet account balances a minimum, reconcile balance sheet account balances to supporting documentation such as AR aging reports to supporting documentation such as AR aging reports and/or internally prepared schedules/spreadsheets on a and/or internally prepared schedules/spreadsheets on a quarterly basis.quarterly basis.

Answer 7:Answer 7:

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New GASB Pronouncements for 2008:New GASB Pronouncements for 2008:

What new GASB pronouncements will be What new GASB pronouncements will be implemented in Fiscal Year 2008?implemented in Fiscal Year 2008?

Question 8:Question 8:

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New GASB Pronouncements for 2008:New GASB Pronouncements for 2008:

• GASB 45GASB 45 – – Accounting and Financial Accounting and Financial Reporting by Employers for Postemployment Reporting by Employers for Postemployment Benefits Other Than PensionsBenefits Other Than Pensions • GASB 48GASB 48 – – Sales and Pledges of Receivables Sales and Pledges of Receivables and Future Revenues and Intra-Equity and Future Revenues and Intra-Equity Transfers of Assets and Future RevenuesTransfers of Assets and Future Revenues • GASB 50GASB 50 – – Pension Disclosures – an Pension Disclosures – an amendment of GASB Statements No. 25 and No. amendment of GASB Statements No. 25 and No. 27.27.

Answer 8:Answer 8:

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Component Units:Component Units:

We are a component unit. Our independent auditors We are a component unit. Our independent auditors prepared various audit adjustments to the Financial prepared various audit adjustments to the Financial Statements. Should those entries be posted in the Statements. Should those entries be posted in the system?system?

Question 9:Question 9:

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Component Units:Component Units:

Yes. Please provide a copy of those entries to General Yes. Please provide a copy of those entries to General Accounting Reporting Team, attention Dolores Reyna Accounting Reporting Team, attention Dolores Reyna and/or Frank Leonard. We will help you coordinate and/or Frank Leonard. We will help you coordinate the posting of those entries into the system.the posting of those entries into the system.

Answer 9:Answer 9:

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Reporting TeamReporting TeamWho to Contact:Who to Contact:

Dolores Reyna: CAFR/Audit questionsNew GASB pronouncementsComponent UnitsSchedule R

Frank Leonard: Simpler Year-End Accounts Payable AccrualPeriod 998Financial Highlights (PAFR)nVision ReportsSchedule I

Sue Warner: Special Revenue Funds (Flux, Fund Balance, BS Recon)Due to/from Other Govts (Schedules T-9, V-9, T-12, V-12, B & G)Statistical SectionPrepaids (Schedule M)

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Reporting TeamReporting TeamWho to Contact:Who to Contact:

Daisy Vergara: Capital Projects Funds (Flux, Fund Balance, BS Recon)

Deferred Revenue (Schedules S-9, S-12, L-1, L-2)CAFR DistributionManagement Discussion and Analysis

Fendy Kao: Internal Service Funds (Flux, Fund Balance, BS Recon)

Due to/from Other Funds (Schedule A)Advances to/from other Funds

Gladys Smith: Chart of AccountsState Controller’s ReportOperating transfers in/out

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Chart Of AccountsChart Of [email protected]

orGladys Smith

[email protected]