San Diego County Office of Education District Financial Services Financial Accounting/Reporting welcome 2013-14 YEAR END CLOSING WORKSHOP 1.

1

San Diego County Office of Education District Financial Services

Financial Accounting/Reporting

welcome

2013-14 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

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1 Section 1General Accounting Information

4

5

Gen

eral

Acc

ounti

ng

Info

rmati

on 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

Gen

eral

Acc

ounti

ng

Info

rmati

on 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

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2 Section 2 Closing Schedules

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

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Section 3 Checklists 3

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

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

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4 Section 4Entries Made Prior to Closing

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Prepaid Expenditures (p4.2)

Step 1 - Reverse prior year closing entry:Res Goal Func Obj DR CR

Insurance xxxx xxxx xxxx 5400 1,500Prepaid Exp. xxxx 9330

1,500

Step 2 - Establish current year closing entry:Res Goal Func Obj DR CR

Prepaid Exp. xxxx 9330 2,000Insurance xxxx xxxx xxxx 5400 2,000

Due

to/D

ue F

rom

(p4.

4–4.

6) 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/D

ue F

rom

(p4.

4–4.

6) 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/D

ue F

rom

(p4.

8–4.

9) 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

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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)

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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.

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Section 5Closing Entries & Accruals 5

Clos

e ou

t PY

C/L

and

A/R

(p5.

2)

A/R & A/P objects must be ZERO before you accrue for the closing year:

FD Res Obj DR CRxx xxxx 9202 9,750.64xx xxxx 9201 9,750.64

FD Res Obj DR CRxx xxxx 9510 10,475.87xx 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.

Expe

nditu

re A

ccru

als

(p5.

3 -5

.4)

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

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Example B(p5.7)

Unpaid invoices of $20,000 for merchandise or services received by June 30:

Res Goal Func Obj DR CRBooks & Sup xxxx xxxx xxxx 4000 6,000Services xxxx xxxx xxxx 5000 4,000Cap Outlay xxxx xxxx xxxx 6000 10,000C/L xxxx 9510 20,000

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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

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Example(p5.7)

Recalculate LCFF using actual data and accrue the difference between recalculated state aid & receipts

Fund Res Obj DR CRA/R 03 xxxx 9201 100,000State 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

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6 Section 6 Payroll Accruals – 9910’s

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Payroll Accruals/9910’s

9910-000 Payroll9910-311 STRS9910-312 STRS CB Plan9910-321 PERS9910-322 PERS EPMC9910-331 Social Security9910-332 Medicare9910-333 ARS

9910-340 H&W9910-350 SUI9910-360 W/C9910-370 Retiree H&W9910-371 OPEB Allocation9910-375 OPEB Direct9910-380 PERS Red9910-390 Other Benefits

Payroll Holding Accounts

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Payroll Accruals/9910’s – SUI(p6.5)

Step 1 - Current FY General Ledger - SUI expenses for quarter ending 6/30:FD Res Obj DR CR06 xxxx 3501-000 2,00006 xxxx 9910-350 2,000

Step 2 - District Journal Entry to set up Current FY accrual:Fund Res Obj DR CR06 xxxx 9910-350 2,00006 xxxx 9510 2,000

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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 CR06 9999 7999 2,00006 9999 9110 2,000

Step 4 - District Journal Entry to clear suspense accrual in the Subsequent FY:FD Res Obj DR CR06 xxxx 9511 2,00006 9999 7999 2,000

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Payroll Accruals

Same process for STRS & PERS

9910-371 & 9910-375 OPEB accrual process is under Section 12 GASB

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7 Section 7Direct/Indirect Costs

Dire

ct C

osts

(p7.

2-7.

3) 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

Dire

ct C

osts

– S

ampl

e En

trie

s(p

7.2-

7.3)

NCLB School Choice (intrafund):DR 06-00 3010 1110 3600 5710 Title ICR 03-00 0000 0000 3600 5710 Transportation

Catering charges (interfund):DR 03-00 0000 0000 2140 5750 Professional DevCR 13-00 5310 0000 3700 5750 Food Services

Print shop (interfund):DR 12-06 XXXX 0001 XXXX 5750 CDCCR 03-00 0000 0000 7200 5750 Undistributed

Admin. expenses to developer fees (interfund):DR 25-19 0000 0000 7200 5750 Developer FeesCR 03-00 0000 0000 7200 5750 Undistributed

Indi

rect

Cos

ts(p

7.5-

7.11

) 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

Indi

rect

Cos

ts(p

7.5-

7.11

) 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

Indi

rect

Cos

ts(p

7.5-

7.11

)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

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9 Section 9 Categorical Programs

Sour

ces

of C

ateg

oric

al F

undi

ng

(p9.

2)

Federal

State

Pass-Through

Gra

nt o

r Enti

tlem

ent?

(p

9.3–

9.4)

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/

SDCO

E Tr

ansf

er o

f Fun

ds(p

16.7

-16.

8)

Example 1 - Lottery funds transferFd Res Obj DR CR03 1100 9110 1,00003 1100 8782 1,00006 6300 9110 10006 6300 8782 100

Example 2 - Step A ROP funds (non-lottery) transferFd Res Obj DR CR06 9025 9110 1,000

06 9025 8782 1,000

Step B flex/sweep ROPFd Res Obj DR CR06 9025 8990 1,000

06 9025 9110 1,00003 0000 9110 1,000

03 0000 8990 1,000

Form

CAT

Use CAT Form to track your federal, state and local categorical programs

Calculates deferred revenue, receivable, ending balance

On-line video training available

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Entries to Make After Completing the CAT Form(p9.13-9.14)

Step 1 - Closing EntryUnearned revenue:

Res Obj DR CR Title I 3010 8290 10,000Def. Rev 3010 9650 10,000

Step 2 - Entry in the Subsequent YearClear unearned revenue:

Res Obj DR CRDef Rev 3010 9650 10,000Title I 3010 8290 10,000

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Entries to Make After Completing the CAT Form(p9.13-9.14)

Step 1 - Closing EntryAccounts Receivable:

Res Obj DR CRAcct Rec. 6300 9201 5,000Lottery 6300 8560 5,000

Step 2 - Entries in the Subsequent YearClear Suspense:

Res Obj DR CRSuspense9999 8999 7,500Lottery 6300 9202 5,000Lottery 6300 8560 2,500

Clear Accounts Receivable:Res Obj DR CR

Lottery 6300 9202 5,000Lottery 6300 9201 5,000

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Entries to Make After Completing the CAT Form(p9.13-9.14)

Step 1 - Closing EntryAccounts Payable:

Res Obj DR CRSpec Ed 6535 8590 3,000Acct. Pay. 6535 9510 3,000

Step 2 - Entries in the Subsequent YearAccounts Payable: Pay Invoice:

Res Obj DR CRSpec Ed 6535 9511 3,000Spec Ed 6535 9110 3,000Clear Payable:

Res Obj DR CRSpec Ed 6535 9510 3,000Spec Ed 6535 9511 3,000

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10 Section 10Deferred Maintenance

Def

erre

d M

aint

enan

ce

(p10

.1–1

0.14

)

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

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Def

erre

d M

aint

enan

ce

(p10

.1–1

0.14

)

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

Def

erre

d M

aint

enan

ce

(p10

.1–1

0.14

)

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

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49

Section 11Reserves 11

Rese

rves

(p11

.1–1

1.8)

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 balances9740

Economic uncertainty9770

Other Designations9780

Reserves could also be designations by the Board

Fund

Bal

ance

Cla

ssifi

catio

ns Fund Balance Classifications - hierarchy based upon the level of constraint placed upon the use of resources.

Restricted Funds

1. Nonspendable Revolving cash 9130 = 9711 Stores 9320 = 9712 Prepaid expenditures 9330 = 9713 All Other Nonspendable Assets 9719

2. Restricted Restricted Balance 9740

New

Fun

d Ba

lanc

e Cl

assi

ficati

ons

Unrestricted Funds

3. Committed - board action Stabilization Arrangements

9750 Other Commitments

9760

4. Assigned - designated official(s) Other Assignments

9780

5. Unassigned Reserve for Economic Uncertainties 9789

Rese

rves

Sam

ple

(p11

.2)

In the general ledger, Stores - 9320 has a balance of $5,000. When the physical inventory was taken, the actual stock was valued at $ 5,500.

District journal entry:Step 1 - Increase balance in Stores Fd Object DR CR03 9320 500 Stores03 4000 500 Supplies

Step 2 - Set up reserve03 9799 5,500 Total Reserves03 9712 5,500 Reserves for

Stores

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12 Section 12 GASB

55

GASB 63 GASB 63 - Financial Reporting of Deferred Outflows

of Resources, Deferred Inflows of Resources, and Net Position Very uncommon but Common Core SS Certain transactions subject to deferred recognition do

not meet the definition of assets or liabilitiesCURRENT PROPOSED

9100–9499 Assets 9400–9499 Capital Assets

9100–9489 Assets 9400–9489 Capital Assets

9490–9499 Deferred Outflows of Resources 9490 Deferred Outflows of Resources

9500–9699 Liabilities 9660–9669 Long-Term Liabilities

9500–9689 Liabilities 9660–9669 Long-Term Liabilities

9690–9699 Deferred Inflows of Resources 9690 Deferred Inflows of Resources

GASB Coming Soon GASB 65 - Items Previously Reported as Assets and

Liabilities Effective in 2013-14 9650 in now Unearned Revenue

GASB 68 - Accounting & Financial Reporting for Pension Plans Effective in 2014-15

Unfunded liabilities PERS & STRS

57

Section 13 Temporary Borrowing13

Inte

rnal

Bor

row

ing

(p13

.2 –

13.

3) Temporary borrowing between funds

Must conform to EC 42603

Must have governing board approval

Must be repaid either in the same fiscal year or in the following fiscal year if borrowing was initiated within final 120 days of fiscal year

Sample resolution provided on website & page 13.3

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Due to / Due From(p13.2)

Step 1 - Setting up the interfund loanFund Object DR CR03 9311-013 100,000 (Due from fund 13)03 9110 100,000

13 9110 100,00013 9611-003 100,000 (Due to fund 03)

Step 2 - Repayment of internal borrowingFund Object DR CR03 9110 100,00003 9311-013 100,000

13 9611-003 100,00013 9110 100,000

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15 Section 15Audit

Getti

ng R

eady

for t

he A

udito

r (p

15.1

– 1

5.11

) Recommend that a binder or a

electronic file be designated for copies of documents that the auditor will need

A list of documents is provided LCFF Certification

CALPADS report 1.17

62

Section 16Accounting Updates 16

63

LCFF Changes Resources closed to 13/14 revenue inc.8980

1300 Class Size Reduction K–3 (optional Resource) 2200 Continuation Education 2400 Juvenile Court/County Community Schools 2410 Juvenile Court 2420 County Community Schools 2430 Community Day Schools 7090 Economic Impact Aid (EIA) – State Compensatory Education (SCE) 7091 Economic Impact Aid – Limited English Proficient (LEP) 7250 School Based Coordinated Program (SBCP) 7230 Transportation: Home to School 7235 Transportation: School Bus Replacement 7240 Transportation: SD/OI

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LCFF Changes Objects:

All LCFF revenue in 8011 none in old flexed accounts 8590 or 8015

No 8091 transfers to special ed or community day No 8092 or 3800s for PERS reduction No 7615 or 8915 for transfer to DM fund 14

replaced with 8091 transfer No 8434 CSR

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LCFF Changes Post transfers/payments to COEs for district

students in programs operated by the COE using Goal 0000 and Object 7142, Other Tuition, Excess Costs

COEs should record the payment received from districts using Object 8710, Tuition

Not a contracted service 5100/5800

Common Errors (p16.2-16.5) Incorrect use of abatements

5 allowable abatements CSAM 560 Current year expenditures only - no prior year

5100 subagreements for instructional services only Payments to services providers >$25k per contract Affect indirect cost

Function 7700 - Centralized Data Processing Computer/Information Technology SIS, FIS, PeopleSoft, etc.

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Goals ROP, Perkins, CTE, & other vocation ed.

MOE - Federal funding at risk 6000 = ROP for K-12 4630 = ROP/vocational ed/CTE for adult ed. fund 11 3800 = all other CTE/vocational ed.

Perkins/CTE - 3515, 3540, 3550

Adult Ed. = 4000 to 4749 MOE - Federal funding at risk Fund 11