Fiscal Year End Review Session

Agenda

• Year End Schedule & Important Dates • Dual Year Processing • Review of Indexes • Property Accounting – Purchase of Equipment • Commodity Level Accounting for PO’s • Year-End Accruals • Justification Memo • P-card Deadlines • Purchasing • JV Processing • Miscellaneous • Questions

Key Year End Dates – June 24 - DPRs, JVs and IDVs to be included

in FY15 are due to Fiscal Monitor. – June 25 - Last day to purchase items from

Bookstore. The Bookstore will not be closed during year end.

– June 30 - any FY15 ELRs must be completed and approved by all parties.

– July 1 – 1st Close

Key Year End Dates, cont. – July 3 - P-Card transactions through

6/18/2015 will be posted to Banner. – July 8 - Deadline for JVs from Business

Managers and Research Centers – July 10 – 2nd Close – July 17 – 3rd Close – starting at 5:00pm – July 22 - Controller Close reports available

following day

Transaction Date vs. Activity Date

• Transaction Date – Banner posts transactions to

fiscal years and periods based on the transaction date. • Activity Date – The date a transaction is actually

entered into Banner.

Dual Year Processing

• You may begin processing FY16 purchase requisitions on June 2, 2015

• Creating a FY16 requisition during the Dual Year period:

-Transaction Date must be >June 30, 2015 -Delivery Date must be > Transaction date

Dual Year Processing, cont.

Reviewing Funds

• General Ledger Review – Review Assets, Liabilities and Fund Balance

• Look for reverse balances • Compare for no change from prior year • AFR exception reports will help identify issues,

but don’t wait for them.

Reviewing Indexes

• Unrestricted Funds – I&G and Non I&G Funds

• Compare current year activity to prior year activity

• Question any expense with a credit balance • Verify that there is not any YTD expense

activity in account code 799800 • Compare budget to actual expenses

Reviewing Indexes, cont.

– I&G Funds • There should not be any YTD activity in

the following account codes – Revenue accounts – Resale accounts – Applied charges accounts, 795xxx (except in

specific circumstances)

Reviewing Indexes, cont.

– Non I&G Funds • Question any revenue that has a debit

balance • Verify that any resale account codes,

77xxxx are appropriate on that index.

Reviewing Indexes, cont.

• Zero all default P-card account codes - 738011 • Federally excluded account codes • Requesting back up documentation for journal

vouchers versus using various reports with transaction detail (ex: COGNOS, JV text or BDMS)

Reviewing Indexes, cont.

• Restricted Funds – Various State of New Mexico billings have a

quicker than normal turnaround time. • Be prepared to submit final expenditures in order to

avoid the risk of late billing which could result in the agency refusing to pay.

– Departments should continuously review any accounts receivable balances that are 120 days or older and support SPA in collection efforts, to avoid the write off of receivables at year end.

Property Accounting • When you purchase an ASSET it should be

Tagged so that it can be tracked by NMSU.

• Not all purchases are considered an ASSET, therefore not all purchases are Tagged.

• Commodity Codes and Account Codes DRIVE the

process for identifying and Tagging Assets.

• Not all Tagged ASSETS are OWNED by NMSU.

Property Accounting Capital Assets: (Use the Account Code 78XXXX)

• Moveable assets/Not permanently affixed to a building • Valued at $5,000 or More with an expected useful life

of 1 year or More • Includes SOFTWARE (use account code 786000) • FREIGHT /INSTALLATION charges are added to the

acquisition cost or value of Capital Assets • DISCOUNTS should be deducted from the value of the

Capital Asset (on PO) • Included as an ASSET in NMSU’s Financial Statements

and DEPRECIATED (expensed) over Useful life

Property Accounting Non-Capital Assets: (Use Code 740XXX)

• Moveable assets/Not permanently affixed to a building • Valued at $1,000 to $4,999.99 with an expected useful

life of 1 year or More • Included as an EXPENSE in the Current Year

University Financial Statements and NOT DEPRECIATED

Property Accounting Items NOT TAGGED:

(Don’t use 78XXXX or Commodity Code XX00)

• Equipment or Supplies Less than $1,000 • Software Less than $5,000 • Included as an EXPENSE in the Current Year

University Financial Statements and NOT DEPRECIATED

Property Accounting Why do Account & Commodity Codes Matter?

Banner will generate a unique property record called an Origination tag or O-tag when it sees certain account or commodity codes.

When an O-tag is created Property Accounting looks for an Asset to Permanently tag (barcode) and add to the inventory system.

Account and Commodity Code Possibilities O-tag Created? Cap Entry Created?

Account Code 78XXXX and Value Greater than $5,000 Yes Yes

Account Code 78XXXX and Value LESS than $5,000 Yes No

Commodity Code XX00 (any account other than 78XXXX) Yes No

Commodity Code XX99 (any account other than 78XXXX) No No

Property Accounting Who Owns the Asset? U, F, S, or P-tag

• U-Tags –Assets OWNED by NMSU – For Federally Funded Capital Assets use account code 780300;

all other Capital Assets should use 780200

• These can be Capital Assets (greater that $5,000) or Non-Capital Assets (between $1,000 and $4,999)

• Remain in Departmental Inventories until disposed via

Inventory Change Request (ICR)

Property Accounting Who Owns the Asset? U, F, S, or P-tag

• F, S, or P-Tags – Assets NOT OWNED by NMSU – F-Tags – Assets OWNED by Federal Gov’t - Use code 780400 – S-Tags – Assets OWNED by State Gov’t - Use code 780500 – P-Tags – Assets OWNED by Private Entity - Use code 780700

• These assets have annual reporting requirements and

require permission for disposal or transfer.

• These assets are tracked by NMSU and Inventoried, but NOT included in NMSU’s Financial Statements

Commodity Level Accounting

• Commodity Level accounting is the default on all purchase requisitions (preferred method).

• Use Commodity Level in these instances: – Mixed Commodities – Mixed FOAPALS – Asset Tags required

• Document Level accounting is used if there is only 1 commodity code and 1 FOAPAL.

Commodity Level Accounting

• Commodity Codes and Account Codes are entered into the Requisition and PO’s – Multiple FOAPALS can be used to pay individual

items. – Payment distribution can specify a dollar amount

given for a FOAPAL – Once invoiced each line will be paid as indicated

on FOAPAL distribution – FOAPALS can be changed

Commodity Level Accounting Original PO

Commodity Level Accounting

• Reminders on Purchase Requisitions using the FPAREQN form: – Item text versus Document Text

• Item text expands on description of item • Document text applies to information related to the

whole purchase requisition (example: enter free form information and select clauses)

– Reference Prior Asset Tag (U-tag) for subsequent component purchases.

Property Accounting

• Do you have equipment that was delivered, but never tagged? – Is it a Capital or Non-Capital Asset? – Has the invoice been paid?

• FPIOPOF (Open Purchase Orders) –Banner

• Contact AFR or See Capital Asset Guide http://af.nmsu.edu/wp-content/uploads/sites/4/2013/05/Capital-Asset-Guide.pdf

Property Accounting

• Cut-Off for Year End – Equipment Purchases – Items Received and Paid before July 1, 2015 will

be Capitalized and Tagged for FY15. – Items Received before July 1, 2015, but Paid on or

after July 1, 2015 will be Accrued, Capitalized, and Tagged for FY15.

– Items Received on or after July 1, 2015 will be Capitalized and Tagged for FY16.

Property Accounting

• Cut-Off for Year End – HED Library GOBs – FY15 P-Card Purchases for on HED Library

General Obligation Bonds need to be completed by June 19th, 2015.

– Backup documentation for any outstanding expenses needs to be submitted to AFR by July 7th, 2015.

– Failure to meet deadlines might result in HED not reimbursing NMSU for some purchases.

Accounts Payable Dates • Notable Dates

– Remaining FY15 PO invoices will not be paid between 2nd and 3rd close

– FY16 PO invoices will not be processed until July 1st – Between 2nd and 3rd close, only FY16 PO invoices

will be paid. FY15 encumbrances will not be rolled forward to July until 3rd close (July 17)

– NOTE: All DPRs received after June 30, 2015 will be posted in FY16

Accruals • NMSU prepares full accrual financial statements that require

income to be reported when earned and expenses to be reported when incurred.

• Our financial statements must include all revenue earned and expenses incurred in FY15, even if the transactions have not been completed. The year end accruals adjust the revenues and expenses that are in Banner to amounts required for full accrual financial reporting.

• The effect of the accrual is reversed in FY16

Accruals, cont. Three-way match The terms of the PO require that the invoice be matched to the PO, and that the goods/services have been received in Banner, before the invoice can be paid.

Example: – Ordered a microscope on 5/30/15 which was received 6/29/15. – MUST show receipt in Banner by to 6/30/15 or it will not be

automatically accrued. – Invoice sent to A/P to be paid. – A/P will automatically accrue if it was received correctly in

Banner by 6/30/15. – VERY important to receive items in Banner that were actually

received by 6/30/15.

Accruals, cont.

• There is a process that automatically identifies and posts three-way match PO accruals. The criteria used to identify the amount to be accrued are: – As of June 30, 2015

• A valid three way match PO exists • Goods/services have been received in Banner • The Invoice has not been posted in Banner If for some reason an item isn’t received in Banner, but is

physically received, please contact your fiscal monitor, with documentation of receipt and we will evaluate if an accrual is necessary.

Accruals, cont. Two-way match

• The terms of the PO requires that the invoice be matched to a line on the PO before the invoice can be paid. (usually services). Only need to accrue expenses over $10,000.00.

Example: – Procured services 5/30/15, the services were complete by

6/30/15. Invoice sent to A/P, but not before 2nd close. You will need to let AFR know to accrue the amount of the services.

– Procured services 5/30/15, the services were NOT complete on 6/30/15. AFR will NOT need to accrue the amount for services.

– Procured services 5/30/15, the services were partially complete on 6/30/15. AFR will need to accrue the amount for services completed.

Accruals, cont.

• Two Way Accrual Process: – AFR runs a COGNOS report that lists open two-way match POs. – Each department will receive a list of their open two-way match POs

for review. – Departments are asked to review the information and provide AFR with

a list of the POs should be accrued for year-end, and the amount of each accrual based on invoices or correspondence from the vendor. AFR accrues using account code 221005. Accruals reversed in July.

– PO balances for plant funds charged to account codes 754x, 782x, 783x and 792x will not appear on the two-way report. These POs are included in the Construction or Subcontract accrual reports.

Accruals, cont. • Subcontract accrual process:

– AFR uses a COGNOS report to identify subcontractors. – Banner Subcontract form is FGIENCD – Each department will be sent a list of their subcontracts and

asked to provide information on any services rendered before 7/1/15 that have not been billed to the University.

– Sent to SPA for feedback. – Based on information received, AFR will post the

subcontract accrual.

Accruals, cont.

• Construction accrual process: – Facilities and Services are given a list of open PO balances

associated with large construction projects. – Facilities and Services personnel review the POs and if

necessary, contact the vendors to determine the appropriate accrual.

– AFR posts the accrual based on information provided.

$100 Justification Memo Justification Memo is required when an employee submits a request

for reimbursement where a single purchase is greater than $100.00. • The items listed below are exempt from this rule:

- Food Purchases -Work Boots - Books - Memberships - Work Related Travel

• Rule applies to single receipts over $100 regardless of the transaction location.

• If multiple receipts are less than $100 and add up to $100 or more then no memo is required.

• BPM Definition can be found under section 4.40.70 Reimbursable Purchases.

Purchasing

• Clean up Incomplete Purchase Requisitions – Review Banner FOADOCU (Document by User) – Refer to Banner Finance Manual for process to

delete a requisition

Purchasing, cont.

PCard FY 15 Deadlines

• Last FY15 PCard cycle 6/5/15 – 6/18/15 • PCard transactions posted in WellsFargo by

6/18 will be posted to FY15 • PCard transactions posted in WellsFargo after

6/18 will be posted to FY16 • Business managers will be contacted to assist

with outstanding PCard balances in their areas

Encumbrances

• Review Open Reservations and Open Commitments – Use Finance Self-Service

• View Reservations –Budget Queries –Operating Ledger Data Column, check

reservations –Input Index

Encumbrances, cont. Check Reservations

Encumbrances, cont. Drill down on account code

Encumbrances, cont. View list of reservations

Purchasing, cont.

• View open encumbrances – Encumbrance Query – Input Index number

Purchase Order, cont. All POs for fiscal year will appear

Purchasing, cont.

• Completion of Receiving – Banner FOIDOCH

• Document History

Purchasing, cont.

Purchase Order

• Purchase Order History – Finance Self-Service

• View Documents by Purchase Order – All transaction associated with Purchase

Order – Invoice will show summary of Purchase

Order

Purchase Order, cont. All transactions related to PO

Purchase Order, cont. Summary of PO

Purchasing, cont.

– Assign clauses • 03 Federal Grant • 04 Federal Contract • 08 Delivery Before July 1 • 14 Delivery After July 1 • 63 End of Year Payment Delay

– List commodity items separately, do not combine

FIP JV Processing • Electronically Routed JVs (JEC/JED, B4C/B4D)

– These must be routed through Banner queues for approval, so consider the timing when close to month end

• Electronic JVs (JE16s, CR05s, &c) – Consider FIP and Fiscal Monitor deadlines – Hard copies requiring fiscal monitor signatures – Physical copy & electronic copy sent to fiscal monitors who

forward them to FIP after review

• Manual entry (IDVs, CR05s, &c) – Less than ten lines – Consider FIP and Fiscal Monitor deadlines

• Plan ahead! Errors cause delays.

FIP JV Processing • Electronically routing JVs– Remember that year

end is a busy time, so plan ahead to avoid delays. • Uploads requiring signatures– Non-routing

uploads (JE16s, etc) must come to FIP from fiscal monitors.

• Posting schedule– Uploads submitted late in the period may be delayed by errors. Timely and early submission to fiscal monitors will help avoid delays.

FIP JV Processing

• Errors will cause delays in processing • Tips to avoid common errors:

– Make sure index is valid (i.e., not termed, etc.) – Make sure username is authorized to post – Double-check account numbers – Use the correct spreadsheet (JE16 vs. JED, etc) – Make sure transaction date is in the current open

period

Miscellaneous

• Electronic Processing (Uploads) of Budget, Journal Vouchers, and Cash Entry Vouchers is mandatory for entries with over 10 lines.

• Routing Reminders: – If there are any restricted funds - route the

electronic file to SPA. – If there are no restricted funds – route the

electronic file to AFR

Upload Templates

Ben Glickler – FIP bglickle@nmsu.edu Carolina Munoz– AFR cmolina@nmsu.edu Lesley Doyle – AFR ldoyle@nmsu.edu Mike Hoskins – Property Accounting

hoskins@nmsu.edu Rennette Apodaca – Purchasing rennette@nmsu.edu

Questions?

?

?

?

?

?

?

?

?

?

?

?

?

?

?

? ?

?

? ?