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FISCAL YEAR END SURVIVAL KIT TRAINING
CORAL GABLES CAMPUS
Contact Information: Martha Arocha University of Miami Controller’s Office
Tel: 305-284-6148Email: [email protected]
FISCAL YEAR 2015
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Agenda Importance of the Year-End close
What WE NEED YOU TO DO for Year-End close
Year –End close information and dates for:• Controller’s Office• Purchasing • Accounts Payable • Payroll• Office of Research• Audit & Advisory
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Importance of a close
To prepare complete and accurate financial statements for the University for the period ending May 31st, 2015 to distribute to our
stakeholders (i.e. trustees, government agencies, bondholders).
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THE CONTROLLER’S OFFICE WILL SEND OUT THE YEAR END CLOSING SCHEDULE MEMO IN EARLY-MID MAY WHICH WILL
PROVIDE YOU WITH DUE DATES AND CRITICAL INFORMATION ON WHAT YOU NEED TO DO
Important
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REVIEW EARLY & OFTEN
During the month of MAY
review the transactions
posted against your accounts in:
RPT FR90, DATA WAREHOUSE
DMAS/FRS
WHAT WE NEED YOU TO DO
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WHAT WE NEED YOU TO DO cont.
Review for
possible:
Omissions and/or Errors
posted to your
accounts
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WHAT WE NEED YOU TO DO cont.
June 5th, 2015 (related to Non-Payroll corrections)
June 3rd, 2015 (related to DHRS Payroll adjustments/corrections)
June 1st, 2015 (HR Workday) – Payroll Accounting Adjustments (PAA)
In order to be reflected in 1st PRELIM CLOSING - Submit correction entries to FYE 2015 activity no later than:
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WHAT WE NEED YOU TO DO cont.
June 17th , 2015 (IDR manual Journal Entries )
June 12th , 2015 at NOON (Payroll Adjustments)- HR Workday
June 11th, 2015 at NOON (DHRS Payroll)
In order to be reflected in 2nd PRELIM and FINAL CLOSING - Submit correction entries to FYE 2015 activity no later than:
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WHAT WE NEED YOU TO DO cont.
June 22nd, 2015 at Noon (non-sponsored accounts and non-payroll, other than accruals & deferrals and interdepartmental charges)
June 18th, 2015 (accruals and deferrals journal entries) Refer to Year End Closing Memo; available on:
http://www.miami.edu/finance/index.php/treasurer/areas/controllers_office/
June 18th, 2015 (Sponsored accounts 6XXXX non-payroll)
CONTROLLER’S OFFICE
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Controller’s Office
Journal Entries • Journal entries should be submitted to the Controller’s Office in the following order:• Batch Control Form• Completed Journal Entry Form with approvals• Backup supporting documentation (i.e. approvals, DMAS screenshots, etc.)
• Batch Number Issues: • All journal entries require a Batch Reference ID• The Batch Reference ID first digit number should be tied to the trans. code• TC 030 Receipts should start with a 3##• TC 040 Disbursements should start with a 4##• TC 060 Journal Entries use 6##
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Controller’s Office cont.
• Journal Entries – due on or before June 5th for 1st Prelim closing
DEADLINES
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Controller’s Office cont.
• On or before June 18th for Revenue and/or Expense Accrual for 2nd Prelim and Final Closing
• On or before June 18th for Sponsored Accounts (6XXXXX) for 2nd Prelim and Final Closing
DEADLINES
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Controller’s Office cont.
• On or before June 22nd at Noon for non-sponsored, non payroll and non revenue deferrals or expense accruals for 2nd Prelim and Final Closing
DEADLINES
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The goal of the year-end accrual process is to recognize revenues and expenses in the period in which the economic events are incurred, regardless of when the payment is received or paid, to ensure accurate presentation of revenues and expenses. Accrual basis accounting records revenues at the time when services or sales are made rather than when cash is actually received from customers. It records expense at the time when services or goods are received or performed rather than when cash is actually paid to vendors.
Controller’s Office cont. Year-End Accrual Procedures
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Controller’s Office cont. EXAMPLE OF AN EXPENSE ACCRUAL AND REVERSAL
• Example: UM Dept. receives office supplies from a supplier near the end of a month, but has not yet received an invoice from the supplier by the time we close books for the year
• ORIGINAL Journal Entry – May Entry
• Debit - SLXXXX- XXXX (Expense) Credit – GL XXXX-2531 (Liability)
• REVERSAL Journal Entry – June Entry
• Debit - GLXXXX – 2531 (Liability)• Credit – SLXXXX -XXXX (Expense)
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Revenues are recorded throughout the year for services/goods rendered as well as processing of cash receipts from third-parties during the period of service.
However, there could be a lag between the time a sale of services or goods to a third-party is complete and when the invoicing is done and recorded in the general ledger or the payment from a third party is received and processed.
When revenues have been earned but not yet recorded via the standard business processes, an accrual entry is necessary at fiscal year-end to recognize the revenues in the fiscal year during which the business transactions occurred.
Controller’s Office cont. To Accrue Revenue
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To identify revenues that have been earned but not yet recorded, department staff should review their records of sales to third-parties through May 31 and reconcile such transactions against corresponding invoices or cash receipts recorded in the general ledger.
Controller’s Office cont. To Accrue Revenue
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EXAMPLE OF A REVENUE ACCRUAL • Example: To accrue for an Athletic Event that occurred within the
current fiscal year, but the revenue wasn’t recorded by the fiscal cut-off because of non-payment by 5/31.
• ORIGINAL Journal Entry – May Entry• Debit - Accounts Receivable - 1321
Credit – Auxiliary Revenue-0466
• REVERSAL Journal Entry – June Entry • Debit - Auxiliary Revenue – 0466
Credit – Accounts Receivable-1321
Controller’s Office cont. To Accrue Revenue
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All accrual journal entries should be supported by documentation showing completion of the sale of services or goods before the end of the fiscal year, and all journals should be appropriately reviewed and approved.
Departments are expected to provide supporting documents if the accrual entry is selected for review by the external auditors.
Controller’s Office cont. Accruals
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There are several ways to identify unrecorded expenses:Analyze the nature of spending in your departmentWhat types of expenses does the unit typically experience during the year and when?
Controller’s Office cont. To Accrue Expense
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Pay particular attention to expenses usually occurring towards the end of May
Analyze vendor invoices posted to FRS towards the end of May with invoice date of June and prior.
Accrual estimates, for when vendor invoice information is unavailable, should be discussed with General Accounting/Controller’s Office prior to recording.
Controller’s Office cont. To Accrue Expense
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Controller’s Office cont.
DeferralsRevenue deferrals represent revenues received before May 31st, 2015 but the activity giving rise to the revenue will not occur until future fiscal years
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Controller’s Office cont. EXAMPLE OF A REVENUE DEFERRAL
• Example: Rent revenue received in May 2015 but it is for rent due for the month of June 2015 (FYE 2016)
• ORIGINAL Journal Entry- May Entry• Debit - SLXXXX- XXXX
Credit – GL XXXX-2619
• REVERSAL Journal Entry - June Entry• Debit - GLXXXX – 2619• Credit – SLXXXX -XXXX
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Controller’s Office cont.
Pre-PaymentsPre-payments represent expenses or services paid for in the current year but to be used or consumed in the future fiscal year.
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Controller’s Office cont. EXAMPLE OF A PRE-PAYMENT
• Example: UM Department pays June’s rent in May
• ORIGINAL Journal Entry - May Entry• Debit - GLXXXX- 1522
Credit – SLXXXX-XXXX
• REVERSAL Journal Entry - June Entry• Debit - SLXXXX – XXXX• Credit – GLXXXX -1522
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Controller’s Office cont. • Submit Journal REVERSING the accrual or
revenue deferral to be posted in fiscal year 2015-2016 together with ORIGINAL journal
• Each journal should be submitted with proper documentation including reason why a deferral or accrual is needed.
• Each journal should be sent to Martha Arocha via interoffice mail to the Controller’s Office or hand delivered @ Gables One Tower, Suite 150M
• On or before June 18th for 2nd and Final Closing
JOURNAL ENTRY
INVOLVING EXPENSE
ACCRUALS (OTHER THAN SALARIES ) &
REVENUE DEFERRALS SHOULD BE SUBMITTED:
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Controller’s Office cont. They may be presented on various documents such as journal entries, IDR forms and Sponsored form FA11
IDR’S are services rendered by one UM department to another
IDR’s are reviewed in the Controller’s Office before data entry enters into FRS
Interdepartmental charges (IDR’S):
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Controller’s Office cont.
• IDR’S – presented on a paper form due June 5th for 1st Prelim closing and June 17th for 2nd Prelim
• IDR’s – entered on-line through IDR system due May 29th to appear on FY2015 reports
DEADLINES
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Cash Receipt Transactions
• It is extremely important to follow up on cash receipts when sending invoices. Currently, there are monies just sitting in this UM bank account that may belong to your department’s accounts.
Bank of America UM Concentration Account
(Bank 4)
• Refer to the Medical Finance year end memo to ensure that all deposits/cash receipts and related account reconciliations meet the due dates to be included in the fiscal year end numbers.
Bank of America Medical Concentration Account
(Bank 13)
• It is extremely important to reconcile the cash received from the daily bank reports sent by the Treasurer’s Office to ensure that you are recording any amounts that belong to your accounts and they are not just sitting in suspense accounts.
Bank of America Visa, Master Card & AMEX
Account (Bank 16)
IMPORTANT REMINDER - from the Offices of the Controller and Treasurer that incoming cash should be recorded on a timely basis using uniform procedures at fiscal year end & throughout the year. Depts. have a few business days before monthly closes to reconcile cash. Contact the Treasurer’s Office to be added to the distribution list for daily bank reports.
Controller’s Office cont.
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Controller’s Office cont.
• Cash Receipts to Bursar’s Office• 1st prelim – May 29th by 1:00 pm
DEADLINES
PURCHASING
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Purchasing Review all purchasing encumbrances and notify Purchasing Department of any discrepancies
• DMAS Open Commitments Screen & the Open Commitments Status Section in FR90 Report are good tools for this analysis
Ensure that all change orders are processed timely to enable AP to process invoices without delay
• This will ensure that Accounts Payable’s processing of invoices is not delayed and that invoices are processed in the correct fiscal year
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Purchasing cont.
Closing Purchase Orders
• Ensure that all invoices have been paid before closing a PO
• If an invoice is received in late May and the PO has already been closed; a new PO is needed
Change Orders
. • FY15 closes June 19th, 2015
• New change orders for FY16 won’t be processed until FY15 is closed
• An end user can create a change order in UMeNet, but it may not be approved by Purchasing and/or appear in DMAS until mid – June
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Purchasing cont.
Capital Equipment
• All capital equipment needs to be delivered and installed before May 31. If not, it will be charged to FY16
Standing Purchase Orders (SPO’s)
• Standing purchase orders are allowed for services
• SPO’s are NOT allowed for catering and supplies (Airgas is an exception to this rule)
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Purchasing cont.
Sponsored Accounts
• PO’s using a sponsored account may not need to be closed. The only way to know is to check DMAS to see when the account expires
Paper Requisitions
• In general there should be no paper purchase requisitions
• In the future Workday won’t allow us to create paper orders
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Encumbrances (Commitments)
An encumbrance or commitment is a mechanism used to burden or decrease the free balance of an account
Encumbrances will be zero by the 2nd close of the fiscal year end but note that encumbrances on PO’s will carry forward if not deleted with the Purchasing Department
Encumbrances may or may not carry forward
Purchasing cont.
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What are the Steps Involved in Your Purchasing Encumbrance Review of
Open Commitments
• By reviewing the DMAS Open Commitments screen • Or the Open Commitments Status section of RDS Report FR90
Review the validity of open encumbrances:
• Refer to Purchasing Policy BSJ-010- Change or Cancellation of an Order• http://www.miami.edu/finance/index.php/purchasing/polic
ies_procedures/• Contact the Purchasing Dept. at your campus if you need their
assistance or you think there might be a system issue with the remaining encumbrance
What should you do if you encounter open PO’s that have no invoices pending and should be closed
• Review releasing encumbrances/closing PO’s document instructions
• To log on to UMeNet go to: http://enet.miami.edu
UMeNet has an e-form tool that may be used to release encumbrances from the account and delete the PO
Purchasing cont.
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Purchasing cont.
How to Close a Purchase Order
Using the Purchasing Doc Close eform
1. First, be sure all invoices have been paid and all checks have been issued.
2. Open Internet Explorer and go to https://enet.miami.edu
3. Log into UMeNET using the Cane ID username and password. HINT this is the same login used for MyUM to view paychecks and benefits.
4. Click the Purchasing tab.
5. In the green tool bar click Create.
6. From the drop down menu, choose Purchasing Doc Close. HINT If the document doesn’t appear, try clicking the double arrows, then More.
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Purchasing cont.
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Purchasing cont.
13. Type additional comments explaining why the PO needs to be closed. Note attachments are not required by Purchasing and may be utilized for personal records.
14. Click Submit to begin processing.
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Purchasing cont.
• Purchase Orders: create or change orders for old year – May 29th, 2015 by 1:00 pm.DEADLINES
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Purchasing cont.
• Purchasing (Purchase Orders) • Ignacio Calle 8-8963CONTACTS
ACCOUNTS PAYABLE
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Accounts Payable
The last day to submit exceptions (items that could not be delivered to AP by 05/29/15 due to exceptional circumstances) to AP is Tuesday 06/02/15 to be included in the 1st preliminary Report 90.
During the Fiscal Year End processing period, AP will pay an invoice that has insufficient funds on the PO, if you write “OK to Force” on the invoice and print name, sign, and date it.
Check your POs to ensure there is no open encumbrance/unpaid invoice. Contact vendors and request an invoice copy if not yet paid, and submit to AP.
All PO invoices , eChecks, and eBERFs must be submitted for processing by Friday May 29th, to ensure processing to FY15.
Fiscal Year End 2015 processing period will run from 06/01/15 – 06/16/15.
ACCOUNTS PAYABLE FYE15 PROCESSING TIPS
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Accounts Payable cont.
PO invoices must be delivered to Accounts Payable located in Gables One Tower #400, Loc. Code 2943. Invoice copies attached to a Purchase Requisition in ARIBA are document backup only and do not arrive in AP.
The fiscal year applied to an expense is based on when the good/service/transaction took place, and not on when the funding is available in the account.
All items approved on or after June 17th will post to the New Year, FY16.
During the FYE period, payment for eCheck and eBERFs may be delayed for few additional days and may not occur on the same date the document is fully approved.
Final exception items must be in AP no later than 12:00 pm (noon) on Friday 06/12/15, in order to appear in the Second Prelim Report 90. NOTE: AP/Disbursements will make every effort to reach these exception processing timelines, however they are not guaranteed; hence the importance to submit documents by 05/29/15.
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Accounts Payable cont.
It is critical that all cardholders reconciling transactions in the Corporate Account Reconciliation system (CAR), pays close attention to the mapping dates and the period that will be mapped. It is a common practice to map weekly during fiscal year end. The following link provides the dates for mapping to FRS and the mapping period. Any reallocation or splitting of charges must be done within the periods shown for fiscal year end.
The following link provides the dates for mapping to FRS and the mapping period: https://umshare.miami.edu/web/wda/treasurer/Accounts%20Payable/Fiscal%20Year%20Ending/PCard_Mapping_Schedule_FY15.pdf
Purchasing Card
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Accounts Payable cont.
• eChecks & Travel Cards • eBERFs /BERFs (employee
reimbursement)
• Accounts Payable Invoices
• Due date - 1st Prelim – June 2nd • Due date – 2nd and Final – June 12
Noon
DEADLINES
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Accounts Payable cont.
• Accounts Payable• Hazel Burgess – 8 -1962• Elsa Liauwapau – 8- 2287
CONTACTS
PAYROLL
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Payroll Journal, Salary Accrual and Default Account
Payroll salary accrualDefault account
Payroll Journal
Payroll
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Payroll cont.
Default Accounts – are not valid
accounts to hold salary charges.
These accounts are used as temporary buckets until the correct account is
identified.
Default Accounts – must be cleared
Payroll journals must be processed as
soon as possible, no later than June 5th, 2015 for 1st Prelim
closing
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Payroll cont.
For 2nd Prelim and Final closing - DHRS Salary Journals s/b submitted by June
11th, 2015 by Noon
For 2nd Prelim and Final closing
Payroll Accounting
Adjustments in HR Workday s/b transmitted by
June 12th, 2015 by Noon
Note: Any charges left in default accounts
after June 12th, 2015 will be charged to
your dept. accounts
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Payroll cont.
June 1st HR Workday, June 3rd DHRS
For May 1st Prelim Closing Ongoing through June 8th
June 11th DHRS, June 12th HR Workday at Noon – For May 2nd and FINAL closing for FY15
Ongoing, final reflected on June 19th
Payroll Corrections/Payroll Accounting Adjustments Cut Off Dates
Deadlines for Departmental submission Reflected in FRS/DMAS on
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Payroll cont. Salary accruals - will be run by the Payroll Office and will appear on 1st Preliminary closing reports as follows:
Pay Type Pay Period Paid On Entry Estimated FRS Posting date
Bi-weekly payrolls:
5/07/15 – 5/20/15 5/29/15 7 days accrual 6/2/2015
Student payroll:
5/07/15 - 5/20/15 5/29/15 7 days accrual 6/2/2015
9/12 Faculty payroll:
5/01/15 - 5/31/15 5/29/15 7 days accrual Accrue 12th payment (100%)
6/2/2015
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Payroll cont.
• Payroll & default Salaries
• Due date – 1st Prelim closing – June 1 WD, June 3 DHRS
• Due date – 2nd and Final Closing – June 11 DHRS, June 12 WD Noon
DEADLINES
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Payroll cont.
• Payroll • Alicia Lopez – 8-3556 CONTACTS
OFFICE OF RESEARCH
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Office of Research Administration - FYE ‘15 Notes
•Close out is instead based on the award budget year
Sponsored (6) accounts do not close at Fiscal Year End
e-BERF and e-Checks do not have a deadline for Year End on Sponsored Accounts
•Review salaries charged to Sponsored accounts•Salaries should be charged where time/effort was spent•Submit cost transfers before the deadline•Effort must reflect in the appropriate fiscal year•Work Day effort certification period will start Mid August and FY 2015 cost transfers need to have been processed
Critical Points
Clear all encumbrances on Default accounts
Submit all cost transfers to clear Default account by deadline
Submit Non- salary cost transfers before the deadline
Office of Research
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Office of Research cont.
Pay Class FEI/FA-10 WD
Monthly Through 3/31/15 Pay Day Start 4/30/15 Pay Day
Bi-weekly Through 4/6/15 Pay Day Start 4/17/15 Pay Day
Students Through 4/6/15 Pay Day Start 4/17/15 Pay Day
Salary transfers and Default clearing
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Office of Research cont.
• Costing allocation:o Formerly DHRS account distributiono Always use for future allocationso Make sure the costing allocation is prepared on the correct ” position”o Do not fill in the “ Position Restrictions” When you put something in
position restrictions, it narrows what the costing allocation applies to
• Payroll Accounting Adjustmentso formerly salary cost transfer – FEI and FA-10o always use for retro allocationso make sure is prepared on the correct “ position”o make sure is prepared on the correct “earnings”
Tip Sheet Summary for Cost Center ManagersPayroll Accounting Adjustments (PAA) process to ORA
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Office of Research cont.HR Workday – Payroll Accounting Adjustments
IMPORTANT TIPS
Initiated by the Cost Center Managers or the Finance Business Process Initiator
Transmitted to the ORA office for review and approval
When approved, data included in the FRS integration file
Batches released into FRS
For further details how to create payroll accounting adjustment, click link below:
http://www.miami.edu/index.php/workday_hr/training/tip_sheets/finance/
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Key Contact List
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Year End Deadlines Dates below reflect when information must be received in central offices:
(*) – Report 90’s reports can be accessed on-line via the Report Distribution System (RDS) the day after the system produces the reports.
(**) – HR Workday Labor Distribution Reports can be accessed in Workday upon user request, when the reports become available.
Note: Salary information on Report 90’s and HR Workday Labor reports for 1st Preliminary Closing will not reflect the same information. This was done to allow all payroll journal entries received to date to be reflected on FRS on a timely basis. Therefore, only for 1st closing, FRS will have more up-to-date information.
Reference: Year End Closing Memo
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Current Addresses Central Offices
Office of Audit and Advisory ServicesCoral Gables Campus
Jill Baron
OFFICE OF AUDIT AND ADVISORY SERVICES
OBJECTIVES
To create awareness of:
• Internal Controls• ’CaneWatch for
Reporting Improprieties• Audit and Advisory
Services as a Resource
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OFFICE OF AUDIT AND ADVISORY SERVICES
Internal Controls - is a process for assuring achievement of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies.
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OFFICE OF AUDIT AND ADVISORY SERVICES
Internal Controls Reviews and Reconciliations
Perform
frequent
reviews of
financial
activity reflect
ed in FRS
Report 90’s
• Closely review expenses
• Look for inappropriate charges - Is it reasonable?
• Review revenues, including cash receipts for reasonability and outliers
• Compare entries to approved source document (e.g., Invoice, contract, etc.).
• Question everything
• Do not accept an answer that does not make sense
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OFFICE OF AUDIT AND ADVISORY SERVICES
Internal Controls
• The Reconciler should not be approving and recording expenses
• The Cashier should not record the deposits and reconcile to the Report 90’s/ DMAS
• An independent party (no access to cash, inventory, or approval authority)
should review.
Segregation of duties
Compensating Controls
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OFFICE OF AUDIT AND ADVISORY SERVICES
Ensure an Open and Ethical
1
• The U has been the victim of financial fraud perpetrated by its employees.
2
• There are things that each of us can do to maintain ethical standards and financial controls.
3• Internal Control Policy
4• Fraud Policy
5• Training
6•‘CaneWatch Hotline
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OFFICE OF AUDIT AND ADVISORY SERVICES
Detection Methods of Occupational Fraud and Abuse
TipManagement
Review Internal Audit
By Accident Account Reconciliation
Document Examination
External Audit Notified by Police
Surveillance/Monitoring
Confession IT Controls Other
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OFFICE OF AUDIT AND ADVISORY SERVICES
The most common
method of detecting
occupational fraud is….
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OFFICE OF AUDIT AND ADVISORY SERVICES
Initial Fraud and Abuse Detection Methods
Tips is the #1 method for identifying fraud
Management review and Internal audit follow as 2nd and 3rd. Ti
ps
Inte
rnal A
udit
Accou
nt R
econ
ciliatio
n
Exte
rnal A
udit
Notified
by La
w Enf
orce
men
t
Confe
ssion
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
2010 2012 2014
TIPS
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Open, honest communications are the expectation, not the exception.
Employees should feel comfortable approaching their supervisor to discuss a violation of policy that may have occurred. You may also contact Office of Audit and Advisory Services (8-2605).
’CaneWatch can be used to report violations of policies. ’CaneWatch is hosted by EthicsPoint, a third party hotline provider.
’CaneWatch
The University of Miami’s
Confidential Hotline.
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OFFICE OF AUDIT AND ADVISORY SERVICES
’CaneWatch
’CaneWatch is open to any individual who wishes to report a concern regarding irregularities at the University of Miami.
All reported incidents will be considered and, where appropriate, investigated.
University of Miami employees who report an activity that may be in violation of a law, rule, or regulation are protected against retaliation by the Whistleblower Protection Statement.
www.CaneWatch/ethicspoint.comOr call 877.415.4357
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“Fraud is an avoidable waste of University resources. It creates a distraction from important work and negatively impacts employee morale and the University’s reputation. Together, we must work to strengthen internal controls and create an environment where integrity and ethical behavior are relentlessly enforced.”
Joe NatoliSenior Vice President for Business and Finance & Chief Financial Officer
Source: Email sent to University community on April 5, 2012
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For more information please contact:
Jill BaronHospital Audit Manager
Coral Gables 8-2605 Medical [email protected]
Office of Audit and Advisory Services
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Important Note
Please designate a responsible individual in your area to be available through August 28th to answer questions pertaining to journal entries, account status, analysis needed for the auditors, and other information required for the year-end closing.
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Questions?
Fiscal Year End Topics
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Have a Successful Fiscal Year-End 2015!
