Welcome to the Year-End Accounting Workshop

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Welcome to the Year-End Accounting Workshop

Andrea Napoli, Manager Accounting Ops

Gary Maccarone, Sr. Staff Accountant/Outreach Specialist

Anthony Robinson, Sr. Staff Accountant

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Today’s Objectives

• Familiarize you with:– Importance & timing of fiscal year-end processes – Accounting for FY 14 expenses paid after June 30th

(accruals)– Accounting for FY 15 expenses paid before June 30th

(prepaid)– Accounting for FY 15 income received before June

30th (deferred income)– Significant year-end processing dates– Who to call for assistance

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Importance of RIT’s Fiscal Year-End

• Impact of events in the external environment (“corporate America”) on RIT

• RIT environment– No history of regulatory violations– Culture isn’t tolerant of fraudulent accounting– While risk for fraud exists in all organizations,

management’s overall assessment is that RIT’s internal control & accounting environment is strong

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Importance of RIT’s Fiscal Year-End - Ethics (continued)

• RIT is committed to governing our community in a way that is both ethical and honest, and serves as a role model to our students by demonstrating honest stewardship of university assets and resources.

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Importance of RIT’s Fiscal Year-End - Ethics (continued)

• Begins with YOU• 4 questions to ask:– Does this follow RIT policies and procedures?– Does this affect the students or others in a negative

way?– Could there be negative consequences to the

University?– Am I proud to do it?

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Importance of RIT’s Fiscal Year-End -

Ethics (continued) • Anonymous whistleblower system to

report possible misconduct relative to financial reporting, accounting, internal control, regulatory compliance, and use of Institute resources.

• Phone 866-294-9358/866-294-9572 TTY• http://www.ethicspoint.com

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Importance of RIT’s Fiscal Year-End (continued)

• Goal is accurate & timely financial statements– Timely closing process– Appropriateness of accounting transactions

• Accruals• Prepaids• Deferred Income• Thorough documentation

– Complete balance sheet account reconciliations

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• Fiscal year is July 1st - June 30th

– NTID departments follow RIT closing processes at June 30th

• Accounting sends memo regarding year-end processes to RIT managers in early June– Information posted on Controller’s Office web

page

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• Auditors arrive in mid August to begin the year-end audit– Audit continues for 3 - 4 weeks

• Financial statements are ready for distribution & presentation to the RIT Board of Trustees

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Significant Year-End Dates

• June 27th 4:30 PM – Last day for cash deposits and petty cash expenses to be included in FY 14

• July 2nd 4:30 p.m. – Last day Accounts Payable will accept Purchase Order Invoices, Invoice Payment Forms, Travel Expense Reports & Employee Expense Reimbursements through Oracle

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Significant Year-End Dates

• July 2nd 4:30 PM – Last day for departments to enter journal entries for preliminary statements

• July 3rd 4:30 PM – Last day to enter invoices in Accounts Receivable

• July 3rd 4:30 PM – Last day AP will enter PO invoices, Invoice Payment Forms, & Travel Expense Reports

• July 2nd 4:30 PM – Employee Expense Reimbursements (I-Expenses) must be approved in Oracle & documentation must be received in AP

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Significant Year-End Dates (continued)

• July 3rd – July 15th AP will prepare Year-End Accrual entries for goods received, services rendered or travel taken on or before June 30th

• DR Department expense account• CR 01.15199.32900.00.00000.00000


• Departmental Action Required– Departments will only prepare Year-End Accrual

JEs for goods and/or services received on or before June 30th for which the vendor Has Not Provided An Invoice by July 11th

• DR Department expense account• CR 01.15199.32900.00.00000.00000

– When invoice is received, indicate on Invoice Payment Forms or Travel Expense Reports “Accrued FY 14”

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• Send documentation to Accounting indicating batch name, JE name and fax to 5-5583– Appropriate documentation – packing slip,

estimate of the completed work, the date received or future date

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• July 7th – Preliminary Closing • July 8th – Preliminary statements– Departments review June transactions &

make corrections before final closing

• Use the special June department statement (RIT FY 2014 Dept Stmt)– Encumbrances aren’t included in “Available

Balance Column”

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• July 14th 4:30 PM – Last Day for department’s to enter journal entries for Final department statements

• July 17th – Final Closing for Departments– Accounting continues to process significant FY 14

transactions through Aug 6th • July 18th – Final Department Statements• Accounting & Financial Reporting prepare

year-end schedules & financial statements for external auditors

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Who to Call for Assistance

• Invoice Payment Forms Yancey Moore 5-4900Jackie Hughes 5-7679Catrina Sapp 5-2885

• Travel Expense Reports & Kitty Stappenbeck 5-5580I-Expenses Mary Kay Tyner 5-7221

• Purchase Order Invoices Yancey Moore 5-4900Janet Bristol 5-2372

• JE, Petty Cash, Deposits & Gary Maccarone 5-2237All File Feeds

• ProCard, BTA & GTA Valerie Russell 5-4491• Payroll Expenses Kitty Stappenbeck 5-5580

Christa Abugasea 5-2418• Dept Stmts, Encumb Gary Maccarone 5-2237

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Who to Call for Assistance (continued)

• Special & Designated Gary Maccarone 5-2237Projects (1XXXX)

• Grants & Contracts Sponsored Programs See SPA(3XXXX projects) AccountingDirectoryhttps://www.rit.edu/fa/controller/sponsored/assignments.html

• Gift & Endowment Projects Pricilla Schiffhauer 5-7872(2,6 & 7XXXX)

• Agency Accts 9XXXX Gary Maccarone 5-2237• Capital Equipment (84200) Kerry Phillips 5-2297• Plant & Fixed Assets Jane McGrath-Briggs 5-4933• Budget Entries Chris Monaco 5-5982

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Year-End Accounting Review

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Accrual Based Accounting

• Expenditures are recognized in year goods are received or services rendered; not when ordered or paid for – Services rendered or goods received on or

before June 30th are charged to FY 14 – Services rendered or goods received after

July 1st are charged to FY 15

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Purchase Orders

• Goods must be received or services rendered on or before June 30th – Fax Receiving documentation (i.e. packing

slip or invoice) if items are delivered directly to your department • Steve Lipson; ext. 5-2119, fax 5-6815, e-

mail - [email protected]

• July 3rd – last day to match invoices to Purchase Orders

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Purchase Orders (continued)

• Purchase Orders:– July 3rd – Procurement Services runs

Uninvoiced Receipts Report• Creates Accrual Journal Entry and Accrual

Encumbrance Entry– If goods are received or services are rendered by

June 30th but not received in Oracle, send AP the invoice with proof of receipt, AP will prepare the Year-End Accrual entry

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Encumbrances

• Encumbrances– Run Encumbrance Detail Report through

May 31st and compare to department statement

– “Finally close” old purchase orders• Mary Jane Kosel; ext. 5-5885, e-mail -

[email protected]– Open encumbrances at June 30th will

automatically be carried over to FY 15

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Invoice Payment Forms

• July 3rd – – Last day for AP to enter Invoice Payment

Forms in Oracle to charge goods & services received by June 30th directly to FY 14

• July 3rd – July 16th – FY 14 expenses will be accrued by AP with

a year-end accrual entry

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Travel Expense Reports

• July 3rd • Last day to enter expense reports in Oracle

for trips taken prior to July 1st

• July 3rd – July 16th • FY 14 expenses will be accrued by AP on a

year-end accrual entry

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Procurement Card Purchases

• Closing date for JP Morgan Chase PaymentNet is June 30th

• Transfer to G/L July 3rd – 8:30 a.m.• Last minute purchases might not be

charged to your June p-card statement– Accounting will process Year-End Accrual

entries for a transaction date of June 30th or prior and a post date of July 1st or later

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Accrual Example

JE Category – Use “YEAR-END ACCRUAL”

FY 14 Statement

DR 01.63100.73150.35.00000.00000 $200.00

CR 01.15199.32900.00.00000.00000 $200.00

FY 15 Statement

DR 01.15199.32900.00.00000.00000 $200.00

CR 01.63100.73150.35.00000.00000 $200.00

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Payroll & Benefit Accrual

• Payroll & benefit expenses incurred in June, but not paid until July, are automatically accrued by Accounting (includes Add Pays)– Accrued = charged to FY 14

• Actual payroll expense is posted in FY 15 & accrual is reversed – Effect on department budget in FY 15 is -0-

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Payroll & Benefit Accrual Example

• Wages earned during the bi-weekly pay period 5/30/14 - 6/12/14 (FY 14)– Pay on 6/20/14 (FY 14)

• Wages earned on 6/13/14 – 6/26/14– Will be paid on 7/03/14 (FY 15)– Whole payroll will be accrued for FY14

• Wages for 6/27 - 6/30 (4 days) will be accrued to FY 14 based on the 26th payroll– Fringe benefits are also accrued

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Prepaid Expenses

• Prepaid expenses – Expenses paid in FY 14 for goods or services that will be received in FY 15– Charge to a prepaid account in FY 14 & charged to an

expense in FY 15 on a Prepaid Journal Entry by AP– Indicate FY 15 expense on Invoice Payment Form

• If you prepaid an expense using your p-card, prepare a Journal Entry – JE Category = “PREPAID”– Debit 01.15199.09000.00.00000.00000– Credit your department expense account

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Prepaid Example (continued)

• In May 2014, you send an Invoice Payment Form to AP for a service contract for 7/1/14 - 6/30/15; payment is due by 6/30/14

– AP will charge a prepaid account in FY 14

– AP will create a Prepaid Journal Entry to charge your FY 15 budget in July

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Accounts Receivable

• All income for goods or services provided to an organization outside of RIT during FY 14 should be recorded by June 30th, even if payment has not been received from the customer

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Accounts Receivable (continued)

• Many departments are using Oracle Accounts Receivable System to invoice customers (JE’s are automatic)

• If you are not using A/R, when the customer is invoiced, the department prepares a JE to debit Accts Receivable & credit the appropriate Income account

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Accounts Receivable Example

• IPI provided research testing for 3M Corporation on May 14th

– When the invoice was sent in May, a JE was recorded to debit A/R 01.66500.04000.00.00000 & credit Corporate Contracts Income 01.66500.52100.00.00000.00000

– In July 14 when the payment is received, debit cash & credit A/R 01.66500.04000.00.00000 to clear the A/R account

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Deferred Income

• Deferred Income – Income is recorded in the year service is rendered, not when it is received

– Cash is received in advance in FY 14 and the service will be provided in FY 15

– Charge to a deferred account in FY 14 & record as income in FY 15 on a Journal Entry

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Deferred Income Example

• In June 14 several alumni made reservations & paid by check to attend the 2014 Brick City Weekend in Oct 14

– Deposit the checks to Deferred Income account 01.94420.36280.00.00000.00000

– In October 14, Alumni Relations will record a JE to record the income • Debit 01.94420.36280.00.00000.00000 – Deferred Income• Credit 01.94420.59000.35.00000.00000 – Misc Income

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Documentation Requirements

• Send supporting documentation for all prepaid, accrual,& deferred income journal entries to Accounting – Indicate batch name, journal name & dates

for the item– Must be received by July 15th or the journal

entry can’t be processed for FY 14– Fax to ext. 5-5583

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Account Reconciliations

• Balance sheet account reconciliations – Accounts Receivable, Inventory, Suspense,

Prepaid, Deferred Income

• Reconciliations for June due July 11th

– Reconcile to preliminary balances

• Make correcting entries by July 14th • Complete confirmation/certification

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Account Reconciliations (continued)

• Accounts Receivable – Prepare a list of unpaid invoices & an aging

• Inventory – Physical count taken at June 30th provide details, GL = Count

• Prepaid Expense – List of invoices paid in FY 14, show FY 15 date

• Deferred Income – List of customers who paid in FY 14 for FY 15 services/goods

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Most Important Things to Remember

• NTID follows all RIT year-end processes• Accrual based accounting – Goods

received or services rendered by June 30th are charged to FY 14 and paid in FY 15 (date is non-negotiable) Purchase Orders, Invoice Payment Forms, Travel Expense Reports, Procurement Card Transactions, Payroll & Benefits

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Most Important Things to Remember (continued)

• Prepaid Expenses – Paid in FY 14 for services rendered after July 1st (date is non-negotiable)– Prepaid Account FY 14; FY 15 Expense Account by

Journal Entry• Accounts Receivable – Service is rendered

before June 30th & paid after July 1st – A/R & Income in FY 14; Cash & A/R in FY 15

• Deferred Income – Cash is received before June 30th, the service is provided after July 1st

– Cash & Def Inc in FY 14; Def Inc & Misc Inc in FY 15

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Most Important Things to Remember (continued)

• Fiscal Year 2014: Year-End Closing Procedures are available on the Controller’s web page: https://www.rit.edu/fa/controller/accounting

• Accounting and/or external auditors may ask for additional information to meet new external audit requirements

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Questions?

• Contacts• Gary Maccarone, Sr. Staff Accountant/

Outreach Specialist• Ext. 5-2237• Email: [email protected]

• Anthony Robinson, Sr. Staff Accountant • Email: [email protected]

Documents

Welcome to the Year-End Accounting Workshop