3e. Annual Audit & Year End Processes

Annual Audit & Year End Processes

Overview of Year End Processes

• Mid‐August, send all budget authorities lists of people getting paid from each grant. If they will continue into next fiscal year/next grant number, they need to let Restricted Accounting know, so that we can tell HR.
• Monitor encumbrances and blanket PO’s, and make sure that all are completely cleared out by year end.
• Work with Purchasing and Accounts payable to ensure that all remaining transactions are posted quickly and accurately.
• Check to make sure that all outstanding issues on tracked expenses (like travel advances) have been resolved.
• Check to make sure that all PAR forms have been received.
• When reconciling, calculate the amount of the end of year budget rollover on the bottom of the reconciliation spreadsheet

• Calculate the end of year payroll and benefits accrual, and make sure that it posts correctly:
  • August payroll that posts in September will be accrued back to the previous fiscal year. Depending on how the pay periods fall on the calendar, a single payroll might be split between two fiscal years.
  • Benefits that are tied to the hours worked in a pay period (5906, 5907, 5908, 5909, and 5910) will also be accrued back to the previous fiscal year with the payroll portion.
  • All other benefits subcodes are tied to the month in which they are charged to the GL, and will stay in September and not be accrued back to the previous fiscal year.
    • If the grant continues into the new year, do nothing. The benefits can stay in the account in the new fiscal year.
    • If the grant in question ends 8/31, the September benefits must be evaluated by individual employee. If the grant program continues under a new award number, and the employee in question continues to work for the grant, transfer the benefits to the new grant account number.
    • If the employee does not continue to work for the grant program, or the grant program is entirely discontinued, transfer the benefits charges to the department’s 10 account.

• After the final reconciliation for the year has been completed, do the end of year budget transfer for all continuing accounts:
  • Close the current year by CR all expense subcodes by the available budget remaining, DR the revenue subcode by the total remaining budget.
  • Open the new year by CR revenue and DR expenses, for the amount that should roll over from the previous year’s unspent funds.
    • For grants that are closing during the fiscal year, there is no need to do closing budget entries.
    • Re‐pull salary information for the new year, and adjust any payroll JE’s for continuing grants to reflect the annual increase.

• Restricted Accounting Year‐End Entries:
• Objective: For 8/31 Revenues to equal Expenses (Closing Balance=0)
• Following Any Reconciling Entries:
  • For balances of $10 or less (debt or credit): Write off balance to Miscellaneous:
    • 10‐0‐07001‐4812‐00
  • For all remaining accounts:
    • If Expenditures>Revenues (positive Closing Balance), set up a receivable for the balance: DR receivables (1300), CR revenue (federal 4301, state 4401, local government 4501, local private 4601 or per account). Description: ACCRUE/REV/{account name}.
    • If Revenues> Expenditures (negative Closing Balance), DR Revenue, Cr Def Revenue (2501). (sub‐code 2501 will probably need to be set up in Datatel).
    • When billing the Final report (Invoice) during year end, CR Receivables and DR Revenue for all unbilled expenditures in the same year. If there are expenses in prior year that have not been billed, keep in mind that a journal entry was made Dr Receivable Cr Revenue in prior year. In the new year the receivable of unbilled expense will rollover as an opening balance in the receivable. When you invoice for the expense in old year and new year the JE must only be set up Dr Receivable Cr Revenue for expense in new year.
    • On all (31, 32, 33, 34) accounts run a GLTB summary report in “Datatel”. Review all expenditures and follow the process above.
  • For 84 accounts belonging to the E3 Alliance (As of FY2016, E3 is now treated as a private account 34).
    • Because E3 84 accounts utilize a special GL (and are entirely balance sheet liability accounts), they must be manually closed out. Revenues and Expenses will not be zeroed out during the automatic Datatel closing process.
    • Once all fiscal year transactions have posted, create the closing JE and date it 9/1 of the new fiscal year.
    • DR Revenue and CR all expenses for the total amounts booked in the previous year. Use subcode 2730 (funds held in custody) to balance the JE. 2730 serves as the fund balance in this account structure.
    • Make sure that the person keying the JE into Datatel knows that the type should be “Opening Balance,” not “General”
    • This JE will adjust the opening balance in the new fiscal year to remove accumulated revenues and expenditures that rolled forward from the previous year, manually achieving the proper closing process.

Year End Audit Schedules:

1. Federal/State Expenditures by CFDA number Audit Schedule: (Provide a reconciliation of the expenditures to the Federal Revenue)

• Run a GLBR in Datatel for Funds 31 and 32, “Annual Budget Report”.

• Under the screens be sure to do the following:

• Fiscal Year (current year), Annual, Calendar Ending “8” Include Account “A” all statuses under GL standard selection screen, include funds 31 and 32, and include subcodes

5,6,7,8,9

• Break on Fund and Unit

• Show individual account “N”

• Rerun the report with only object code 4 for revenues

• Open the Schedules of Expenditures of Federal Awards, and key in the actual expenditures for each grant in fund 31 on the detail page, using the YTD Actuals column

• Make sure to confirm with the CFDA website that the CFDA program descriptions are up to date and accurate.

• Using the most current instructions from THECB, make any formatting changes required to this schedule.

• Expenditure amounts should be listed net of any pass‐throughs.

• Make sure to add in the amount for Pell from the indirect cost report (located in current fiscal year/Del on T drive)

• At year end, the total expenditures should match the total revenues from the revenue GLBR

• Open the Schedules of Expenditures of State Awards, and key in the actual expenditures for each grant in fund 32 on the detail page, using the YTD Actuals column.

• Using the most current instructions from THECB, make any formatting changes required to this schedule.

• Expenditure amounts should be listed net of any pass‐throughs.

• At year end, the total expenditures should match the total revenues from the revenue GLBR. However, expenditures in 97204 (ORP/TRS/ERS), TPEG accounts must be

subtracted from the total expenditures. Include the reconciliation tape on the GLTB, and make notes on the expenditure report to indicate which expenditures were removed.

• If revenues and expenditures are out of balance, the difference can probably be found in TPEG or CWS accounts. See Student Accounting.

2. Federal/State passed through to the listed sub‐recipients by the college

1. Run a GLTB in Datatel for Funds 31 and 32 with sub‐code 6583.

2. Review each account and determine the Sub‐recipients.

3. Key data from GLTB into Schedule of Expenditures of Federal/State Awards pass Through on the T drive

3. Indirect Cost recoveries tied to the G/L Audit Schedule

• Run a summary GLTB in Datatel for the following:

a. 10‐0‐05001‐XXXX‐00; 4302, 4503,

b. Redo for Fund 31, 32, 33, 34, 36 subcode 6592

• Reconcile 10 accounts to the grant accounts

• Key data from GLTB into Schedule of IC‐AA on T drive

4. Administrative Allowance recoveries tied to the G/L Audit Schedule

• Run a summary GLTB in Datatel for the following:

a. 10‐0‐05001‐xxxx‐00; 4303, 4402, 4502, 4602

b. Redo for Fund 31, 32, 33, 34 with sub‐code 6588.

• Reconcile 10 accounts to the grant accounts. 4303 will always be out of balance by TPEG

• Key data from GLTB into Schedule of IC‐AA on T drive

5. Schedule of Restricted Fund Balance/Net Assets

• Run a GLTB on Fund 31, 32, 33, 34, 36, 37

• Run separate reports for the following sub‐codes

1) “3999” – Fund Balance

2) “5, 6, 7, 8,” ‐ Expenditure

3) “4” ‐ Revenue

4) “9” – Other Additions

• Key Totals of all the funds into the Schedule of Restricted Fund Balance on the T drive. Total should balance to the fund balance.

6. Schedule of Capital Grants or Capital Appropriations: Review grants that have capital items.

• Run GLTB on Fund 31,32,33,34 under sub‐code 6701,6801‐6806,7701‐7708

7. Copy a list of all Grant Accounts

8. Run Restricted Clearing Account GLTB – it must have a zero balance 10‐0‐00000‐1389‐00

9. Budget Awards not Received or Expended as of August 31

• These are contract and grants already committed, multi‐year awards, or funds awarded during fiscal year, for which monies have not been received or funds expended.

• Run a GLBR in Datatel for the next fiscal year all new budgets should be updated. Run fund 31,32,33,34 on all multi‐year accounts. Or in the next fiscal year the reconciliation

spreadsheet should be update with the carry forward budget amount. Refer to grant list

• Notify Student Account to provide information for Pell and other Federal awards.

10. Cheryl Coe should send a copy “Students Receiving Financial Aid” for Note 4 in the annual audit.

11. Schedule of Gift accounts

• Run a summary GLTB for fund 36. Put the closing balance amounts on the Schedule of Gift accounts on the T drive. Make sure to exclude unit 00000.

12. Schedule of Significant Receivables

• Run a GLBR in Datatel for Funds 31, 32, 33 and 34, “Annual Budget Report”.

• Under the screens be sure to do the following:

• Fiscal Year (current year), Annual, Calendar Ending “8”

• Include Account “A” all statuses

• Under GL standard selection screen, include funds 31, 32, 33 and 34, and include subcode 1. Make sure to exclude unit 00000

• Break on Fund and Unit

• Show individual account “N”

• Fill in the Schedule of Significant Receivables on the T drive.

13. Payroll Cost recoveries tied to Payroll & Benefits Reclamation subcodes

• Run a summary GLTB on 4504 across all funds

• Run a summary GLTB on 6576/6577 across all funds

• The totals should net out.