1
WELCOME TO THE
YEAR-END ACCOUNTING
WORKSHOP
Andrea Napoli, Manager Accounting Ops
Gary Maccarone, Sr. Staff Accountant/Outreach Specialist
Anthony Robinson, Sr. Staff Accountant
2
Today’s Objectives
• Familiarize you with:
• Importance & timing of fiscal year-end processes
• Accounting for FY 15 expenses paid after June 30th (accruals)
• Accounting for FY 16 expenses paid before June 30th (prepaid)
• Accounting for FY 16 income received before June 30th
(deferred income)
• Significant year-end processing dates
• Who to call for assistance
3
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.
• 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
• Goal is accurate & timely financial statements
• Timely closing process
• Appropriateness of accounting transactions
• Accruals
• Prepaids
• Deferred Income
• Thorough documentation
• Complete balance sheet account reconciliations
(continued)
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Importance of RIT’s Fiscal Year-End
(continued)
• 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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Importance of RIT’s Fiscal Year-End
(continued)
• 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 26th 4:30 p.m. – Last day Accounts Payable will
accept Purchase Order Invoices, Invoice Payment
Forms, Online Employee Expense Reimbursements
• June 29th 4:30 PM – Last day for cash deposits and
petty cash expenses to be included in FY 15
• June 30th 4:30 PM – Last day for Oracle online payroll
entries – (Summer Salary, Add Pays, Special
Assignments,) for work completed prior to July 1st to
be entered and approved to be included on the prelim
statements
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Significant Year-End Dates
• June 30th 4:30 PM – Last day AP will enter PO
invoices, Invoice Payment Forms
• June 30th 4:30 PM – Employee Expense
Reimbursements (I-Expenses) must be approved in
Oracle & documentation must be received in AP
• July 2nd 4:30 PM – Last day for departments to enter
journal entries for preliminary statements
• July 6th 4:30 PM – Last day to enter invoices in
Accounts Receivable
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Significant Year-End Dates
(continued)
• July 1st – July 13th 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
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Significant Year-End Dates
(continued)
• 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 10th
• DR Department expense account
• CR 01.15199.32900.00.00000.00000
• When invoice is received, indicate on Invoice Payment Forms
“Accrued FY 15”
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Significant Year-End Dates
(continued)
• Email documentation to postmyje@rit.edu, indicating
batch name, JE name
• Appropriate documentation – packing slip, estimate
of the completed work, the date received
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Significant Year-End Dates
(continued)
• 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
2015 Dept Stmt)
• Encumbrances aren’t included in “Available Balance
Column”
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Significant Year-End Dates
(continued)
• July 14th 4:30 PM – Last Day for department’s to enter
journal entries for Final department statements
• July 16th – Final Closing for Departments
• Accounting continues to process significant FY 15
transactions through Aug 5th
• July 17th – 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
5-4900
Jackie Hughes
5-7679
Catrina Sapp
5-2885
Kitty Stappenbeck
5-5580
Mary Kay Tyner
5-7221
Yancey Moore
5-4900
Janet Bristol
5-2372
Gary Maccarone
5-2237
• ProCard, CTA & GTA
Valerie Russell
5-4491
• Payroll Expenses
Kitty Stappenbeck
5-5580
Christa Abugasea
5-2418
Gary Maccarone
5-2237
• Online Employee Expense
Reimbursements
• Purchase Order Invoices
• JE, Petty Cash, Deposits &
All File Feeds
• Dept Stmts, Encumb
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Who to Call for Assistance
• Special & Designated
•
•
•
•
•
•
Gary Maccarone
(continued)
5-2237
Projects (1XXXX)
Grants & Contracts
Sponsored Programs
See SPA
(3XXXX projects)
Accounting
Directory
https://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 the 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 15
• Services rendered or goods received after July 1st
are charged to FY 16
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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; fax 5-6815, e-mail - snlpre@rit.edu
• June 30th – last day to match invoices to Purchase
Orders
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Purchase Orders
(continued)
• Purchase Orders
• July 1st – 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
• e-mail - purchase@rit.edu
• Open encumbrances at June 30th will automatically
be carried over to FY 16
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Invoice Payment Forms
• June 30th –
• Last day for AP to enter Invoice Payment Forms in
Oracle to charge goods & services received by June
30th directly to FY 15
• July 1st – July 13th
• FY 15 expenses will be accrued by AP with a year-
end accrual entry
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Travel Expense Reports
• June 26th
• Last day to enter Oracle online employee
reimbursements for trips taken prior to July 1st
• Must have completed supervisory approval in
order to be included on prelim statements
• July 1st – July 13th
• FY 15 expenses will be accrued by AP on a year-
end accrual entry
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Procurement Card Purchases
• Closing date for PNC ActivePay is June 30th
• Transfer to G/L July 6th – 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
• Change the default account number in ActivePay before July
6th at 8:30am
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Accrual Example
JE Category – Use “YEAR-END ACCRUAL”
FY 15 Statement
DR 01.63100.73150.35.00000.00000 $200.00
CR 01.15199.32900.00.00000.00000 $200.00
FY 16 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 15
• Actual payroll expense is posted in FY 16 & accrual is
reversed
• Effect on department budget in FY 16 is -0-
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Payroll & Benefit Accrual Example
• Wages earned during the bi-weekly pay period 5/29/15 -
6/11/15 (FY 15)
• Pay on 6/19/15 (FY 15)
• Wages earned on 6/12/15 – 6/25/15
• Will be paid on 7/02/15 (FY 16)
• Whole payroll will be accrued for FY15
• Wages for 6/26 - 6/30 (5 days) will be accrued to FY 15 based
on the 25th payroll
• Fringe benefits are also accrued
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Prepaid Expenses
• Prepaid expenses – Expenses paid in FY 15 for goods or services
that will be received in FY 16
• Charge to a prepaid account in FY 15 & charged to an expense in FY 16
on a Prepaid Journal Entry by AP
• Indicate FY 16 expense on Invoice Payment Form
• If you prepaid an expense using your p-card, prepare a Journal
Entry – JE Category = “PREPAID”
• Email documentation to postmyje@rit.edu, indicate batch name in the
subject line
• Debit 01.15199.09000.00.00000.00000, line description: date of event,
name of vendor & invoice #
• Credit your department expense account
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Prepaid Example
(continued)
• In May 2015, you send an Invoice Payment Form to AP for a
service contract for 7/1/15 - 6/30/16; payment is due by
6/30/15
• AP will charge a prepaid account in FY 15
• AP will create a Prepaid Journal Entry to charge your FY 16 budget in July
• In May 2015 you charge a conference registration fee being
held in July 15 on your procard
• Prepare a Prepaid Journal entry, email documentation to
postmyje@rit.edu, indicate batch name in the subject line
• Debit 01.15199.09000.00.00000.00000, line description: date of event,
name of vendor & invoice #
• Credit your department expense account
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Accounts Receivable
• All income for goods or services provided to an organization
outside of RIT during FY 15 should be recorded by June 30th, even
if payment has not been received from the customer
• 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 20th
• 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 the cash is received
• Cash is received in advance in FY 15 and the service
will be provided in FY 16
• Charge to a deferred account in FY 15 & record as
income in FY 16 on a Journal Entry
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Deferred Income Example
• In June 15 several alumni made reservations & paid by
check to attend the 2015 Brick City Weekend in Oct 15
• Deposit the checks to Deferred Income account
01.94420.36280.00.00000.00000
• In October 15, 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
• Email supporting documentation for all prepaid,
accrual,& deferred income journal entries to
postmyje@rit.edu
• Indicate batch name in the subject line
• Line description: date of event, vendor name &
invoice #
• Documentation must be received by July 15th or the
journal entry can’t be processed for FY 15
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Account Reconciliations
• Balance sheet account reconciliations
• Accounts Receivable, Inventory, Suspense, Prepaid, Deferred Income
• Reconciliations for June due July 10th
• Reconcile to preliminary balances
• Use new format
• Make correcting entries by July 14th
• Reconciliations for final balances due July 24th
• Use new format
• 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 15, show
FY 16 date
• Deferred Income – List of customers who paid in FY 15
for FY 16 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 15
and paid in FY 16 (date is non-negotiable) Purchase
Orders, Invoice Payment Forms, Employee Expense
Reimbursements, Procurement Card Transactions,
Payroll & Benefits
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Most Important Things to Remember
(continued)
• Prepaid Expenses – Paid in FY 15 for services rendered
after July 1st (date is non-negotiable)
– Prepaid Account FY 15; FY 16 Expense Account by Journal
Entry
• Accounts Receivable – Service is rendered before June
30th & paid after July 1st
– A/R & Income in FY 15; Cash & A/R in FY 16
• Deferred Income – Cash is received before June 30th,
the service is provided after July 1st
– Cash & Def Inc in FY 15; Def Inc & Misc Inc in FY 16
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Most Important Things to Remember
(continued)
• Fiscal Year 2015: Year-End Closing Procedures are
available on the Controller’s web page:
https://www.rit.edu/fa/controller/accounting
Fiscal Year 2015 closing memo
• 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: gpmatg@rit.edu
• Anthony Robinson, Sr. Staff Accountant
• Email: adratg@rit.edu