“YEAR-END ACCRUAL” FY 14 Statement

Welcome to the Year-End
Accounting Workshop
Andrea Napoli, Manager Accounting Ops
Gary Maccarone, Sr. Staff
Accountant/Outreach Specialist
Anthony Robinson, Sr. Staff Accountant
Today’s Objectives
• Familiarize you with:
– Importance & timing of fiscal year-end processes
– Accounting for FY 14 expenses paid after June 30th
– Accounting for FY 15 expenses paid before June 30th
– Accounting for FY 15 income received before June
30th (deferred income)
– Significant year-end processing dates
– Who to call for assistance
Importance of RIT’s Fiscal YearEnd
• 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
Importance of RIT’s Fiscal YearEnd - 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
Importance of RIT’s Fiscal YearEnd - 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
– Could there be negative consequences to the
– Am I proud to do it?
Importance of RIT’s Fiscal YearEnd - 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
Importance of RIT’s Fiscal YearEnd
• Goal is accurate & timely financial statements
– Timely closing process
– Appropriateness of accounting transactions
Deferred Income
Thorough documentation
– Complete balance sheet account reconciliations
Importance of RIT’s Fiscal YearEnd
• Fiscal year is July 1st - June 30th
– NTID departments follow RIT closing
processes at June 30th
• Accounting sends memo regarding yearend processes to RIT managers in early
– Information posted on Controller’s Office web
Importance of RIT’s Fiscal YearEnd
• 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
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
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
• July 2nd 4:30 PM – Employee Expense
Reimbursements (I-Expenses) must be approved in
Oracle & documentation must be received in AP
Significant Year-End Dates
• July 3rd – July 15th AP will prepare YearEnd Accrual entries for goods received,
services rendered or travel taken on or
before June 30th
• DR
• CR
Department expense account
Significant Year-End Dates
• 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
• CR
Department expense account
– When invoice is received, indicate on Invoice
Payment Forms or Travel Expense Reports
“Accrued FY 14”
Significant Year-End Dates
• 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
Significant Year-End Dates
• 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”
Significant Year-End Dates
• July 14th 4:30 PM – Last Day for department’s
to enter journal entries for Final department
• 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
Who to Call for Assistance
• Invoice Payment Forms
• Travel Expense Reports &
• Purchase Order Invoices
• JE, Petty Cash, Deposits &
All File Feeds
• ProCard, BTA & GTA
• Payroll Expenses
• Dept Stmts, Encumb
Yancey Moore
Jackie Hughes
Catrina Sapp
Kitty Stappenbeck
Mary Kay Tyner
Yancey Moore
Janet Bristol
Gary Maccarone
Valerie Russell
Kitty Stappenbeck
Christa Abugasea
Gary Maccarone
Who to Call for Assistance
• Special & Designated
Gary Maccarone
Projects (1XXXX)
• Grants & Contracts
Sponsored Programs See SPA
(3XXXX projects)
• Gift & Endowment Projects Pricilla Schiffhauer
(2,6 & 7XXXX)
• Agency Accts 9XXXX
Gary Maccarone
• Capital Equipment (84200) Kerry Phillips
• Plant & Fixed Assets
Jane McGrath-Briggs 5-4933
• Budget Entries
Chris Monaco
Year-End Accounting Review
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
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, email - [email protected]
• July 3rd – last day to match invoices to
Purchase Orders
Purchase Orders
• 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
• Encumbrances
– Run Encumbrance Detail Report through
May 31st and compare to department
– “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
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
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
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
Accrual Example
JE Category – Use “YEAR-END ACCRUAL”
FY 14 Statement
DR 01.63100.73150.35.00000.00000
CR 01.15199.32900.00.00000.00000
FY 15 Statement
DR 01.15199.32900.00.00000.00000
CR 01.63100.73150.35.00000.00000
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-
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
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 =
– Debit 01.15199.09000.00.00000.00000
– Credit your department expense account
Prepaid Example
• 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
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
Accounts Receivable
• 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
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
– In July 14 when the payment is received, debit cash
& credit A/R 01.66500.04000.00.00000 to clear the
A/R account
Deferred Income
• Deferred Income – Income is recorded in the
year service is rendered, not when it is
– 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
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
– 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
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
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
Account Reconciliations
• 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
Most Important Things to
• 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
Most Important Things to
• 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
Most Important Things to
• Fiscal Year 2014: Year-End Closing
Procedures are available on the
Controller’s web page:
• Accounting and/or external auditors may
ask for additional information to meet
new external audit requirements
• Contacts
• Gary Maccarone, Sr. Staff Accountant/
Outreach Specialist
• Ext. 5-2237
• Email: [email protected]
• Anthony Robinson, Sr. Staff Accountant
• Email: [email protected]
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