Financial Records System Manual
| Chapter 21 - Year End: That Special Time of Year | |||
| GENERAL Colorado State University's fiscal year is July 1 to June 30. Two closings are processed by the FRS. The first closing captures, in addition to the normal June activity, accrual entries such as accounts payable, accrued payroll expenses, accounts receivable adjustments and prepaid expenditures. The second closing captures adjusting entries from the campus and Business and Financial Services. The whole process results in the University's year-end financial statements. SCHEDULING AND DEADLINES Closing out the fiscal year presents a unique set of circumstances which require different schedules and processes. During the year end cycle, FRS will be tracking two fiscal years; the one being closed and the one being opened. Departmental users will be allowed access to the old fiscal year until the first close. After that, only the new year files will be available. Business and Financial Services will have access to both years throughout the year-end period. The same deadlines apply for June closings as applied for other months; one working day prior to the scheduled closing. Interactive input will be accepted until 6:00 P.M. of the scheduled closing. Other specific deadlines are distributed each year-end. SYSTEM REQUIREMENTS Many FRS programs and reports only run at year end. This presents unique scheduling problems. Business & Financial Services, Sponsored Programs and Information Systems must coordinate schedules to ensure that all required processing is completed in the proper sequence. Information Systems treats the closing of the old year much like any other month except for separate fiscal year files; encumbrance processing; and the extra reports that must be scheduled, tested and run. Once the old year is closed, ending balances must be transferred to the new year. Special year-end programs are required to accomplish these tasks. Dual Fiscal Years Having two fiscal years operating simultaneously means that input to FRS must identify the fiscal year that is applicable. This is accomplished by the fiscal year field on the Batch Header (screens 09A and 030). The system tracks and reports on the two years individually. Unique Year-End Reporting The year end process requires additional reporting to monitor the progress of the year end closing and to report the financial status of the institution. These year-end reports must be scheduled for production by the FRS. Reports unique to year-end include special FBM094'S, FBM095'S, Z Writers and FBM070'S. Some of the FBM094'S and FBM095'S are run every day to allow the fund accountants to monitor the progress of the closing. Other FBM094's and FBM095's sort financial data for financial statement presentations. Most Z-Writer reports are used by Sponsored Programs Accounting to close out sponsored programs. FBM070's are utilized to report the financial status of the institution. Please note that FBM070's must be maintained to include any changes during the year to fund groups, accounts, account controls, subcodes, attributes and accounting processes. FBM070'S should, therefore, be test run prior to year-end to ensure that all changes processed during the year are reflected. Unique reporting is used during June, July and August. These should be reviewed with Information Systems to ensure that their inclusion is still required and that they are scheduled to be run on the proper date. Business & Financial Services should notify Information Systems if non-scheduled reports need be added to the year-end schedule. New-Year/Old-Year Transition The new-year/old-year transition involves several processes. These include the elimination of closed or deleted accounts, verifying that all active accounts are transferred to the new year file, verifying that ending balances from the old year are transferred as beginning balances for the new year, reestablishing encumbrances for selected fund groups, checking to ensure that project year balances are retained, and ensuring that automatic budget reallocation instructions are carried forward to the new year. The key to year-end transition is the year-end transfer attribute (FG046 and FS058). This attribute controls the type of year-end processing accounts within the FRS will receive. At Colorado State University, three options are provided.
Create the New-Year-Files (FBY001) FBY001 creates a set of skeleton records for the new year. These records are in the GL, SL, OC, Suspense and Batch Areas. The GL and SL records contain accounts designated to continue in existence from the current (old) year. The accounts have the same attribute values and dollar records, but all dollar fields are initialized to zero. FBY001 creates the new year records on the data base. The Report Description records and the table entries for the Chart of Accounts, Automatic Budget Reallocation and Global Subcode Edit tables remain the same. New year control records are created on the data base for open commitments and suspense items. The Processing Month and the Fiscal Year fields on the FA Main OOAK Record are updated. The year-end transfer attribute controls the selection of accounts (along with the Delete Flag) from the GL and SL. If an SL account's delete code is 1 and/or the transfer attribute has a value of C, the delete code is reset to 2 and the account is carried forward for prior-year dollars only. The code is carried forward to the new year. If an SL account's delete code is 2, it is not carried forward to the new year. If an account is carried forward (GL or SL), the attribute record is unaltered. All dollar records are brought forward, but all dollar fields are set to zero. In the GL, flags are unaltered. In the SL account the flags are carried over as is, with the exception that the BUDSUP flag is reset to zero in all accounts. Frequently, FBY001 is run up to three months before the year-end. It may be run at any time before or after the start of the fiscal year. (For documentation reference purposes, we assume the start of the fiscal year is July 1.) If FBY001 is run before July 1, new accounts which start July 1 may be created through the normal maintenance process in the new records. Other data (new, changed attributes or budgets) may also be maintained. On July 1, the skeleton set of records is ready to receive new-year data. However, unlike a normal month-end, the old year cannot be closed immediately. It must remain open to enable the user to make various year-end adjustments. It must remain open to enable the user to make various year-end adjustments. Optimally, this could be done within two to three weeks; however, it can be a month or more. Budget Entries to the New Files (FBY005) Enter next year's budgets (with transactions) for the new year via FBY005. The records structure defines a "Next Year Budget" field. The user may load this throughout the year (for fiscal year accounts), such as, in the current year for the next year. After the skeleton records are established (FBY001), FBY005 may be executed to create budget transactions to enter the new-year records through records maintenance. The user may manually create the input for the full budget or to supplement the automatic process. this step is desirably completed before July 1, or the beginning of the fiscal year, but may be later. After this step, it is recommended to run FBD043, FBM009 and FBM061; compare the old year figures with the new year. Note: FBY005 is also refered to as the Transaction Generator in the IDMS DP documentation.< Control Record Reset (FBY009) This program is run on or about the first of July. It switches the controls for the current year with the new year controls. Project Account Closing (FBY002) While June 30 may be the end of the fiscal year, for most grants/contracts and construction accounts it is just a normal month-end. To begin new-year processing of project accounts, a "month-end like" process must occur. Therefore, the SL and particularly the OC records need to be processed around July 3-5, at least before any new-year activity is entered. FBY001 moves all GL and SL accounts to the new year. To start the new fiscal year, all SL accounts with a year-end transfer attribute of P must be transferred into the new-year records. FBY001 may have already brought this account into the new year. If project accounts were subsequently added to the old records, FBY002 recognizes this and brings the account forward at this time. For these accounts, each old attribute record is added (or replaces the existing record) into the new year. The attributes are as they were in the old records. Each new dollar record is added without change except for the rolling of the dollar data. If the record already exists, it is updated. The current month, fiscal year-to-date and project-to-date from the old records are added to the project-to-date in the new records. All budget fields, the encumbrance field and the budget balance available are added to their corresponding fields in the new records structure. FBY002 also acts like the Month-end Roll program (FBM003) for project accounts. In this example, with June being the last month of the fiscal year, FBY002 will add the current month dollars to the project fiscal year-to-date dollar accumulator and also the appropriate quarter actual accumulator. If the project fiscal year-end attribute of the fourth quarter-end attribute is 06 (such as, June), then the corresponding dollar fields are zeroed out. This is done on an account-by-account basis. All Open Commitment records related to these SL accounts without their drop flags on are transferred as is to the new records. If any new records already exist with the same key, the current outstanding amount and liquidating expense amount are added to the new file record corresponding fields. Although FBY002 does not update GL dollar records, it checks for GL accounts created in the old year since FBY001 was executed. If the check is positive, these active accounts are brought over to the new year with all dollar fields set to zero. Without this action, it is possible to have a new-year SL account without a corresponding or mapping GL account. After this step, it is recommended to run FBM009 and FBM061 and compare the old year amounts with the new year. The GL will be handled in Step 4 in its entirety by FBY003, which is explained next. Processing of old-year vouchers against non-project accounts will still be necessary, and most likely voluminous. It may be desirable to continue to direct the AP activities to the old-year records and allow a limited number of controller-appointed personnel to access the new year records for the purpose of processing new-year charges. When the preponderance of charges affects the new year, then the majority of users accessing AP should be redirected to the new year's records. The FA accounting feed flag setting of B in the AP Start/End Session Screen (130) assists in this process of updating old versus new year FA records with the AP Data. The screen will allow three options for the FAS feed flag; a Y for Yes, an N for No and a B for Batch. When a B is entered, it will instruct the integration process to continue immediate updating of the Accounts Payable records, but will also prepare a batch to be fed to the proper accounting records, either new or old, at a later point (when VBD020 is run). When a large volume of old-year transactions are processed in AP, the user can direct the on-line FA updates to the new-year accounts and process the old-year charges to accounting by batch. FBY002 sets a delete flag in the old-year project accounts. Therefore, charges cannot be charged erroneously to old-year project accounts. Once the volume has changed, the flow can be reversed, the old-year FA records will be locked out from on-line processing and only updated by batch processing until the year-end work is completed. On-line activity will be directed to the new-year FA records. Fiscal Year Closing (FBY003) After the old year has received all known and appropriate year-end adjustments, and all outstanding suspense records have been corrected, the ending balances are transferred into the new-year records. In the GL, this includes all account control records 1VVV to 3VVV that have an ending balance (including bank accounts) and, depending upon the year-end transfer attribute, other selected account control records. Refer to Section 12.1 of this manual. Suspense records are not transferred to the new year, but must be corrected in the old year. All suspense records must be cleared in the old or this program will not run successfully. All active SL accounts not previously created in the new year records by FBY001 or FBY002 are brought over at this time. Dollar activity is only carried over for the project accounts as in FBY002. FBY003 can also roll forward the last month's (e.g., June) current month dollars to the project/alternate fiscal year dollar accumulator and/or quarter-to-date dollar accumulator. This process assumes that the attributes controlling the dollar roll forward is set the same on all F accounts. If the ending quarter agrees with the fiscal year end, (such as, 06), then the quarters will be zeroed out. If the user wants to carry forward the dollars in these accounts, a special control record parameter must be used. After this step, it is recommended to run FBD043, FBM009 and FBM061 and compare the old year amounts with the new year. Budget/Commitment Carry Forward (FBY005) This step is optional. It depends on the policies of the institution. Some institutions allow the accounts to carry forward budget dollars. Some require that the allocated budget be dropped at year-end. The fiscal year accounts may have encumbrances and/or budget surpluses or deficits that the user desires to carry forward into the new year. FBY005 can create the transactions for input to the maintenance of the new year records. This may be done selectively for each transaction type. Note: FBY005 is also refereed to as the Transaction Generator in the IDMS DP documentation. Prior Year Accumulator Load (FBY006) During the first month of the new year, after the old year is completed, the prior year actual or historical accumulators (current month and year-to-date for July last year, and the prior year-end, e.g., June 30) must be initialized, assuming July 1 fiscal year. After FBY003 has been executed, FBY006 loads prior year history to the new-year records. GL/SL Synchronizer (FBY007) This program validates certain internal accumulators to ensure that the GL and SL records are properly synchronized. This program resets the GL counter tracking the number of SL accounts which are mapped to it. Depending on the timing of FBY001, FBY002 and FBY003 execution, it may be helpful to execute FBY007 after each step. GL/SL Report History File Purge (FBY004) -- Optional This step is optional and may be run at any time during the year if desired. The GL/SL Report History File maintained by FBM050 contains a record for each fiscal year that a 10-digit account is in existence. The start of each new fiscal year causes this file to increase in size equal to the count of all GL and SL 10-digit records in the data base. If the user determines that data on the Report History File are no longer useful, he may remove those records by using FBY004; this will increase the processing efficiency of the file in later cycles. If all data on the file are relevant and useful, do not run this step. Old Year Purge (FBY008) This program performs two functions. The first is to reset the FA Main OOAK Record to inactivate the "other", or old year, from processing. This is needed for two reasons: to keep anyone from inadvertently updating a closed year, and to clear out the control information so that FBY001 can run. The other function performed by FBY008 is to actually erase all of the records associated with a specific fiscal year from the data base. When the erase function is performed, the year being deleted cannot be the year that is currently active (meaning the current fiscal year on the FA Main OOAK Record.) THE YEAR-END CHECKLIST Closing out the old year involves many factors. Year-end closing entries must be processed to reflect the correct account balances. Ending balances from prior year financial statements should be compared to beginning balances in the FRS to verify that they are the same. Corrections should be entered with a 098 transaction code. Reviews must be conducted to ensure that attributes used to generate financial statements are present and accurate. These are only a few of the tasks that must be completed at year end. Each person involved in the year-end close should prepare a checklist of required tasks. |