Fiscal Year 2007

CAFR Debriefing

 Thank you all for your assistance.
 Vavrinek, Trine, Day & Co., LLP auditors were happy with the year-
  end schedules, especially when backup documentation was attached.
 Audit was completed 2 weeks earlier than prior year.
 Audit findings:
   – Accounts Receivable-System (112100)
        No Aging report supporting the backup documentation
        No internal departmental spreadsheet supporting the GL
   – Credit Balances in Asset Accounts
        Certain asset accounts with credit balances, without proper
          documentation. Overall, immaterial, but deficiency in

Frequently Asked Questions

Question 1:

Accounts Payable
   The ACO posted additional Accounts
   Payable for vouchers entered from July 1
   through August 31 for services incurred
   prior to June 30. Can my department
   revise the prior year revenue accruals in
   September as a result of the additional AP

Answer 1:

Accounts Payable:

   No. You should estimate your future AP
   accrual when preparing the Revenue
   Accruals. The year-end schedules are due
   the 3rd week of July. At that point, estimate
   your receivables based on prior year AP
   vouchers which are either reimbursable by
   3rd parties or other departments which will
   be received subsequent to June 30.

Question 2:

Accounts Payable
   How should I estimate AP as of June 30, for
   purposes of revenue accrual and/or year
   end encumbrances if the vendor invoices
   have not been received prior to the Year-
   End Schedules due date?

Answer 2:

Accounts Payable
   Determine an appropriate valuation based on
   that vendor’s invoice history. For example,
   estimate based on the average of the past 11
   invoices paid, May’s total invoice paid, or
   the project manager’s knowledge with the
   contract and/or vendor.

Question 3:

Accounts Payable
   The department does not have sufficient
   remaining budget for additional AP
   vouchers paid from July 1 through
   September 30 for goods/services received
   prior to June 30. Therefore, the AP will not
   be posted against the prior year’s budget.

Answer 3:

Accounts Payable
 False. Vouchers paid from July 1 through
 September 30 will be posted to the prior fiscal
 year, if the goods/services were received prior
 to June 30, regardless of remaining
 appropriations in the department. Generally
 Accepted Accounting Principles requires to post
 expenditures in the year incurred.

Question 4:

Revenue Accruals
  My department has a reimbursable grant
  with the State of California. At year-end,
  we estimated accounts receivable of $3
  million dollars. However, the state notified
  us in September that $1 million is not
  allowable. Should I revise the year end

Answer 4:

Revenue Accruals

     Yes. Provide a revised year-end
     schedule, with a revised Journal Entry
     and all supporting documentation. If
     the amount is material, the journal will
     be posted prior to the final June 30
     closing process. If immaterial, the
     revision may not be posted.

Question 5:

Revenue Accruals
   Our department has prepared a clean-up
   reconciliation and found additional
   billings to other departments for the
   previous fiscal year. Can we prepare a
   journal in September to bill those
   departments as of June 30?

Answer 5:

Revenue Accruals
   No. Billings should be posted by July 31
   for all services provided prior to June 30
   to other departments. If needed, estimate
   amounts. Period 998 is not a cleanup

Question 6:

Account Reclassification
 I have reconciled my project cost and/or
 expenditures accounts and need to post various
 reclassifications as of June 30. Can I prepare
 and post the journal at the end of August to clean
 up the accounts?

Answer 6:

Account Reclassification

   No. Period 12 is open through July 31.
   Please prepare all clean up entries,
   including reclassifications from July 1-July
   31. Period 998 is not a clean up period.
   Period 998 is only for audit adjustments.

Question 7:

Balance Sheet Clean-up
 My department is responsible for reconciling
 revenues and expenditures. The ACO is
 responsible for reconciling all balance sheet

Answer 7:

Balance Sheet Clean up:
  False. Each department is responsible for reconciling
  the balance sheet accounts such as assets and
  liabilities. To ease the process, consider cleaning up
  odd variances in balance sheet accounts (i.e.: credit in
  assets and debits in liabilities) throughout the year. At
  a minimum, reconcile balance sheet account balances
  to supporting documentation such as AR aging reports
  and/or internally prepared schedules/spreadsheets on a
  quarterly basis.

Question 8:

New GASB Pronouncements for 2008:
  What new GASB pronouncements will be
  implemented in Fiscal Year 2008?

Answer 8:

New GASB Pronouncements for 2008:
  • GASB 45 – Accounting and Financial
  Reporting by Employers for Postemployment
  Benefits Other Than Pensions
  • GASB 48 – Sales and Pledges of Receivables
  and Future Revenues and Intra-Equity
  Transfers of Assets and Future Revenues
  • GASB 50 – Pension Disclosures – an
  amendment of GASB Statements No. 25 and No.
Question 9:

Component Units:
  We are a component unit. Our independent auditors
  prepared various audit adjustments to the Financial
  Statements. Should those entries be posted in the

Answer 9:

Component Units:
  Yes. Please provide a copy of those entries to General
  Accounting Reporting Team, attention Dolores Reyna
  and/or Frank Leonard. We will help you coordinate
  the posting of those entries into the system.

                        Reporting Team
                        Who to Contact:
Dolores Reyna:   CAFR/Audit questions
                 New GASB pronouncements
                 Component Units
                 Schedule R

Frank Leonard:   Simpler
                 Year-End Accounts Payable Accrual
                 Period 998
                 Financial Highlights (PAFR)
                 nVision Reports
                 Schedule I

Sue Warner:      Special Revenue Funds (Flux, Fund Balance, BS Recon)
                 Due to/from Other Govts (Schedules T-9, V-9, T-12, V-12, B & G)
                 Statistical Section
                 Prepaids (Schedule M)

                       Reporting Team
                       Who to Contact:
Daisy Vergara:   Capital Projects Funds (Flux, Fund Balance, BS Recon)
                 Deferred Revenue (Schedules S-9, S-12, L-1, L-2)
                 CAFR Distribution
                 Management Discussion and Analysis

Fendy Kao:       Internal Service Funds (Flux, Fund Balance, BS Recon)
                 Due to/from Other Funds (Schedule A)
                 Advances to/from other Funds

Gladys Smith:    Chart of Accounts
                 State Controller’s Report
                 Operating transfers in/out

Chart Of Accounts

         Gladys Smith


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