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County of Riverside Office of the Auditor-Controller

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					Fiscal Year 2007-08
  Year-End Training




    Robert E. Byrd, CGFM
   County Auditor-Controller


 County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Table of Contents

           Agenda
          •   Introduction / Objectives
          •   Fiscal Year-End Budgetary Controls
          •   Preparing & Submitting Closing Documents
          •   Receivables
          •   Inventories
          •   Accounts Payable
          •   Reserve for Encumbrances
          •   Revenue Recognition and Deferred Revenues
          •   Prepaid Expenses
          •   Depreciation
          •   Bank Accounts Controlled by Agencies or Departments
          •   Treasurer Cash Receipts (TCRs)
          •   Contingent Liabilities
          •   Subsequent Events
          •   Capital Leases
          •   Revolving Funds

   County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training

  Objectives
     • To promote uniformity & consistency in procedures
     • To provide accurate, timely & reliable information
     • All organizational units under BOS governance are
       subject to these requirements
     • Most schedules are due to the ACO on or before close
       of business July 18, 2008.


     Year-End Manual is located at:
              http://www.auditorcontroller.org/opencms/yearend/index.html




   County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 2


 Year-End Budgetary Controls
    • Pursuant to Government Code §29120,
      budgetary units cannot exceed BOS-
      approved appropriations

    • ACO cannot close fiscal year until
      appropriation budget deficits are
      eliminated pursuant to BOS-approved
      budget action



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 3




  Preparing and Submitting
     Closing Documents




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 3

 Journal Entry (JE) Guidelines
 • Submit a copy of your JE with each signed
    Year-End Schedule to ―ACO Year-End‖
 • Prepare JE to the budgetary level ordinarily
    used by business unit to capture accounting
    needs of organization
 • An accrual entry must include both the accrual
    and the reversal entry for posting
 • Round amounts to nearest dollar


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 3

 Accrual Entry Preparation
    1) Date: 06/30/2008
    2) Source: ―YE‖
    3) Ref. Number: Business Unit
            (Example: ACARC)
    4) Accounting Period: Verify = 12
    5) Fiscal Year: Verify = FY 2008

    Note: Riverside County does not use
    the “Reversal” feature for this fiscal year.


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 3

 Accrual Reversal Preparation
    1) Date: 07/01/2008
    2) Source: ―YE‖
    3) Ref. Number: Business Unit
            (Example: ACARC)
    4) Accounting Period: Verify = 1
    5) Fiscal Year: Verify = FY 2009

    Note: Use the “Copy Journal” feature for
    PeopleSoft 8.8 as outlined in Chapter 3 of
    the Year-End Manual.

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 3


    Schedule N
      • Summarizes the closing schedules

      • Must accompany each closing package

      • Required for each budgetary unit even if
        there are no closing schedules




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

 Receivables Classifications
    • Operating Accounts Receivable
    • Due From Other Governments
    • Due From Other Funds
    • Accounts Receivable – Other
    • Taxes Receivable (ACO prepares accrual)
    • Interest Receivable (ACO prepares accrual)


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4


 Receivables Schedules
   • Schedule A – Due From Other Funds
     (Governmental Funds)
   • Schedule A – Due From Other Funds
     (Proprietary Funds)
   • Schedule B – Due From Other Governments
   • Schedule C – Operating Accounts Receivable
   • Schedule D – Accounts Receivable - Other


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

Schedule A –
Due From Other Funds
• When a receivable and corresponding payable
  exists between County funds on June 30
• Cash is not available to satisfy liability
• Amount is $5,000 or greater
• Business units for both sides of the
  transaction must agree



County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

  Schedule A –
  Due From Other Funds                                     (cont’d)
  • Business unit entitled to revenue is required to:
       -   Coordinate the transaction
       -   Prepare Schedule A (GF or PF)
       -   Prepare journal entry to post accrual and accrual reversal in
           PeopleSoft financials

  • Only GL Module should be used for recording interfund
    transactions.

  • The offset account must be Due To Other Funds.



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5

  Schedule A –
  Due To Other Funds                                       (cont’d)
   • When a liability and corresponding
       receivable exists between County funds on
       June 30
   • Cash is not available to satisfy liability
   • Amount is $5,000 or greater
   • Business units for both sides of the
       transaction must agree


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

  Schedule A –
  Due From Other Funds (cont’d)
  Line #      Account                    Description       Base Amount

  1           125100                     Due From            $XXX,XXX
              (Governmental)
                                         Other Funds
              125200
              (Proprietary)

  2           7XXXXX                     Applicable        - $XXX,XXX
                                         Revenue
                                         Account


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5

 Schedule A –
 Due To Other Funds
  Line #        Account                  Description       Base Amount

  3             5XXXXX                   Applicable          $XXX,XXX
                                         Expenditure
                                         Account
  4             206200                   Due To Other      - $XXX,XXX
                (Governmental)
                                         Funds
                206100
                (Proprietary)




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

 Schedule B –
 Due From Other Governments
    • Funds entitled to revenue as of June 30
    • Revenue due from Federal, State, City or
        other Governmental entity
    • Amount due is $5,000 or greater
    • Cash is not received in advance




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

  Schedule B –
  Due From Other Governments

  • Complete Schedule B
  • Prepare accrual and accrual reversal journal entries
  • Submit above with supporting documents to ACO



  Note: Schedule T-12 should include amounts from
        Schedule B.

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

  Schedule B –
  Due From Other Governments
  (cont’d)

 Line #           Account                         Description    Base Amount


 1             118XXX Due From Other                             $XXX,XXX
                      Governments
 2             7XXXXX Applicable                                - $XXX,XXX
                  Or  Revenue or
               2301XX Deferred Revenue


     County of Riverside ■ Office of the Auditor-Controller
                                                         County Of Riverside
                          DUE FROM OTHER GOVERNMENTS (ASSET ACCOUNT SEQUENCE 118XXX): Account Analysis
                                                  Account Analysis as of June 30, 2008
SCHEDULE T-12                                             Due July 18, 2008


Fund:
Dept. ID:
Receivables expected to be receipted after June 30, 2008:
                                                                                                   Claim, Inv., or
                    Row                                                            if Amount           Reference       Description   Date earned   Expected
                                                    Due From (Governmental        Est                                                ( mm / dd /    Receipt
                    No.                   Acct.             Entity)               *    Due              Number         of Service       yy )         Date

1
2

3
4
Total DFOG to be receipted after
6/30/08                                                                                 $   -

TOTAL DFOG (MUST TIE TO THE GENERAL LEDGER)
All items on Schedule B should be reported on this schedule, plus any other receivables previously accrued.


Preparer's name (print):                                                                         Approval signature:

Preparer's title:                                                                                Telephone number:




    County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

   Schedule C –
   Operating Accounts Receivable
           Amounts owed to the County for
           goods or services provided to

                 • Private individuals
                 • Businesses
                 • Organizations



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

 Schedule C –
 Operating Accounts Receivable
 Do not include:
     • Amounts due from other funds (Schedule A)
     • Amounts due from other governmental
       entities (Schedule B)
     • Receivables based on assessments
       (e.g., property taxes, interest, or special
       assessments)

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4
  Schedule C –
  Operating Accounts Receivable
  • Complete Schedule C for:
      – Amounts $5,000 or greater
      – Revenue is earned (entitled) as of June 30
      – Governmental funds expecting to receive revenue
        within 3 months
  • Create accrual and accrual reversal journal entries in
    PeopleSoft financials
  • Submit above with supporting documents to ACO

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

 Schedule C –
 Operating Accounts Receivable
  Line              Account                     Description    Base Amount
   #
 1                   112200              Accounts Receivable   $XXX,XXX
                     (For YE)

 2                   7XXXXX              Applicable Revenue / - $XXX,XXX
                          Or             Deferred Revenue
                     2301XX




     County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4


                        What if I’m entitled
                         to revenue and it
                     doesn’t fit the definitions
                for accrual on Schedule A, B, or C




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

  Schedule D –
  Accounts Receivable - Other
  • For receivables not meeting the listed
    classifications, accrue as ―Other‖
  • Must be $5,000 or greater
  • Earned (entitled to) revenue as of June 30
  • Governmental Funds – Revenue must be
    available within 3 months of fiscal year-end



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4

  PeopleSoft Billing Module
  The last day to enter and process billing
    invoices into the Billing Module is July 21st
    at the end of business
  • The Billing Module can not be used for year-
    end accruals
  • The appropriate year-end schedules must be
    completed to capture your department’s
    revenue accruals


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 7


  Schedule E - Inventory
   Materials and supplies held in the normal
   course of operations for future consumption




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 7

  Schedule E – Inventory
  (cont’d)

   • To which entities does the inventory process
       apply?

   • What is required if the inventory process
       applies?




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 7

 Schedule E – Inventory
 (cont’d)

    • Perform a physical inventory count
    • Record the count results in PeopleSoft:
          – Inventory Management Module
          – Online journal ($5,000 minimum adjustment)
    • Schedule E is required to document
      results of physical count



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 7

   Schedule E – Inventory
   (cont’d)
                           Top Portion of Schedule E
                                           As of June 30, 2008

    SCHEDULE E
    (Refer to Y-E Closing Manual, Chapter 7)

    Fund No.:              20008                           JE Number:
    Fund Name:             Transportation Equipment        Business Unit:
    JE Source:             YE                              Page of
    DeptID:                3130700000
    Dept Name:             Transportation Equipment
    Fund Type:                                 (Enter "G" for governmental or "P" for proprietary)

    Ending Inventory Value, June 30*                                                                 $96,854
    Less: Beginning Inventory Value, July 1                                                           82,388
    Inventory Adjustment Amount (JE required if $5,000 or more)                                      $14,466




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 7

  Schedule E – Inventory
  (cont’d) Middle Portion of Schedule E
    Since the amount is greater than $5,000, please prepare the entries as shown below.

    Journal Entry for Governmental Fund :
    Note to user              Account         Description                                     Debit or (Credit)
                                      170100 Inventory Of Materials & Supp                               14,466
    (Enter applicable A/C)           52XXXX                                                             (14,466)
                               To adjust inventory and related expenditure account per YE inventory count.
    (Enter applicable FB A/C)        3XXXXX                                                              14,466
                                      303100 Reserve For Inventory                                      (14,466)
                              To reserve the portion of FB that is not available to finance current current
                              expenditures.

    Journal Entry for Proprietary Fund :
    Note to user             Account        Description                                 Debit or (Credit)
                                    170100 Inventory Of Materials & Supp                          14,466
    (Enter applicable A/C)         52XXXX                                                        (14,466)
                               To adjust inventory and related expense account per YE inventory count.




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5


      Accounts Payable Categories
        • Due To Other Funds
        • Due To Other Governments
        • Accounts Payable – Other
        • Operating Accounts Payable
          (ACO prepares accrual)
        • Salaries and Benefits Payable
          (ACO prepares accrual)


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5


  Accounts Payable
     • Current liabilities resulting from the
        receipt of goods or services
     • Payment is not expected to be made until
        a subsequent accounting period

     The Auditor-Controller’s Office will create
     AP accrual journal entries for July and for
     August.


                  County of Riverside ■ Office of the Auditor-Controller
 2008 Year-end Training – Chapter 5
Determining the Proper Invoice Date
                                         YES
            Is the invoice for the                 Enter the date goods
              receipt of goods?                       were received


                  NO
                                                                                     06/04/2008-07/03/2008
                                                                                        Enter 06/30/2008

          Does the invoice show a        YES     Which fiscal year does the   FY08
         service date with a range?               range include the most?
         (e.g., 06/01/2008-06/30/2008)                FY08 or FY09?           FY09
                                                                                     06/25/2008-07/24/2008
                                                                                     Enter the las t day in the
                  NO                                                                          range



          Does the invoice have a        YES
                                                  Enter the last day of the
               service month?
                                                           Month
          (e.g., the month of June)


                  NO


            Does the invoice not
            reference any date?


                  NO


           Contact vendor and/or
          responsible manager to
           identify service period
County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5


  Accounts Payable




    In order for a voucher to get picked up in the AP
    accrual process, you must enter 06/30/2008 in the
    Invoice Date field in the Voucher Header panel.

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5


  Accounts Payable
   The AP accrual process will include
   two Journal Entries:
        • 7/31/08 for vouchers posted from
          7/1/08 through 7/25/08.
        • 8/29/08 for vouchers posted from
          7/26/08 through 8/25/08.


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5

  Schedule G –
  Due To Other Government
    • Amount due to a federal, state or other
         local governmental entity

    • A liability resulting from services received
         or unexpended resources provided by
         another government entity




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5

 Schedule G –
 Due To Other Government
    • Complete Schedule G
    • Prepare accrual and accrual reversal
         journal entries
    • Submit above with supporting documents
         to ACO

    Note: Schedule V-12 should include
    amounts from Schedule G.

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5


  Schedule G –
  Due To Other Government
  Line #      Account                    Description       Base Amount

  1           5XXXXX                     Applicable         $XXX,XXX
                                         Expenditure
                                         Account
  2           2081XX                     Due To Other      - $XXX,XXX
                                         Governments




  County of Riverside ■ Office of the Auditor-Controller
                                                                                   County Of Riverside
             DUE TO OTHER GOVERNMENTS (LIABILITY ACCOUNT SEQUENCE 2081XX): Account Analysis
                                         Account Analysis as of June 30, 2008
SCHEDULE V-12                                               Due July 18, 2008

Fund:
Dept. ID:
Amounts expected to be paid after June 30, 2008:
                                                                                                     Claim, Inv., or
                Row                                                                 if Amount            Reference        Description      Date incurred       Expected
                                                                                  Est
                No.                   Acct.        Due to (Governmental Entity)   *     Owed               Number        of Transaction   ( mm / dd / yy )   Payment Date

1
2

3
4
Total DTOG to be paid after
6/30/08                                                                                $   -


TOTAL DTOG (MUST TIE TO THE G/L)                                                       $   -
All items on Schedule G should be reported on this schedule, plus any other payables previously accrued.


Preparer's name (print):                                                                         Approval signature:

Preparer's title:                                                                                Telephone number:




    County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training




              BREAK!!!
               The presentation will resume

                       in 15 minutes

  County of Riverside ■ Office of the Auditor-Controller
  ???? Questions ????
       Send your questions via email to:

ACOYearend@Co.riverside.ca.us
                                                 Or

    Look for Yearend, ACO in your email
                address book

County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5


    Salaries and Benefits Payable
        Amounts Due For:
        • Employee salaries
        • Employee benefits
              - Retirement
              - Flex benefits (Medical/Dental)
        • Compensated Absences due upon
            termination
              - County share of Social Security
              - Medicare taxes
        • Other accrued payroll costs
  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5




  For liabilities that either do not fit
  the definition of vendors, other
  funds, and other governments, or
  are non-traditional AP type
  transactions…




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 5

 Schedule I
 Accounts Payable — Other

  Line #     Account                  Description          Base Amount

  1          5XXXXX                   Applicable             $XXX,XXX
                                      Expenditure
                                      Account
  2          201200                   Accounts             - $XXX,XXX
                                      Payable - Other



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6

 Schedules K and K-1
 Reserve For Encumbrance
      • Encumbrances are commitments related
          to unperformed / unfulfilled purchase
          orders or contracts for goods or services

      • BOS approval is required to:
         - Create the Reserve for Encumbrance
         - Adjust new year appropriation amounts



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6

 Schedules K and K-1
 Reserve For Encumbrance                                    (cont’d)
  • Fund balance should be reserved to reflect the
    commitment of resources no longer available for other
    purposes

  • If you wait until the commitment is fulfilled (goods/
    services received) to record a liability, funding
    (appropriations) may not be available in the new fiscal
    year

  • County allows departments to bring committed prior
    year appropriations into the new year

   County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6

 Schedules K and K-1
 Reserve For Encumbrance                                                    (cont’d)
   Only commitments with available budgeted appropriations
   can be encumbered. Requests for Reserve for Encumbrances
   cannot exceed approved Net County Cost.

   Approved Net County Cost                                Actual Net County Cost

      Budgeted Appropriations                                     Actual Expenditures
      Less: Est. Dept. Revenues                            Less: Actual Dept. Revenue

   = Budgeted Net County Cost                              =   Actual Net County Cost

                                    Cannot Exceed

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6


  Events Not Qualifying For
  Reserve For Encumbrances                                 (cont’d)

  • Goods or services received prior to June 30
       - These become liabilities
       - Pay through PeopleSoft by August 31, 2008 or
       - Accrue on Schedule A, G, or I

  • Undelivered goods or services as of June 30
    that are less than $5,000
  • Requisitions are requests, not commitments
    nor obligations

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6


                Schedules K ~
             Purchase Orders Only

        Schedules K-1 ~
  Other Commitments such as
  Contracts, Form 11s, MOUs,
       and Form 5s, etc


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6



   To Request Reserve for
        Encumbrance
Prepare YE Schedules K or K-1

   Submit schedules to your analyst in
  the Executive Office for approval by
               7/18/08



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6

  Schedule K and K-1
  Reserve For Encumbrance                                  (cont’d)

  Preparing the Schedule
  Step 1: Log into the Riverside County
       Auditor-Controller's Office website.
                   This can be done by going to the
                   County's home page and selecting
                   Auditor-Controller from the drop-down
                   menu.
  http://www.auditorcontroller.org/opencms/home/index.html



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6

    Step 2: From the Riverside County Auditor-
    Controller's Office website select "Year End"




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6

   Step 3: From the "Year-End Publications" list,
   select "Schedule K Listing".




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6
  Step 4: From the list of business units, select
  your business unit. A listing of Schedule K
  reports will be displayed. Each listing is a link
  to Excel files that can be either saved to your
  own computer or printed.




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6

  Schedules K and K-1
  Reserve For Encumbrance                                  (cont’d)
    • Save your Business Unit to your
      Computer
    • There will be a tab for each of the reports:
         • RVPOA621B ~ Sorted by Business Unit & PO
           and give PO Description (Detail)
         • RVPOA621C ~ Sorted by Business Unit, Fund,
           Dept ID & Account #
         • RVPOA621D ~ Sorted by Business Unit, Dept
           ID and Account (Summary)


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6

  Schedules K and K-1
  Reserve For Encumbrance                                  (cont’d)

   • Review all three Schedule K Reports
   • Determine appropriate encumbrance
       amounts
   • Complete Schedule K
   • Submit all three to your analyst in the
       Executive Office by Friday, July 18, 2008


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 6

  Schedules K and K-1
  Reserve For Encumbrance                                  (cont’d)
 • Approved Schedules K and K-1 are to be provided from the
   CEO to the ACO by 7/25/08 for consolidation and
   calculation of:
      - FYE Reserve for Encumbrance amount
      - New year departmental increase in appropriations
        amount
 • ACO to provide summary data for FYE Reserve for
   Encumbrance and new year departmental increase in
   appropriations to CEO by 8/29/08
 • CEO to prepare and submit Form 11 for Board approval on
   9/23/08


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 4


 Criteria for Revenue Recognition

      • Accrual Basis of Accounting
            (Proprietary Funds only – Internal Service Funds,
            Enterprise Funds)


      • Modified Accrual Basis of Accounting
            (Governmental Funds only – General Fund, Special
            Revenue Funds, Capital Project Funds, Debt
            Service Funds)


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training– Chapter 4

  Revenue Recognition
  • Proprietary funds recognize revenue when
    earned regardless of when cash is received.
     (accrual)


  • Governmental funds should recognize revenue
     only when the revenue is both measurable and
     is expected to be received within ―availability
     period‖. (modified accrual)
             - Generally 3 months
             - 12-month if expenditure-driven grant
             - 60 days for taxes (including sales tax)


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 8


 Revenue Recognition
  What if a potential revenue transaction
   does not meet both the ―measurable‖
   and ―available‖ criteria for recognition in
   the current period?

  Answer.
  For governmental funds, if revenue is earned but
    not available, or available but not yet earned,
    the revenue transaction should be recorded as
    a deferred revenue.

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 8

  Instances To Record
   Deferred Revenue
    • Schedule L-1
            When Cash is received in advance
            of the earning (entitlement) process

    • Schedule L-2
            When earned by a Governmental
            Fund, but not available

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 8

  Cash Received In Advance Of
  The Earning Process (Schd. L-1)

        • Cash is received prior to:
              – Providing goods or services
              – Having a legally enforceable claim
              – Eligibility requirements being met




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 8


  Eligibility Requirements

  • Restrictions on the use of resources
    (allowable costs)

  • Time requirements to expend or start
     expending resources



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 8


 Prepare Schedule L-1 (Advance)
  • Schedule L-1 (Advance) is used to identify
    cash received in advance of revenue
    recognition

  • An entry is required when a department has
    already booked unearned amounts to revenue

  Note: Schedule S-12 should include amounts
  from Schedule L-1.

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 8

  Cash received in advance
  Example:
  On March 15, 2008, Dept. ABC received $500,000
  from the State for use in road repairs project.

  The department recorded revenue upon cash
  receipt and the amount is not yet been earned.
   Account                                                  Debit    Credit
   Cash (101100)                                 $500,000
   Revenue (7XXXXX)                                                 $500,000


   County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 8

  Cash received in advance
  Example: (Cont.)
  On June 30th, only 50% of the project has been
  completed. A reclassification entry is then needed
  to account for the outstanding liability of $250K
  since only 50% of the project has been earned.
  The entry to record deferred revenue and should
  be reported on Schedule L-1 and S-12:
   Account                                                  Debit   Credit
   Revenue (7XXXXX)          $250,000
   Deferred Revenue (230XXX)          $250,000


   County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 8


    Prepare Schedule L-2
    (Unavailable)
      Schedule L-2 (Unavailable) is used to
      identify amounts that have been earned,
      but are not available.

      Schedule S-12 should include amounts
      from Schedule L-2.




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 8


 Schedule L-2 (Unavailable)
 (cont’d)
  Line #    Account                 Description            Base Amount


  1         1XXXXX                  Receivable             $XXX,XXX
                                    (Classification
                                    Dependent On Who
                                    Owes Money)

  2         2301XX                  Deferred               -$XXX,XXX
                                    Revenue



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 8
 Revenue is earned, but not available
 Example: (L-2)

 On June 15, 2008, a governmental fund provided services to
 a City for $500,000. An invoice billing was sent to the City
 for the services provided and the proceed is not expected to
 be received until Oct. 15, 2008.
  The entry to record earned but unavailable revenue on
  June 30 (Period 12):
  Account                                                    Debit     Credit
  Receivable (11XXXX)                                       $500,000
  Deferred Revenue (230XXX)                                            $500,000

  Submit your reversal entry with Schedule L-2
   County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 9


  Schedule M -
  Prepaid Expenses
    • Amount paid for a product or service that
         has not been fully used as of fiscal year-
         end.
          - Insurance premiums paid in advance
          - Rents that are paid in advance




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 9

  Schedule M -
  Prepaid Expenses                                         (cont’d)

  • Schedule M allocates the total amount paid
      between current FY expense and amount
      capitalized for future FY expense

  • Journal entry is required to capitalize
      amount of expense not used




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 9

 Capitalization of
 Prepaid Expense

  Line #     Account                 Description           Base Amount

  1          140200                  Prepaid                 $XXX,XXX
                                     Expense
  2          5XXXXX                  Applicable            - $XXX,XXX
                                     Expenditure
                                     Account



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 10


                    Depreciation
                                           Proprietary funds—
                                             Depreciation posts to
                                             proprietary ledger, then closed
                                             to Actuals ledger at year-end.

         No Year-end                       Governmental funds—
           Accrual                           Depreciation posts to
           Needed                            governmental ledger. Expense
                                             used for government-wide
                                             financial statements only.



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 11

  Schedule P
  Bank Accounts Controlled by Agencies
  and Departments

                               DUE AUGUST 8, 2008
    Complete Schedule P for all bank accounts:
         • Open during the year (new & existing)
         • Closed during the year
         • List top 10 sites where cash and checks
           are collected


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 11

  Schedule P
  Bank Accounts Controlled by
  Agencies and Departments (cont’d)
    Required attachments:
    •      June bank statement
    •      June bank reconciliation
    •      Authorized signature card
    •      Request to establish the account
    •      Top 10 collection sites
    •      Schedule P questionnaire

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training




          Treasurer Cash
              Receipts
        For Fiscal Year 2008




                  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training

Types of Treasurer Cash Receipts
 • Cash Deposits
     -   Money deposited into the County Treasury

 • Zero Balance Accounts (ZBA)
     -   Money deposited into an authorized bank
         institution or pick up by armor
         transportation

 • Wire Transfers
     -   Money wired out of the County Treasury


  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training


                    Wire Transfers




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training

                         Cash Deposits
                                     Cut-off date




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 13

  Schedule R
  Contingent Liabilities
  • May become liabilities as a result of an
      existing condition, situation, set of
      circumstances, and

  • There is a reasonable expectation that a
      loss has occurred




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 13

  Accounting for Contingent
  Liabilities
  • If Probable & Estimable = ACCRUE
  • If Probable, but not estimable = DISCLOSURE,
     but not accrued

  • If Reasonably Possible = DISCLOSURE, but
     not accrued

  • Remotely Possible = No disclosure, No
     accrual

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 13




             If Contingent Liability
              Requires Accrual or
                   Disclosure
           Complete Schedule R



  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training

  Subsequent Events

  • Significant events or transactions
    considered material to the financial
    statements of the County that occur after the
    end of the Fiscal Year but prior to the
    issuance of the annual CAFR.

  • Require Note disclosure.




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 12



 Capital Leases

    Substantially all the risks and benefits
    of ownership are assumed by the
    lessee.




  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 12


 To qualify as a Capital Lease, only
 one of the following criteria must
 be met:
    1. Transfer of ownership at end of lease
    2. Bargain purchase option
    3. Lease term is equal to 75% or more of
       estimated life of leased property
    4. Present Value (PV) of minimum lease
       payments = at least 90% of the asset’s fair
       value

   County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 12


Capital Leases                                   (cont’d)

   If none of the capital lease criteria is met, the
   lease is classified as an operating lease.

   Use the capital lease test at the ACO website, to
   properly classify the lease.

   Link:
   http://www.auditorcontroller.org/opencms/forms/Capital_Lease_Test.xls




   County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 14


  Revolving Funds
 • Definition
   A Revolving fund is an authorized amount
   of cash in the form of currency, a bank
   checking account or both. Revolving
   funds are established for specific
   operational needs to facilitate certain
   expenditure and cash transaction
   throughout the County departments



   County of Riverside ■ Office of the Auditor-Controller
           Revolving Funds (cont’d)

• An Example of a Revolving Fund :
  ABC Department has established a Revolving
  Fund account for the amount of $500 and their
  Custodian is John Deer. The $500 is kept in a
  lockbox at their location. The monies are being
  used for miscellaneous expenses. For example,
  postal stamps, employee reimbursement, office
  supplies and etc.



County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 14


  Revolving Funds                                           (cont’d)

 • California Government Code Section 29321.1
   requires the Auditor-Controller to render a
   written report to the Board of Supervisors at
   the end of each fiscal year identifying the
   revolving funds in existence during the fiscal
   year, the amount of such fund, and the officer
   using the fund.




   County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training – Chapter 14


  Revolving Funds                                           (cont’d)
 • Schedule W has been created for you to
   identify:
     –   Your Revolving Fund Number
     –   Revolving Fund Amount
     –   Location of Revolving Fund and
     –   Revolving Fund Custodian
 • Schedule W is due on July 18th unless you have
   a checking account outside the Treasury, you
   may then submit Schedule W on August 8th
   along with your Schedule P.

   County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training


         Mail Year-end Packets To:
                    Attention:
                  ACO Year-End
                  Mail Stop #1050

  County of Riverside ■ Office of the Auditor-Controller
2008 Year-end Training

                         Hand Deliver
                     Year-End Packets To:


                      ACO Year-End
                        11th Floor



   County of Riverside ■ Office of the Auditor-Controller
  ???? Questions ????
       Send your questions via email to:

ACOYearEnd@co.riverside.ca.us
                                                 Or

            Look for Yearend, ACO in your
                  email address book
County of Riverside ■ Office of the Auditor-Controller
                                     The End




County of Riverside ■ Office of the Auditor-Controller

				
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