Fiscal Close Workshop – Auxiliary and Sales & Service Units May 2017 Detailed instructions and deadlines are found in the 2016-2017 Fiscal Year Close Information and Dates memo. The memo and more information can be found at www.accounting.uci.edu/fiscalclose/ Important information will also be posted to the “KFS Year-End Close News” portlet located on the KFS tab in Zotportal. Detailed fiscal close information will also be emailed to the KFS-Update email list. Sign up to get these messages by going to maillists.uci.edu/ and subscribing to KFS-Update. If you have questions or need help, please contact kfs@uci.edu or 949-824-7001. Slides from this workshop will be available online later this week at www.accounting.uci.edu/fiscalclose/

Agenda Introduction and Overview – John Douglas Transactions Fiscal Closing Transactions – Victor Cesario AP/Disbursements & Travel – Karen Miller Encumbrances – Melissa Lee Payroll – Ashley Penny Decision Support – Kevin Chung Questions REGARDING DEADLINES: The information in this workshop and the information included in the 2016-2017 Fiscal Year Close Information and Dates memo do not cover cutoff dates and deadlines from the Budget Office. This workshop also does not cover departmental deadlines or cutoffs. Keep in mind that your school or unit may have earlier cutoffs or additional rules compared to those communicated in this workshop.

What is an auxiliary enterprise? Auxiliary enterprises: Are essentially self-supporting activities; Provide non-instructional support to students, faculty, and staff; Charge a specific user charge or fee The general public may be served only incidentally by these enterprises. Examples: housing, non-housing food service, parking, bookstore, student center. Adapted from UCOP policy BUS-72. Auxiliary enterprises are assigned UC fund numbers between 70000 and 74999 at Irvine.

What is a sales & services agreement? Sales & services agreements: Are used when a campus unit wishes to render a service or provide goods to a non-University user for which revenue is collected; The furnishing department incurs expense to make available a product or service which is sold to the non-University user for an established price, or at a price based on an established standard pricing method. Examples: some School of the Arts productions, passport office, Thesaurus Linguae Graecae. Adapted from UCI policy 703-14. UC fund numbers between 60000 and 66099 at Irvine have been established for sales & service activities. Charges established for these activities should recover full University costs, both direct and indirect. The Budget Office reviews all proposals for sales & service activities.

What is sales & services income? Income without contractual requirements that is irrevocable should be deposited as a gift; If the product or service is customized, income should be deposited as a private contract or grant; If the product or service is standardized, income should be deposited as sales & services income.

What is Fiscal Close? Fiscal Close is the process of: Ensuring that our financial data is accurate for the ending fiscal year; Organizing the campus financial records for inspection by auditors; Creating our yearly financial statements which are then consolidated with the other UC campuses into system-wide statements and reports for the Regents. UC must prepare consolidated financial statements in accordance with Generally Accepted Accounting Principles (GAAP) every year. Irvine’s records need to be in line with these accounting rules so that they can be incorporated by UC Office of the President into accurate financial statements. General Rules: Revenues must be recorded when they are earned. Expenses must be recorded when incurred.

Responsibilities Departments and their coordinating points are responsible for seeing that all income and expense is recorded accurately and that all accounts close in a solvent condition. The Accounting Office is responsible for consolidating data, preparing year end reports and statements for the Office of the President, and producing the final ledger. It is the responsibility of each department to close its books in a timely manner. Each department must ensure that it ends the year with all its accounts solvent. Effectively this means that your total budget must be greater than or equal to your total actuals. More on this later.

Three Stages of the Close for Departments Preliminary – This stage reflects all direct charges for the fiscal year. Interim – The one-week period after the Preliminary deadline during which departments can make adjustments. Final – There is no more department input. The Accounting Office makes necessary adjustments for the Final ledger. The terms “preliminary, interim, and final” come to us from the UC Office of the President and these terms were used in the old financial system. In KFS, Period 12 will include departmental fiscal year-end activities. Both the Prelim and Interim ledgers will be run and submitted to OP in Period 12. Period 13 is principally for the Accounting and Fiscal Services department to prepare the financial information for transmission of the Final ledger to the Office of the President.

Key Dates July 5 – Recharges complete July 7 – Prelim July 14 – Interim – Period 12 will close in KFS, and certain non-final docs will be canceled (GEC, BA, BAT, YEDA). July 28 – Final August 7 – July will close Recharges must be completed by July 5. Users will not see recharges that post on the 5th on the ledger until the 6th. What we called the “Preliminary” ledger will be ready after July 7. You need to have all regular business complete before we get to the end of the preliminary period at the end of business on July 7. The departments have the “Interim” week from July 8 to 14 to make adjustments and corrections. Period 12 closes on July 14. The Period 13 “Final” ledger will be complete/available in the first week of August.

Fiscal Close What to Expect

What You Need to Know to Close the Year June 30 – Deposits: CR, CCR, COD June 30 – Last day to initiate any KFS Maintenance Changes June 30-July 14 Accounting Reviewer Bypass (BA, BAT, GEC & DI documents ONLY) July 1-July 14 Action List Reminder/Daily E-mail All cash deposits to the Irvine Central Cashier need to be done by 1p.m. on June 30. Specific details are in the fiscal close deadlines and instructions memo. The Medical Center are the primary users of the CR and CCR documents. COD is what is used by the main campus. June 30 is the last day to do any maintenance like changes to accounts or fiscal officers. After that, changes can’t be made again until Period 13 ends on July 28. Expedited workflow for BA, BAT, GEC, DI Action list reminder changed to DAILY

What You Need to Know to Close the Year July 7 – Last day for KFS initiated documents where Fiscal Period 12 has been selected (drop down). These must be FINAL except for the documents listed on the next slide. If documents are not final by July 7, they will be canceled.

What You Need to Know to Close the Year July 14 – Last Day for Fiscal Period 12 FINAL KFS initiated documents: BAs & BATs GECs YEDAs (Available July 8 – July 14) Sometimes documents will say they are “Processed” rather than final. That’s OK and the document can be treated as though it were final. Processed means it’s been recorded to the ledger but is still in workflow. (For example, it is in someone’s action list as a simple Acknowledge.) From July 8-14, users will still be able to process budget documents (BA/BAT) and General Error Corrections (GEC) as needed to get your accounts in order. You will also be able to use the Year-End Department Accrual/Deferral (YEDA) document to handle deferrals and accruals over $10,000, but only for that one week.

Quick Guide to Processing Accruals & Deferrals for Fiscal Close 2016-17 This section covers what accruals and deferrals are and how we record them.

Why Accruals & Deferrals? In accordance with UCOP Accounting Policies & Procedures, financial activity must be recorded in the Fiscal Year that relates, corresponds, or supports that activity. Accruals and deferrals are used when a revenue or expense item should be moved from one fiscal year into another. For example, a department might provide a service in June and prepare an invoice for that service after the cutoff (in July). In this case, the revenue should be accrued in June. If a department receives a payment for a service in June but the service is not provided until July (or later), that revenue should be deferred into the new fiscal year.

Recording Accruals & Deferrals KFS Document available July 8 = YEDA (Year End Department Accrual/Deferral) Minimum amount ≥ $10,000 (Expenses per Invoice) Minimum amount ≥ $5,000 (Capitalized Equipment) Minimum amount ≥ $35,000 (Plant - Capitalized Construction costs) The Year End Department Accrual/Deferral (YEDA) Document will be used to process accruals and deferrals during the interim week of July 8 to 14. General rule: you only need to do a YEDA for amounts equal to or greater than $10k. There are exceptions to this rule for capitalized equipment and plant/capitalized construction costs. Anything under $10k doesn’t need to be accrued or deferred (subject to the exceptions). Those transactions will simply be recorded in the new fiscal year.

What is an Accrual? Income Income that you earned in June but will not actually have the funds until July. Expense Expenses for activity incurred in June but will not pay until July. An example of an income accrual would be a department that provides a service in June but doesn’t prepare an invoice (record revenue) until after the cutoff (in July). This income should be accrued in June (in the 2016-17 fiscal year). An example of an expense accrual would be receiving goods or services in June but not recording the invoice/expense until after the cutoff (in July). This expense should be accrued in June (in the 2016-17 fiscal year).

Income Accrual An example of an income accrual would be a department that provides a service in June but doesn’t prepare an invoice (record revenue) until after the cutoff (in July). This income should be accrued in June (in the 2016-17 fiscal year).

Expense Accrual An example of an expense accrual would be receiving goods or services in June but not recording the invoice/expense until after the cutoff (in July). This expense should be accrued in June (in the 2016-17 fiscal year).

What is a Deferral? Income Income that you received in June but relates/corresponds/supports activity that will not happen until July. Expense Expenses that you paid for in June but relates/corresponds/supports activity that will not happen until July. An example of an income deferral would be if you planned to have a conference in July but you were already receiving registration fees in June. This income should be deferred so that it is recorded in the 2017-18 fiscal year. An example of an expense deferral would be paying in advance for a conference facility. You pay the fee in June even though the conference isn’t until July. The expense should be deferred so that it is recorded in the 2017-18 fiscal year.

Income Deferral An example of an income deferral would be if you planned to have a conference in July but you were already receiving registration fees in June. This income should be deferred so that it is recorded in the 2017-18 fiscal year.

Expense Deferral An example of an expense deferral would be paying in advance for a conference facility. You pay the fee in June even though the conference isn’t until July. The expense should be deferred so that it is recorded in the 2017-18 fiscal year.

Appropriating/Budgeting Income/Recharges New Process This Year: Higher Level Alignments Less Appropriations

Income Object Balances $0 Balance by Chart, Account & Object

Income Object Balances $0 Balance by Chart, Account & Object

Recharge Object Balances $0 Balance by Chart & Account

Recharge Object Balances $0 Balance by Chart & Account

Transfers to/from a non-operating fund Reserve Funds (Auxiliary Enterprises) There may be specific circumstances for which the accumulation of reserves for future year expenses may be considered appropriate and in the best interest of the campus community. Example: capital renewal/replacement. Requests for transfers to/from reserves should be sent via Excel template to Accounting (by July 14th)

Reserves (non-Auxiliary) Fund# 76390 Recharge Renewal & Replacement Reserves Official Recharge Units Only (Budget Office Review) Contact the Budget Office first Provide General Accounting the information to process the transactions by July 14

Account Solvency Only Specific Sales & Service accounts are allowed to close in deficit Please use Fund Summary & Account Summary to determine Budgetary & Financial solvency July 14 last day for accounts to be in solvent condition

New Fiscal Year What to Expect

New Fiscal Year July 1 (KFS Transactions) Carry Forward Balances = Budget minus Actuals Object Code 0008 Consolidation Code UNAL Fiscal Period BB vs. CB The new fiscal year starts on July 1 for new business. Carryforward balances are determined by calculating your budget minus your actuals. Encumbrances are not factored in. You do not need to balance your expense budget object codes against expense consolidations. Just make sure your overall account is not in overdraft. Income object codes must have a variance of zero at the end of the fiscal year. We will have a Beginning Balances (BB) period where you will see the carryforward balance. CB stands for Contracts & Grants Balance. Summary reports include the BB or CB period in the totals. In other reports you will have to select BB or CB from the bottom of the Fiscal Period drop down to include those periods.

Carryforwards for self-supporting units As long as your income object codes are at $0 all your other consolidation objects will roll into 0008 0008 is where you will find your carryforward from FY 2016-17

Intercampus Expense Transfers (ICT Document) June 30, 5pm Due in General Accounting The deadline for recharges to other campuses is June 30. This is specifically for when you are charging another campus for something.

UC Campus Tab

UC Campus Tab

AP/Disbursements Travel Karen Miller

Invoices Deadlines Invoices must be submitted to Accounts Payable no later than July 6th 4pm. Email Invoices to accounts-payable@uci.edu Invoices for FY 2016-17 that are not processed by July 7th must be accrued by the department if the expense is greater than $10K. Do not hold on to invoices if you miss the deadline. Just get them in as soon as possible and Accounts Payable will make every effort to key them in. Make sure you’re referencing your PO numbers. Let Accounts Payable know if you have a situation where you want an invoice processed in this fiscal year but want the payment future dated/sent in July.

Invoices Tips When sending invoices to AP to pay please ensure the PO has enough money and is ok to pay on. Invoices must be submitted to Accounts Payable no later than July 6th. Email to accounts-payable@uci.edu

TEM and DV All TEM and DV documents need to be submitted, scanned and approved by Travel Accounting by 4 p.m. on June 23rd to be recorded as expenses for 2016-17. Continue to process your documents after June 23rd, Travel Accounting will make every effort to approve your documents by the June 30th deadline. All TEM documents need to be submitted, scanned and approved by Travel Accounting by 4 p.m. on June 23rd to be recorded as expenses for 2016-17. If you have something where it is essential that it be included in 2016-17 and you are close to the deadline, you may want to hand deliver your supporting documents to scanning to make sure they are done as quickly as possible. Do not include personal/sensitive information in your documents. Contact Travel if something personal has made it’s way into the system and needs to be expunged. Anything with a travel end date older than six months will need exceptional approval. Any travel with an end date older than a year cannot be processed

TEM and DV Cont’d Anything approved after June 30th will be posted in the next fiscal year. Anything with a travel end date older than six months will need exceptional approval. Any travel with an end date older than a year cannot be processed For Travel Fiscal Close Questions contact travel- accounting@uci.edu All TEM documents need to be submitted, scanned and approved by Travel Accounting by 4 p.m. on June 23rd to be recorded as expenses for 2016-17. If you have something where it is essential that it be included in 2016-17 and you are close to the deadline, you may want to hand deliver your supporting documents to scanning to make sure they are done as quickly as possible. Do not include personal/sensitive information in your documents. Contact Travel if something personal has made it’s way into the system and needs to be expunged. Anything with a travel end date older than six months will need exceptional approval. Any travel with an end date older than a year cannot be processed

·         Documents must be scanned or photographed using one of the following formats: .pdf, .jpg, .jpeg, .bmp, .png, .tiff, or .tif. ·         Before uploading images, ensure sensitive and personal information is redacted. Files cannot be deleted after they are uploaded.

Encumbrances Melissa Lee From a central accounting perspective, encumbrances are not factored into determining whether an account is solvent or not. Some schools/units may still want to account for encumbrances though. Each group may have its own rules to follow. Centrally, we do not want to carry old/invalid encumbrances forward into a new year. Close out any dangling or leftover encumbrances in your accounts. Please close out all encumbrances left over from a travel authorization or a Purchase Order where no more activity is expected to occur. Note that Accounts themselves, including Contracts and Grants, cannot be closed if they have any encumbrances on them.

Encumbrance Report The Encumbrance Report (UCI Decision Support) contains all types of encumbrances and is up to date as of last night. This is the report/tool to use when determining what encumbrances should be cleared and what remains on an account or Org. This report shows the document type that is causing the encumbrance, the Reference Number (PO Number or TEM Number or KFS Doc/Feeder number).

Encumbrance Report In the Encumbrance Report, you search by Organizations (including Roll-Ups) or Account(s). You can select different document or encumbrance types, filter out POs that have already closed, or select a certain dollar threshold. If the encumbrance stems from a Purchase Order- it will show whether it is open/closed and the type.

Encumbrance Carry Forward Encumbrance Carry Forward by 7/11/17: External Encumbrance (EX) = Carry Forward Purchase Orders Cost Share Encumbrance (CE) = Carry Forward An encumbrance related to a cost-share account Internal Encumbrance (IE) = Carry Forward Facilities Management Internal Encumbrances Travel Authorizations Pre-Encumbrance (PE) = No Carry Forward With the exception of pre-encumbrances, all encumbrances will be carried forward into the new fiscal year before 7/11/17. No encumbrance corrections can be done for FY 2016/17 after July 1st. Only select Payment Requests can post entries to FY 2016/17 between 7/1 and 7/7 (Prelim Ledger), depending on the invoice dates and entry by Accounts Payable (so please turn in all invoices by AP’s deadline)

Encumbrances Please see the 2016-17 Fiscal Year-End Close Information & Dates instructions, for deadlines & details per encumbrance type. Special Purchasing Encumbrance Deadlines: Last Day to submit a PO Close request to Central Purchasing: June 23 Last Day to close fulfilled Low Value Purchase Orders: June 30 All PO Amends must be final on June 30 to post to the 2016-17 Fiscal Year Purchase Orders can be closed by going into the current version of the Purchase Order/Purchase Order Amend and selecting the ‘close order’ button. NOTHING should be closed unless the order has been fully fulfilled or the vendor has notified the unit that no further payments or credits are forthcoming. Contract Managers and Fiscal Officers can close POs (that have had amends or partial payments). Contract Managers (only) can void POs (that have had no payments).

Payroll 2016-17 Fiscal Closing Dates Ashley Penny

June Bi-Weekly (B1) Payroll Time Reporting Deadline June 21st Pay hours and leave usage for 6/4/17 – 6/17/17 (biweekly)

June Bi-Weekly (B1) Payroll Cycle Cutoff June 22nd First deadline for: Payroll Expense Transfers Late/Reduce Pay Additional Pay transactions Pay Cycle “B1” and Pay Period End date “061717”

June Monthly Payroll Time Reporting Deadline June 23rd May 2017 leave usage (monthly)

June Monthly Payroll Cycle Cutoff June 26th – June Monthly payroll cycle cutoff Second deadline for: Payroll Expense Transfers Late/Reduce Pay Additional Pay transactions Pay Cycle “MO” and Pay Period End date “063017”

Supplemental (XX) Payroll Cycle Cutoff July 3rd – Third deadline for Payroll Expense Transfers Final deadline for: Late/Reduce Pay Additional Pay transactions Z payments (School of Medicine) Pay Cycle “XX” and Pay Period End date “060117”

Payroll Expense Distribution Ledgers for June Payroll July 5th – PPP5302 payroll ledgers Available in Electronic Document Library (EDL)

Special (XX) Payroll Cycle Cutoff July 6th – Final deadline for Payroll Expense Transfers i. Use Pay Cycle “XX” and Pay Period End date “070317” ***No Late/Reduce or Additional pay transaction. They will be Deleted!***

Payroll Expense Distribution Ledgers for June/July July 7th – PPP5302 payroll ledgers available in Electronic Document Library (EDL)

Accruals for Transferring Payroll Already Paid in 2016-17 Fiscal Year Work with Central Payroll – Susan Schwartz (GEC-R accrual) Departments process Payroll Expense transfer Provide Post Authorization Notification (PAN) to Central Payroll Benefits must move with salary Only exception is Contract and Grant funds

Decision Support Kevin Chung

Decision Support Tools Toggle Encumbrances in Reports BLISS Ad-Hoc Query Organization Account Status You can query by the highest org Groups Account Balances by Income and Expenses Ensure that your Income categories Budget and Actuals align so the variance is zero. Object Code Balance Report (FS0219) Shows Expense Object Codes that have credit balances The Organization Account Status report is useful for aligning income budget and actuals so that they have a variance of zero. Remember that doing this is required for fiscal year end. Utilize the report to create a csv to upload into KFS. For Details see http://accounting.uci.edu/support/guides/budgetincome.html More details about working with this report are here: http://www.accounting.uci.edu/news/2015/20150424.html

Pre-Run Reports Reports being pre-run and saved: Ledger Reconciliation Account Summary Account Transactions Fund Summary Reports generated for July 1 – July 14

Use Reports to upload to KFS Use reports to create a file to upload data into the Budget Appropriation Transaction. For details see http://accounting.uci.edu/support/guides/budgetin come.html Upload to KFS using CSV guide: http://accounting.uci.edu/support/guides/importlin es.html

Questions? Online Resources Workshop slides available online later this week. Check the “KFS News and Announcements” Portlet on ZotPortal for deadlines. More information is available on the Accounting and Fiscal Services website: www.accounting.uci.edu/fiscalclose/