1. Reconciling December

2. Reconciling December
The month of December should be reconciled and closed just any previous month, special attention should be made the following accounts.
Balance Sheet Accounts
Cash should balance to the Treasurer’s Cash Trial Balance
Accounts Receivable should balance to the Accounts Receivable Report
If you have multiple A/R Accounts each account should balance to the group of customer types
A/R for Individuals should balance Individuals A/R Report
A/R for Townships should balance to Townships A/R Report
A/R for Municipalities should balance to Municipalities A/R Report
A/R for Other County Departments should balance to Other County Departments A/R Report
A/R for Other Governments should balance to Other Governments A/R Report
State Aid Receivables should balance to the State Aid SAAS Status Report
The balances may differ due to transactions that have not yet been processed by your office or State Aid.
State Aid Allotments should balance to the State Aid SAAS Status Report

3. Reconciling December, continued
Balance Sheet Accounts continued
Accounts Payable should be zero at the end of December
Salaries Payable should be zero at the end of December
Unearned (Deferred Revenue) for State Aid Accounts
Regular and Municipal Maintenance should be equal to the current year allocation for each account
Regular, Municipal, Town Bridge, Special Town Bridge, State Park, Turnback
Funding that is paid in advance (95%) is calculated with this formula:
Allotment Balance, plus any revenue to be recognized for open projects, minus recognized revenue for overruns on projects that have not been finalized with State Aid.

4. Accruals

5. Accruals
Daily Time should be posted to for the time worked in December but paid in January.
Invoices that were for the current year but paid next year within the accrual dates for the county. If the purchases are interfaced to the county financial system multiple purchase batches may need to be interfaced for each warrant run.
Adjustments for year-end accruals
Current and Delinquent Taxes receivable
Reverse prior year receivable entry
Book Current year receivable entry
Benefits Payable
Reverse prior year payable entry
Book Current year payable entry
Vacation Payable

6. Accruals, continued Adjustments for year-end accruals, continued
Vested Sick Leave Payable
Reverse prior year payable entry
Book Current year payable entry
Adjust Comp Time Payable
If current Comp Time Payable is to high:
Debit Comp Time Payable (liability)
Credit Comp Time Adjustment (Unallocated Benefit Account)
If current Comp Time Payable is to low:
Debit Comp Time Adjustment (Unallocated Benefit Account)
Credit Comp Time Payable (liability)
Contracts Payable

7. Accruals, continued
Recognize Revenue for Certified Work paid within county accrual period
Debit Unearned (Deferred) Revenue
Credit Revenue
Reconcile all Accrual Accounts
Accounts Payable should equal the Accounts Payable Report
Salaries Payable should equal the Salaries Payable by Employee/Department
Contracts Payable should equal retainage for open contracts
All adjusted accounts should be the current year receivable or payable balances.

8. Inventory Variances
When all balance sheet accounts have been reconciled for year-end the inventory on the Costrite System must be adjusted to the physical inventories on hand at the end of the year.
Field and Shop staff will take a physical inventory of all items included in the system inventory
Filters
Oil, Anti-Freeze, Trans Fluid
Gas and Diesel
Signs
Culverts
Stockpiles
Salt and Sand
Before making adjustments to inventory review unit prices for inventory items, make adjustments to the unit price if needed.
Adjust quantities to each inventory item if needed.
After all Balance Sheet Accounts have been reconciled and inventory items have been adjusted to the physical values Unallocated Spreads may be entered for year-end processing.

9. Year-End Unallocated Spreads

10. What are Unallocated Costs
Unallocated costs are costs that cannot be directly related to
A specific road
Construction/engineering project
Equipment unit
Every effort should be made to charge costs directly to the appropriate cost area before using unallocated accounts.
Unallocated costs are divided between two categories
Highway related
Administration
Maintenance
Construction/engineering
Shop/equipment.
Non-highway related
These should be isolated and will not be distributed highway activities

11. Administrative Costs Administrative costs
Are expenses that are not directly attributable to a specific activity
Any unapplied administrative costs will be included with the maintenance reporting by road system as unallocated
Examples of unallocated administrative costs are:
Administrative Salaries
Engineering Computer Program/Service Contract
Fringe Benefits
County FICA, Medicare, PERA Expenses
County Health Insurance Expense for Employees
Vacation, Sick Leave, Personal Leave, Military Leave, etc.
Minor Office Furniture/Equipment
Office Supplies
Training and Education
Travel and Lodging

12. Administrative Costs - Continued
A portion of the Engineer’s salary may be moved to the construction area
Based on a fair estimate of the Engineer’s time.
Documentation should be on file to show how this estimate was determined.
Some costing systems distribute Fringe Benefits directly to labor costs by actual Fringe Benefit Costs for
The period by actual labor activities OR
inflate actual labor rates by a Fringe Benefit Overhead Rate.

13. Administrative Costs - Continued
If Fringe Benefits are applied to actual labor costs
The amount applied will appear in a separate column on various reports provided by the costing system
The credit offset for the Fringe Benefit Expense will be cash or a liability account
If Fringe Benefits are applied by inflating actual labor rates by a Fringe Benefit Overhead Rate
The labor cost column on various reports will be inflated by the Fringe Benefit Overhead Rate
Reports may be printed including or excluding the Fringe Benefit Overhead Rate
The credit offset for the Fringe Benefit Overhead Rate is included in the Fringe Benefit section of the unallocated costs

14. Construction Costs Unallocated construction costs
Expenses relating to construction operations that cannot be identified to a particular construction project.
The costs in these accounts should be prorated to engineering based on total costs of the projects at year-end.
If the County chooses, they may seek reimbursement of these engineering costs using their State Aid allocation.
Examples of unallocated construction costs include
Alignment Surveys
Cross Section Stock Piles
Drafting Supplies
Engineering Expense
Engineering Field Work
Field Engineering Supplies
General Permits
Road Studies
Wetlands Bank/Mitigation

15. Construction Costs - Continued
Education and training costs related to the county engineering staff
Are not allowed to be prorated to construction projects or individual roads
These costs should be included in the administrative unallocated dollar amount on the maintenance report by road system

16. Maintenance Costs Unallocated maintenance costs
Are maintenance expenses that are difficult to associate with a particular road
All efforts should be made to charge to the individual roads before using unallocated maintenance accounts
After costs have been accumulated in each unallocated account
They may be spread to the individual roads in the appropriate maintenance account

17. Maintenance Costs - Continued
Unallocated maintenance costs may be distributed to the roads based on
Total mileage
System mileage
Surface mileage
Labor
Number of intersections, curves and hills
The formula used to distribute unallocated costs will be determined by the type of unallocated cost

18. Maintenance Costs - Continued
Examples of unallocated maintenance costs include
Annual Bridge Inspections & Report
Bridge Inspections – Not related to a project
Building Barricades
Gravel (stockpiled, crushing, prospecting)
Maintenance Supplies for specific maintenance accounts (brooms for minor surface maintenance sweeping)
Salt and Sand, materials and mixing costs
Sign Materials
Straightening Sign Posts
Traffic Studies/Counts
Weight Restrictions
Weight Scale Calibration

19. Maintenance Costs - Continued
Most unallocated costs
Will be distributed by mileage
Some costs that will be distributed based on special distribution formulas

20. Maintenance Costs - Continued
Each county should develop a method of allocating materials they choose to spread that works best for them
Salt and sand is a good example of a special distribution formula
It’s usually applied to bituminous or concrete surfaces only at intersections, curves and hills
A survey of all road systems should be done to determine the number of intersections, curves and hills on bituminous or concrete roads
Example
CSAH Regular: 120 intersections, 55 curves, 30 hills = 205
CSAH Municipal: 110 intersections, 20 curves, 3 hills = 133
County Roads: 30 intersections, 5 curves, 10 hills = 45

21. Maintenance Costs - Continued
Based on this example
The percentage of salt and sand distributed to CSAH Regular would be 54%
CSAH Municipal would be 35%
County roads would be 11%
The salt and sand would be distributed to each road program
Based on the calculated percentages to bituminous or concrete surfaces only
Using this formula will place more costs on the CSAH Municipal roads since the number of CSAH Municipal miles are usually the least of the county’s road systems.

22. Shop/Equipment Costs Unallocated shop and equipment costs are expenses
Relating to shop and equipment operations that cannot be identified to a particular unit
Examples of unallocated equipment costs include
Shop Overhead (Utilities)
Shop Supplies & Small Tools
Miscellaneous Repair Parts
Building & Grounds Maintenance
Inventory Adjustments for Fuel
Inventory Adjustments for Parts and Replacements

23. Shop/Equipment Costs - Continued
Inventory adjustment
Should be held to a minimum through the use of good inventory control and management
Should become part of cost added to equipment
And prorated back to the units in developing a rate
Or ultimately become an entry into adjustment to equalize depreciation

24. Non-Highway Related Costs
Non-highway costs
Should be accumulated in the area for county dollars or authorized work for others.
Non-highway related activities must not be included in the unallocated costs which are distributed to the road system
Non-highway costs may include costs associated with
Capital Outlay
Ditch Fund for Flood Control
Agricultural Inspection
Work for Others
Other Non-Highway Related Costs
911 Signing

25. Conclusion
Every effort should be made to charge costs directly to the appropriate cost area before using unallocated accounts.
Unallocated costs are divided between two categories – highway related and non-highway related.
The highway related unallocated costs are divided into categories for administration, maintenance, construction/engineering and shop/equipment.
Non-highway related unallocated costs should be isolated and will not be distributed highway activities.
A worksheet for distributing unallocated costs at year-End is available on the State Aid Finance Website:

26. Year-End Reports and Final Adjustments

27. Year-End Reports and Final Adjustments, continued
Fixed Asset Report
Print the Fixed Asset Report, Annual Depreciation is included in the report
Summary of Road Program Maintenance Costs
This report provides the total costs by road program for the year
This report is used to determine the revenue recognized for the year for Regular and Municipal Maintenance
Adjustment for Regular/Municipal Revenue
Compare the total expenses for Regular/Municipal Maintenance to the Unearned Revenue Account Balance
If the expense exceeds the Unearned Revenue Balance, the amount of revenue is the Unearned Revenue Balance.
If the expense is less than the Unearned Revenue Balance, the amount of revenue is equal to the total expense.
Adjustment for Regular/Municipal Receivable
If there is an unpaid balance for the Regular/Municipal Maintenance Allotment, determine if the amount already received by the county is less than the Regular/Municipal Revenue.
Compare the Regular/Municipal Revenue to the receipted amount for the current year, if revenue exceeds the receipt amount the county is due additional funds, the difference in these amounts represents the Regular/Municipal Receivable.
Debit Regular/Municipal Maintenance Receivable
Credit Regular/Municipal Maintenance Allotment

28. Year-End Reports and Final Adjustments, continued
Adjustment for Regular/Municipal Overpayment
If the Regular/Municipal Maintenance Expense is less than the amount receipted for the current year and overpayment of maintenance has occurred. The amount that the receipt exceeds expense is the amount that the county has been overpaid.
Debit Regular/Municipal Maintenance Allotment
Credit Regular/Municipal Construction Overpayment Account
Debit Regular/Municipal Maintenance Unearned Revenue
Credit Regular/Municipal Construction Unearned Revenue
Adjustment for Regular/Municipal Maintenance Transfer to Construction
If Regular/Municipal Maintenance expenses did not exceed the current year allotment the remaining Allotment and Unearned Revenue balances are transferred to Regular/Municipal Construction
Credit Regular/Municipal Maintenance Allotment
Debit Regular/Municipal Construction Allotment

29. Annual Report

30. Annual Report
A number of reports from the Costrite System may be used to complete a number of pages in the annual report:
Page 3 Financial Statement – Costrite Trial Balance
Page 4 Accounts Receivable – Costrite Accounts Receivable Report
Page 6 Inventory of Materials and Supplies – Costrite Inventory Balance Report
Page 7a Accounts Payable Detail – Costrite Accounts Payable Report
Page 8 Fixed Asset – Costrite Fixed Asset Report
Page 10 Statement of Revenues and Expenditures – Costrite Revenues and Expenditure Guidelines, IFS Account Activity Report
Page 11 Summary of Maintenance Costs by Funds – Costrite Summary of Maintenance Costs by Date Range
Page 12 Detailed Maintenance Costs by Funds – Costrite Analysis of Routine Maintenance

31. The End