1. Joe Fistrovich, Controller, State Budget Agency Steve Daniels, Deputy Auditor, Auditor of State June 7, 2012

2.  Introduction /Background on State Chart of Accounts and Accounting System  Budget Close  PO Rollover  Year-End Cleanup  Financial Close  Balancing Budget with Financial Ledgers  Questions 2

4.  FUND  5 digits - Primary means for tracking and relating specific sources and uses of revenues or budget authority  Generally, do not cross Agencies  Multiple Attributes are assigned to each Fund value to assist with Financial, Budgetary, Federal and Capital Project Reporting 4

5.  LEGAL FUND (ATTRIBUTE OF FUND):  4 digits - collection of Funds  Reporting Level for Financial (CAFR) and Budgetary (Budget Bill)  1000 = General Fund  If Funds are appropriated by Budget Bill or Federal Grant is received, new Legal Fund is created  Legal Fund for Federal Funds = by Federal Granting Agency  Budget Agency Revenue Forecast Tracks General Fund Revenue, Control 3 Funds 5

6.  CONTROL CODE (ATTRIBUTE OF FUND):  Control Code 3: Appropriations Revert; Receipt of Revenue has no Budget Impact  Control Code 4: Biennial Appropriations; Receipt of Revenue has no Budget Impact  Control Code 5: Non-Reverting; Receipt of Revenue increases Appropriations  Control Code 6: Non-Reverting; Receipt of Revenue increases Appropriations and Allotments  Control Code 7: Non-Reverting; Receipt of Revenue has no Budget Impact  Used for Federal grants and Capital projects 6

7.  ACCOUNT  One set of values used across all agencies  First digit represents major financial reporting classification:  Balance Sheet  1 = Assets, 2 = Liabilities, 3 = Fund Balance  Income Statement  4 = Revenues, 5 = Expenditures  6 = Internal Service Fund Revenues “64” and Expenses “65”  7 = Other Financing Sources “74” and Uses “75”  Rarely used by anyone except AOS, SBA  Separate set of Accounts for Budgetary control / ledgers 7

8. 8 Projects (Federal grants & Capital Projects) General Ledger / Commitment Control Purchase Order (ePro) Requisition (ePro) Asset Management Billing Accounts Receivable Time & Labor PeopleSoft Human Resources Inventory RFQ (ePro) Receiver (ePro) Travel& Expenses Accounts Payable

9.  All GL Entries must balance at the Fund Level. When an entry doesn’t balance, System inserts lines with InterUnit/InterFund Cash (111500) to make it balance.  Inter Unit account is considered to be part of Cash Balance of Fund  Entries must have valid Edit and Budget Checking Status to post to GL  System summarizes the Subsystem entries each day by chart string, so if there are 10 deposits that have the same chart string, they will result in one entry in the General Ledger.  Details exist in the subsystem 9

11.  Commitment Control Module – Accounts start with E  APPROP Ledger –  Appropriations established by General Assembly (Budget Bill) or Federal Grant Award  Controlled Ledger (can’t be exceeded without override)  ALLOT_CTRL Ledger – allows Control at Personal Services / Other Than Personal Services level  ALLOT Ledger – Tracking purposes for agency use 11

12.  Biennial Budget Bill passed in odd-numbered year of General Assembly  Funds in Budget Bill – fixed appropriation unless augmentation authority explicitly granted  Some Funds not in Budget Bill  Federal Funds – Grant Award sets appropriation  Dedicated Funds – supported by revenue received 12

13.  Agency Spending Plans  Quarterly – how will agency stay within budget  Special focus on General Fund  ALLOT_CTRL, ALLOT reflect spending plan  Reserve requirement – money not allotted  Administrative Action  SBA moves money within an agency, usually monthly  State Board of Finance  SBA/AOS/TOS move money between agencies 13

14.  Goal – push documents through the system and abide by AOS/IDOA year-end deadlines  AP – vouchers must post, budget errors resolved  AR – deposits made at TOS, accounting entries completed  GL/AM – entries made by deadlines 14

15.  Daily / Weekly monitoring of Funds with negative APPROP balances  Goal : no Funds negative at year-end close  Administrative Actions as needed  State Budget Agency has pre-loaded FY13 1 st quarter allotments.  Initial Budget Allotment schedules and 1 st Quarter Transfer List (matching funds) to be loaded by July 1 st.  Balance General Fund with AOS 15

16.  No outstanding requisitions at year-end  Either Purchase Order or start again in new year  PO will retain Budget Reference, but Budget Periods will become 2013. 16

17.  Agency staff will not be allowed in PeopleSoft from 4:00 PM on June 29 th until 8:00 AM on July 1 st (Indy time)  Budget Close withdraws budgets in current year and prepares budgets in new year  Need to operate at beginning of July until financial close is complete 17

18.  FY12 ALLOT_CTRL and ALLOT ledgers will be reduced to zero using Budget Close process.  FY12 Budget for non-reverting Control 7 Funds are manually rolled forward to FY13 for ledgers based on APPROP available balance.  Control 5 and 6 Funds will be manually rolled forward to FY 13 based on available cash balance. 18

20.  AP: Pay vouchers by June 30 th – insure payments made from current budget year  GL: Post journal entries as soon as possible after June 30 th  AM: Close AM books (separate ledger) as soon as possible after June 30 th  Balance General Fund reserve with SBA  Make Statutory Transfers (Rainy Day Fund, Build Indiana Fund)  Monitor Fund and Legal Fund Cash Balance 20

21.  Deadline for submitting FY12 Journal Entries and ID bill Journal Entries to AOS  4:30 PM June 22 nd  Automatic exception for allocating June 13 th, June 20 th and June 27 th payroll entries  Deadline for these entries is 4:30 PM July 2 nd  No exceptions!  June 27 th payroll will be loaded by morning of June 25 th (potentially June 23 rd ) 21

22.  Agency staff will not be allowed in PeopleSoft from 4:30 PM on July 13 th until 8:00 AM on July 16 th (Indy time)  Necessary to allow processing of Financial Close 22

23.  Appropriations in Control 3 Funds are pre-funded with “cash” from the Legal Fund  Done via “Intrafund transfers” from Closing Center (ends in 99) - eliminated  Year-end treatment depends on:  Account Type  Balance Sheet balances roll forward  Income Statement balances close to Fund Balance and start new year at $0  Control Code of Fund

24.  Example – 1 Fund in General Fund - Budget Agency  $1,000 Revenue Estimate  $1,000 Budget  3% Reserve Requirement ($970 Allotments)  $970 in Expenses  $1,050 in Revenue  Cash is deposited at TOS, but recorded in AOS Fund 24

25. 25 InterUnit 111500 BB Approp 750002 BB Approp 740002 Fund 10520 Budget Agency 1000 InterUnit 111500 Fund 10099 Closing Center 1000 Bal = - 1,000 Bal = - 1,000 Bal = 1,000

26. 26 InterUnit 111500 Cash 110100 Salaries & Wages 510101 Fund 10520 Budget Agency 970 InterUnit 111500 Fund 10470 Auditor of State 970 Bal = 970 Bal = 970 Bal = 30 Bal = -970

27. 27 InterUnit 111500 Cash 110100 Sales Tax 412010 Fund 10520 Budget Agency 1050 InterUnit 111500 Fund 10470 Auditor of State 1050 Bal = -1,050 Bal = - 1,050 Bal = 1,080 Bal = 1,050

28. 28 July 1st – June 30thPeriod 0 Period 996 Period 999 State Fiscal Year Beginning Balance Adjusting Entries Ending Balance

29.  Control Code of Fund  Control Code 3: Asset Balances swept to Closing Fund (same first 3 digits but last 2 are 99)  Cash left behind for AP and Encumbrances only  Fund Balance account 311300 (Unassigned) is used  Control Code 4:  Odd year – works like control 3  Even year – works like control 5  Control Code 5, 6, and 7: Retain asset balances  Income Statement accounts close to Account 311310 (Assigned)  Certain Fund Types close to Restricted, NonSpendable or Committed

30.  Before Year-End Close is run, allocations are run to  Close out InterUnit Cash to Cash  All balances in 111500 moved to 110100  Made in adjustment period – special prefix in Journal ID (FYA)  Revert Asset Balances for Control 3 Funds  Asset Balances swept to Closing Fund (same first 3 digits but last 2 are 99) in same Legal Fund  Except cash is left behind for Accounts Payable not yet paid  Made in adjustment period – special prefixes (FYC, FYD, FYF)  Sweep Revenue received for Federal funds to Closing Fund  Revenue balances and associated cash swept to Closing Fund  Made in adjustment period – special prefix (FYH)

31.  When Year-End Close is run,  Income Statement Accounts are closed out to Fund Balance  Year begins typically with balances in Cash (110100) and Fund Balance (311300 or 311310)  Query or inquiry results with periods 0 through 999 for revenue or expense accounts will show $0 balance  Query or inquiry results that include periods 1 through 999 for balance sheet accounts will not include amounts that rolled forward from a prior year  Fund Balance accounts are rarely used throughout year  only for material correcting entries where revenue or expenses have closed to fund balance

32. 32 InterUnit 111500Sales Tax 412010 Fund 10520 Budget Agency 1080 1050 1600 InterUnit 111500Cash 110100 Fund 10470 AOS Fund 80 InterUnit 111500BB Approp 750002 Fund 10099 Closing Center 1000 BB Approp 740002 1000 Salaries & Wages 510101 970

33. 33 InterUnit 111500Sales Tax 412010 Fund 10520 Budget Agency 1080 1050 InterUnit 111500Cash 110100 Fund 10470 AOS Fund 80 InterUnit 111500BB Approp 750002 Fund 10099 Closing Center 1000 BB Approp 740002 1000 Salaries & Wages 510101 970 Fund Balance 311300 80 Cash 110100 80 1000 1080970 1000 1050 1000

34.  Budget Agency reports  $1,000 Budget  $80 Reserve Balance consists of  $30 Unspent Appropriations (Reversions)  $50 Revenue Over Forecast 34

35. 35 From State Budget Agency website: Budget Information, Fiscal Year Close-Out Statements General Fund Reserve must be positive $0.06 in FY02 Automatic Taxpayer Rebate?

36. 36

38.  Steve Daniels, Auditor of State’s Office sdaniels@auditor.in.gov (317) 233-9817  Joe Fistrovich, State Budget Agency jfistrovich@sba.in.gov (317) 232-2974 38