Search
Financial Services Manual (FIN)
![[horizontal rule]](finhr.gif){kind=small}
| Effective: 3/18/1985 |
Revised: 11/1/2012 |
![[ASU logo]](asu.gif) |
FIN 105: Fiscal Year-End Closing |
Contents
Overview of Encumbrance and Expenditure Cutoff
Deadlines
-
Accounts Receivable Billing Documents
Capital Purchases near Fiscal Year-End
Payroll Expense Redistributions
Processing of Old Year IIs against PO Documents
Purpose
To close out year-end financial transactions
Source
University policy
Introduction
The following information outlines fiscal year-end close-out procedures for the ASU accounting system for various fiscal areas. While some minor changes may have been made, in general these procedures are consistent with prior years.
It is important to understand these planned procedures so that budget availability can be closely monitored and proper accounting cutoff can be achieved. Likewise, it is important to pay attention to online notices for any supplements and/or modifications to these procedures. Although every effort is made to keep modifications to a minimum, the necessity for last-minute modifications exists.
Training sessions related to management and reconciliation of accounts are available. If you have any questions about the Advantage financial accounting system e-mail announcements, or if you would like to enroll in the training sessions, call the Advantage financial accounting system helpline at 480/965–2334.
Overview of Encumbrance and Expenditure Cutoff
The general rule for year-end closing is that a use of funds occurs only when a payment voucher (PV) is generated to pay an external vendor or an interdepartmental billing (II) is processed within the accounting system. Exceptions to this general rule are made for certain purchase orders and certain interdepartmental purchase orders remaining open at June 30; these exception items are known as “prior year commitments.”
Prior year commitments remain encumbered on state agency/orgs (agency codes that have a “1” in the third digit) as of year-end, even though the actual expenditure does not occur until the following fiscal year. Specific items classified as prior year commitments and their budget treatment are discussed in detail below.
On state agency/orgs, outstanding orders that are not included as prior year commitments will not remain encumbered at year-end on the 12th month reports. These items will be a use of ensuing fiscal year budgets unless invoices and receiving documents have been processed or received by Payables and Reimbursements as noted in a following section.
In general, purchase orders to external vendors and most interdepartmental purchase orders, including prior year commitments, are reopened automatically in the following fiscal year; therefore, new purchase orders are not required. Exceptions to this general rule are purchase orders that have been inactive for a lengthy period of time.
Deadlines
Deadline dates for processing current fiscal year documents are typically issued by Financial Services by April 30 of each year and are published on the Financial Services News Web page.
Payables and Reimbursements
Goods and services received in June are recorded as current fiscal year expenditures; goods and services received in July are recorded as ensuing fiscal year expenditures.
It is important that departments correctly input receiving reports into the Advantage financial accounting system as soon as possible after full or partial receipt of items ordered. If the items are received in June, a June date is to be used even if the receiver is being input in July; conversely, if the items are received in July, a July date is to be used when the receiver is entered into the Advantage financial accounting system.
Both receiving reports and vendor invoices for the current fiscal year expenditures must be entered into the Advantage financial system and delivered to Payables and Reimbursements by the published deadline date. Financial Services can ensure that June items are recorded as current fiscal year expenditures only if the published deadline date is met. Otherwise, it is likely that noncapital items will be processed against the ensuing fiscal year budget.
Travel
Travel authorizations and claims for current fiscal year travel must be received by Travel Reimbursements no later than the published deadline date. Claims submitted after that date for travel expenditures incurred before July 1 will likely be processed against ensuing fiscal year budgets.
Petty Cash
Original receipts are required. Itemized receipts are preferred and may be required in certain circumstances before reimbursement is made. Disbursements made from petty cash funds are to be turned in no later than the published deadline date for all disbursements made through June 30 or the last work day of June. Receipts for July purchases should not be included with those of June or earlier.
Accounts Receivable Billing Documents
Final processing for accounts receivable billing documents will be the published deadline date, although documents should be delivered at the earliest time possible. If documents delivered by this deadline are rejected from the system due to errors, they will be re-entered into the system in the next fiscal year.
Capital Purchases near Fiscal Year-End
Off-Campus Purchase Requests for capital purchases from the current fiscal year State General Operating Fund budget (agency/orgs whose third digit of the area code is a “1”) should be made by the published deadline date. Refer to FIN 405–02, “Capital Purchases Near Fiscal Year-End,” for additional information.
Payroll Expense Redistributions
A payroll redistribution is used to move payroll expense to a different account number, position number, or pay period end date. The deadline for processing payroll expense redistributions in current fiscal year is set by Financial Services. Advantage fiscal year end calendar is online at Advantage Calendars. Payroll expense redistributions processed after the deadline will be recorded against the subsequent fiscal year’s budget.
The deadline for position and job data reclassification, adjustments, or corrections that are not payroll expense redistributions is set by Financial Services-Payroll Services. Payroll calendars and year-end information relating to payroll can be found at FS Payroll Calendars.
Payment of Annual Services
Payment for subscriptions, dues, maintenance agreements, and other services covering a period of time generally should be made in the fiscal year in which service begins. If the period of service begins in July, however, payment may be made in the prior fiscal year.
Prior Year Commitments
Prior year commitments apply only to state agency/orgs and are either significant capital purchases or special projects that remain encumbered at year end on the 12th month reports and for which appropriation (budget) increases are recorded in the ensuing fiscal year. Prior year commitments include:
- Capital purchase orders (PCs) coded to an object code beginning with the number “78.” If there are minor parts on the same purchase order coded to a noncapital code, the entire order will be treated as a prior year commitment if the remaining encumbered balance is at least $500.
- Interdepartmental purchase orders (PO documents) to the
following vendors:
- Department of Facilities Management (FACMAN)
- Information Technology (IT)
- ASU Purchasing (FURNITURE or CARPET)
- Sun Card Services (SUNCARD)
- West campus Information Technology Service (ASUWIT)
- West campus Facilities Management (ASUWFACMAN)
- Polytechnic campus Facilities Management (POLYFACMAN)
- ASU Stores (ASUSTORES), FOLLETT, and Canon (CANON) for orders coded to capital only
- Computing Services (COMPUTING) for orders coded to EDP Services (7310 31).
Interdepartmental POs must have a remaining encumbered balance of at least $500 to qualify as a prior year commitment.
- Special items for long-term projects that are manually encumbered by Financial Services using a journal voucher on sub-object code 7390 91, upon special written request to and approval by dean or director and appropriate vice president/vice provost/provost, and the senior associate vice president for Finance and deputy treasurer.
In addition to being reopened and re-encumbered in the following fiscal year to the same state agency/org, a corresponding appropriation increase is also made in the ensuing fiscal year in the amount of these prior year commitments. For further information on appropriation increases, refer to FIN 102–01, “Appropriation Budget Changes.”
The appropriation increase to the “all other” appropriation units (agency/org number plus suffix of “A”) occurs after the loading of the new year original budgets, which normally occurs in July or August.
Approving and Processing Current Fiscal Year Purchase Requests/Interdepartmental Purchase Orders, and Quick Turnaround Forms
The deadline for approving and processing online purchase requests (RX documents), quick turnaround forms, and interdepartmental purchase orders (PO documents) with a June date is published each year. Due to time constraints at fiscal year-end, university users are encouraged to submit final fiscal year RX and PO documents well before the cutoff date. After the cutoff date, all online RX and PO documents remaining on the suspense file (SUSF) need to be redated with a July 1 date. Should an emergency situation arise in which goods or services must be obtained immediately from an off-campus vendor with a current fiscal year purchase order, contact the responsible buyer in the Purchasing and Business Services Department.
Payment Vouchers
The deadline for submitting Payment Vouchers (PVs) and supporting documentation for expense reimbursements and other similar items to be reflected as current fiscal year expenditures is published each year. The forms and supporting documentation need to be sent to Payables and Reimbursements.
Other User Documents
The deadline for approving and processing other user documents such as Appropriation Transfers (A1 documents) and Expense Transfers (IX documents) with a June date is published each year. After the deadline, transactions of this nature for the current fiscal year can only be processed by Financial Services.
Reopening of Purchase Orders
As previously mentioned, the process of reopening orders in the next fiscal year occurs for all off-campus purchase orders (PCs and POs) as well as most interdepartmental orders (PO documents), including blanket orders.
Processing of Old Year IIs against PO Documents
As previously mentioned, interdepartmental orders are automatically reopened and re-encumbered in the next fiscal year for all interdepartmental vendors. It is important not to confuse the reopening process with the appropriation increases discussed earlier. Appropriation increases occur only for those items classified as prior year commitments.
The reopening process occurs earlier for interdepartmental purchase orders than for purchase orders to external vendors. Service departments have approximately one week into the new fiscal year to process billings (IIs) related to the old year. During this period of approximately one week, service departments must not process any billings (IIs) with a date in the new year that reference PO documents with a prior year date.
After the period for processing old-year billings, all remaining open interdepartmental billings are automatically reopened and re-encumbered in the ensuing fiscal year. Consequently, it is important for org managers to review all outstanding interdepartmental encumbrances and close out any orders that are no longer relevant prior to being reopened in the new fiscal year. Such encumbrances are closed out by modifying the interdepartmental order (PO document) to zero dollars.
| Note: | Before modifying a PO document to zero dollars, check with the service department to ensure that there are no charges pending against the PO document. |
Final Payables and Reimbursements Processing
The reopening process for off-campus orders (PCs and SCSs) occurs after Payables and Reimbursements has processed old-year items during approximately the first week of the new fiscal year.
The reopening process at ASU for both interdepartmental and off-campus orders consists of:
- processing two journal vouchers—one to unencumber the
balance in the old year and one to re-encumber the balance in the
new year
and
- changing the fiscal year entry in document tables to the new year.
One benefit of this approach is that the document numbers do not change. Another advantage to this approach is that it permits reopening prior year commitment items while allowing them to be reported as a use of funds on reports for the year being closed. A disadvantage to this approach is that it complicates determining online budget status during the closing process.
Final 12th Month Summary Financial Status and rollup reports reflect the following:D
| Encumbrances in Agency/Orgs in Final Reports | |
|---|---|
| Type of Agency/Org | Comments |
| State | Only prior year commitment items appear as encumbrances on 12th month reports |
| All other agency/orgs | All remaining open encumbrances appear on 12th month reports |
New Year Appropriation Entries
After appropriation entries to establish original budgets are processed in the new fiscal year, additional appropriation entries can then be made to increase appropriated budgets for prior year commitment items.
Most appropriation increases for prior year commitment items occur via automated entries with a transaction ID prefix of “PYC.”
skip navigation bar