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2014 Fiscal Year-End Close Administrative Procedures. June 2, 2014. Overall Agenda. Importance of Fiscal Year-End Close…and GAAP Training – Jeff Manning Fiscal Year-End Closing Guidelines FAR, Accounts Receivable, Payroll – Jennifer Killingsworth Accounts Payable – Angie Downing

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2014 Fiscal Year-End Close Administrative Procedures


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    1. 2014 Fiscal Year-End Close Administrative Procedures June 2, 2014

    2. Overall Agenda • Importance of Fiscal Year-End Close…and GAAP Training – Jeff Manning • Fiscal Year-End Closing Guidelines • FAR, Accounts Receivable, Payroll – Jennifer Killingsworth • Accounts Payable – Angie Downing • Procurement – Michael Logan • Financial Reporting for Fiscal Year-End – Valarie Waddell

    3. Importance of Fiscal Year-End Close Jeffrey M. Manning Assistant Director, Audit & Compliance

    4. Agenda • Importance of Fiscal Year-End Close • Audit of University Financial Statements • Audit Timeline • GAAP & the Accrual Basis of Accounting • Accounts Receivable • Accounts Payable • Deferred Revenue • Prepaid Expense

    5. Importance of Fiscal Year-End Close • Annual evaluation of financial performance at the University and Departmental levels • Close of operating budgets • Evaluation of effectiveness of internal control systems in place and fiduciary responsibilities • Needed for the preparation of Financial Statements in accordance with U.S. GAAP for: • External Audit (KPMG) Board of Trustees • Bond Holders Department of Education • Donors Tax Returns • Insurance Providers Banks • The Wake Forest University fiscal year 2013 Financial Statements can be found at: • Audited Financial Statements | Financial Services | Wake Forest University

    6. The Audit Objective • “In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Wake Forest University as of June 30, 2013, and the changes in its net assets and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.”

    7. Fiscal Year 2014 External Audit • KPMG, LLP will be conducting the external audit • Preliminary Fieldwork, including an assessment of internal controls, will begin on May 27th • KPMG will return in mid-August to audit the University’s financial statements • Audited financial statements and communication regarding internal controls will be presented to the Board of Trustees in October

    8. What is U.S. GAAP? • U.S. GAAP – generally accepted accounting principles, in the U.S., are the accounting rules used to prepare, present, and report financial statements for non-profit organizations. • GAAP includes the standards, conventions, and rules for recording and summarizing transactions, and for the preparation of financial statements. • Requires that WFU prepare financial statements using the Accrual Basis of Accounting.

    9. What is the Accrual Basis of Accounting? • Accrual basis:accounting method that records revenue transactions in the period earned, and records expenses by matching them to the revenues that they helped create (rather than when payment is made or received). • Accrual – recognition of revenue/expense in year ending 6/30/14. • Deferral – recognition of revenue/expense in periods after 7/1/14. • * Year-end accruals will reverse in July 2014

    10. Accrual: Accounts Receivable • Definition: WFU has performed a service or delivered a good, prior to the end of the period, and has not received payment for the service or goods provided. • Threshold: $0 • Cutoff Dates: December 31st & June 30th

    11. Accrual: Accounts Receivable • Campus Responsibility: • Complete the Deposit Accrual Form found on the Finance website (and on next slide) for Accounts Receivable transactions. • Deposit proceeds normally when received (use same FOAPAL as on Deposit Accrual Form). • FAS Responsibility: • June journal entry to record the revenue and receivable, for June FY14 reporting. • July FY15 journal entry to reverse June FY14 entry, which will cancel out with the deposit once received.

    12. Accrual: Accounts Receivable http://finance.wfu.edu/faculty-staff/financial-reporting

    13. Accrual: Accounts Receivable • Scenario: • Conference held on 6/29/14 • Payment received on 7/10/14

    14. Accrual: Accounts Payable • Definition: WFU has received the benefit of the good or service from an outside vendor, during the current period, but has not paid for the item. • Threshold: $0 • Cutoff Dates: December 31st & June 30th

    15. Accrual: Accounts Payable • Campus Responsibility: • Send approved invoices or other documentation to Accounts Payable (within established deadline of July 8th). • FAS Responsibility: • Record the expense in June, for June FY14 reporting. • Reverse the June FY14 journal entry in July FY15. • Pay the vendor the full amount owed.

    16. Accrual: Accounts Payable • Scenario #1: • Services provided: 6/29/14 • Invoice Date: 7/2/14 • Invoice Provided to AP: 7/3/14

    17. Accrual: Accounts Payable • Scenario #2: • Goods provided: 6/27/14 • Invoice Date: 7/7/14 • Invoice Provided to AP: 7/10/14

    18. Deferral: Deferred Revenue • Definition: Cash received by WFU prior to providing the services to the outside party. • Threshold: $0 • Cutoff Dates: December 31st & June 30th

    19. Deferral: Deferred Revenue • Campus Responsibility: • Deposit proceeds when received. • Complete the Deferred Revenue Form found on the Finance website (and on next slide) for Account Receivable transactions (use same FOAPAL as deposit). • FAS Responsibility: • June journal entry to record the deferred revenue and cash receipt, for June FY14 reporting. • July FY15 journal entry to reverse June FY14 entry, and recognize the revenue in July.

    20. Deferral: Deferred Revenue http://finance.wfu.edu/faculty-staff/financial-reporting

    21. Deferral: Deferred Revenue • Scenario: • Payment received on 6/29/14 • Conference held on 7/15/14

    22. Deferral: Prepaid Expense • Definition: WFU pays for good or service in advance of receiving the benefit of the good or service. • Threshold: $10,000 • Cutoff Dates: December 31st & June 30th

    23. Deferral: Prepaid Expense • FAS Responsibility: • After invoice payment, Accounts Payable reviews each invoice over $10,000 to determine if a portion should be reclassified to prepaid. • Accounts Payable prepares a journal entry to move a portion of the expense to the prepaid account. • Accounts Payable emails the invoice approver to inform them of the entry and gives them instruction about future entries.

    24. Deferral: Prepaid Expense • Invoice Example • Notice: • Dates of service • (11/1/13 to 10/31/14) • Amount of service • ($14,040.00)

    25. Deferral: Prepaid Expense • Accounts Payable entry to move to Prepaid:

    26. Deferral: Prepaid Expense • Cognos transaction detail in FY14 after prepaid entry • by Accounts Payable:

    27. Deferral: Prepaid Expense • Accounts Payable email example:

    28. Deferral: Prepaid Expense • Campus Responsibility: • Potential identification of prepaid expense invoices. • Submit future journal entries as instructed by Accounts Payable. • Department entry to expense Jul FY15 – Dec FY15:

    29. 2014 Fiscal Year-End Closing Guidelines Jennifer Killingsworth Assistant Director, General Accounting

    30. Agenda • Fiscal Year-End Close and Your Role in the Process • Fiscal Year-End Closing Schedule with Key Dates • Fiscal Year-End Guidelines • Financial Accounting & Reporting (FAR) • Accounts Receivable (AR & SFS) • Payroll • Questions

    31. What is WFU’s Fiscal Year-End? • Fiscal year is July 1st through June 30th • Year-end close is performed to finalize a snap shot of transactional activity for an entire fiscal year. Processes are performed to ensure that all transactions are posted and reflected on the financial reports. • Most processes at year-end occur throughout the year. The only change for year-end is proper management of June and July cut off dates.

    32. What is the objective of year-end Close? • To record ALL receipts/revenues and disbursements/expenses in the proper fiscal year.

    33. Who’s involved? • The entire campus community is one team working in tandem.

    34. What is your role? • Review your reports and research any unusual or incorrect items (should be done throughout the year) as soon as possible. • Ensure proper cutoff for transactions during June and July. • Make sure all deadlines are met and that you have followed all year-end procedures that will be discussed today. • Please ask questions if you need help!!

    35. Key Dates for Fiscal 2014 Close-First Departmental Close • June 6th Final day to request a new supplier be set up through Procurement Services • June 13th Project Summary Requests (PSR) in FAR by 5 PM • June 23rd Deacon Depot Purchase Requisitions entered by 5pm • June 30th Final day for receipt of goods for fiscal 2014 • July 1st P-card statement closing date. Transactions must be posted by this date • July 2nd - Invoices, employee travel expense reports, and expenditure vouchers in AP by 5 PM (will be posted in 1st close) • - All deposits in Accounts Receivable by 4:30 PM • - Journal entries in FAR by 5 PM • - Fixed asset addition/disposal support in FAR by 5 PM • July 3rd All fiscal 2014 gifts in Advancement by 3 PM

    36. Key Dates for Fiscal 2014 Close-First Departmental Close • July 7thProcurement card (Pcard) documentation in Accounts Payable (AP) and entered into Works by 5PM (will be posted as an accrual in 2nd close) • July 8th Final Invoices, employee travel expense reports, and expenditure vouchers in AP by 5 PM (will be posted by 2nd close) • July 9th Payroll reallocations and redistribution in Payroll by 5 PM (will be posted by 2nd close) • July 9th FIRST Departmental Close – Draft reports available after 5 PM

    37. Key Dates for Fiscal 2014 Close-Second Departmental Close • July 11th Journal entries in FAR by 5 PM • July 14th - Final Bi-weekly, Student, Ad Comp Payroll Accruals and any redistributions/reallocations recorded • - July 1st Pcard statement accrual recorded • - APC entry for RCxxxx funds recorded • - Known prepaids and accruals • July 15th SECOND Departmental Close – Draft reports available after 8:30 AM

    38. Key Dates for Fiscal 2014 Close-Final Departmental Close • July 16th * Final Journal entries in FAR by • 5 PM • July 17th * FINAL Departmental Close – Final reports available after 5 PM

    39. What happens after July 17th? • Remaining balances on fiscal year 2014 purchase requisitions roll to fiscal year 2015 • Ongoing review of expense and revenue transactions for classification as accrual or prepaid • THE EXTERNAL AUDIT!!! • University Audited Financial Statements presented to the Board of Trustees and issued in October

    40. Financial Accounting & Reporting • (FAR) • GUIDELINES

    41. Journal Entry Preparation • Fill out the journal entry form completely. If you need assistance, please call Ruth Smith (x 5977), Freddy Acuña (x 5186), or go to the Financial Reporting webpage and click on the How To tab for a link to our recent Journal Entry training presentation. • Include an accurate description (up to 35 characters). • Attach proper support documentation (i.e., copies of receipts, invoices, Cognos reports, etc.) • Ensure that you have proper signature authorization before sending the journal entry to FAR.

    42. Fixed Assets/Projects • Project Summary Requests (PSR) • For projects being funded from current fiscal year departmental funds, approved PSR’s must be submitted to Jessica Gorrell (x 6408) no later than June 13th. Forms can be found at: • http://finance.wfu.edu/faculty-staff/project-management • Fixed Assets • Support for all additions, disposals, and transfers must be submitted to Kathryn Hackworth (x 4096) no later than July 2nd. Forms and policy can be found at: • http://finance.wfu.edu/faculty-staff/asset-management

    43. RC & ER Funds • Any RC or ER funds which are overspent (debit balance) as of June 30 will need to be corrected. Please check your Cognos reports to identify which of your funds are overspent. • To correct overspent balances, expenses will need to be moved to either: • another appropriate restricted fund • the department’s operating budget • Please submit journal entries for these corrections by July 11th at 5pm.

    44. Accounts Receivable • (AR and SFS) • GUIDELINES

    45. Cash Receipt DeadlineTuesday, July 2nd at 4:30 PM • Reminder: If making a deposit after June 30th that relates to fiscal 2014 activities, tell the cashier that the transaction should be posted to fiscal 2014.

    46. Receivables Due • Cash not received by June 30th • If a service was performed by June 30th and payment has not been received by the cash receipt posting deadline (Wednesday, July 2nd), we must evaluate the documentation to determine if we need to accrue (record in a journal entry) the revenue. Please complete and submit the Deposit Accruals Formto Karen Brown at brownkm@wfu.edu. The form can be found on the Financial Reporting webpage by clicking on the Forms tab. • Example: A department receives cash after July 2nd for revenue that was earned in fiscal 2014. This item may need to be recorded as a receivable due to WFU in fiscal 2014.