SUBJECT
Fiscal Year Closing of Obligations
PURPOSE
To establish guidelines on fiscal year closing and the determination of fiscal year.
AUTHORITATIVE REFERENCES
K.S.A. 75-3002 |
K.S.A. 75-3728 |
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GENERAL INFORMATION
Deadline for Processing Receipts and Expenditures at Fiscal Year End
The fiscal year begins July 1 of each year and closes June 30 the following year. The cutoff date for most agency processing is listed in the annual Fiscal Year End Informational Circular. Every effort should be made by each state agency to pay outstanding obligations prior to fiscal year end closing. Deadlines and due dates established in the Fiscal Year End Informational Circular are selected to allow as much time as possible for processing old year transactions.
Deadline for Obligating Fiscal Year Funds
The Office of Facilities and Procurement issues an Informational Circular to provide fiscal year end guidance and deadlines for submitting Purchase Requisitions that require bidding or are prior authorization requests for the next fiscal year. The annual Fiscal Year End Informational Circular referenced in the preceding section includes the cutoff dates for the submission of all other requisitions/purchase orders.
Purchases within local delegated authority and purchases against previously approved contracts must have been made on or before June 30 to be recognized as firm orders, formal agreements, and contracts for goods and services for obligating current fiscal year funds.
See the Fiscal Year End Informational Circular for deadline dates for Vouchers, Deposits and Interfunds.
Status of Vouchers Received After Deadline
All vouchers submitted for payment after the established deadline will be considered as July transactions. Obligations chargeable against prior fiscal year funds must have been included on one of the following types of encumbrance documents in order to be routinely processed for payment:
SMART Purchase Order (initiated via a requisition)
SMART Travel Authorization
SMART GL Journal Encumbrance: used when the obligation is known but the vendor is not
(requires approval from the Division of Budget)
However, limited authority exists for agencies to process obligations that were not appropriately encumbered at year end. Those procedures are set forth in Policy Manual 11,966.
Deposit Deadline
As soon as cash received on or before June 30 can be balanced, a deposit should be prepared and released to the State Treasurer’s Office for processing. For additional information, see the Fiscal Year End Informational Circular.
Interfunds
All interfunds must be processed within the same fiscal year as initiated in accordance with information provided in the annual Fiscal Year End Informational Circular.
Fiscal Year Determination for Expenditure Transactions
Listed below are guidelines for determination of the appropriate fiscal year to charge agency obligations. Those denoted with an “*” possibly are, or should have a contract established in SMART with appropriate approvals, and/or have a PO encumbrance associated with them, and/or have approvals from Contracts and Purchases.
Commodities - Fiscal year is determined by the date that the order is placed. However, orders for consumable or perishable goods that must be ordered prior to June 30 for delivery after that date may be charged to the subsequent fiscal year. In these cases, the voucher should clearly indicate that the order was for delivery in the subsequent fiscal year.
Capital Outlay - Building projects may be encumbered based on the beginning date of the project.
Credit Card Purchases:
Procurement Cards (P-Cards):
All purchases posted to cardholder accounts on the June P-Card statement will be considered old fiscal year business.
Purchases posted to P-Card accounts after the June P-Card statement cutoff date (fifteenth workday) through June 30 may be considered as either old or new fiscal year business, at the agency’s option. For example, if your agency is using the P-Card for a purchase that has significant budgetary impact, you may decide to encumber (PO must have a valid budget status) those transactions as old fiscal year business. During the P-Card reconciliation process, the applicable PO must be associated to the P-Card transaction.
Other Credit Cards:
Fiscal year is determined by the date the purchase is made.
Dues, Memberships and Subscriptions - Fiscal year determination is the beginning date of the membership or subscription period.
Maintenance or Ongoing Service Contracts * - Fiscal year is determined by the commencement date of the time period covered by the payment. Payments must be made in accordance with the payment terms of the contract agreement.
Other Contractual Services * - Fiscal year is determined by the date that the services were provided.
Professional Services * - Fiscal year is determined by the date that the services were rendered.
Projects—Fiscal year is determined by the beginning date of the project.
Rental of Equipment * - Fiscal year is determined by the ending date of the agreement. Payments must be made in accordance with the payment terms of the agreement. In special instances (e.g., postage meters) in which advance payments are required by the lease agreement, the payment date specified by the agreement will determine the fiscal year to be charged.
Rental of Space in Buildings and Lease of Land * - Fiscal year is determined by the beginning date of the time period covered by the payment. Payments must be made in accordance with the payment terms of the lease agreement.
Repairing and Servicing of Buildings and Equipment * - Fiscal year is determined by the completion date of the job. Repair and remodeling projects may be encumbered based on the beginning date of the project or work order.
Salaries and Wages - Fiscal year is determined by the date the payment is made (pay date).
Telephone/Copiers – The method of billing is used in making the determination—if a vendor bills before service is received, the fiscal year is determined by the beginning date of service; if the vendor bills after service is received, the fiscal year is determined by the ending date of service.
Travel - Fiscal year is determined by the date that the segment of travel took place. In cases of consecutive travel that begins in the old fiscal year and ends in the new fiscal year, the entire cost may be charged to the new fiscal year. Payments by P-Card may follow the P-Card guidelines above.
Tuition - Fiscal year is determined by the beginning date of the class.
Utilities - Fiscal year is determined by the ending date of service.
Imprest Funds
“Check” expenditures from locally held imprest funds dated on or before June 30 should be submitted for reimbursement prior to the deadline for accounts payable voucher submission. Fiscal year determination for imprest fund expenditures is the same as for “Expenditures” listed above.
The imprest fund should be intact as of June 30, as required by K.S.A. 75-3073. Agencies using imprest funds should process a reimbursement voucher, and complete the reconciliation, prior to the closing of the fiscal year.
Petty Cash
Petty cash procedures are the same as those set forth in the Imprest Fund Section above.
CONTACT SOURCES
Office of Audit and Assurance Services
Delegated Audit Team
