Commonwealth of Massachusetts Office of the Comptroller Annual CloseOpen Meeting

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Commonwealth of Massachusetts Office of the
Comptroller Annual Close/Open Meeting

• FY05 FY06
• Annual Close/Open Meeting
• May 12, 2005
• 930-330

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Agenda

• Introduction
• Welcome
• MMARS Upgrade 3.5
• Appropriation Management
• Encumbrance Management
• Accounts Payable
• Accounts Receivable
• Lunch
• Payroll LCM
• Fixed Assets/GAAP
• Federal Grants

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Key Dates

• May 5 Department COA setup
• May 20 MMARS unavailable for 3.5 upgrade
• May 23 3.5 upgrade in place
• May 28 House 1 loaded
• May 31 MMARS available for FY06 V V

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Key Dates

• June 1 payments reference encumbrances
• June 15 last day routine encumbrances
• June 30 last day goods services / cash
• July 1 A/P period begins
• July 11 last day to enter split week payroll
• July 13 MMARS unavailable
• Aug 31 End of Accounts Payable

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WelcomeMartin J. Benison, Comptroller

• First Year of NewMMARS
• OSC Reorganization
• Department Advisory Board
• Open Close

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OSC Reorganization

• New Deputy
• Federal Grants Management
• Application Management
• Single Audit

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Department Advisory Group

• Policy review
• Discuss System issues
• Members
• Susan Bristol MHD Richard Cooley DMH
• Pamela Gerrior DOC Jackie Harris EHS
• Lauren Johnson OSC Sarah Johnson SCA
• Jay Linnehan MCC William Marchant TRC
• Paul Naves DOR Anna Prince DCR
• Roberta Ricci DET Frank Velluto AGO
• Michael Weeks POL

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Close 05 Open 06

• Focus
• Flexibility
• Training

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ANF Late Encumbrance Policy

• Approval is necessary for any new or increased
  encumbrance greater than 25K after May 31st.
• Process
• Agency submits request via ANF Platform.
• ANF analyst reviews request
• ANF communicates decision via Platform.
• Agency Enters transaction in MMARS

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Budget Process Update

• April 25-29- House debates amendments
• Mid May- Senate Budget
• Late June- Conference Budget
• July 1, 2005 GAA
• Late July send FY06/FY07 spending plan templates
  to agencies.
• Mid to late August- ANF to send FY07 spending
  caps to agencies
• Early October Agency spending plans due to ANF

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Questions?
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• Joan Shea, Deputy Comptroller

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MMARS 3.5 Upgrade

• 3.5 Upgrade Highlights
• Focused on fine tuning existing processes rather
  than introducing new functionality
• Performance improvements to annual open/roll and
  close processes
• Some changes will be visible to the user

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MMARS 3.5 Upgrade (cont.)

• Visible changes
• All dates display 4 digits should reduce coding
  mistakes
• Situations where encumbrance was over liquidated
  are addressed
• Clearer reporting of EFT payment dates
• Improved field help

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MMARS 3.5 Upgrade (cont.)

• Visible Changes
• Consistent rounding of numbers throughout the
  application
• Wildcard searches by date range
• Expanded help in a variety of documents

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MMARS 3.5 Upgrade (cont.)

• Upgrade Approach
• In place migration
• Similar testing process to 3.3.3 upgrade
• Re-use of test cases scenarios that only happen
  at fiscal year transition
• Full SPT (Simulated Production Testing)

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Customer Service

• Multiple approaches to providing user support
• On-line access to information
• News when you need it most
• Training
• Updated job aids, policy, etc

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Customer Support (cont.)

• On-line resources
• Updating of policies and procedures
• Open/Close guidance available on the Knowledge
  Center
• Announcement of changes, etc. on Knowledge Center
  home page
• eUpdate notification

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Customer Support (cont.)

• Training
• Department feedback from survey and Advisory
  Committee guided changes
• New Instructor Led Training sessions
• Defined sequence for what training should happen
  when
• Focused workshops and web casts
• Revised eLearning in next fiscal year

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Customer Support (cont.)

• Updated job aids
• Input from departments and helpdesk on where
  clarification needed
• 3.5 changes being reflected in job aids
• Some departments choosing to customize job aids
  to incorporate specific requirements for their
  organization

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Questions?
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Managing Appropriations and Rolls from 2005 to
2006
Mary Beth Shaughnessy-Newell, Bureau Director
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Balances that Forward to 2006

• Uncommitted Balances Types 2CN (Capital), 3TN,
  3TX (Trusts) and 4FN (Grants)
• Budgetary, Retained Revenue and Intergovernmental
  Balances require legislative authorization
• Only up to the ceiling on that legislation
• Can be in the 2005 GAA, 2006 GAA or supplement to
  2005 GAA

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Balances that Forward to 2006 (cont.)

• Process runs weekly from Mid July through the end
  of Accounts Payable
• Departments need to look at 2005 and 2006 to help
  verify and validate
• Notify the General Accounting Bureau for problem
  solving

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Irregular Balances and Corrections

• Same as it ever was must be resolved by June 30
• Federal grants by September 30 full
  presentation later
• Expenditure Corrections
• EXs flow to the Accounting Bureau
• PRADJs flow to Payroll
• For federal grants, general accounting will work
  with revenue

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Expenditure, Advance and Payroll Refunds / Budget
Transfers

• Same Process as Every Year
• Cash must be deposited in the bank by July 1 at
  Noon
• ER Documents must be in final status by July 5
• If federal grants, general accounting will work
  with revenue
• Budget Transfers must occur by June 15
• All Intersubsidiary transfers require ANF
  approval
• Cross Appropriation transfers authorized by
  legislation must be received by CTR General
  Accounting Bureau

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Chart of Account Considerations for FY06

• All changes must be established before ANY FY06
  activity
• Changes to department defined elements due to CTR
  May 5

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Timeline for Chart of Accounts and Rolls
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Verifying and Validating Budgets

• Do all budgets agree to what either was in FY2005
  or in House 1?
• Appropriations
• Dollars (House 1)
• Subsidiaries
• Are Revenue Budgets linked to spending where
  applicable?
• Are units set up properly?
• DO NOT ENCUMBER UNTIL VERIFIED AND VALIDATED

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Questions?
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Kathy Sheppard, Deputy Comptroller
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Encumbrance Management

• A multi-year contract will have the same MMARS
  Doc ID throughout the life of the contract.

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Encumbrance Management

• RPOs funded by 2CN or 4FN accounts must include a
  valid program code
• Each TELP or lease should have a separate RPO in
  MMARS
• Capital Leases (L21-L33) must include the sub
  object code CAP
• Ready Payment Workshop is on May 5th.

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Encumbrance Management

• FY2005 Encumbrances
• Review contract out-year lines in preparation for
  the Contract Roll in early June.
• Encumbrance deadline is May 31st.
• To avoid requests for late encumbrances,
  departments should conduct a through review of
  their financial status to ensure there is
  sufficient funds encumbered to cover all
  commitments incurred during the fiscal year.

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Encumbrance Management

• FY2005 Encumbrances
• Encumbrances gt25,000 during June must be
  pre-approved by ANF.
• See pp. 31 32 of the Open Close Book for
  additional information.
• All encumbrances received by CTR on or before
  June 30th will be reviewed and approved, if
  appropriate.

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Encumbrance Management

• FY2005 Encumbrances
• Net Zero Dollar Adjustment Encumbrances in the
  same appropriation and same object class will be
  accommodated throughout accounts payable.
• Zero Dollar Encumbrance Correction documents (CEC
  or GAEC) to reopen a closed encumbrance will be
  accepted throughout accounts payable.

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Encumbrance Management

• FY2005 Encumbrances
• Late Encumbrances, due to unforeseen
  circumstances, will be reviewed on a case by case
  basis.

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Encumbrance Management

• FY2006 Encumbrances
• Reminder Encumbrances funded in revenue
  accounts can be processed to final based on the
  uncommitted estimated receipts.
• ANF will establish budgetary estimated receipts
  for retained revenue accounts (1RN, 1RS, 1IN
  1IS).
• Departments with CTRs Accounting Bureau must
  establish budgetary estimated receipts for trust
  accounts (3TN 3TX).
• Departments with ANF must establish budgetary
  estimated receipts for federal grant accounts
  (4FN).

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Encumbrance Management

• FY2006 Encumbrances
• First Contract Roll (modification to the
  contract) will occur in early June.
• Modifies the BFY06 accounting line event type
  from PR08 to PR05 or PR56 to PR51
• Increments the fiscal year field on the BFY06
  accounting line from FY05 to FY06
• Modifies the reserved funding designation on the
  BFY06 accounting line from yes to no so funds
  will be made available for distribution.

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Encumbrance Management

• FY2006 Encumbrances

PR05
2006
No
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Encumbrance Management

• FY2006 Encumbrances
• Second contract roll (modification to the
  contract) will occur in mid to late July.
• Increments the fiscal year field on the BFY07 and
  beyond accounting lines from FY05 to FY06.
• Open Activity Roll for 2CN funded contracts only
  (modification to the contract) will occur in
  early September.
• More information to follow.

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Encumbrance Management

• ISAs
• Parent departments should communicate regularly
  with their child departments.
• FY06 ISAs can be processed as soon as House 1 is
  loaded to MMARS.
• ISAs must be executed and the funding must be in
  place before the child department performs
  services or incurs obligations.

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Encumbrance Management

• ISAs
• Child department budget lines supported by (1)
  valid parent department budget lines and (2)
  multi-year ISAs will roll into FY06.

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Encumbrance Management

• ISAs
• Reminder There is only one child budget line
  per department per appropriation.
• For example, if a child department has more than
  one ISA with the same parent department and
  funded by the same appropriation, there is only
  one child department budget line supporting both
  ISAs.

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Encumbrance Management

• ISAs
• When there is more than one ISA funded by the
  same appropriation, the child department should
  be able to identify activity associated with each
  individual ISA.
• Options include
• Department Budget
• Unit
• Activity

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Questions?
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Accounts Payable Period
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Accounts Payable Vendor/Customer

• Transaction processing
• EFT
• Vendors with multiple accounts
• Status - Reminder there is a 10 day pre-note
  period

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Accounts Payable Payments

• Encumbrances required for Payment Requests after
  May 31st
• Scheduled Payment Dates
• During the A/P period Budget FY, Accounting
  Fiscal Year and Accounting Period are required on
  all Payment Requests
• BFY AFY

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Accounts Payable Payments

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Accounts Payable Payments

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Accounts Payable Advances

• Emergency Advance Checking Account
• Every Department should have one
• Advances requests can be available in 2 business
  days
• Your FY2005 Advance should be closed prior to an
  FY2006 being opened
• Problem with Payroll issued July 1st should be
  supported with your FY2006 Advance

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Accounts Payable Intergovernmental ITI/ITA

• BUYER
• ITA (Agreement)
• Payment

• SELLER
• ITI (Initiator)
• Invoice

• The Transactions are Linked
• Linkages
• Payment (ITA) to Invoice (ITI)
• Payment (ITA) to Encumbrance (IE)

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Accounts Payable Intergovernmental ITI/ITA

• Communication between Seller and Buyer
• Sellers need to match payments to invoices
• Buyers need to match invoices to payments
• ITI to ITA Reports

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Accounts Payable Intergovernmental ITI/ITA

• COMMUNICATE
• Every time a SELLER creates an invoice (ITI) the
  BUYER should be notified
• PARTNERSHIP
• As with any vendor relationship payment should be
  made routinely within 30 days of receipt of the
  invoice

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Accounts Payable Intergovernmental IET

• Bi-weekly Payroll Tax Charges
• Medicare Tax 1.45
• Unemployment Insurance (UI) 0.3
• Universal Health Insurance (UHI) 0.12
• FY2005 5 pay periods left
• FY2006 Generally 2 of payroll costs AA CC

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Accounts Payable Bill Paying Statistics

• Where we last left off
• FY2004 85
• Now
• January through March 2005 - 72
• Report NAP632W
• Lets Get Back to Business
• Paying Bills Routinely in 30 Days via EFT

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Accounts Payable Credit Card ContractFPRF
19designatedOSC

• Statewide Contract
• Small Purchase Credit Card Program
• Bank of America awarded contract
• Purchases may include incidental, contract
  purchases, non-standard business hour purchasing,
  and travel

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Accounts Payable Credit Card ContractFPRF
19designatedOSC

• Electronic invoices - Paperless Billing
• Cardholder statements on-line
• Department invoices
• Payments due 25 days from invoice date

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Questions?
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Accounts Receivable

• Eric Berman, Deputy Comptroller
• Kevin Moran, Bureau Director

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Accounts Receivable Management

• Basic Items to Remember
• Departments are responsible for making diligent
  efforts to collect legislatively authorized,
  earned revenue/account receivables owed the
  Commonwealth.
• A department must deposit all cash receipts in a
  bank account designated by the Office of the
  State Treasurer (TRE) daily. Receipts may
  include cash, checks, and credit cards, and
  represent accounts receivable or over-the-counter
  transactions.

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A/R Billing Cycle
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Whats Different in MMARS from Classic MMARS

• MMARS no longer has an Receivable Increase (RI)
  or Receivable Decrease (RD) documents.
• MMARS Receivables are modified by creating a new
  version of the RE and entering the current total
  billed amount.
• (Not the Net Change amount.)

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Example

• Summary receivable maintained across fiscal years
• FY05 A receivable was billed for 1,000,000
• New billed amount 1,500,000 for fiscal year 2006
• Department Modifies the existing accounting line
  amount field to 2,500.000.
• Resulting number represents last year's billed
  amount -- 1,000,000 -- added to the new years
  estimated billed amount -- 1,500.000.

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Summary RE Reporting

• Departments
• create a new summary RE for every fiscal year or
  maintain one multi-year RE.
• with approved delegated billing and accounts
  receivable systems are required to utilize MMARS
  to maintain a Summary RE by fund and revenue
  source code.
• are required to adjust the summary receivable
  amount by the close of each accounting period

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Intercepts and Write Offs

• Intercepts performed prior to July 1 will be
  recorded as FY05 revenue.
• Write-off (WO) requests must be sent to the
  Revenue Bureau in writing by June 10, with
  appropriate supporting documentation must be
  submitted with request.

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Statewide Debt Collection Contract

• All FY05 collections made by a debt collection
  agency are deposited to an approved bank account
  by noon July 1, 2004.
• Remind debt collection agencies no later than
  July 10 to submit reports and invoices.
• New Contract expected Fall of 2005

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Lockbox and E-Payments

• Deposits to the Bank Of America Central Lockbox
  by 1159 p.m. June 30 will be recorded in MMARS
  as FY2005 CRs.
• Credit Card transactions processed by EDS before
  1159 p.m. June 30 are recorded in MMARS as
  FY2005 CRs.
• Reconciliation Reports
• NAR402SD - CR Generation Report
• MARUCH21 - Master Lockbox Daily Deposit Report
• Daily emailed EDS Daily Payment Summary Report
  and on-line Bank of America Merchant Services
  reports.

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FY2005/FY2006 RE Roll Overview

• Classic MMARS Individual RE documents were
  unaffected by the Revenue roll process.
• On Saturday July 9, 2005 all FY2005 RE documents
  with a balance greater than zero will
  individually roll into FY2006 and will retain the
  same Document ID number.
• After completion of the cross fiscal year roll
  process CTR will perform verification and
  validation on the rolled RE transactions
• Departments should perform a verification and
  validation exercise on their department specific
  transactions

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FY2005/FY2006 RE Roll Example
Roll Attributes for AFY2005/BFY2005 RE Billed
Amount 500.00 - Collected Amount 200.00 Open
Amount 300.00

• Two new versions (modifications) will be created
  for every RE with a balance greater than zero
• Version 2 (1st roll version) will decrease the
  original RE balance to 0.00 in AFY2005/BFY2005
• Version 3 (2nd roll version) will increase the
  RE balance to 300.00 in AFY2005/BFY2006

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Other Items

• Helpful reports
• NAR405S Transaction level report listing all
  revenue related activity during a given period -
  Review weekly.
• NAR401W - Accounts Receivable Detailed
  Transaction Activity - Review at accounting
  period close.
• NAR410SD/SS Detailed Aging Receivables by
  department as of a given date within the fiscal
  year - Review at accounting period close.
• NGA208W Cash Received and Allocated Report -
  Review at accounting period close

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Questions?
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Payroll Close / Open Timeline

• Kevin McHugh, Manager

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Key Dates

• Prior to June 1 Identify any FY06 COA changes,
  e.g. program codes or appropriation changes
• May 1st- Start entering PH documents
• June 1st
• Position Rules Roll Departments can begin
  requesting FY06 Rules
• PH over 25K requires ANF approval for Executive
  Branch Departments (By Policy)

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Key Dates

• June 24- Last day for HR transactions or
  garnishment transactions in HRCMS for PPE June 25
• June 27- Last Day for posting Time for PPE June
  25
• June 28- Last day for making changes in Labor
  distribution in LCM for PPE June 25

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Key Dates- Splitweek

• June 30-
• Last day for entering PH
• Last Day for PRRV (Cash Cut off of 7/1) for FY05
• July 8 Last Day for HR transactions
• July 11 Last Day for Time and Attendance Entry
  in HRCMS
• July 12 Last Day for LCM changes
• July 13 Possible system down day for MMARS and
  LCM

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Mass Rules Roll - MPOAA

• On June 1st, CTR will either approve or reject
  all pending POAA Rules requested for FY05
  Activity and will Process the MPOAA program. Any
  new rules needed for FY05 Activity can be entered
  after June 2nd.
• New draft rules for FY06 will be in the LCM
  document catalog

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HR/CMS Contract Employee

• No special HRCMS processing requirements for
  Contract Employees
• Funding Source changes can be made by (HRCMS)
  Position Transfers or via LCM redistributions

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Splitweek Proration

• Payroll will be prorated by business days of the
  payperiod 4 Business Days in FY05 and 6 Days in
  FY06.
• All Prior Pay Period postings to Weekly Elapsed
  Time dated before 6/25 will post to FY05
• Job Actions will create a time slice which will
  affect the proration. Hires will post to the
  date hired and hard terminations will end on
  the date posted

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Splitweek Considerations

• ERIP 2 All Sick and Vacation Payments will post
  to FY06 regardless how it is posted
• Hours displayed online show rounding- it does
  not affect dollars nor actual hours in the
  database
• Defaults and Exceptions split as expected

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Looking at the Big Picture

• Payroll is a summarized transaction
• 80 of the state workforce work a Monday through
  Friday work schedule
• Even for large 24/7 operations proration logic is
  highly accurate in aggregate

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Big Picture Example

• State Police have _at_ 2000 employees, have a unique
  schedules, including all kinds of additional pay
• In testing, the payroll split was within 2/10ths
  of 1 of exact split without any adjustments

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Employee Specific Example of How Splits are done
in HRCMS and LCM

• DMR example from testing Split month

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Test Example
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Test Example
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Test Example
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Test Example
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Posting during Splitweek

• Only Sick and vacation buyback (VIL, SBB, etc.)
  will post entirely to FY06, during Splitweek,
  unless the person has a job action after June 30
  (hire, transfer, termination)

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How to Post to Correct FY

• All pay earnings are summarized on the HRCMS
  paycheck and the interface generally passes a pay
  begin date of 6/26 and a pay end date of 7/9.
  LCM will assume a work schedule of Monday
  Friday.
• To post all earnings to FY05, enter the date of
  6/25 or earlier.

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Accounts Payable

• Payroll Holds are object code based so
  departments need to encumber based on estimated
  payroll dollars i.e. A01,A08,B02, etc.
• CTR Payroll can assist departments in advising
  how to create PH documents.

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Questions?
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Fixed Assets/GAAP

• Eric Berman, Deputy Comptroller

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GAAP CAFR

• FY 2003 CAFR received an award from the
  Government Finance Officers Assn. (GFOA)
• The FY 2004 CAFR has also been submitted to the
  GFOA.
• The quality of CAFR depends upon timely and
  accurate GAAP reporting YOU!
• FY 2005 GAAP instructions will be available
  around May 13th.
• The GAAP reporting package is due back to CTR by
  August 8th, 2005.
• Potential Audit Findings if not returned on a
  timely basis

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Fixed Assets

• MMARS Functionality is largely the same as
  Classic MMARS with 2 notable exceptions
• Depreciation
• Payments are now linked to assets based on
  commodity codes used and fixed assets are
  generated as payments are made
• Rules of capitalization and timing are the same

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Fixed Assets

• Notable events on the calendar
• Fixed assets transactions for period 12 and
  before must be in MMARS by July 8, 2005
• AP transactions must be coded for FY2005
• New policy on impaired assets to be released in
  FY06 to comply with GAAP

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Fixed Assets

• Reports available
• NGA150WD Fixed Asset Detail Report (A complete
  list of all GAAP Non-GAAP assets)
• NGA150WS Fixed Asset Summary Report
• NGA151WD GAAP Fixed Asset Detail Report
• NGA151WS GAAP Fixed Asset Summary Report

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Questions?
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• Federal Grants
• Kevin Moran, Bureau Director
• Eric Berman, Deputy Comptroller

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Agenda

• Where Weve Been in State Fiscal Year (SFY) 05
• Opening SFY06
• A review of Federal Grants Setup
• ISAs and Grants
• Parent / Child Relationships
• Reconciliations
• Treasury and Federal Operations
• Policy Review

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Where Weve Been in SFY05

• Lessons Learned From SFY05 Opening
• Program Periods
• Lack of Budget Lines (no SFY05) line in either
  spending, funding profiles or Reimbursable Grant
  Budgets
• ISAs not being set up properly
• Backlog GREW and GREW and GREW

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Where Weve Been in SFY05

• Invigorated Working Group in September 2004 to
  tackle these issues
• Also added additional items including
• Workflow
• Forms Setup
• Federal Cash Issues
• Edits
• Training

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Where Weve Been in SFY05

• Where weve gone since then
• Grant Set Up Forms Redone
• Separate forms for New Grants, Amended Grants and
  ISAs / ISA Amendments
• Federal Adjustment Form Created
• Enhances Communication and Audit Trail
• MMARS Correction Form Created
• Audit Trail Purposes

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Where Weve Been in SFY05

• Reimbursement History Table Created in the
  Warehouse but still tweaking
• (M_CA_Draw_Reimb_and_Receivable)
• Queries developed with Departments to reconcile
  grants
• Worked with Departments, sometimes individually
  to teach the grant process
• Defined Policies and Procedures to implement
  grant edits in SFY06

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Closing SFY05 for Federal Grants
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Closing SFY05

• No more PUSHBACKS IF AT ALL POSSIBLE
• All Federal Cash for Expenditures BEFORE JUNE 30,
  2005 should be at Treasury by July 29, 2005
• August used for AP transactions and any residual
  cleanup
• SFY06 Edits on Structure 88
• Recycling to Begin
• MORE LATER

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Closing FY05

• What to do
• Reconcile grants by comparison of expenditures to
  revenue
• Review federal grant elements are any expiring
  on June 30 that should be 9/30 or 12/31? DATES
  ARE VERY IMPORTANT
• Clear rejected transactions
• Provide Treasury and OSC with documentation for
  all federal cash system adjustments
• Make sure BQ88 receipts tie to BQ82 revenue.
  Obligation ceiling in BQ89 should tie to revenue
  from BQ82
• More later

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Opening FY06
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So what do we need to worry about for FY06 -
OPENING

• Before Encumbrances are Entered or Rolled for
  FY06
• Verify and Validate that
• Funding Profile Accepts FY06
• Program Budget has FY06 capability
• Central Budget Structure has Obligation Ceiling
• Revenue Budget is Established
• Decide on Departmental Budgets
• Assure that LCM Rules are Proper

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So what do we need to worry about for FY06 -
OPENING

• Before Encumbrances are Entered for FY06
• Verify and Validate that
• ISAs are filed on a timely basis
• INFORMATION IS TRANSFERRED BETWEEN PARENT AND
  CHILD
• Program
• Appropriation

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Federal Grants Setup Process
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MMARS Grant Process Revised 4-19-2005
Direct Grant to Revenue Unit ISA to Procurement
Unit
118
Step 1Departments
119
Step 2Comptrollers
120
Step 3Comptrollers
121
Step 4Comptrollers
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Step 5ANF
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Step 6Departments
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Step 7Departments
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Step 8ANF or Comptroller
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MMARS Grant Process Revised 4-19-2005
Direct Grant to Revenue Unit ISA to Procurement
Unit
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ISAs and Federal Grants

• Key Ingredient to Success
• COMMUNICATION OF DATA BETWEEN PARENT AND CHILD
• Major Program
• Program
• Program Period
• Appropriation
• Dollar amounts
• Remember no spending or encumbering until data
  is fully loaded!

128
ISAs and Federal Grants

• Form for Setup is in Knowledge Center
• PARENT must complete the form
• Form MUST be submitted by the PARENT with all
  applicable documentation to the Procurement
  Bureau
• Procurement approves and routes to Revenue

129
ISAs and Federal Grants

• Amendments
• Changes, like other ISA amendments must go to
  Procurement Unit
• USE Same Setup Form Except Check Off Amended ISA
  and Complete
• BQ89 Budgetary Estimated Receipts Field and
• BQ88 Federal Grant Award Amount field
• Use Amended Dollar Amount Only
• NOT Whole New Amount

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Reconciliation of Grants
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Reconciliation Example

• EOT has a Major Program F60018 from Federal
  Catalog Number 20.509.
• Ten programs are part of the Major Program

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Reconciliation Example

• 3 more programs F189040I, F189035I and F187040R
  have awards and in some cases encumbrances, but
  no spending or revenue
• 7 other programs are not active under the F60018
  major program
• Remember, successful draws require active
  subaccounts

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Reconciliation Example Spreadsheet of Structure
88 Items
EFFECT OF PAYROLL ADJUSTMENT AND CH DUE
EFFECT OF AN EX CH DUE
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Reconciliation Next Steps

• Review the applicable federal system report
  generated (e.g. from Smartlink)
• Compare payments to cash received in structures
  82 and 88
• Review reimbursement history table in the CIW to
  find rejected transactions
• Review revenues and expenditures for postings in
  wrong program(s)
• Work with OSC to solve problems promptly!

140
Reconciliation Next Steps

• Helpful Items Needed in Problem Solving before
  you call the Revenue Bureau
• Basic chart of accounts information major
  program, program, revenue source code,
  appropriation
• Date of problem(s)
• Are payroll or non-payroll expenditures involved
  or both?
• A warehouse query showing the issue
• Segments of report NCA495W (central draw) or NCA
  496W (non-central draw) showing issue
• Are there rejected draws involved?

141
Reconciliation Next Steps

• Run the query making a table (essentially a
  ledger) of your grant activity showing inflows
  and outflows
• Query SQL will be part of the policy and will be
  posted on the CIW website as a starter query
• Provides basic information needed to help
  reconcile and clear rejects

142
Clearing FY05 Rejected Draws - MMARS

• 2 Basic MMARS Redraw Scenarios
• Rejected draw from the designated federal payment
  system, MMARS data is correct.
• Rejected draw from the designated federal payment
  system, MMARS data is incorrect.

143
Clearing FY05 Rejected Draws - MMARS

• Rejected draw from the designated federal payment
  system, MMARS data is correct. (CH)
• Solution
• CH Document needed CTR creates
• Effect
• Initiates the redraw of funds
• Will not update Accounting Journal
• Will update Cost Accounting Journal BQ88 screen

144
Clearing FY05 Rejected Draws - MMARS

• Rejected draw from the designated federal payment
  system, MMARS data is incorrect.
• Solution
• EX, PRADJ, LARQ or a PRRV Document needed
  Department creates
• Effect
• Initiates the redraw of funds from correct
  program
• Will update Accounting Journal
• Will update Cost Accounting Journal BQ88 screen
• Credit line must be offset at federal payment
  system

145
Clearing FY06 Rejected Draws - MMARS
Reimbursement Request Recycling Schedule Monday
CMIA File Sent to TRE Tuesday Draw entries
to Federal Payment System Draw
reject list is finalized by TRE Wednesday
Program is entered on Recycling Table
Department corrects draw reject
error Friday Draw is initiated to automatically
redraw funds
146
Treasury and Federal Operations

• Treasury is in charge of drawing federal cash
  based on
• MMARS information
• For non-central draw information from
  departments
• Adjustments made if rejects or transfers needed
  between subaccounts

147
Treasury and Federal Operations

• Treasury and OSC work together to fix federal
  problems based on departmental data
• Dialogue has started with federal contacts to
  notify them of upcoming adjustments
• 5 separate systems need to be maintained and
  balanced with MMARS
• MUST file federal system change form with
  Treasury and OSC released as part of policy
• Good business practice to include the CD
  information with any federal system change form
  so that it is easy to trace from one to the other.

148
Treasury CMIA Draw Process Reject Clearing
Process
149
Treasury CMIA Draw Process Reject Clearing
Process
150
Treasury CMIA Draw Process Reject Clearing
Process
151
Treasury CMIA Draw Process Reject Clearing
Process
152
QAs on Rejects in Federal Systems

• What attributes drive the online federal payments
  system?
• All Systems are driven by the letter of credit
  (LOC) and / or the subaccounts within the LOC

153
QAs on Rejects in Federal Systems

• Can positive entries be accepted via the online
  federal payment system?
• ALL SYSTEMS YES
• Can negative entries be accepted via the online
  federal payment system?
• EDCAPS, LOCES NO
• ECHO, SMARTLINK, ASAP YES, as long as the sum
  of all sub-accounts within the LOC is positive
• Can a sum net negative amount be accepted via the
  online federal payment system?
• All systems NO

154
QAs on Rejects in Federal Systems

• How about if positive lines negative lines
  net positive?
• EDCAPS Yes only to net positive sub-account
  within LOC. EDCAPS does not take net negative
  sub-account. (Net positive or net negative within
  sub-account happens because there are programs
  within the sub-account with positive and negative
  entries.)
• ECHO, SMARTLINK, ASAP YES - Both positive and
  negative lines entered into the system
• LOCES NO Negative Adjustments must be faxed
  to US DOJ

155
QAs on Rejects in Federal Systems

• How about if positive lines negative lines
  net zero?
• EDCAPS YES -through special processing on the
  Drawdown Adjustments screen
• ECHO - NO
• LOCES NO Net Zero Adjustments must be faxed
  to US DOJ
• SMARTLINK NO
• ASAP - YES through special processing on the
  Book Entry Adjustment screen

156
QAs on Rejects in Federal Systems

• How about if positive lines negative lines
  net negative?
• All systems NO
• Reports to be filed
• EDCAPS None required for draw purposes
• ECHO SF272 Quarterly
• LOCES SF272 Quarterly and SF 269 Annually
• SMARTLINK AND ASAP SF272 Quarterly

157
QAs on Rejects in Federal Systems

• What if I have to return funds to the feds?
• If its current state fiscal year use an RF
  document
• Use the vendor / customer code for the particular
  federal agency
• Negative CH document should be processed
  simultaneously so as to not draw federal funds
• Prior state fiscal year
• GAX document with Object Code T04
• Federal agency must be a customer
• Negative CH document should be processed
  simultaneously so as to not draw federal funds

158
QAs on Rejects in Federal Systems

• What if I have to return funds to the feds?
• If Feds DONT want the funds back
• Letter to Revenue Bureau
• Grant is completed
• All accounting has been done
• Attach Correspondence from the Feds saying that
  they do not want funds returned
• OT is done by Accounting Bureau to the General
  Fund
• Work with the Revenue Bureau to assure success
• Needs special handling so as not to cause a draw

159
Draft CMIA Policy Review

• Executive Summary
• Policy is being issued in DRAFT until we are sure
  processes are fully in place so that you can
  succeed using edits in the system
• CMIA threshold is increasing from 5 million to
  30 million
• Policy centers around edits due to rejected draws

160
Draft CMIA Policy Review

• Why?
• Large issue hindering reconciliation and
  operations
• Non Central Draw grants were running negative
  until OSC notified departments of negatives and
  need for draw(s)
• Not a large understanding of the relationship of
  federal cash systems to MMARS

161
Draft CMIA Policy Review

• Emphasizes Parent and Child Relationships
• Facilitates reconciliation and calculation of
  budgetary estimated receipts
• Strengthens internal controls surrounding federal
  adjustments

162
Draft CMIA Policy Review

• In order to assure compliance with federal CMIA
  requirements, all draws of federal funds must be
  processed through the Commonwealths Automated
  Central Draw process, under the supervision of
  the Comptroller, unless specifically assigned to
  a Non-Central Draw process
• Delegation is available to NCD if federal
  restrictions are in place or if inefficient

163
Draft CMIA Policy Review

• Parent and Child Departments share the
  responsibility for working with CTR and TRE to
  ensure that federal funds are received in a
  timely fashion, and in compliance with all
  federal and state regulations
• Parents need to coordinate with children and
  share major program and program code information
  as well as all other COA elements

164
Draft CMIA Policy Review

• Departments must inform the Comptroller of
  impending changes in processes, accounts, or in
  codes that may affect future requests for federal
  funds.
• Its easier to set things up right up front than
  to fix them in the end
• Typical changes

165
Draft CMIA Policy Review

• Departments need to review report NCA495W (ACD)
  or NCA496W (NCD)
• Delineates spending and reimbursement
• Non Central Draws must draw as current as
  possible
• Fiscal years must end in a zero or positive
  position

166
Draft CMIA Policy Review

• Budgetary Estimated Receipts Loading SAME AS
  CLASSIC MMARS
• Must work with ANF - Example
• 1,000,000 federal grant award is received in
  October 2004 (SFY05) and is valid for 3 years.
• ANF receives spending plan from department that
  750,000 will be spent in SFY05 and 250,000 in
  SFY06.
• A BGRG document is entered for the entire
  1,000,000 however, the BGCN document is entered
  for budgetary estimated receipts of only 750,000
  in SFY05.

167
Draft CMIA Policy Review

• Budgetary Estimated Receipts Loading Continued
• Must work with ANF - Example
• Department spends only 500,000 in SFY05
• Remaining 250,000 - communicated to ANF as part
  of the SFY06 spending plan
• ESTIMATED RECEIPTS DO NOT BALANCE FORWARD
• BGCN modified entered raising the budgetary
  estimated receipts in SFY06 to 500,000.
• Must reconcile to GAA adjusted for Program Budget

168
Draft CMIA Policy Review

• Internal Controls
• Spending Control edits will be loaded during FY06
• Automated and non-automated central draw grants
  will only be allowed to reject three consecutive
  times before edits will be enabled
• Stops spending funds that are unavailable
• Recycling process used to attempt to redraw
  rejected transactions

169
FAQs

• What documentation do I need to set up a new
  grant?
• What documentation do I need to set up a
  continuing grant?
• What documentation do I need to give a child
  grant money through an ISA?

170
FAQs

• What tables are affected in the setup of a grant?
• How Long Does it Take from the Time of Submission
  of the Grant Package, (Direct Grant or ISA), to
  OSC to the Time the Department Can Begin
  Activity?

171
FAQs

• Who sets up the BGRG and Who do I notify to
  request approval?
• Is the Parent or the Child Responsible for MMARS
  Setup for ISA Grants
• Is there a requirement only one program code per
  sub-account?

172
FAQs

• What is a funding profile and how many should my
  Department have?
• Re Direct Grants
• What do we do to increase our budgetary estimated
  receipts?
• Re ISA
• What tables do I use in MMARS to review my
  grants?
• How can I tell if a child department has made
  expenditures against my grant?

173
FAQs

• Do Grant Program Codes have be listed on the
  encumbrance or just the expenditure?
• What do I do if my expenditure was submitted to
  final with the wrong program code?
• How do I know which of my transactions drew
  federal funds and which rejected?

174
Questions?