Interim Year End

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Interim Year End

• Margaret Laithwaite
• Jill Roberts
• Nicola Smith

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Agenda

• Interim year end timetable
• Changes for April 2008
• Faculty Audit Deliverables
• Procedures

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Interim Year End Timetable

• Draft timetable in handout
• Compressed timescales single conversation
• Monthend forms good basis for year end
• Main differences for year end from month end
• Central accruals run
• Assets stock takes, asset verification,
  intercompany balances
• Liabilities full suspense account
  reconciliation, bad debt provision, leases
• PL
• Cross faculty teaching adjustments
• Tuition fees reconciliation
• Allocations
• commentary in notes to the accounts formats
• Review of FSR return reports

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Audit Deliverables

• Faculty based audit
• Samples will be provided at least a week before
  faculties are audited
• Good working papers

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Monthend and Year end Guidance

• School Accountants responsible for communication
  to Finance Officers
• Accounting procedures web based
• Easy to access for any staff involved in monthend
  and year end
• Can be easily updated if procedures change
• Most procedures have been reviewed and updated
• Accessed via the Financial Accounting section of
  the Finance website
• http//www.campus.manchester.ac.uk/finance/FA/FARo
  le.shtml

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Year end Processes Fixed Asset verification

• Change to the process this year
• Fixed asset registers will be sent out each
  month.
• Information not complete please review and
  advise us of missing information LOCATION is
  very important
• At year end annotate staff need to add the name
  of the person who has verified the asset.
  Listing will be passed to the auditors
• Hoff to confirm to the centre
• The assets have been physically verified by the
  person named and are all still held in the
  location described on the listing, and have not
  been disposed of.
• We still own the asset, and it is still
  functional.
• The asset listing is complete for the faculty,
  and includes all items which would come under our
  capitalisation policy (gt25,000 cost)
• Assets no longer owned will need to be written
  out of the register will be done centrally.

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Year end Processes Donated assets

• Donated assets with estimated value of gt25,000
  should be notified to the centre as soon as they
  are received
• Procedure notes are available on the web
• Provide a finance code for the depreciation
• New under SORP 2007 we will release an amount
  equivalent to the depreciation charge to the same
  finance code, therefore there will be no net
  charge passing through the PL
• Need to ensure all donated assets are recorded on
  the asset register and verified, in the same way
  as purchased assets

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Year end Processes Research income accrual

• New procedure this month uses the R code on BOTH
  sides of the journal
• Accrue costs as well as income
• New code for payroll accruals
• 2060 Accrued Academic staff costs
• 2061 Accrued other staff costs
• Better analysis of the balance sheet element,
  currently under review

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Accruals and deferrals (2)

• What problems are people having?
• Loading large journals over 1000 lines can be
  sent to the centre BEFORE 3 pm
• Take care you are not deferring and accruing
  income on the same grant, unless you know there
  are 2 separate funding streams, with separate
  source of funds. Justification of any grants
  where this has happened will be required
• P codes need to use 9465 NOT 9461 etc.
• Confusion over which responsibility to use

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Year end Processes Other accruals

• Issues with completeness of accruals
• Invoices are late being posted to the system
• Order information is inaccurate

Order
Goods received
Invoice
Accounts
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Invoice not matched to order
Order
Invoice
Goods received
We may accrue for an invoice that has already
been paid!!
Accounts
Inaccurate ordering/order left open
We may accrued for open orders where order value
gt invoice value
Order 10,000
Invoice 7,000
Goods received
Accounts
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Year end Processes Invoice processing times
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Year end Processes Invoice processing times
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How can we improve information for accruals?

• Review accuracy of orders
• Order values may by used as basis for accruals if
  goods are receipted
• Ensure finance officers tidy up the system on a
  monthly basis
• Close orders that have been completed
• Make sure invoices are being matched to orders
• Make sure goods are being receipted against
  orders
• Prompt document processing
• Backlogs
• Invoice approvals
• Invoices under query - HOLD

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Year end Processes Suspense accounts

• Requirement to identify and monitor all suspense
  account balances within their schools.
• Do we really need the accounts?
• Need to keep to a minimum
• Reconciled regularly and balances cleared -
  Impact on PL
• Money Laundering legislation
• Monthly list of suspense balances
• Owners
• Help text meaningful in describing nature of
  the balance
• Monitor balances
• Year end
• The name of the person who has reconciled the
  balance at month 11
• Explanation of the balance
• Very tight timescales, therefore do at month 11
  (8) and update at month 12
• Reconciliations will be sampled by the auditors

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Year end Processes Leases

• Leases are disclosure requirement in the
  accounts, therefore it is important that an
  accurate lease register is maintained.
• At each financial quarter end the lease register
  list must be reviewed by each HOFF and
  updated/completed if necessary. Any amendments
  should be communicated to the Financial
  Accountant by email.
• Copies of all lease agreements listed in the
  register must be available for audit purposes
• Will be sampled at year end for audit
• No Finance leases must be entered into without
  express prior approval - contact Financial
  Accounting in the first instance for advice
• Check Hire of equipment expenditure for leased
  assets

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Closing Activity Codes

• Need to check a code before it is closed
• Payroll charges
• Commitments
• Residual balances
• New process soon to be made available
• Run as a core report in GL Activity code manager
• Instructions for use are on the web
• http//www.campus.manchester.ac.uk/finance/FA/Acco
  untingManual/DevolvedProcesses/GeneralProcesses.sh
  tml
• Mechanics for closing a code
• Brought forward balances issues
• Need to clear each balance sheet IE code
  separately, or carried forward balance sheet
  balances will appear on this code next year
• Further guidance
• http//www.campus.manchester.ac.uk/finance/FA/Acco
  untingManual/ReferenceMaterials/ClosingCodes.shtml