As year-end time approaches for Road Commissions, do you ever get that feeling like, “UGH, it has been almost a year since I did this stuff and I can’t remember everything I’m supposed to do!”?
We’re hoping the following list will aid you in compiling the year-end information you need for your audit and to be in compliance with State/Federal requirements. Please note that this is an example of what may be required. Each Road Commission is different, and therefore, you should not use this as a complete list for preparing your year-end information for audit. If you have any questions, your auditor should be able to give you a list of what they require.
YEAR-END CLOSING LIST
Bank Reconciliations: Make sure that Payroll and Accounts Payable and any other bank accounts are reconciled. Your cash balance on the General Ledger should match the bank’s ending balance adjusted for any deposits in transit and outstanding checks as noted on your reconciliation. It may be helpful to run a copy of your reconciliation along with a copy of the last bank statement for your auditor.
County Statement Reconciliation: Just as you would reconcile your accounts with the bank’s balance, make sure you reconcile your cash account with the County’s bank statement.
Petty Cash: Though you may want to spot check your actual petty cash during the year, don’t forget to count and verify that the required amount is on hand at year-end and matches your general ledger petty cash amount.
Accrued Interest Receivable: Make sure that the amount listed on your County’s bank statement matches your 056 Receivable account. It might not hurt to make a copy of the County’s statement where it shows this information and highlight it for your auditor.
Sundry Receivables: Some of you may have a list outside of Pro Fund Accounting where you are keeping track of different sundry accounts and their payments. If so, make sure you tie all those out to your general ledger sundry receivables in total. Depending on your auditor’s preferences, it may also help if you run a datalist for each sub-account to show the activity and final balance for the year.
Township Receivables: As with Sundry Receivables, if you keep any separate data on your Township Receivables, run copies of that along with datalists, and tie them out to the general ledger total.
MTF Receivable: Make copies of your last two checks of the fiscal year. For those with a December 31 year-end, these would be the checks for November/December that you received in January/February. These two checks in total should equal your MTF receivable.
In advance of year-end, you should be taking counts of all your different types of inventory and making any adjustments to the balances in Pro Fund Accounting. Once all adjustments are made, your auditor should come out and sample test the inventory. If any discrepancies are found, the auditors will have you change them, but they may also want to investigate why there was a difference. Your balances on your inventory status report should match your inventory general ledger accounts.
Once all of your applicable invoices have been posted in the old year, run a copy of your prepay as of the last day of the fiscal year. The total on the prepay reports should equal the total in your 202 Accounts Payable account. It may also help your auditor if you run copies of your prepays from the first 2 months of the new year. This way the auditor can see what was paid in the new year that may be applicable to the old year.
Once you have made sure that your Equipment List and your Fixed Asset List (for applicable items) agree, you will run your depreciation. Once the depreciation is run, scan all the entries to make sure they seem reasonable. If everything is in order, run the Fixed Assets Activity Wide Report for Disposed Equipment, Purchases for the Year, and Fixed Assets on hand as of the last day of the fiscal year.
Each Road Commission will have different lists for their liabilities, so we will try to go over those that are normal for Road Commissions.
Federal/State Project Summaries: As many of you learned at the recent Finance/Human Resource Seminar, the booking of the Federal and State funded projects will no longer be part of your budget or monthly entries starting next year. However, they WILL still be part of your GASB-34 conversion; therefore, you will still need to keep track of them. It might be easier to continue as you have done in the past, posting them to whatever worksheet you use, but NOT posting them to Pro Fund Accounting. This way you will have all the data readily available to make your journal entries for the GASB-34 conversion.
Accrued Payroll Deductions: You should list out any of those payroll deductions that were taken out of the last month of the fiscal year, but not paid until the first month of the new year. An example of this would be FICA/FICA-MED applicable to old year but paid in new year.
Pension Payable: Quite a few of you may have Municipal Employees Retirement System (MERS) for your pension. The employee deductions associated with MERS (or any other pension system) are taken out monthly; however, depending on timing, they may not be submitted to the pension company until the next month. At year-end time, this means the cash is not disbursed until the new year. Because of this, you need to make an entry to put the employee side back into cash (DR) and Pension Payable (CR).
Performance Deposits: Some of you may require contractors to put money on account as a Performance Deposit. If you have several of these, you probably have these listed on a worksheet such as Excel. If you do, make sure that the total of all the different Performance Deposits equals your total in your Performance Deposit account in Pro Fund Accounting.
Permits on File: Do any of you allow contractors to put money on account to pay for permits? For those contractors that get a lot of permits, it is sometimes easier to do it this way versus waiting for a check each time. If you allow this at your Road Commission, then you will need to make sure that the balances at year-end of all the different contractors equals your balance in Pro Fund Accounting.
941s: To assist your auditor, run copies of all 4 quarters of your 941.
PREarnings: Run the PREarnings report to show those days that have been accrued.
PR Audit with Equipment: Run the PR Audit with Equipment report to show dates in old year that were paid in New Year.
Federal/State Funded Projects: As was stated previously under Liabilities, the Federal/State funded projects are not required to be a part of your budget or your monthly entries, starting next fiscal year. You will still need to keep spreadsheets on these, however, so you can make your GASB-34 conversion entries.
MTF Revenue: Your MTF revenue for the year in Pro Fund Accounting should match the total provided by the State for the fiscal year.
Township Contributions: For those of you that have Township participation with projects, you will have sent them invoices over the year for those projects in which they’ve participated. You should verify that the total of all the invoices for that particular Township matches what you have in Pro Fund Accounting. Some of you may keep Excel spreadsheets by Township if you have a lot of invoices. Make sure that the total of all of the Townships’ Contributions equal your Township Contribution account in Pro Fund Accounting.
Sundry Contributions: Just like Township Contributions, you should verify that all the invoices sent equal your total in Sundry Contributions in Pro Fund Accounting.
Charges for Services: As most of the Road Commissions process permits, it is appropriate to verify that all the amounts charged for permits, etc. equal the total in Charges for Services. Again, if you use separate worksheets for this, make sure these worksheets and all their data equals the Charges for Services in Pro Fund Accounting.
Interest and Rent Controls: Verify that all your different accounts that have interest, (both from the bank and from the County) balance to this account in Pro Fund Accounting.
GASB-34, State Contract Requirements, ACT-51: Once all your information is complete for your auditor to come out, you will still need to complete your GASB-34 conversion, any State Contract Requirements, and of course the ACT-51.
As I stated before, there may be other areas/account numbers that you use at your particular Road Commission. A good idea would be to take this list to start with and make yourself a check-off list of everything you do for year-end, that way come next year you’ll have a starting place. As time permits, it may also help for you to write down instructions on how to do each one of these items. It will help you each year, but it will also help your Road Commission should some unforeseen circumstance happen, or simply when you are ready to retire, everything will be in order.