Reporting Requirements for Annual Financial Reports of State Agencies and Universities

USAS

USAS Entries
Restatements to Fund Balance/Net Position and System Clearing Adjustments

After the Comptroller’s office publishes the Annual Comprehensive Financial Report (ACFR), the financial reporting analysts prepare USAS entries for all ACFR adjustments to ensure all agencies have correct beginning fund balance/net position for the preparation of the next AFR and to ensure that no system clearing balances exist for any agency. An agency may still identify instances where beginning balances in USAS are not correct due to a discovery of an error in its own books and, therefore, a restatement may be necessary.

An agency may use generic T-codes to adjust USAS balances to accurately reflect its AFR amounts. Some generic T-codes automatically debit or credit the system clearing general ledger account (GL 9999) or basis conversion system clearing general ledger account (GL 9992) while others allow the user to manually input a system clearing GL in USAS. System clearing balances occur as a result of using the generic T-codes that post to GL accounts 9999 or 9992 and for which the debits and credits to GL 9999 or 9992 do not balance.

Regardless of how a system clearing account is populated in USAS, all system clearing account balances must be zero at the D23 fund level prior to submission of the AFR package. In the event a system clearing account has a balance due to an accounting error, the agency needs to investigate and clear the balance as soon as the error is found.

Per policy, agencies must formally document a reconciliation of the fiscal 20CY AFR to USAS financial reports. Several sources can help document the reconciliation and identify restatements due to errors to be corrected or to zero-out system clearing balances:

• The DAFR8920 General Ledger Fund Detail Trial Balance report – Ordered at fund level 4 (D23 fund level)
• The DAFR8580 Balance Sheet – Governmental and Proprietary Fund Types report – Ordered at fund level 4 (D23 fund level)
• The DAFR8590 and DAFR8600 – Operating Statement report – Ordered at fund level 4 (D23 fund level)
• The USAS General Ledger Summary Inquiry (56) screen

Agencies can use the following step-by-step approach to determine whether or not a restatement of beginning fund balance in the current fiscal year is needed and how to adjust system clearing balances to zero:

1. Order a DAFR8920 or DAFR8580 for the current fiscal year. Since agencies are required to zero out any system clearing balance created in the current fiscal year and make AFR entries at the D23 fund level, set up the agency report request at fund level 4. The same information is available on the General Ledger Summary Inquiry (56) screen.
2. Create a spreadsheet, if necessary, at the D23 fund level with columns for appropriated fund beginning fund balance/net position per USAS and compare this column to the column representing current year AFR beginning fund balance/net position amounts to adjust the current year beginning balance.

   Example:

   	D23 Fund 0001 Beginning Fund Balance per USAS Source: DAFR 8920, DAFR 8580 or 56 screen for Current Year	Fund 0001 Beginning Fund Balance per AFR Source: Agency AFR for Current Year	Adjustment Amount = Agency AFR minus USAS Amount
   GL 2301 – Fd Bal – NonSpnd for Inventory	$ < 4,000.00>	$ < 4,000.00>	$ 0.00
   GL 2303 – Fd Bal – NonSpnd for LT Loans, Cont and Rec	< 11,000.00>	< 11,000.00>	0.00
   GL 2310 – Fd Bal – Restricted	< 1,000.00>	< 1,000.00>	0.00
   GL 2320 – Fd Bal – Assigned	< 2,500.00>	< 2,500.00>	0.00
   GL 2325 – Fd Bal – Unassigned	< 5,500.00>	0.00	5,500.00

3. Based on the above example where the USAS fund balance is greater than the AFR fund balance, the agency must restate its beginning fund balance in USAS by $5,500.00 using T-code 454R and COBJ 3891. If the USAS fund balance is less than the AFR fund balance, the restatement is made using T-code 454 with the same COBJ 3891. T-codes 454 and 454R require a balance sheet GL account, other than fund balance accounts, to be entered. T-code 454 and 454R automatically credits or debits GL 6075 restatements, which closes to fund balance during the GL close process.

   Any restatement indicates either a USAS prior year asset balance or liability balance (or a combination of both) does not tie to the current year AFR beginning asset and/or liability balance(s).

4. In order to determine which balance sheet GL account to restate, further analysis is needed. Create a spreadsheet, if necessary, at the D23 fund level with columns for appropriated fund asset and liability GL account balances per USAS and compare this column to the column representing current year AFR asset and liability GL account balances.

   	D23 Fund 0001 Balances per USAS Source: DAFR 8920, DAFR 8580 or 56 screen for Current Year	Fund 0001 Balances per AFR Source: Agency AFR for Current Year	Adjustment Amount = Agency AFR minus USAS Amount
   GL 0045 – Cash in State Treasury	<250,000.00>
   GL 0048 – Legislative Cash	261,100.00
   Subtotal – Cash in State Treasury	11,100.00	0.00	<11,100.00 >
   GL 9000 – Legislative Appropriations	80,000.00	82,100.00	2,100.00
   GL 0285 – Consumable Inventories	2,000.00	2,500.00	500.00
   GL 0385 – Other Current Assets	<750.00>	0.00	750.00
   GL 9999 – System Clearing	< 2,250.00>	0.00	2,250.00

5. Based on this additional analysis, the restatement adjustment noted above would be made to GL 0048 since the difference of $11,100.00 in this GL is sufficient to cover the $5,500.00 restatement needed. Process a restatement in the amount of $5,500.00 to correct a portion of the cash balance difference by using T-code 454R to decrease fund balance with an offset to GL 0048. The remaining cash difference of $5,600.00 can be adjusted using T-code 645 and input GL 0048.

   GL 9000 — Legislative Appropriations is understated by $2,100.00 and can be corrected using T-code 644 and input GL 9000.

   GL 0285 — Consumable Inventories is understated by $500.00 and can be corrected using T-code 644 and input GL 0285.

   GL 0385 — Other Current Assets is understated by $750.00 and can be corrected using T-code 644 and input GL 0385.

   The following entries are needed to restate the fund balance and to correct the other GL account balances, resulting in zeroing-out the system clearing balance:

   Seq No	Batch Type	Doc Type	Eff Date	Fin Agy	TC	AY	PCA	COBJ	Amount	R	Appn No	Fund	Input GL
   To Restate Fund Balance
   (1)	5	U	0832CY	XXX	454	XX	99999	3891	$5,500.00	R	N/A	0001	0048
   To Correct Cash in State Treasury
   (2)	5	U	0832CY	XXX	645	XX	99999	N/A	$5,600.00		N/A	0001	0048
   To Correct Legislative Appropriations
   (3)	5	U	0832CY	XXX	644	XX	99999	N/A	$2,100.00		N/A	0001	9000
   To Correct Consumable Inventories
   (4)	5	U	0832CY	XXX	644	XX	99999	N/A	$ 500.00		N/A	0001	0285
   To Correct Other Current Assets
   (5)	5	U	0832CY	XXX	644	XX	99999	N/A	$ 750.00		N/A	0001	0385

   Attention: When a restatement entry is made, a corresponding disclosure in Note 14 is required. Include a detailed explanation for the amount restated in the disclosure.

   Accounting effect of these entries:

   		Debit	Credit
   (1)	To Restate Fund Balance
   	6075 Restatements	$ 5,500.00
   	0048 Legislative Cash		$ 5,500.00
   (2)	To Correct Cash In State Treasury
   	9999 System Clearing	$ 5,600.00
   	0048 Legislative Cash		$ 5,600.00
   (3)	To Correct Legislative Appropriations
   	9000 Legislative Appropriations (Balance Sheet)	$ 2,100.00
   	9999 System Clearing		$ 2,100.00
   (4)	To Correct Consumable Inventories
   	0285 Consumable Inventories	$ 500.00
   	9999 System Clearing		$ 500.00
   (5)	To Correct Other Current Assets
   	0385 Other Current Assets	$ 750.00
   	9999 System Clearing		$ 750.00

6. After the above entries are made in USAS, the system clearing GL account will be zero as noted by the recap below.

Recap