NJ Municipal Grant Accounting in MCSJ

Transcription

1 NJ Municipal Grant Accounting in MCSJ This manual will help the user understand how to set-up and account for State and Federal Grants in the MCSJ Financial software. The following topics will be covered: Basic Grant Accounting Journal Entries Step 1: Creating Grant Accounts in the Current and Grant Funds Step 2: Charging Grant Appropriations and Realizing Grant Revenue in the Current Fund Step 3: Setting up Appropriated Reserves and Grant Receivables in the Grant Fund Unappropriated Reserves Chap 159 s and Change in Title and Text Grant Account Status Reports Basic Journal Entries The journal entries listed below show some of the commonly required Grant Accounting entries. The entries may vary slightly under different circumstances. With proper software set-up and by using the appropriate batch posting methods, the MCSJ software will make these entries automatically and provide accurate reporting for all grant activity. Record Budget entry for Chapter 159 grants in Current Fund Appropriations: State/Federal Grants Anticipated Revenue: State/Federal Grants 1-1

2 Basic Journal Entries Charge Grant Appropriations and Realize Grant Revenue in Current Fund (including match) Appropriations: State/Federal Grants Anticipated Revenue: State/Federal Grants Appropriations: Local Match Due to Grant Fund (Match) Set-up Grant Spending Reserve, Receivable and Interfund for Local Match in Grant Fund Grants Receivable Due From Current (Match) Appropriated Reserves Record Receipts in Grant Fund Cash Grants Receivable Record Disbursements in Grant Fund Appropriated Reserves Cash Record Receipts for Grants not Appropriated for in Current Fund Budget Cash Unappropriated Reserves Note: Cash entries will require accompanying interfund entries if Current Fund cash is used for grant receipts and/or disbursements. The interfund entries are required in order to keep the current and grant funds in balance. 1-2

3 Step1: Create Grant Budget and Revenue Accounts Apply Unappropriated Reserve against Grant Receivable Unappropriated Reserves Grants Receivable Step1: Create Grant Budget and Revenue Accounts When a grant will be included in the municipal budget (Adopted or Amended), at least 4 accounts will need to exist or be added to the system. A budget and revenue account will be needed in the Current Fund and then separate budget and revenue account(s) will be needed in the Grant fund. The Current Fund accounts will simply be used to record and charge/realize the budget. The Grant Fund accounts will be used for all cash disbursements and receipts. Any special grant sub account detail will be set-up in the Grant Fund. Current Fund Grant budget accounts in the Current Fund should begin with a number and should be formatted according to the State Flexible Chart of Accounts. These accounts will only be used to hold and charge off the Current Fund appropriations. They are NOT used to record grant disbursements. An example is provided in Figure 1-1. Current Appropriations Due From/To Grant Fund Figure 1-1 Note: The Fund Type can be set to Budget or Grant. If Grant is selected, the Misc tab on the account will appear as shown in Figure 1-2. The user can assign the corresponding Current Fund grant revenue account, which will enable the system to tie the two accounts together in the Adopt/Amend Batch. The budgeted amount can then be posted once for grants with no match. 1-3

4 Step1: Create Grant Budget and Revenue Accounts Optional link to Current Fund grant revenue account. Figure 1-2 Note: It is not necessary to fill out the Misc tab grant information on Current Fund accounts. This information will be updated on the Grant Fund accounts. Grant revenue accounts in the Current Fund should begin with a number and should be formatted according to the State Flexible Chart of Accounts. These accounts will only be used to hold the anticipated budget and realize grant revenue. They are NOT used to record cash receipts. See Figure 1-3. Due From/To Grant Fund Anticipated Revenues Figure

5 Step1: Create Grant Budget and Revenue Accounts Note: The Revenue Journal line entries are only required if the Revenue Batch is used to realize Grant revenue. These lines can be left blank if revenue will be realized in the G/L Batch (as described in this manual). Grant Fund The Grant Fund budget accounts should start with a letter (G is recommended but not required) so that expenditures may be recorded over multiple fiscal years. These accounts should be used to record all grant disbursements. Any sub account detail you wish to set-up in order to track grant expenditures should be done in this fund. Note: E&A recommends that a new account be established for each grant appropriated during the year. In other words, separate accounts should exist for the 09 grant and the 08 grant with the same name. While the system will permit you to update the same G- account for each new award, the system reporting is best designed to support separate accounts for each year. Appropriated Reserves Cash Interfunds (if necessary) Figure 1-4 Note: Account numbering for the G accounts is user defined. It is recommended that the account s department segment (702 in the above example) be unique for each unique grant name. The remaining segments can be used to group grants by year, funding source, organize sub account detail, or any other grouping the user feels is important. Notice the Fund Type is set to Grant. This will allow the user to record information about the grant on the Misc tab. See Figure

6 Step1: Create Grant Budget and Revenue Accounts Figure 1-5 Grant Fund revenue accounts should also start with a letter so that receipts may be recorded against the account over multiple fiscal years. These accounts should be used to record all cash receipts and will maintain the grant s receivable balance. See Figure 1-6. Grants Receivable Interfunds (if necessary) Figure 1-6 Note: Account numbering is user defined, but it is recommended the department segment (702 in the above example) be unique for each grant name. 1-6

7 Step2: Charging Grant Appropriations and Realizing Grant Revenue in the Current Step2: Charging Grant Appropriations and Realizing Grant Revenue in the Current Fund Once the Current Fund municipal budget is adopted (or grants are added via a Chap. 159) and budgeted figures are posted to the accounts, the anticipated revenue for each grant should be realized and the budget appropriation for each grant should be charged. Each grant should then be separately recorded in the State and Federal Grant Fund, where a grant receivable and spending reserve need to be established. For grants requiring local matches, the budget appropriation for these matches should also be charged in the Current Fund and transferred to the spending reserve in the Grant Fund. G/L Batch The best way to charge grant appropriations and realize grant revenue is by using the G/L Batch. The example below illustrates how to post the entries for a single grant with a local match. Figure 1-7 Note: When all grants have been charged, the debits to the grant budget will equal the credits to the grant revenue plus the credit to the Due From/To Grant Fund for any local matches appropriated in the budget. Charge Grant Appropriations and Realize Grant Revenue in Current Fund (including match) Appropriations: Grant Appropriations: Grant Local Match Anticipated Revenue: Grant Due to Grant Fund (Match) 1-7

8 Step3: Setting up Appropriated Reserves and Grants Receivables in Grant Fund Step3: Setting up Appropriated Reserves and Grants Receivables in Grant Fund After the grant budget appropriations have been charged and the anticipated revenue realized in the Current Fund, the grant spending reserves and receivables need to be established in the Grant Fund. If no grant matches are involved, the Adopt/Amend Batch can be used to post the Grant budget in the grant fund. This batch will automatically post the G/L entry to set-up the Receivable and Appropriated Reserve G/L balances. If grant matches are involved, it is recommended that the user post the grant budget through the budget and revenue account maintenance screens. Then, the manual entry to set-up the Receivable, Appropriated Reserves, and Interfund Receivable (Due From/To Current) should be posted in the G/L Batch. Note: The budgeted amounts posted in the Grant fund can be entered with either an Adopted or Chapter 159 Reason code. If posted with an Adopted reason code, the budgeted amounts will appear in the Current Budgeted column on the current year s Grant Account Status report. If posted with a Chapter 159 reason code, the amounts will appear in the Amended column of the current year s Grant report. The Chapter 159 reason is recommended for users who do not add new grant accounts for each year because they will be able to easily distinguish the newly appropriated amounts from the grant s previous balance. Posting Budget in Account Maintenance Figure

9 Step3: Setting up Appropriated Reserves and Grants Receivables in Grant Fund Figure 1-9 Figure 1-10 Set-up Grant Spending Reserve, Receivable and Interfund for Local Match in Grant Fund Grants Receivable Due From Current (Match) Appropriated Reserves 1-9

10 Step3: Setting up Appropriated Reserves and Grants Receivables in Grant Fund Using Adopt/Amend (Only recommended if no grant matches) Figure 1-11 Set-up Grant Spending Reserve, Receivable in Grant Fund Figure 1-12 Grants Receivable Appropriated Reserves 1-10

11 Unappropriated Reserves Unappropriated Reserves At times, money may be received for grants that have not yet been appropriated in the Current Fund budget. Since no spending reserve or receivable has been established, this money needs to be receipted against a liability account called Unappropriated Reserves in the Grant Fund. Eventually, the grant will be appropriated in the Current Fund budget, usually via a Chapter 159 resolution, which will allow the spending reserve and receivable to be established in the Grant Fund. Then, the Unappropriated Reserve balance can be applied against the grant s receivable balance. In order to post receipts of Unappropriated Reserves, revenue accounts should be established for any grants where unappropriated funds are received. While the account number is user definable, E&A recommends that G- accounts be established to handle these receipts. Most importantly, the accounts should be numbered in a fashion that keeps them separate from the Grant Receivable revenue accounts on the Grant Revenue Status report. An account example is below: Unappropriated Reserves Figure 1-13 To apply an Unappropriated Reserve balance against the Grant Receivable balance, the entry should be recorded in the G/L Batch. See the following example: Apply Unappropriated Reserve against Grant Receivable Figure 1-14 Unappropriated Reserves Grants Receivable 1-11

12 Chapter 159 s and Change in Title and Text Chapter 159 s and Change in Title and Text Many times, grant rewards will not be known at the time of budget adoption. Consequently, a Chapter 159 resolution is needed to insert the grant budget appropriation and anticipated revenue into the Current Fund budget. If a match is required (may require an emergency appropriation), then a Change in Title and Text amendment is needed to shift the amount for the Matching Funds for Grants appropriation to the newly appropriated grant. Once this is accomplished in the MCSJ system, the grant process is no different than you would follow for grants that are part of the original adopted budget. The Chapter 159 budget amendment can be entered on the Current Fund accounts through the Account Maintenance screens or using the Adopt/Amend Batch. If the account maintenance screen is used, be sure to choose the Chap 159 reason code. The G/L entry to reflect the budget amendment will also have to be posted in the G/L Batch: Db Anticipated Revenues Cr Current Appropriations The screens below illustrate a Chapter 159 amendment entered in the Adopt/Amend Batch: Figure 1-15 Figure 1-16 A Change in Title and Text budget amendment can be posted through the Budget Account Maintenance screen or by using the Adopt/Amend Batch. When posting through the Account Maintenance, simply change the budgeted figures on the budget 1-12

13 Chapter 159 s and Change in Title and Text accounts and choose the Chg Title/Text reason code. The screens below illustrate a Change in Title and Text amendment entered in the Adopt/Amend Batch. Figure 1-17 Grant ABC Matching Funds for... Figure 1-18 Note: No journal entry is required in the G/L to reflect a Change in Title and Text. After you have completed the budget postings for the Chapter 159 and Change in Title and Text (if needed), charge the budgeted amounts off in the Current Fund and set up the spending and receivable balances in the Grant Fund as described in steps 2 and 3 of this manual. 1-13

14 Grant Reports Grant Reports Grant Account Status - Budget This is a Budget Account Status report designed especially for lettered grant accounts. Since Grant type accounts may span multiple budget years, the report requires the user to enter an Opening Balance Budget Year. This enables the user to view an opening balance at the start of the year and to see only current year activity totals. The report also contains additional grant related features such an Original Grant column and the ability to print miscellaneous grant information from the Misc tab in Budget Account Maintenance. When run for the appropriate range of accounts, this report should tie back to the G/L Appropriated Reserves balance. Select Finance>Budget Account>Grant Account Status. Figure 1-19 Grant Account Status - Revenue This is a Revenue Account Status report designed especially for lettered grant revenue accounts. Since these lettered accounts may span multiple budget years, the report requires the user to enter a Year for YTD Totals. This enables the report to show separate current and prior year activity totals. When run for the appropriate range of accounts, this report should tie back to the G/L Grant Receivable balance. Select Finance>Revenue>Grant Account Status. 1-14

15 Grant Reports Figure