Accounting Services > State Accounts: Reconciling the Account

State Accounts: Reconciling the Account

Account Expenditure Summary

Summary Page
Detail Activity
Ending Balance
Pending Items
Outstanding Purchase Orders
Payroll Supplement

Regular
Temporary
Filled - Vacant Lines

Cash Disbursements
Balancing the Account

Summary Page

In addition to the campus and purpose identifying numbers, the heading of the summary page includes the account number, department name, month ending date, and fiscal year.

The body of the page lists the expenditure category by object code, reflecting any adjustments that are made during the course of the year. Following this is the column showing the total expenditures for that month. The next two columns show the total amount actually paid out, and the amount that has been encumbered on purchase orders to cover items ordered. The sum of these two columns is recorded in the Total Committed column. The Uncommitted Balance column is the allocation less the Total Committed. The last column displays the percentage of funds committed.

Detail Activity

This section displays all activity for the month, grouped by object code. If funds have been moved to or from an object code via budget transfer, this information will be shown first under the caption "Reassignment of Funds" (For more information on budget transfers, see the section by that name.)

0000-1999: Object codes 0000 through 1999 list the amounts for each payroll.
2000-2999: This section lists the total monthly payroll charges for temporary personnel and students.
3000-8999: The monthly activity of all requisitions, purchase orders, and journal transfers is reported here. Each object code section is divided into three sub-groups. The first is the Reassignment of Funds activity, the second is the Purchase Order and Voucher Transactions activity, and the third is the Journal Transfers activity.

As described above, the Reassignment of Funds reflects changes in allocation made via budget transfer.

The sub-group describing Purchase Order and Voucher Transactions follows. Each entry in this section is broken down in the following manner. The first number is the specific object code assigned to the purchase order by Purchasing. This is followed by the date(s) for the purchase order and its entry into the system. The next number is the purchase order number. Beneath this is the vendor name.

The next columns often cause confusion. When a purchase order is created, Purchasing marks the appropriate funding from the account and puts it in reserve. This is called encumbering the funds. Once the order is received and the vendor has sent an invoice, the system disencumbers the funds (takes them out of reserve) and then expends them (pays the bill). If the final bill comes in at less than the original purchase order, the original amount is disencumbered, but only the actual invoice amount is paid. The difference between the two amounts goes back into the account.

Therefore, when funds are encumbered, they are shown as a positive amount in the "Encumbered" column. When the bill is paid, the encumbered amount is shown as a negative and the "expended" amount appears as a positive.

Thus, totaling the encumbrances and expenditures gives you the actual amount that is committed at any given time.

You might notice that some purchase orders have additional expenditures listed as entries in the 5000 series These are shipping charges. In most cases, shipping charges are determined after the fact. Rather than have departments increase every PO that has shipping charges, Accounts Payable simply pays them and charges them to 5010. Since no funds are encumbered for this purpose, only the expenditure column shows the activity.

The next sub-group shows the Journal Transfers. Any exchange of services between on-campus departments results in a journal transfer. Journal transfers should be generated by the use of Material and Services Requisitions (described above). Memos should only be used to correct expenditure activity. For example, when you fill out a requisition for graphic services, the amount that Graphics charges appears on your AES as a journal transfer. The copy of the requisition that is returned to you should contain an identifying number that is referenced on the AES for that journal transfer. When you are billed for monthly phone usage, this also appears as a journal transfer. Other services that are billed as journal transfers include computer or typewriter repair, catering from on-campus food services, advertising charges, etc. Services that use journal transfers are paid directly as soon as Accounting receives notification. You will never see journal transfers listed in the encumbered column. They are only listed as expenditures.

Ending Balance

Each object code group ends with two rows. The first row shows the total amounts for the month. The second row shows the current balance after the month's activity. These numbers are reflected on the cover page.

Pending Items

The next section of the AES lists items that are pending. When a requisition is received by Purchasing, it is immediately entered into the system. The transaction is reflected in the accounting system as pending until a purchase order is completed. Checking this section allows you to verify that your requisition has been processed.

Outstanding Purchase Orders

This section lists purchase orders that have not yet been disencumbered. It groups them by object code and includes such information as the requisition number and date, the balance left on the PO, the vendor, and a short description of the item.

The outstanding purchase order section is important for three reasons. First, it allows you to keep track of what items have not yet been paid for. If you receive your order and two months later see the purchase order still listed as outstanding, you should contact Purchasing. They will need to encourage the vendor to send in an invoice so that the order can be paid and closed.

The second reason that this section is important has to do with purchase orders that require multiple payments. Certain purchase orders, particularly those for contracts, call for payments on a regular basis. For example, a piece of leased equipment may have to be paid for each month. The initial purchase order must include funding for the entire year's payments. However, only a portion of the encumbrance is expended each month. By checking the Outstanding Purchase Orders report, you can track the balance of payments left on a purchase order to determine if payments are being made in a timely manner.

The third reason is to check for duplicate encumbrances. This is of particular concern when requesting large contractual services, such as equipment leasing. The funds are initially encumbered when the purchase order is created. Once the contract has been processed, the funds under the PO number are supposed to be disencumbered while funds under the contract number ("C" number) are encumbered. Sometimes both PO and contract remain encumbered. Since these are usually large amounts, this can tie up quite a bit of funding.

Payroll Supplement

The next three sections of the AES delineate the payroll expenses. The regular payroll shows the line number, social security number, official title, name, pay period (1-26), payroll date, state FTE, gross biweekly pay, annual salary, and fiscal year-to-date earnings for each employee on the account. This list is repeated for each pay period, usually two for each month. The annual salary is shown at 1.00 FTE. To calculate a persons actual annual salary, multiply by their FTE.

The temporary and student personnel payroll is organized in much the same manner. However, the salary is reported in terms of wage per hour.

The last section of the payroll report contains a list of all lines, filled or vacant, on the account. This list includes the original SUNY appointment date, the consecutive date, and the campus appointment date. It also shows the exact annual salary, based on FTE.

Cash Disbursements

Actual payments are listed in this section. They are grouped according to the source of payment and contain the payment voucher number and date, the check number and date, PO and invoice numbers, payee name, and amount. They also contain two additional dates. The first is the invoice date, and the second is the liability date. Some years ago, in an effort to ensure timely processing of payments to avoid overdue payment fees, Accounts Payable began to more carefully track vendor's due dates. As a result, payments are now made more promptly.

Balancing the Account

Purchase orders are not the only way to expend funds on an account. Therefore, keeping a record of purchase orders and subtracting only their amounts from an allocation will give an incomplete picture of that account's actual balance. It is important to check the AES each month and compare the charges to your known commitments. If you cannot identify an item, or if you have any questions on the legitimacy of a charge, you can call the department responsible for the transaction (i.e., purchase order would be Purchasing. voucher payment would be Accounts Payable).

The AES reports are usually available after the 15th of the month and cover the previous month's activity. Thus, the information they report is at least three weeks behind current activity. In order to know what your actual current balance is, you must develop some method of accounting for current activity. This can be as elaborate as a ledger, paper or computer, that duplicated the AES and adds each item as it comes in; or, you may just want to verify the information on the AES each month, while keeping a running total of items that have not yet appeared. Obviously, this becomes more crucial as the year draws to a close. To successfully administer your funds, you need to be aware of your actual current balance. Computer access to the SUNY system should help in this area.