Accruals - Items Received But Not Invoiced Accruals

Items Received but not Invoiced Accruals (Only for those agencies doing on-line receiving)

Under the modified accrual basis of accounting, an agency in receipt of goods at June 30 must record the appropriate expenditure and associated liability if the agency has not been invoiced and paid for those purchases as of July 31. Legal title to goods passes to an agency upon receipt and acceptance by the agency. Accordingly, the agency must record its obligation to pay for goods received as of June 30 to appropriately reflect year-end expenditures and liabilities.

Identifying the Items Received but Not Invoiced Accrual Transactions

The accrual process for identifying and recording goods received as of June 30, but not invoiced in July, is automated in the NCAS system. A data set is created at June 30 which contains information from purchase orders with an invoice status of open or partial and a receipt type payment basis, indicating goods are received but not yet invoiced. On the last day in July, all invoice activity for July is compared to the existing June 30 data set.  The purchase order amounts that remain open to invoicing  are used to generate transactional data which results in the identification of goods received as of June 30, but not invoiced or paid at July.

Items received as of June 30 and invoiced but not paid prior to July 31 should be accrued through the Accounts Payable system.

Posting the Items Received but Not Invoiced Accruals

The NCAS system creates an accrual batch of transactions based on the comparative data and will be posted at the agency's request.  The items received not invoiced accruals should be injected at the same time as the normal accrual injection.  Both these injections are done only at the agency's request.  The batch is created automatically on the first day of the second period, August 1, and is posted through Financial Controller to the General Ledger with an effective date of June 30. The items received but not invoiced transactions are posted to the Accounts Payable account, 211100. The source code for these transactions is identified on the General Ledger as "PS ACCRUAL" to indicate the document source type represents an accrual of items received at June 30 but not invoiced or paid during July.

Verifying the Items Received but Not Invoiced Accruals

When the items received but not invoiced accrual batches are created and posted through Financial Controller to the General Ledger, the Items Received Not Invoiced report is automatically generated. Agencies should verify the batch totals and detail transaction data to determine the accuracy of the posting transactions.

The accrual batch is processed only once and adjustments to the accrual entry must be manually recorded with a journal voucher entry in the Budgetary Control module as a closed period adjustment with an effective date of June 30 and a "33" in the third and fourth positions of the document ID.

Creating the Automated Accrual Reversals

The system programmatically creates a reversing entry of the items received but not invoiced accruals with an effective date of June 30 of the next fiscal year. The accrual reversing entry is future dated and posts to the SBM, where it remains until the end of the next fiscal year. On June 30, the accrual reversals are automatically posted to the General Ledger.

A listing of accrual reversing transactions residing in the SBM is available through the GLPUBLIC library IE report series C-U-GL-SBM-LISTING-EFFECT-DATE, using June 30 of the next year as the selected effective date.  Each NCAS agency should review the suspended reversal batches to verify the batch totals and the accuracy of the detail transactions. Corrections to the suspended batches are made on-line in the General Ledger Module.

OSC recommends that each agency maintain a hard copy of the Suspended Batch Master listing for their Comprehensive Annual Financial Report files. The SBM is subject to daily maintenance by agency personnel. The accidental purging of year-end accrual reversals from the SBM will make it necessary for the agency to manually re-key the accrual reversals as journal voucher entries in Budgetary Control with an effective date of June 30 of the next fiscal year. Agency personnel responsible for maintaining the SBM should be instructed not to purge any prior year accrual reversing entries from the SBM.

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