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Preparing for year-end

It is hard to believe that 2018 is almost over! With the rolling of the calendar comes the need to close out the accounting year, prepare for annual reports and prepare for a strong start to the upcoming year. There are some things to consider now to make the year-end process easier and ease your workload in 2019. Below is a year-end checklist to consider. In addition, please consult the year-end duties set forth in the State Board of Accounts bulletins.   

Cash and fund balances

  • Confirm all balance requirements are being met and take action to eliminate any negative fund balances. If the statutory process is followed correctly, a temporary loan now between funds can alleviate an audit comment later.
  • Reconcile all cash and fund balances to bank accounts and ensure all reconciling items are processed. (That oddball receipt from last February has to be dealt with)!

Budget to Actual Expenditures

  • Compare budget to actual spending and investigate if any appropriated accounts are overspent or will be by the end of the year.   Many budget adjustments can be handled by the fiscal officer, others will need more formal approval.  Forecasting through year-end saves you time during the annual report season.
  • Time permitting, compare your forecasted 2018 actual spending to your 2019 budget. You may find economies or challenges in individual line items. For example, if your 2019 budget for gasoline is $1,000 and in 2018, you are on track to spend $1,500 – you might have an issue.

Transaction analysis

A thorough analysis of your detailed transactions' completeness, accuracy, reasonableness and consistency will benefit your government.  For example, if you record eleven monthly utility bills to your utility expense line and one monthly utility bill to your miscellaneous account, now is the time to process the correction.

Encumbering Appropriations

Review unpaid purchase orders and contracts from 2018 and determine if appropriations need to be encumbered.  Remember, all appropriations expire on December 31, 2018 and are replaced with the new appropriations on January 1, 2019.   The only exception is properly executed encumbrances.

Identify Stale Outstanding Checks

The State Board of Accounts provides guidance on how to cancel old checks, but for year-end planning purposes, this is a good time to review HOW to do that in your individual accounting systems.   Reading the manual today saves you a scramble drill next year.

Address Dormant Funds and Accounts

Unused accounts and funds clutter up reporting.   This is a good time to consider those issues and brush up on the processes to make accounts inactive within your accounting system and to officially declare funds dormant.

Transfers In and Out

Transfers in = transfers out.  No exceptions.   Check them now or at the last minute on March 1.  Your choice.

This is a brief list to help you get started.   Please remember to refer to the help guides from your accounting systems and State Board of Accounts bulletins to finish 2018 and get off to a good start in 2019.

For more information on this topic, or to learn how Baker Tilly municipal specialists can help, contact our team.

Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and wholly-owned subsidiary of Baker Tilly Virchow Krause, LLP, an accounting firm.

Daniel A. Hedden
Partner, CPA
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