Working in Concert to Process the Year-End Close

Each month, various departments within University Finance and Administration (UFA) prepare to record entries and reconcile accounts for each fiscal year, all in anticipation of the year-end financial close, which typically takes place during the second week of August.

“The monthly closes throughout the fiscal year help the departments and central accounting lead up to the year-end close. The departments, all the way up to the Chancellors’ offices and central Vice President areas, need to reconcile their accounts and record all entries in the JUN-XX period, which remains open longer than a normal month end,” explained Christy Dolce, Associate Controller, Controller - University Accounting.

The process involves not only the University Controller’s Office (UCO), but also Student Accounting, Billing and Cashier Services (Student ABC); Research Financial Services; University Budget Office; University Procurement Services; and Cost Analysis and Reporting, all of which record entries, process transactions, and analyze data throughout the JUN-XX period. Marc Garas and Ann Griffin on the Financial Information Systems (FIS) team provide focused training that helps standardize the teams’ approach to processing various types of journal entries and cost journals while offering tips and tricks for reconciling accounts and the projects ledger to general ledger. These transactions affect the audited financial statements, performed in June by external auditors, KPMG. FIS supports KPMG with special reporting or data requests throughout the review.

After the close of the JUN-XX period, UCO opens the JUN-ADJ-XX period. This period remains open until the audit is complete. UCO and the Chancellors’ offices can continue recording material entries to the general ledger only in the JUN-ADJ-XX period. During this time, the University Controller’s Office produces three statements – the Statement of Net Position; the Statement of Revenue, Expense and Changes in Net Position; and the Statement of Cash Flows. These statements, which are included in the year-end financial report that KPMG audits, are analyzed and compared to those of prior years to evaluate fluctuations. UCO often has multiple versions of the statements because further adjusting entries are made during the JUN-ADJ-XX period.

“KPMG performs interim audit procedures in June, and then returns the end of August to begin year-end work. The audit lasts throughout the month of October, and even goes into November until the statements, Management, Discussion and Analysis (MD&A), and notes are all ticked and tied, and support is provided for every single number in the report,” Dolce said.

Once UCO completes the financial report and audit—generally by the end of October—it presents the report to the Audit Committee for approval. Occasionally, a few numbers from the state, such as Government Accounting Standards Board (GASB) 75, Other Post-Employment Benefits (OPEB) can delay the report finalization process. Once all updates, edits, and reviews from KPMG and UCO have been integrated and approval from the Audit Committee Chair and Mike Gower received, the statement is released.

As with many financial processes, the year-end close became more involved after the Rutgers-University of Medicine and Dentistry of New Jersey (UMDNJ) merger. Much of this added complexity can be attributed to the presence of two different systems—Banner for UMDNJ and RIAS for legacy Rutgers—not to mention a related dramatic increase in the amount of activity and transactions.

“After merging with UMDNJ, Rutgers began to report on healthcare and patient service activity that it never did before, increasing the scope of the audit…At that time, we had separate closing schedules and had to coordinate timing to consolidate,” Dolce said.

This consolidation required UCO to manually add data from both systems to produce the annual financial statements until the university implemented its new financial management system, which combined both systems. This is one example of how the UCO reporting workflow continues to improve each year.

Visit the UFA website to view a log of Comprehensive Annual Financial Reports from 2016 on.