FIN 2.09.01 Year-End Grants Funds Cash and Fund Balance
The City has centralized grant funds. The expenses tracked in these funds are reimbursementbased expenses. Typically, at the end of a fiscal year the Grants Fund’s cash and fund balances are negative due to the delay in reimbursement. At year-end, bureaus are required to cover the negative balance by making loans to the Grants Fund proportionate to their share.
Year-End Grants Fund Loan Process
In early June, the Grants Office runs a cash report for accounting periods 1-11 by fund and business area using tcode FAGLL03, account 100000, funds 217000-217015, 218000-218002 and 219000-219001. After the cash report is complete, expense projections for June are calculated and incorporated into the cash report. The projections are based on average monthly expense incurred by each grant in AP 1-11. Each grant is attributable to a specific bureau. The cash report is submitted to CBO and Technical Accounting prior to the BRASS deadline for the Over Expenditure Ordinance (OEO). CBO works with the Bureau Budget Analyst to complete the BRASS load for the year-end loans. CBO and the Bureau Budget Analysts will communicate the Grants Fund loan information to Bureau Accounting Staff.
Loans will be budgeted in the OEO and, simultaneously, the repayments will be budgeted in the Adopted Budget for the next fiscal year (to the degree that the appropriation doesn’t increase the Approved Budget appropriation for the fund by more than 10%). This ensures that authority exists both to make the loan on June 30th, and to repay it the next day, July 1. CBO will work with Bureau Budget Analysts to make sure that the loans are correctly budgeted.
The loans must be authorized in a separate resolution by Council. The resolution must contain the purpose, amount, and terms of the loan. Language in the resolution standardly specifies that the loans will not accrue interest. (Because of the negative cash generated by the bureau, the City pooled cash overall receives less interest. It would be inappropriate to pay bureaus interest on amounts due to the Grants Fund due to a negative cash balance.) CBO will prepare the Grants Fund loan resolution to address these criteria.
Accounting: Year-End Grants Fund Loan Journal Entry
In October, the Grants Office and Technical Accounting will prepare the final cash and fund balance reports based on actual results of the full fiscal year. The cash and fund balance report will be provided to CBO. CBO will work with Bureau Budget Analyst and Accounting Staff to determine the bureau’s funding source for their portion of the loans to the Grants Fund. CBO will notify the Grants Office and Technical Accounting of the loan funding source determination.
Technical Accounting will complete a JE recording the loans and a JE recording the loan repayment. The loan JE is always dated June 30 in accounting period 13, and the repayment JE is always dated July 1 of the subsequent fiscal year in accounting period one. These two entries will be entered in SAP at the same time to avoid any interest allocation issues and to avoid the possibility of failing to reverse the loan JE. Technical Accounting park the documents in SAP, and then notify the bureaus and the Grants Office of the document number requiring their review and a note of approval to be placed in the SAP document attachment After the Bureaus review and place an attachment stating approval of the entries, they will notify Technical Accounting that the entries are ready for completion/approval and posting.
Examples of prior year Grants Fund year-end loan calculations and processing are available from the Grants Office.
OMF Grants Division and Accounting Division
Adopted by City Council August 2014