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How to Make Your Year-End Close Go More Smoothly

​Do you want to make your year-end go a bit more smoothly? We’re here to help.  Here are a few easy reminders for you to consider, which should save time during the audit process.

1.  Verify your bank reconciliations are caught up. Making sure all of your bank reconciliations are complete (and all unreconciled differences are addressed) will save you a lot of questions and identify any adjustments that need to get made before the auditor asks about them.

2.  Make sure your taxable values have been adjusted for any tax tribunal assessments paid during the year.  We know you don't control that process, but a well-placed call to the county can insure those adjustments are posted to the MDE website timely.  MDE will process changes on the State Aid Status report the next month and prevent the district from having further cash flow challenges.

3.  Complete your grant reimbursement requests timely.  Remember that grant reimbursement requests at year end (whether made to the ISD, MDE, or federal government) must be made with sufficient time for the funds to be collected by August 31. However, they can only be completed once the “cash” has left the district. 

Under GASB 33, funds should be received timely enough to allow the district to pay current obligations.  This has generally been defined as 60 days.  If the funds haven’t been received in that time frame, it may be necessary to defer the revenue recognition until the next year, which can create significant budget variances.  Identifying what expenditures to reimburse and when the cash is paid are both keys to success here.

4.  Ensure you have all of your semiannual certifications and Personnel Activity Reports (PARs) done and available.  Since many grant personnel take some time off during the summer, making sure these documents are easily accessible can save a lot of time during the audit process.

5.  Make sure things that have changed during the year have been accounted for properly.  What am I talking about? Here are some common items that need adjusting:

  • Bond issues or refunding bonds.
  • Close out of bond projects with remaining funds. Remember, those dollars might need to go to the Debt Fund!
  • Tax tribunal adjustments - have the debt funds been allocated their proportionate share of any assessments?  Have the millage rates been computed correctly for the next year?
  • Cost sharing arrangements for health insurance.
  • Changes in termination payouts for vacation and/or sick days.

6.  Make sure the Food Service Fund is being charged indirect costs, if the fund is self-sufficient.  As more districts have begun using an outside vendor to run their food service programs, there are more instances where the food service fund is breaking even or making money.  In these situations, the food service fund is allowed to transfer funds to the General Fund.  The transfer is capped at the allowable charge to food service for indirect costs.  Watch out, though.  Make sure this amount is computed correctly, as we’ve seen more districts get questions on this from the Michigan Department of Education lately. (Hint – refer to the “old” paper food service cost reports.  The computation was built into those forms).

7.  GASB 54 Commitments – Remember, any commitments must be “created” by the Board prior to June 30.  The actual amount of the commitment does not need to be determined then, but the item and method for determining must be in place.  Last year many school boards adopted fund balance policies.  Check the policy; some commitments may have been included in the policy.  Assignments can be made after year end if needed.

8.  When in doubt, just ask!  If there are transactions that are new for you this year or don't look right, just ask.  Don’t worry about getting "written up"; it's when the auditor comes across something that’s not right with no up-front discussion that we have to figure out if the item is reportable or not.  We’d much rather have a conversation with you up front — it saves everyone time and heartache.

If there are other items that would help your district close its books more smoothly, just shoot me a quick message at laura.claeys@plantemoran.com.  I’ll be happy to share the data with everyone.  Good luck with the last month of the fiscal year!

Contact Us

Laura Claeys

877.622.2257, x64910