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June 10, 2016 Article 2 min read
This six-point checklist can help simplify your year-end close and audit process.

As the end of June is rapidly approaching, we thought it would be a great time to share some year-end reminders to make the year-end close and audit process as painless as possible. Contrary to how it may feel, auditors are not looking for things to “write up”. Working together as a team, here are some items that may make the audit less painful (and allow you to enjoy the summer a bit more!).

  1. Year-end accruals
    Remember to adjust your year-end balances. These include:
    • Hourly payroll accruals for work performed prior to June 30 and paid in July

    • Retirement contributions paid in July for work done prior to June 30

    • Section 147c accruals - the balance should ONLY be the amounts due to ORS for July and August (from your state aid status report), plus any June Section 147c amounts not remitted until July. Anything else should be moved to expenditure accounts (increasing or decreasing them).

  2. Unavailable revenue
    Keep an eye on amounts recorded as a receivable at June 30 for grants. If those dollars are not collected within 60 days after year end, the revenue should be reclassified as unavailable revenue. This is an entry that may catch you by surprise!
  3. Unearned revenue
    Particularly for categorical revenue received from the state, revenue should only be recognized to the extent services have been provided under the program (ex. at risk), even if the funds have been received in full. Make sure the appropriate amount of unearned revenue has been reported at June 30 to avoid overstating your revenue for the year.
  4. Personnel activity reports
    Make sure the personnel activity reports are done and on file for those individuals funded via Federal programs. You know the auditors are going to ask for them, so be ready! Remember - these forms need to be done on a semi-annual basis for individuals working on a single-cost objective and funded by federal dollars.
  5. Clean up your balances
    This will ensure audit success and avoid questions.
    • Make sure interfunds balance
    • Investigate credit balance in student-activity funds (is the general fund subsidizing a student account, and if so, why?)
  6. Ask for help
    Look at things that are tricky and ask for help before the auditors arrive:
    • Capital leases
    • Bond refunding/debt defeasance
    • Specialized grants
    • Unearned/unavailable revenue accounting
    • Early retirement incentives

As always, if you have any questions or need help with year-end closing entries, please give us a call. We are happy to provide advice. Happy audit season!