This issue of the Financial Management Office Newsletter includes information about the following:
- Fiscal Year 2021 Year-End Closing Schedule
- Clearing Accounts
- Preparation for Upcoming FY 2021 Annual Inventory Verification
- Quarterly Interest Rate for Late Vendor Payments
- Upcoming KFS and JRS Upgrades!
- Unrelated Business Income Tax Exceptions and Exclusions
- Resources
The FMO Newsletter is distributed monthly. Should you have any questions about this newsletter, contact Amy Kunz via email at amykunz@hawaii.edu.
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Fiscal Year 2021 Year-End Closing Schedule
Target Audience: Fiscal Administrators and Staff
The Fiscal Year 2021 Year-End Closing Schedule is now available for your review on the FMO website > General Accounting > Calendar for Fiscal Year-End Close.
Please review the various transaction processing due dates. These deadlines are necessary for an orderly closing of the University’s financial transactions for the fiscal year. Key reminders and what’s new for FY 2021 are as follows:
- An earlier July 6 date to open KFS for FY22 is being tested for feasibility. This possible earlier open date will be without balances; more information to follow
- Outstanding invoices for goods/services received on or before June 30, 2021 should be paid by August 2, 2021
- General Accounting will provide updated instructions and Excel templates for YE JV Worksheets used to record accruals and other year-end adjustments
- L-11 YE JV Worksheets should be used to record (1) A/P over $100,000 not paid by August 2, 2021 and (2) ALL construction A/P as of June 30, 2021 (including retainage)
- KFS will be disabled on July 1, 2021 at 7 pm and will not be available from July 2 through July 7 for the fiscal year end closing process
- DO NOT PROCESS ANY TRANSACTIONS IN KFS ON JULY 1, 2021 EXCEPT FOR FY21 BANK DEPOSITS/RECEIPTS & FY21 BANK DEBIT/CREDIT MEMOS
We very much appreciate and thank you in advance for your attention to the closing process because the size and complexity of the University’s operations call for everyone’s effort and cooperation.
If you have any questions, please contact the General Accounting office at uhgalc@hawaii.edu.
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Clearing Accounts
Target Audience: Fiscal Administrators
Clearing accounts are intended to be used in KFS as a means to process or temporarily hold financial transactions while permanent accounting treatment is being determined. Balances may need to be allocated or transferred as a result of an automated or manual process. There are two main types of clearing accounts in KFS:
- Continuation Clearing Accounts – Used to receive transactions initially coded to an expired account. Frequently needed for extramural project accounts because the accounts are period specific and have expiration dates.
- General Clearing Accounts – Accounts established to accept posting from automated or manual processes when the target account or object code is invalid, not yet determined or not yet ready for posting. Examples include: Banner Clearing, D-71 Clearing, A/R Clearing, C/S Source “Clearing” accounts.
- See AP 8.650, Continuation Accounts.
Monitoring of clearing accounts:
- Clearing accounts should be monitored on a monthly basis by the assigned FA.
- Transactions should be cleared to the appropriate operating account or reconciled if pending additional information. For continuation clearing accounts, transfers to the appropriate extramural projects are to be done timely, generally within 30 days of posting to the continuation account, if not required earlier, i.e. prior to award closeout, or prior to each fiscal year end.
- Chart managers shall monitor new clearing account creation and account modifications to ensure that appropriate attributes are assigned to the accounts.
- FA shall monitor clearing accounts and update responsible individuals in the event of staffing changes.
Please submit clearing account questions to: uhgalc@hawaii.edu for non-extramural accounts and orscomp@hawaii.edu for extramural accounts.
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Preparation for Upcoming FY 2021 Annual Inventory Verification
Target Audience: Fiscal Administrators, Asset Representatives and CAM Processors
Pre- Physical Inventory
Ideally, inventory records should be updated throughout the year as changes occur. However, it is not too late to process updates as long as they are completed prior to June 10, 2021. Doing so will help to ensure that the updated records are captured for the Annual Inventory Verification Report as of June 30, 2021.
To see a current listing of your equipment, the Annual Inventory Verification Report can be downloaded from Jaspersoft. Here’s how:
- Log in to JasperReports Server.
- Type in “Annual Inventory Verification” in the search field box at the top right hand corner next to Log Out and click
. - Click on the report name to run it.
- Input Controls box appears; enter the 3-digit FO code (required field). Building and Asset Rep Username are optional fields.
- Click Apply.
- Click OK.
To export using Excel:
- Click the Export button.
- Select an export format (Excel) from the drop-down.
Take action!
- Ensure that the asset record information (asset description, manufacturer, model number, serial number, location and asset representative) is complete and accurate. Updates should be processed by the department CAM processor by submitting the appropriate Capital Asset Management (CAM) maintenance e-document in the Kuali Financial System (KFS). Please reference the CAM Training Manual.
- Equipment items that are no longer in use, broken or obsolete should be transferred or retired. Please refer to AP 8.543 – Property and Equipment Transfer and Retirement.
Should you have any questions, please contact the Capital Asset Accounting Office at caao@hawaii.edu or (808) 956-8735.
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Quarterly Interest Rate for Late Vendor Payments
Target Audience: Fiscal Administrators and Fiscal Support Staff
Pursuant to Section 103-10 of the Hawai`i Revised Statutes, the interest rate for obligations related to goods delivered or services performed remaining unpaid after 30 days is equal to the prime rate for each calendar quarter plus two percent. The interest rate is adjusted quarterly using the prime rate as posted in the Wall Street Journal on the first business day of the month preceding the calendar quarter. Please refer here for the 2nd quarter interest rate and calculation.
Should there be any questions regarding this change, please call the Disbursing Office at (808) 956-5535.
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Upcoming KFS and JRS Upgrades!
Target Audience: KFS and JRS Users
During the weekend of April 17-18, 2021, ITS will be upgrading the Oracle database that the Kuali Financial System (KFS) runs on and the JasperReports Server (JRS) software. Both KFS and JRS will be down from Saturday April 17 6:00 am to Monday April 19 6:00 am. The Oracle database upgrade should be transparent to the KFS users. The new version (7.8) of JRS has a cleaner look and feel and seems to fix some of the interface and performance issues that users have reported. Refer to the JasperReports Server v7.8 Interface document for sample screenshots of the upgraded interface. If you have any questions, please contact the Fiscal Services Office at fissrv@hawaii.edu.
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Unrelated Business Income Tax Exceptions and Exclusions
Target Audience: Fiscal Administrators and Staff
The March 2021 newsletter had information about being cognizant of UBI (unrelated business income). In contrast, this month’s article will address UBI exceptions and exclusions.
For example, dividends, interest, certain other investment income, royalties, certain rental income, certain income from research activities, and gains and losses from the disposition of property are excluded when computing related business income.
In addition, the following activities are specifically excluded from the definition of unrelated trade or business:
- Volunteer Labor: Any trade or business is excluded in which substantially all the work is performed for the organization without compensation. For example, fund-raising events.
- Convenience of Members: Any trade or business is excluded that is carried on by an organization described in section 501(c)(3) or by a governmental college or university primarily for the convenience of its members, students, patients, officers, or employees. For example, commissions earned in the vending machines at the universities.
- Selling Donated Merchandise: Any trade or business is excluded that consists of selling merchandise, substantially all of which the organization received as gifts or contributions. Many thrift shop operations of exempt organizations would meet this exception.
Should you have any questions, please call me at (808) 956-7162 or email me at kenlum@hawaii.edu.