This issue of the Financial Management Office Newsletter includes information about the following:
- Clearing Accounts
- Fiscal Year 2022 Year-End Closing Schedule
- FY 2022 Equipment Leases Survey – GASB 87
- Required Documents for Setting up NRA Vendors
- Quarterly Interest Rate for Late Vendor Payments
- Updated TouchNet Verification Process
- Suspension of Update to AP 8.851 – Employee Out of State and Intra State Travel
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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Clearing Accounts
Target Audience: Fiscal Administrators
Clearing accounts are intended to be used in KFS as a means to 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 (See AP8.650):
- 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.
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.
As fiscal year end approaches, please be reminded to monitor and appropriately reallocate transactions in your department clearing accounts.
Please submit clearing account questions to: uhgalc@hawaii.edu for non-extramural accounts and orscomp@hawaii.edu for extramural accounts.
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Fiscal Year 2022 Year-End Closing Schedule
Target Audience: Fiscal Administrators and Staff
The Fiscal Year 2022 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 2022 are as follows:
- DO NOT PROCESS ANY TRANSACTIONS IN KFS ON JULY 1, 2022 EXCEPT FOR FY22 BANK DEPOSITS/RECEIPTS & FY22 BANK DEBIT/CREDIT MEMOS
- KFS will be disabled on July 1, 2022 at 7 pm and will not be available through July 5 for the fiscal year end closing process
- KFS will open on July 6 without balances. Balances will be available on July 7, 2022.
- Outstanding invoices for goods/services received on or before June 30, 2022 should be paid by August 1, 2022
- 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 1, 2022 and (2) ALL construction A/P as of June 30, 2022 (including retainage)
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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FY 2022 Equipment Leases Survey – GASB 87
Target Audience: Fiscal Administrators
GASB 87 Lease reporting is effective for our June 30, 2022 fiscal year end. This GASB establishes a single approach to accounting for leases based on the principle that leases are financing instruments for the right to use an asset. In October 2021, we collected information on leases that were in effect as of June 30, 2021. This information will establish the beginning balance for this new class of assets. The information was also submitted to the State of Hawaii Department of Accounting and General Services (DAGS) for appropriate analysis and review.
The next step is to collect the information on leases that will be in effect as of June 30, 2022. Please complete the FY 2022 Equipment Leases Survey here and submit it to kelciew@hawaii.edu by Friday, April 29, 2022. Please take special note of the updated instructions and excluded items tabs for completing the data collection sheet. Let us know if you would like a copy of your October survey for reference purposes.
Please note that this survey is only for equipment. A separate real property survey will be conducted by the Office of Strategic Development and Partnership.
If you have no equipment leases, please email kelciew@hawaii.edu with your department name and FO code(s). Please feel free to email Kelcie Watai at kelciew@hawaii.edu or call (808) 956-3103 with any questions.
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Required Documents for Setting up NRA Vendors
Target Audience: Fiscal Administrators and Staff
Foreign Vendor Documents Requirements
When creating a new NRA vendor or updating an existing NRA vendor for a new calendar year, additional documents are required besides the UH WH-1 Form. This guide has been created to help departments know what the required documents are based on the individual’s visa type.
Foreign Source Memo
Foreign Source Memo has also been created for foreign vendors to certify they are not a U.S. person* and are providing services while physically outside the U.S. The form should be attached to the following:
- Vendor request with the WH-1 and W-8BEN
- Non-employee invoice when submitting for payment
Should you have any questions, please contact Donnie Feng, Disbursing Office at donnie@hawaii.edu.
*Definition of a U.S. Person: For federal tax purposes, you are considered a U.S. person if you are:
- An individual who is a U.S. citizen or U.S. resident alien;
- An partnership, corporation, company or association created or organized in the United States or under the laws of the United States;
- An estate (other than a foreign estate); or
- A domestic trust (as defined in Regulations section 301.7701-7).
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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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Updated TouchNet Verification Process
Target Audience: All
The National Automated Clearing house Association (NACHA), has a compliance requirement for pre-note verification of accounts registered for payments through the Automated Clearing House (ACH). The pre-note verification process is necessary to supplement fraud detection standards for ACH payments as well as supplement data security requirements. On April 22, 2022, a new instant verification process within TouchNet, our third-party online payment processor, will be implemented.
The older version of functionality within TouchNet takes approximately 15 business days to complete verification and is done manually. The delay in processing impacts eRefunds and installment plan payments from being processed if an account has not been verified. Upgrading to Account Validation Service (AVS) will provide a real-time verification method that is linked to a database that is maintained and updated by all major financial institutions within the United States. Validation includes both account and routing number. Unlike the current pre-note process, AVS is automated, occurs at the point of payment, and accounts are immediately verified. If an account is unable to be verified, the student and/or authorized user will be notified immediately of action necessary via the email address on file. Students and/or authorized users will no longer need to contact the cashier’s office since TouchNet customer support will handle all verification inquires.
Another benefit of implementation of AVS is that the University will receive programming updates to remain in compliance with NACHA rules and regulations. Of note, the next update to NACHA rules will begin June 30, 2022 with a two phased rule of data requirements which require bank account numbers used in the initiation of ACH transactions to be rendered unreadable when stored electronically.
If you have any questions, please email Denise DeArment at dearment@hawaii.edu.
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Suspension of Update to AP 8.851 – Employee Out of State and Intra State Travel
Target Audience: All
On January 27, 2022, the Administrative Procedure (AP) for employee travel was updated to limit the use of travel advances as well as address other minor housekeeping items. The AP update was to be effective February 15, 2022, but a subsequent announcement on February 17th, delayed implementation until July 1, 2022 in order to allow for review and comments from the field as to the operational impacts.
An exploratory committee has been meeting with personnel from various departments, units, and campus organizations. Based on the input and feedback that has been received thus far, we would like to give the exploratory committee the luxury of more time to hear about the issues throughout our UH and to more fully examine how better to achieve the fiscal objectives sought with updating the AP 8.851 – Employee Out of State and Intra State Travel.
As such, this communication is to announce that the update to AP 8.851, is hereby suspended indefinitely.
AP 8.851 will revert to its prior version, until such time that the Financial Management Office has sufficiently completed its review of the travel procedures and has a revised approach that can address the operational impacts that have been identified thus far. Please be advised that the goal would be to revise AP 8.851 in the future but with adjustments identified through the exploratory committee process. Prior to that, advance communication throughout the UH will be arranged.
If you have any questions, please email Amy Kunz at amykunz@hawaii.edu.