This issue of the Financial Management Office Newsletter includes information about the following:
- Fiscal Administrators’ Town Hall Meeting Invitation
- MCC Groupings for PCard Holders
- Review for Impairment of Capital Assets
- Preparation for Upcoming FY 2022 Annual Inventory Verification
- “Stipends” and “Grant-in-Aid” are NOT automatically “scholarship or fellowship”
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 Administrators’ Town Hall Meeting Invitation
Target Audience: All
The Financial Management Office will be hosting a Fiscal Administrators’ Town Hall Meeting via Zoom on Wednesday May 18, 2022 at 10:00-11:30am. Agenda Topics:
- Vendor Management Processes
- Year-End and External Audit
- AP 8.851 – Update on Travel Advance and Feedback from the Exploratory Group Meetings
- PostDoc and Fellow Policy Status
- Banner Baseline and TouchNet Project Work
Please join us by using the Zoom Webinar Info below:
https://hawaii.zoom.us/j/98501854663
Webinar ID: 985 0185 4663
PowerPoint presentation and webinar recording will be available soon after completion of the meeting on FMO Website –>Fiscal Administrators. If you have any questions or concerns, please let me know at amykunz@hawaii.edu.
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MCC Groupings for PCard Holders
Target Audience: Fiscal Administrators and Staff
MCC groupings for PCard holders were recently updated. Each cardholder is assigned an MCC group by their department (not by PCard Admin). The department is responsible to determine whether or not a cardholder should be assigned to an MCC group that includes travel MCC codes such as airfare, rental cars and other ground transportation but excludes hotels. PCard holders that do not travel frequently may work with their department for a temporary unblock request to allow for travel purchases temporarily.
The March 2022 Newsletter published by the PCard program further explains the new MCC Grouping: https://pcard.intranet.hawaii.edu/2022/03/09/march-2022/.
Questions are being directed to the Department Coordinator and/or Fiscal Administrator.
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Review for Impairment of Capital Assets
Target Audience: Fiscal Administrators
The 2022 fiscal year end is approaching and it is important that we record all impairments of capital assets for audited financial statement purposes. Capital assets include equipment, buildings, facilities, infrastructure assets and construction projects.
In order to comply with Governmental Accounting Standards Board (GASB) Statement No. 42, “Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries”, fiscal administrators are reminded of the need to report events of impairment of capital assets to the Capital Asset Accounting Office so that appropriate accounting recognition can be determined for the current fiscal year.
For accounting purposes, capital asset impairment is a significant, unexpected decline in service utility (expected usable capacity at time of acquisition) of a capital asset. The events or changes in circumstances that lead to the impairment are not considered normal or ordinary.
Common indicators of impairment are as follows:
- Evidence of physical damage (e.g., fire, flood, wind, etc.).
- Enactment or approval of laws or regulations or other environmental factors (e.g., new water quality standards that cannot be met at a water treatment plant).
- Technological development or evidence of obsolescence (e.g., a magnetic resonance imaging machine that is rarely used because a newer one provides better service).
- Change in manner or expected duration of use of a capital asset (e.g., closing of a school prior to the end of its useful life).
- Construction stoppage (e.g., stoppage due to lack of funding).
Please contact Kelcie Watai at (808) 956-3103 or by email at kelciew@hawaii.edu if you believe your campus or department has experienced any kind of capital asset impairment in the current fiscal year by June 17, 2022. Thank you for your cooperation in this matter.
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Preparation for Upcoming FY 2022 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 by June 9, 2022. Doing so will help to ensure that the updated records are captured for the Annual Inventory Verification Report as of June 30, 2022.
To see a current listing of your equipment, the Annual Inventory Verification Report can be downloaded from JasperReports Server. 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.
- Click on the 3-digit FO code (required field). You may select multiple FO codes.
- Building Location and Asset Rep Username are optional fields but are useful in narrowing your search.
- 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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“Stipends” and “Grant-in-Aid” are NOT automatically “scholarship or fellowship”
Target Audience: Fiscal Administrators and Staff
The words “stipends” and “grant-in-aid” are NOT usually scholarship or fellowship, for tax purposes.
For tax purposes, a scholarship/fellowship may be defined as an amount given to an individual which has the following characteristics:
- It is paid to aid the individual’s pursuit of study, training, or research;
- It does not constitute compensation for personal services – past, present, or future; and
- It is paid more for the benefit of the grantee (recipient) than the grantor (payor).
At times, fiscal administrators misinterpret “grant-in-aid” as scholarship/fellowship, simply because payments are from grant funds assisting (i.e. aiding) a student but this is incorrect. The characteristics stated above need to be reviewed to classify payments as scholarship/fellowship. Also, just because the grant “allows” to fund “stipends”, does not mean it is tax-free nor scholarship/fellowship.
Furthermore, if the proceeds of a grant are paid to enable the grantee (i.e. student) to study, train, or conduct research mostly for his/her own benefit, then the grant is scholarship/fellowship income. Once payment (aka stipend) is analyzed correctly as “scholarship/fellowship”, we then need to classify such payments as “qualified” or “non-qualified” scholarship/fellowship. To understand “qualified” and “non-qualified” scholarship/fellowship, refer to AP 8.561 in following weblink:
https://www.hawaii.edu/policy/?action=viewPolicy&policySection=ap&policyChapter=8&policyNumber=561&menuView=closed
Also, if proceeds of the grant are paid as compensation for lecturing or teaching, then the grant is compensation for personal services and is usually considered to be wages and should be taxed accordingly.
Should you have any questions, please contact Kenneth Lum at kenlum@hawaii.edu.