Year-End Carry Forward with Project Level Control: City of Marquee

City of Marquee recognizes that the Carry Forward Purchase Order Budgetary Control Balances is a collaborative process that crosses subject areas and incorporates this discussion into the year-end close planning.

These are important features for the city of Marquee.

Fiscal year end date is June 30.
Uses a two-way match in accounts payable and does not use receiving.
Centralized accounts payable function.
Doesn't accrue for uninvoiced receipt transactions at fiscal year-end, instead accounts payable accrual is based upon invoices paid after year-end.
Allows departments to submit accounts payable invoices that need to be accrued back to the prior fiscal year until July 31.
Budget ordinance requires the budget adjustment for carried forward purchase orders to be approved by City Council as an agenda item.
City of Marquee uses the Project Management module but does not include Project transactions in their Control Budgets. Budgetary reporting for projects exists in the Project Management module.

Preparing for Purchase Order Carry Forward

In order to prepare for the PO Carryforward Process, City of Marquee begins planning the year end close process and identifies the key participants in the process and the steps performed. From April 1 to April 30, the Year-End Close committee meets to discuss deadlines and begin the planning process. The committee includes these members:

Jennifer (General Accounting Manager)
Richard (Budget Manager)
Sarah (Purchasing Manager)
Zoe (Accounts Payable Manager)
Key Subject Matter Experts

These are the three key phases are identified in the process:

Preparation stage: Stage where key tasks will be performed to get ready for the Carry Forward Purchase Order Budgetary Control Balances process (60 days before fiscal year end to accounts payable accrual date).
Process stage: Stage where key processes (Carry Forward Purchase Order Budgetary Control Balances) are run (1-2 days after final accounts payable accrual process completion).
Completion stage: Stage where any remaining tasks after successfully running the Carry Forward Purchase Order Budgetary Control Balances process are completed (1 + days after process is run).

Preparation Stage - from May 1 to July 24

This table describes the key tasks for the preparation stage.

Budget Manager (Richard)	Department Users	Purchasing Manager (Sarah)	Payables Manager (Zoe)	General Accounting Manager (Jennifer)
Establish the budget calendars for the next fiscal year. Load the next fiscal year budget into Budgetary Control while the budget periods are still Available for Budgeting. Verify that Budget amounts are Loaded Correctly. Ensure that the June (from) period and July (to) periods are open in Budgetary Control. Unarchive the Budgetary Control Carry Forward Sample Reports and modifying the reports as required and reviewing output. Ensure that all key participants are available to address any errors when running the process (General Accounting Manager, Accounts Payable Manager, Purchasing Manager, and any other relevant individuals). Test the Carry Forward Purchase Order Budgetary Control Balances process in a testing environment to determine what parameters will be selected when she is ready to run the process in Production.	Identify purchase orders that are no longer needed and request closure from purchasing staff. Ensure that any pending change orders are entered and approved. Submit all accounts payable invoices that will be accrued by to the prior fiscal year timely.	Close all purchase orders that have expired, closure has been requested by departments, or purchase orders with small balances. Ensure that all open purchase requisitions are converted to purchase orders. Complete or cancel all pending change orders on purchase orders. Analyze purchase orders with Remaining Obligation Balances on reports such as Purchase Order Control Budget Balances Report included in the Budgetary Control Carry Forward Sample Reports.	Ensure that all accounts payable invoices that will be accrued back to the prior year are entered with the accounting and budget dates in the June period or closing fiscal year. Reconciling and closing the accounts payable module for the June period.	Ensure that all due dates are clearly communicated. Establish the accounting calendar for the next fiscal year. Open the encumbrance period for the next fiscal year.

Budget Manager (Richard)

Department Users

Purchasing Manager (Sarah)

Payables Manager (Zoe)

General Accounting Manager (Jennifer)

Establish the budget calendars for the next fiscal year.

Load the next fiscal year budget into Budgetary Control while the budget periods are still Available for Budgeting. Verify that Budget amounts are Loaded Correctly.

Ensure that the June (from) period and July (to) periods are open in Budgetary Control.

Unarchive the Budgetary Control Carry Forward Sample Reports and modifying the reports as required and reviewing output.

Ensure that all key participants are available to address any errors when running the process (General Accounting Manager, Accounts Payable Manager, Purchasing Manager, and any other relevant individuals).

Test the Carry Forward Purchase Order Budgetary Control Balances process in a testing environment to determine what parameters will be selected when she is ready to run the process in Production.

Identify purchase orders that are no longer needed and request closure from purchasing staff.

Ensure that any pending change orders are entered and approved.

Submit all accounts payable invoices that will be accrued by to the prior fiscal year timely.

Close all purchase orders that have expired, closure has been requested by departments, or purchase orders with small balances.

Ensure that all open purchase requisitions are converted to purchase orders.

Complete or cancel all pending change orders on purchase orders.

Analyze purchase orders with Remaining Obligation Balances on reports such as Purchase Order Control Budget Balances Report included in the Budgetary Control Carry Forward Sample Reports.

Ensure that all accounts payable invoices that will be accrued back to the prior year are entered with the accounting and budget dates in the June period or closing fiscal year.

Reconciling and closing the accounts payable module for the June period.

Ensure that all due dates are clearly communicated.

Establish the accounting calendar for the next fiscal year.

Open the encumbrance period for the next fiscal year.

Carry Forward Draft Run Comparisons

This table shows carrry forward draft run comparisons for various options.

Options	Keep funds available unchanged in the carry forward from year	Include budget for purchase orders in the carryforward to year	Budget Adjustment - Year 1	Budget Adjustment - Year 2	Encumbrance - Year 1	Encumbrance - Year 2
Option A	Yes	Yes	-$1000	$1000	-$1000	$1000
Option B	No	Yes	$0	$1000	-$1000	$1000
Option C	Yes	No	-$1000	$0	-$1000	$1000
Option D	No	No	$0	$0	-$1000	$1000

To allow time for purchasing and accounts payable to process transactions, City of Marquee sets department user dates one week before purchasing and accounts payable due dates.

If a department user identifies an invoice in July for services or goods received in July that will be matched to a purchase order not yet carried forward, the user can select from the following options:

Create a new purchase requisition that is added to a prior year purchase order with budget dates equal to the new fiscal year. Once the purchase requisition is converted and added to the exiting purchase order, the department user can submit the invoice to accounts payable for payment.
User can wait until the Carry Forward Purchase Order Budgetary Control Balances process is complete to submit the invoice to accounts payable for payment.

Process Stage - from August 1 – 2

This table describes the key tasks for the process stage.

Budget Manager (Richard)	Department Users	Purchasing Manager (Sarah)	Payables Manager (Zoe)	General Accounting Manager (Jennifer)
Receive confirmation from Zoe that all accrued accounts payable invoices have been paid and the accounts payable period is closed. Receive confirmation from purchasing that there are no pending change orders or active purchase requisitions. Run the Carry Forward Purchase Order Budgetary Control Balances process in the Draft mode, review the output of the process, and request corrections for any errors identified. Corrections that required could include canceling or complete any pending change orders or cancel or pay any pending project accounts payable invoices. Once all errors identified are corrected on August 1 and after business hours to not disturb any in progress transactions, Richard runs the process in final mode with the parameters of option D as City of Marquee requires Council approval for the budget adjustment related to the encumbrances carried forward to the following fiscal year. Notify users that the Carry Forward Purchase Order Budgetary Control Balances has successfully completed. Notify users that they may now submit invoices for the new fiscal year on the re-opened purchase orders.	Ensure that no new transactions (purchase requisitions, change orders, invoices) are submitted until receiving communication from Richard.	Ensure that no new purchase requisitions are entered, no new change orders are created. Available to answer any questions or address any transaction issues that may be found while running the process.	Ensure that no new accounts payable invoices that will be matched to a purchase order are entered or paid. Available to answer any questions or address any transaction issues that may be found while running the process.	Available to answer any questions or address any transaction issues that may be found while running the process.

Budget Manager (Richard)

Department Users

Purchasing Manager (Sarah)

Payables Manager (Zoe)

General Accounting Manager (Jennifer)

Receive confirmation from Zoe that all accrued accounts payable invoices have been paid and the accounts payable period is closed.

Receive confirmation from purchasing that there are no pending change orders or active purchase requisitions.

Run the Carry Forward Purchase Order Budgetary Control Balances process in the Draft mode, review the output of the process, and request corrections for any errors identified. Corrections that required could include canceling or complete any pending change orders or cancel or pay any pending project accounts payable invoices.

Once all errors identified are corrected on August 1 and after business hours to not disturb any in progress transactions, Richard runs the process in final mode with the parameters of option D as City of Marquee requires Council approval for the budget adjustment related to the encumbrances carried forward to the following fiscal year.

Notify users that the Carry Forward Purchase Order Budgetary Control Balances has successfully completed.

Notify users that they may now submit invoices for the new fiscal year on the re-opened purchase orders.

Ensure that no new transactions (purchase requisitions, change orders, invoices) are submitted until receiving communication from Richard.

Ensure that no new purchase requisitions are entered, no new change orders are created.

Available to answer any questions or address any transaction issues that may be found while running the process.

Ensure that no new accounts payable invoices that will be matched to a purchase order are entered or paid.

Available to answer any questions or address any transaction issues that may be found while running the process.

Completion Stage - from August 3

This table describes the key tasks for the completion stage.

Budget Manager (Richard)	Department Users Purchasing Manager (Sarah) Payables Manager (Zoe)	General Accounting Manager (Jennifer)
Close the prior year budget period. Prepare a budget adjustment for the purchase orders that were carried forward to the next fiscal year after approval is received from the City Council.	Resume normal transaction processing.	Analyze activity during the normal fiscal year end close process.

Budget Manager (Richard)

Department Users

Purchasing Manager (Sarah)

Payables Manager (Zoe)

General Accounting Manager (Jennifer)

Close the prior year budget period.

Prepare a budget adjustment for the purchase orders that were carried forward to the next fiscal year after approval is received from the City Council.

Resume normal transaction processing.

Analyze activity during the normal fiscal year end close process.