Year-End Closing and Accounting

A. Year-End Workshops and Calendar

The UTSA fiscal year is September 1 through August 31. Year-end closing activities are performed each fiscal year to help provide an accurate and complete set of financial records to use as the basis for UTSA's annual financial report. During the months of June or July, the controller holds year-end workshops to communicate deadlines for year-end activities and to discuss the closing process, including any changes to business processes. A year-end calendar showing the deadlines, the date of the final August check run and other year-end closing activities is posted to the fiscal year-end website.

B. Closing Activities

UTSA uses accrual basis accounting as required by GASB Statement No. 35. Accrual accounting matches expenses with the revenues that fund them by recording revenues in the fiscal year in which they are earned regardless of when payments are received, and expenses in the fiscal year in which they are incurred, regardless of when payments are made. Consequently, August is left open for the first few days of September. During this time, departments may make additional August entries to ensure all activity is reflected in the correct fiscal year and to avoid excessive accruals.

After August is closed, an accounting period between the prior fiscal year (the year being closed) and the new fiscal year is used by Financial Affairs for year-end closing entries and other adjustments. Accrual entries are subject to a threshold, typically $10,000 or greater.

The fiscal year is then closed after all closing entries and other adjustments are recorded and the annual financial report has been finalized. This fiscal year closing normally occurs in the first week of October.

Closing entries made by Financial Affairs may include, but are not limited to, the following items.

1. Expense Accrual

Expenses greater than $10,000 incurred by the receipt of goods or services in the prior fiscal year but not recorded before the August close are accrued (recorded) before the final annual close.

• Review of departmental records and completion of the August Department Financial Review (see fmog.1.4.1.utsa). Departmental records should be reviewed to identify goods/services received but not recorded (no invoice received, or invoice received but no voucher has been processed) before the August close. Departments should notify Disbursements and Travel Services (DTS) of such items once identified.
• Review of service dates and receipt dates on vouchers. If the date of service or receipt of goods occurred prior to August 31, but the payment was recorded after that date, then that transaction is accrued if it is greater than $10,000.
• Identification of transactions entered after the August close that apply to the prior fiscal year. DTS identifies these transactions through reports.

The above expenses will be accrued as appropriate. To avoid double counting accrued expenses, the accrual entry is automatically reversed in the new fiscal year. The new fiscal year will then have two entries: the actual payment (which records an expense) and the accrual reversal to remove it. The net effect is zero in the new fiscal year because the cost of the item was expensed in the prior fiscal year.

Expenses incurred in the prior fiscal year but not reflected in departmental records nor recorded in either the prior or new fiscal year (unrecorded liabilities) are also accrued as appropriate.