policies and procedures regarding the cafr · policies and procedures manual summary of changes...

CAFR POLICIES AND PROCEDURES MANUAL TABLE OF CONTENTS

REFERENCE 1. Table of Contents 22-010 2. Summary of Changes 22-011 3. Overview 22-015 4. Documenting Payables & Pre-Payments To Be Accrued at Year-End 22-020 5. Entering Accounting Data - Accruals versus Statements 22-025 6. Component Unit versus Primary Government Reporting 22-030

7. Determining Whether Certain Organizations Are Component Units 22-031 8. Voucher Preparation 22-035 9. Accrual Entries That Will Be Created Centrally 22-040 10. Adjustments Not To Be Earmarked For Reversal in the Next Fiscal Year 22-045 11. Entries That Affect Only the Government Wide Financial Statements 22-050 Not the Fund Financial Statements 12. Prior Period Adjustments 22-055 13. Elimination of Intra-company Transfers 22-060 14. Local Funds 22-065 15. Cash on Hand at June 30 22-070 16. Assets and Liabilities not on the Central Accounting System 22-075 17. Inventory Valuation 22-080 18. This section intentionally left blank 22-085 19. Materiality Limit for Interagency Receivables and Payables 22-090

20. Due Dates for Central Service Billing and Other Interagency Billings 22-095

21. Federal Equity Reconciliation / Due from Fed Calculation 22-100

22. Other Reimbursement Receivable 22-105

August 1, 2012 1 22-010


REFERENCE 23. Schedule of Expenditures of Federal Awards (SEFA) 22-110 24. Accrued Employee Benefits Payable 22-115 25. Capital Assets 22-120 26. Items Encumbered as of June 30 22-125 Received Prior to June 30 and Paid After June 30 27. Leases 22-130 28. Unearned/Unavailable Revenue 22-135 29. Eliminations of Duplicate Revenues and Expenses 22-140 Between Governmental Funds of State Agencies 30. Reporting Negative Cash Balances 22-145 31. Elimination of Company 8000 and 8010 22-150 Balances That Are Owed to or Due to Other Funds 32. Internal Service Fund Elimination 22-155 33. Accrual Completion Deadline 22-160 34. Summary of Deadlines 22-161

May 1, 2013 2 22-010


REFERENCE

35. Exhibits:

A. Table for Positions-Accrual Adjustments Document ID 22-191

B. Journal Voucher Entry 22-192

C. Due To/From and Transfer In/ Out Worksheet 22-193

D. Entries to Company 8000 and 8010 22-194 Cash Balances and Subsequent Cash Entries in Other Fund Worksheet

E. Governmental Accounting, Auditing, And Financial Reporting Form 22-195

F. List of Leases 22-196

G. Identifying and Classifying Payables 22-197

G.1 List of Other Governments

H. Exhibit H – This section intentionally left blank 22-198

I. Determining Whether Certain Organization are Component Units 22-199 Worksheet

J. Component Unit Flow Chart 22-200

K. Due from Federal Government Calculation & Federal Equity 22-201

L. Proprietary Fund Additional Entries 22-202

M. Required Entries for Assets Added to FAS After the Deadline 22-203 but for the Current CAFR Fiscal Year

N. CIP Schedule and Entry 22-204

August 1, 2012 3 22-010

POLICIES AND PROCEDURES MANUAL SUMMARY OF CHANGES (FY14)

1. Summary of Changes – Section 22-011 FY14 Summary of Changes section created

2. Accrual Entries that will be Created Centrally – Section 22-040 Updated this section to list all of the special billings that are centrally posted.

3. Due Dates for Central Service Billings and Other Interagency Billings – Section 22-095

Updated this section to list all of the special billings that are centrally posted.

4. Capital Assets – Section 22-120

Clarification to Building Improvements.

5. Capital Assets (Exhibit L) – Section 22-120 Proprietary Fund additional entries.

6. Capital Assets (Exhibit M) – Section 22-120 Required entries for assets added to FAS after the deadline but for the current CAFR fiscal year.

7. Capital Assets (Exhibit N) – Section 22-120 New CIP required entries and schedule.

8. Elimination of Company 8000 and 8010 Balances – Section 22-150 Updated the section concerning the importance of using full center numbers and the section concerning the possible need for additional accruals after the various balance distribution accruals.

April 16, 2014 3.1 22-011

CAFR POLICIES AND PROCEDURES MANUAL OVERVIEW

Purpose:

To provide Policies and Procedures for all agencies to follow regarding the preparation of financial data to be included in the State’s Comprehensive Annual Financial Report (CAFR).

Scope: Includes all agencies in State Government (including its Component Units) to assist in preparation of the Fiscal Year-end CAFR.

Responsibilities:

All State Agencies and Identified Component Units.

May 30, 2007 4 22-015

CAFR POLICIES AND PROCEDURES MANUAL DOCUMENTING PAYABLES & PREPAYMENTS TO BE ACCRUED AT YEAR-END

It is the responsibility of each agency, board, or commission to document their accruals at year-end. Qualifying expenditures, with in the threshold limits, will be accumulated through August 31st of the following fiscal year to be included in the year-end accruals. Expenditures after August 31st need only be accrued if significant.

Payables

Beginning with the first date agencies can post invoices for the next fiscal year, payables must be marked during entry into Accounts Payable (AP), using the appropriate mini-chart indicator on invoice lines. The first date that agencies can post invoices for the next fiscal year can be found in the Year-End Procedures Memo.

Agencies must begin marking payables by the date specified in the above link.

Account Indicator

Accounts Payable 211 Judgments Payable 212

Contracts Payable 213 Grants Payable 215 Due to Other Governments 230 (See Exhibit: G and Exhibit G.1 - Reference 22-197)

Please note: Exhibit G.1 is to be used as a guide, it is not a complete list of all of the other governments used by the State of South Dakota.

Steps to follow to determine which mini-chart indicator is applicable:

Ask yourself, “Is the amount due to another Government?” If YES, use indicator 230. Note the policy change: It is no longer necessary to distinguish between

vendor and non-vendor transactions for amount due to another Government. In other words, use indicator 230 for ALL payables to another Government. NO EXCEPTIONS!

If NO, determine which of the other indicators (211-218) are applicable.

Agencies with “nonstatement” funds SHOULD NOT make accrual entries for payables marked with a mini-chart indicator. BFM will perform this accrual centrally based on the indicator. For “statement funds”, BFM will provide a report of payables marked with a mini-chart indicator to assist in statement preparation. NOTE: “Statement” funds are those funds listed in section 22-025 of this manual. Any funds not listed in section 22-025 will be considered “nonstatement” funds. Agencies remain responsible for entering payable accruals for payments not made through Accounts Payable (AP). This includes BA58 (multiple payee) and various “outside payrolls”. On SDAS for direct invoices, enter the appropriate indicator in the EXP field (immediately left of company field) on the AP worksheet screen (EWS or IWS). On matched invoices, process the document as usual. After nexting the document, add the payable indicator on the AP IMW screen. You can go directly to the IMW screen by typing IMW in next function, or via the CGS screen.

May 26, 2011 5 22-020

http://bfm.sd.gov/caps/docs/yearendproceduresmemo.pdf

http://bfm.sd.gov/caps/docs/yearendproceduresmemo.pdf

CAFR POLICIES AND PROCEDURES MANUAL DOCUMENTING PAYABLES & PREPAYMENTS TO BE ACCRUED AT YEAR-END

If you already use your own mini-chart indicators, you may continue to use them. Type your code in first, and depress ENTER. This brings in your company, account, and center; then, if necessary, replace your indicator with the accrual indicator. Your review for accounts payable items may be limited to documents with a value greater than $500. You need only split lines between “payable” and “not payable” if the portion that is “not payable” exceeds the materiality level indicated above.

For example, you have an invoice line to code to a particular company, account, center for $5,000. $4,700 is “payable”; $300 is “not payable”. This entire line may be coded with a “payable” indicator (since $300 is less than the “payable” materiality level).

However, if $4,000 is “payable” and $1,000 is not, you would code two lines to the invoice. The

$4,000 line must have the indicator; the $1,000 line would not have the indicator.

There may be unique circumstances where the materiality level for payables may be more difficult to determine. For example, in the case of a utility bill totaling $600 that covers June and July (crosses fiscal years), but neither the June nor July amount meets the materiality amount, the invoices should not be marked payable because the June amount is less than $500. Please note that combined monthly bills that do not cross fiscal years (July and August combined billings) should be totaled for materiality determination and marked as a payable if the total payable is greater than $500.

Prepaid Expenses

The prepaid expense indicator 151 is used during the fiscal year (period 1 – 12) to mark any portion of a payment, made through AP, which is being paid in advance that remains prepaid as of June 30th of the fiscal year. For “nonstatement” funds (funds not listed in section 22-025 of this manual as statement funds), BFM will centrally post the prepaid amounts that were marked with the prepaid indicator. NOTE: Agencies will be responsible for posting those prepaid amounts that were not

marked with the prepaid indicator and/or if they are posting completed financial statements to “statement” funds (funds listed in section 22-025 as statement funds).

GASB allows certain types of services that are commonly paid in advance, like insurance premiums and rent to be accounted for either by the purchase method or the consumption method. With the purchase method, the expense is recognized in the period payment is made. With the consumption method, the expense is recognized in the period the product or service is used. For insurance premiums and rent (sub-object codes 5204460, 5204470, 5204490, 5204500, 5204510, and 5204590), we will account for them under the purchase method and the expense will be recorded in the period paid. Therefore, if you have any current fiscal year expenditures for insurance or rents which are for future periods, these items will be left in the current fiscal year expenses and you will NOT report them as prepaid expense. Any other prepaid items should be reported. Your review for prepaid items may be limited to documents with a value greater than $5,000.

May 15, 2010 6 22-020

CAFR POLICIES AND PROCEDURES MANUAL ENTERING ACCOUNTING DATA-ACCRUALS VERSUS STATEMENTS

There will be two scenarios for those entering accounting data into period 13:

1) Those who enter/post only their accruals (rather than completed financial statements) into “nonstatement” funds. “Nonstatement” funds are those companies (funds) not listed below; and,

2) Those that enter/post completed financial statements (rather than accruals) into “statement” funds. Companies (funds) that are considered “Statement” funds are as follows

(NOTE: The companies in parenthesis are actual accounting system companies or companies used in the past for accruals, however post completed financial statements into companies listed on the left side):

• Agriculture Rodent Control ** 6507 State Fair ** 6515 American Dairy Association ** 3053 (8000) SD Rural Rehabilitation Fund ** 3052

Value Added Finance Authority ** 6505 (3052) Brand Fund ** 3057 Livestock Ownership Inspection & Theft Prevention Fund** 3057

Corn Utilization Fund ** 3055 Agriculture – Boards and Commissions ** 6503

• Attorney General Insurance Division Board ** 6503

• Corrections Pheasantland Industries Fund** 6504 Inmate Trust Fund** 8325

• Bureau of Administration

Central Data Processing ** 6001 Telecommunications ** 6002 Records Management ** 6003 Physical Plant Services ** 6004 Central Mail Services ** 6005 RDTN ** 6011 Property Management ** 6021 (6006) State Flag Fund ** 6509 Central Duplicating ** 6007 Federal Surplus Property ** 6511 Maintenance and Repair ** 3113 Fleet and Travel Management ** 6008 State Engineer ** 6016 Central Supply ** 6006 Purchasing and Printing ** 6015 Public Entity Liability Pool ** 8315 BOA Support Services ** 6019 State Collection Services ** 6020 State Radio Teletype ** 6502

May 1, 2013 7 22-025


• Bureau of Finance and Management

Accounting and Payroll ** 6010 Dakota Cement Trust Fund ** 3003 Health Care Trust Fund ** 3004 Education Enhancement Trust Fund * 3005 Cement Plant Retirement Fund * 8902 Cement Plant Fund ** 3058 (9220)

• Bureau of Human Resources Insurance Administration Fund ** 3035 Worker’s Compensation ** 6017 (3035) Unemployment Compensation ** 8301 Personnel – Labor/Mgmt ** 6009 Bureau of Personnel – Enterprise ** 6521 Federal High Risk Pool ** 65xx (2009) • Human Services South Dakota Developmental Center – Redfield ** 5016, 6508 • Health Health Laboratory Services ** 6018 Health – Boards and Commissions** 6503 • Labor & Regulation Unemployment Insurance * 6522 (6503) Labor - Boards and Commissions ** 6503 Banking and Insurance Exam Fund ** 6526 (6520) Subsequent Injury Fund ** 6525 (6520) Regulation-Boards and Commissions ** 6503 • Legislative Research Council Postage Administration ** 6501 • Public Safety Public Safety – Internal Service ** 6022 • Retirement * 8901 • Revenue Lottery * 6516 • Social Services Human Services Center Residential Investment ** 8311 Boards and Commissions ** 6503 • School and Public Lands Permanent Fund ** 3108, 8010, 8610, 5018

• Transportation Aircraft Clearing** 6012

May 1, 2013 8 22-025


• Tourism Economic Development Loan Fund ** 6510 Finance Authority * 6514

• Veterans’ Affairs Veterans’ Home Resident Funds ** 5017

• Component Unit - Blended

Building Authority * 3051 (6013), 4302 (6013), 4600 (6013), 6524 (6013) Educational Enhancement Funding Corporation ** 3005 South Dakota Conservancy District

Water Pollution Control Revolving Fund * 3031 Drinking Water Revolving Fund * 6506 (3031)

• Component Unit – Discretely Presented Conservation Reserve Enhancement Program (CREP) ** 6524

Energy Infrastructure Authority ** 6527 Higher Education Board of Regents Housing Authority * 6512 Science and Technology Authority * 6518 S.D. Economic Development Finance Authority 6514 S.D. Ellsworth Development Authority * 6529 Value-Added Finance Authority ** 6505

Agencies will submit complete and, if possible, audited financial statements of the above funds to the

BFM after entering them into period 13. NOTE: If your fund is not listed above, you will enter your accruals into period 13. If for some reason you believe that you should enter completed financial statements, rather than accrual journal entries into period 13, please contact the Bureau of Finance and Management (BFM) for assistance at 773-3411.

* Indicates separately issued audited financial statements ** Indicates NOT separately issued audited financial statements

May 1, 2013 9 22-025

CAFR POLICIES AND PROCEDURES MANUAL COMPONENT UNIT VERSUS PRIMARY GOVERNMENT REPORTING

Statement No. 14 of the Governmental Accounting Standards Board, “The Financial Reporting Entity”, and Statement No. 39 of the Governmental Accounting Standards Board, “Determining Whether Certain Organizations Are Component Units” establish standards for defining and reporting on the financial reporting entity. For our financial reporting purposes, the following entities have been identified as potential component units and may be reported in the CAFR as discretely presented component units:

Higher Education (Colleges, Universities, Board of Regents, School for the Blind and Visually Impaired, and School of the Deaf) – various companies

South Dakota Housing Development Authority - 6512

South Dakota Economic Development Finance Authority - 6514

Conservation Reserve Enhancement Program (CREP) - 6524

South Dakota Science and Technology Authority - 6518

South Dakota Value Added Finance Authority - 6505

South Dakota Ellsworth Development Authority – 6529

South Dakota Energy Infrastructure Authority - 6527

NOTE: All agencies, except for the aforementioned discretely presented component units, will be reported in the CAFR as primary government. Agencies of the primary government that are owed money from discretely presented component units, or owe money to discretely presented component units must use the following accounts:

Due from Component Units 1251900 Due to Component Units 2200900

Entities of state government that have been identified as discretely presented component units that are owed money from agencies of the primary government, or owe money to agencies of the primary government must use the following accounts:

Due from Primary Government 1251950 Due to Primary Government 2200950

All transfers between agencies of the primary government and discretely presented component units must be reclassified to a revenue and/or expense account.

NOTE: BFM will post centrally all reclassification entries for agencies of the primary government (non-statement funds only) for transfers between agencies of the primary government and discretely presented component units that were completed during the current fiscal year (see Accrual Entries That Will Be Created Centrally: Section 22-040).

Agencies of the primary government that have monies owed to/from or transferred to/from other agencies of the primary government will continue to use the existing due to/from and transfer in/out account codes (e.g., due to other funds, due to other governments, due from other funds, due from other governments, transfers in, transfers out, etc.) as used in the past.

NOTE: The due to/from and transfers in/out worksheet must be completed and submitted by the component unit or primary government entity (see Exhibit C: 22-193). This worksheet must include all due to/from and transfer in/out amounts posted by the discretely presented component unit or primary government entity.

May 15, 2010 10 22-030

CAFR POLICIES AND PROCEDURES MANUAL DETERMINING WHETHER CERTAIN ORGANIZATIONS ARE COMPONENT UNITS

The Governmental Accounting Standards Board (GASB) issued GASB Statement No. 61,”The Financial Reporting Entity: Omnibus”. This statement is an amendment to GASB Statements No. 14 and No. 34. For organizations that previously were required to be included as component units by meeting the fiscal dependency criterion, a financial benefit or burden relationship also would need to be present between the primary government and that organization for it to be included in the reporting entity as a component unit. For component units that currently are blended based on the “substantively the same governing body” criterion, it additionally requires that (1) the primary government and the component unit have a financial benefit or burden relationship or (2) management of the primary government have operational responsibility for the activities of the component unit. Previously, GASB issued GASB Statement No. 39, “Determining Whether Certain Organizations Are Component Units.” This statement was an amendment to GASB Statement No. 14, “The Financial Reporting Entity.” GASB Statement No. 39 added language and criteria to Statement No. 14 that required the State of South Dakota (Primary Government and its Component Units) to report certain organizations that are legally separate tax-exempt entities (examples: Foundations, Associations, etc.) as component units within the state’s Comprehensive Annual Financial Report (CAFR). Therefore, the following policy applies to all state agencies and departments for determining whether certain organizations are component units. Each state agency/department must review all organizations that are legally separate tax-exempt entities that are associated with your agency/department to determine if they need to be reported as a component unit (CU) in the State of South Dakota’s CAFR. Exhibit I of this CAFR Policies and Procedures Manual (reference 22-199) contains a spreadsheet that each agency/department should use to identify and list ALL potential component units (PCU), even if they do not meet the materiality threshold (discussed below). This review must be completed and reported to BFM each fiscal year.

BFM has established a materiality threshold to be applied to the PCU. The PCU organization must have a fiscal year-end asset balance greater than $5 million and/or current fiscal revenues greater than $1 million. If either of these materiality thresholds is met, each agency/department must then determine if the PCU listed on the spreadsheet is a CU for inclusion in the CAFR by completing the flowchart - Exhibit J (reference 22-200). The results of that flowchart should be recorded on the spreadsheet. (Note: BFM has already made the determination for the Housing Authority, Finance Authority, CREP Program, Value Added Finance Authority, Higher Ed, Science and Technology Lab, Rail Road Authority, and S.D. Ellsworth Development Authority).

When determining the PCU’s materiality threshold amounts, use the PCU’s last fiscal year ending nearest to, but not after, the State’s fiscal year end (6/30/XX). (Example: if the PCU fiscal year ended 12/31/07 report revenue and assets for the calendar year 2007; if the PCU fiscal year ended 10/31/07, report revenue and assets from 11/1/06 to 10/31/07).

Included is a flowchart from GASB Statement No. 39 for evaluating potential component units (PCU). This flowchart is intended to aid in the application of the provisions of Statement No. 14, as amended by Statement No. 39. Please use the flowchart in conjunction with the following items to determine if any of the organizations you evaluate need to be reported in the state’s CAFR as a component unit:

May 1, 2013 10.1 22-031


(1) Is the PCU legally separate? GASB No. 14, paragraph 15:

“An organization has separate legal standing if it is created as a body corporate or a body corporate and politic, or if it otherwise possesses the corporate powers that would distinguish it as being legally separate from the primary government. Generally, corporate powers give an organization the capacity to have a name; the right to sue and be sued in its own name without recourse to a state or local governmental unit; and the right to buy, sell, lease, and mortgage property in its own name. The corporate powers granted to a separate organization are enumerated in its corporate charter or in the legislation authorizing its creation. A special-purpose government (or any other organization) that is not legally separate should be considered, for financial reporting purposes, part of the primary government that holds the corporate powers”

(2) Does the Primary Government (PG) appoint a voting majority of the PCU’s board? GASB No. 14, paragraphs 22 – 24:

“If a primary government appoints a simple majority of the organization's governing board, it usually has a voting majority. However, if financial decisions require the approval of more than a simple majority, the primary government is not accountable for the organization. For purposes of determining whether accountability exists, a primary government's appointment authority should be substantive. In some cases the appointment authority of a primary government's officials may be limited by a nomination process. For example, state statutes or local ordinances may require a primary government to select its appointees from a slate of candidates provided by one or more individuals or groups other than the primary government's officials or appointees. A primary government's appointment authority is not substantive if the number of candidates is severely limited by the nominating process, for example, if a primary government must select three appointees from a single slate of five candidates. Additionally, a primary government's appointment authority may not be substantive if its responsibility is limited to confirming appointments made by individuals or groups other than the primary government's officials or appointees. In most instances, legal provisions for appointment of an organization's officials also provide for continuing appointment authority. However, in the absence of continuing appointment authority, the ability of a primary government to unilaterally abolish an organization also provides the basis for ongoing accountability. Thus, a primary government that creates an organization (creation is comparable to the initial appointment of the governing body) is accountable for the organization if the primary government can unilaterally abolish it. A primary government is considered to be accountable for an organization as long as continuing appointments are made by the primary government, even if those appointments are made by a subsequent administration.”

(3) Does the fiscal dependency criterion apply? GASB No. 14, paragraph 21b (as amended):

“The primary government is financially accountable if an organization is fiscally dependent on and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government regardless of whether the organization has (1) a separately elected governing board, (2) a governing board appointed by a higher level of government, or (3) a jointly appointed board.”

July 28, 2008 10.2 22-031


(4) Does the organization’s relationship with the PG meet the criteria of paragraph 40a? GASB No. 39, paragraph 5 (adds paragraph 40a to GASB No. 14):

“Certain organizations warrant inclusion as part of the financial reporting entity because of the nature and significance of their relationship with the primary government, including their ongoing financial support of the primary government or its other component units. A legally separate, tax-exempt organization should be reported as a component unit of a reporting entity if all of the following criteria are met:

a. The economic resources received or held by the separate organization are entirely or almost

entirely for the direct benefit of the primary government, its component units, or its constituents.

b. The primary government, or its component units, is entitled to, or has the ability to otherwise access, a majority of the economic resources received or held by the separate organization.

Note: The ability of a primary government to otherwise access the resources of an organization does not necessarily imply control over that organization or its resources; rather, it entails a broader concept. The ability to access the resources of an organization—not necessarily whether there was an actual transaction during the period—is the important factor for determining when a primary government is entitled to an organization’s resources. A primary government’s ability to otherwise access may be demonstrated in several ways. For example, the primary government or its component units historically may have received, directly or indirectly, a majority of the economic resources provided by the organization, the organization previously may have received and honored requests to provide resources to the primary government, or the organization is a financially interrelated organization, as defined by FASB Statement No. 136, Transfers of Assets to a Not-for-Profit Organization or Charitable Trust That Raises or Holds Contributions for Others.

c. The economic resources received or held by an individual organization that the specific primary

government, or its component units, is entitled to, or has the ability to otherwise access, are significant to that primary government.”

(5) Does the CU meet any of the blending criteria of paragraph 53a, b, or c? GASB No. 14, paragraph 53a, b, and c (as amended GASB 61, Nov. 2010):

“A component unit should be included in the reporting entity financial statements using the blending method in any of these circumstances:

a. The component unit’s governing body is substantively the same as the governing body of the

primary government and (1) there is a financial benefit or burden relationship between the primary government and the component unit, or (2) management of the primary government has operational responsibility for the component unit.

May 1, 2013 10.3 22-031


b. The component unit provides services entirely, or almost entirely, to the primary government or otherwise exclusively, or almost exclusively, benefits the primary government even though it does not provide services directly to it. The essence of this type of arrangement is much the same as an internal service fund – the goods or services are provided to the government itself rather than to the citizenry.

c. The component unit’s total debt outstanding, including leases, is expected to be repaid entirely or

almost entirely with resources of the primary government.

You must complete and submit to BFM – Accounting Analysis and Financial Reporting Office, your spreadsheet of all organizations that are legally separate tax-exempt entities that are associated with your department, as per the above items according to the “Summary of Deadlines” as amended each Fiscal Year. Once information is gathered, BFM will determine reporting level based on quantitative and qualitative basis.

July 28, 2008 10.4 22-031

CAFR POLICIES AND PROCEDURES MANUAL VOUCHER PREPARATION

Agencies will enter accruals and financial statements into period 13. Accruals cannot be entered into the accounting system until period 12 has been closed. This occurs after the July corrections are processed and you have received your final year-end reports. It is important to use the coding structure related to the Fiscal Year for which the CAFR is being prepared.

Agencies will be entering both sides of the accrual entries. This means that you must be familiar with accrual accounting concepts. All entries must be balanced (e.g., both debit and credit entries present), except for encumbrance adjustments. If you are unfamiliar with proper accrual entries, please contact BFM for assistance. No journal entry should affect cash account 1140000. Cash representing: (1) cash on hand must be coded to cash on hand (account 1110000); (2) petty cash must be coded to petty cash (account 1120000); (3) cash in local checking accounts must be coded to cash in local checking account (account 1130000); and, (4) pooled fund cash must be coded to cash (account 1131000). As you begin to enter accrual journal entries or completed financial statements, please be familiar with the statewide chart of accounts for assets, liabilities, equity, revenues, and expenses. Please be sure to post to the proper account (e.g., if you have contracts payable, do not post this to accounts payable). As you post your entries, be sure to post separate amounts for long-term and short-term for items such as loans, receivables, payables, etc. Also, try to limit your postings to the accounts “other assets” and “other liabilities”. If you do post to these “other” accounts, be sure to have an itemized list available for the auditors. There is no need to complete a separate document for each individual accrual.

Use document date June 30 of the CAFR Fiscal Year for all entries.

All documents (except for encumbrance adjustment documents) must be entered into the Budgetary Control on-line journal voucher screen (211) and “ENDED”. Encumbrance adjustments must be entered into the Budgetary Control on-line journal voucher screen (241) and “ENDED”.

NOTE: Please do not put these documents on hold. All documents must be “ENDED” to allow the necessary edit checks to occur. If edit checks are passed, accrual documents will be placed on “Hold” by the system.

Data type on batch header Most period 13 documents (except encumbrance adjustment documents) will be entered as data type 2 transactions. A data type 2 document can have only one company per voucher with the document total being the total of the debits or credits (not a gross total as on a data type 1 document). Available funds file (AFF) validation (e.g., checking funds or updating the AFF) is neither necessary nor desirable when entering accruals or completed statements. Operators must always enter a two (2) in the “Level of Funds Chk” field and in the “Update AFF” field on the voucher header screen (212 or 242). (See example on Exhibit: B Reference 22-192).

May 15, 2010 11 22-035


The Use of Description 1 field in accrual entry lines All accrual document lines should have a description in the Description 1 field. Most Description 1 fields are determined by the agency; however, they need to be descriptive enough to aid all users of accrual data. BFM has specific Description 1 requirements for Due to/from, Transfers in/out, and negative cash. For Due to/from & transfer in/out

For tracking and matching purposes, the document Identification for each accounting system cash document that relates to an accrual entry for the Due to Other Funds, Due from Other Funds, Transfer In and Transfer Out accounts, must be entered at the beginning of the description 1 field of the accrual document line. The only exceptions to this rule will be for:

1. “Due to/from” entries identified centrally by BFM for “statement funds” (see Accrual Entries That Will Be Created Centrally: Section 22-040). For these amounts “CENTRAL, DOT, DOH LAB or PI” can be entered in the Description 1 field. and,

2. If an accounting system document has not been created yet for the actual transfer of cash, for the “due to/from” and “transfer in/out”, then the XFM or XST document with the offsetting “due to/from” or “transfer in/out” must be entered in the descript 1 field.

Agencies should not combine accounting system document (transfer documents, non-cash documents, cash receipt documents, etc.) information for “due to/from” and “transfer in/out” accrual lines. Each accrual entry for “due to/from” and “transfers in/out” lines per XFM or XST document number must only include information from one corresponding accounting system document that was used for the actual transfer of cash except as noted above.

For example:

Agency X provided services to agency Y in June of the current Fiscal Year and then created two non-cash documents to be reimbursed by agency Y. The documents are sent to agency Y in July of the next Fiscal Year for them to enter their expenditure coding and end the document. Agency X has one line of revenue coding on each document, both within the same company; and agency Y has 25 lines of expenditure coding paid from 3 different companies on the first document (N09123) and 2 lines of expenditure coding paid to 2 different companies on the second (N09124).

During the accrual process: Agency X would post two accrual entry lines to Due from other funds for these accounting system documents and include in the description 1 field for the first line N09123 and for the second line N09124.

Agency Y would post Due to other fund entries on 3 separate accrual documents and a total of five lines. Each of the three companies would have an entry line with a description 1 field referencing N09123 and the two companies from the second accounting system document would have a second accrual entry line referencing N09124 in description 1 field.

For Negative Cash

All negative cash documents need to have the following Description 1 field: Negative Cash – Company number with the negative cash.

For Example: Company 2004 reporting due from 1000 for negative cash: Company 2004 Description 1: Negative Cash - 2004 Company 1000 Description 1: Negative Cash - 2004

Point to Remember: Data type 2 accrual documents can include only one company per document.

May 1, 2013 12 22-035


Exhibit C, The Due To/From and Transfer In/Out Worksheet, is required to be completed and submitted with your accrual documents or completed financial statements. (See Exhibit C: 22-193). Any amounts posted to these accounts must be included on this worksheet and reference the accounting system document to which it relates.

NOTE: All agency accrual documents that display postings to a “due to”, “due from”, “transfer in”, or “transfer out” account, and do not have (1) information as requested, and (2) the worksheet attached will be returned to the agency as unapproved documents.

Document ID

All journal vouchers entered on-line that contain accrual journal entries to “nonstatement” funds must have a document ID prefix of XFM and the CAFR Fiscal Year in the fourth digit. If you are entering completed statements on-line for “statement” funds (funds identified on section 22-025 as statement funds), the document prefix must be XST and the CAFR Fiscal Year in the fourth digit

Example: Fiscal Year: 2013: 2014: 2015:

XFM3 or XST3 XFM4 or XST4 XFM5 or XST5

Positions five through seven of the document identification should follow the “Table for Positions-Accruals Adjustment Document ID” (see Exhibit A: 22-191). The remaining three positions would be agency assigned (e.g., XFM7011001 or XST7011001).

Account coding

Account information must be entered at the sub-object level; however; you may enter all like objects at one sub-object, if you prefer. Example: if you have 52050700, lumber supplies; 52050800, hardware supplies; and, 52051200, welding supplies; you may enter all as code 52050200, office supplies. You may use this approach for all the objects of expenditures. All revenue accounts must be coded correctly down to the first four positions, except for any tax revenue accounts that start with 41. All tax revenue accounts that start with 41 must be coded correctly down to the specific revenue accounts that were actually used during the Fiscal Year for which the CAFR is being presented. If you need to do general ledger maintenance on GL Screen 287, please remember to enter an active date less than or equal to June 30 of the current Fiscal Year-end. All agencies must use the following accounts when posting to the “non-operating revenues” account (e.g., account field 4920000) for proprietary funds:

Gain on Disposal of Assets 4920015 Gain on Sales of Investments 4920025 Grant Income 4920035 Non-operating Interest Income 4920045 Other Non-operating Income 4920995

The following accounts must be used when reporting the following non-operating expenses for proprietary funds:

Loss on Disposal of Assets 5228040 Other Expense 5228090 Interest Expense 5228091 Loss on Extinguishment of Debt 5228093

July 30, 2012 13 22-035


Center coding

When posting journal voucher documents, the center code must be entered at a minimum of 10 digits. Digits 8, 9 and 10 represent the funding source code which is needed by BFM to break out the equity by funding source code. This is a new requirement due to the implementation of GASB 54. Exceptions are:

1. Proprietary funds are not affected under GASB 54 so four digit center codes can be used. 2. General Fund. 3. Government Wide entries are not affected under GASB 54.

Documents to be submitted to BFM

The following documents should be sent to your BFM Accounting Analyst as part of your year-end accrual package: Original signed copy of all accrual journal entries. On accrual documents sent to BFM, do not attach invoices or any supporting documents regarding invoices. These must be kept at your office to be available for your Accounting Analyst and the Department of Legislative Audit staff to review. Exhibit C, Due To/From and Transfer In/Out Worksheet Exhibit D, Company 8000 & 8010 related Cash Balance elimination. (If applicable) Due from Federal Government Calculation & Federal Equity Reconciliation for federal companies

For those agencies with companies for which completed financial statements are entered the following financial statements must also be included:

Required Financial Statements – Governmental Funds a) Balance Sheet

b) Statement of Revenues, Expenditures, and Changes in Fund Balances Required Financial Statements – Proprietary Funds a) Statement of Net Position. (Note: The Statement of Net Position must be presented in a classified

format to distinguish between current and long-term assets and liabilities. The net position format—assets less liabilities equal net position—must be used).

b) Statement of Revenues, Expenses, and Changes in Fund Net Position. (Note: Revenues must be

reported by revenue type, e.g., the first four positions identified within the central accounting system’s chart of accounts that relate to revenues, except for any tax revenue accounts that start with 41. All tax revenue accounts that start with 41 must be coded correctly down to the specific revenue accounts that were actually used during the fiscal year. The natural (object) classifications (for example, personal services and benefits, travel, contractual services, depreciation /amortization, bad debts, etc.) should be used when reporting operating expenses. This statement should also distinguish between operating and non-operating revenues and expenses and present a separate subtotal for operating revenues, operating expenses, and operating income. Non-operating revenues and expenses should be reported after operating income. Revenues from capital contributions and additions to the principal of permanent and term endowments; special and extraordinary items, and transfers should be reported separately, after non-operating revenues and expenses.)

May 1, 2013 14 22-035


c) Statement of Cash Flows. (Note: The direct method of presenting cash flows from operating activities

is required in the Statement of Cash Flows.) d) Working Trial Balance Remember to include any centrally posted accruals in the financial statements.

Required Financial Statements – Fiduciary Funds and Similar Component Units

a) Statement of Fiduciary Net Position

b) Statement of Changes in Fiduciary Net Position

c) Working Trial Balance

May 1, 2013 14.1 22-035

CAFR POLICIES AND PROCEDURES MANUAL ACCRUAL ENTRIES THAT WILL BE CREATED CENTRALLY

Accrual entries regarding the following items will be done centrally, except for companies that require complete financial statements (funds listed in section 22-025 of this manual):

1) Year-end payrolls for agencies on the state’s central payroll system.

2) Leave balances for those agencies on the state’s central payroll system. Note: See section 22-115

of this manual for more information regarding accrued employee benefits payable.

3) Leases. Note: See section 22-130 of this manual for more information regarding leases.

4) Amounts due to BFM, Bureau of Administration (BOA), Bureau of Information and

Telecommunications (BIT), and Bureau of Personnel (BOP) for central services billings; and Department of Transportation Airplane. Pheasantland Industries, South Dakota Health Lab, DPS Inspection and Department of Labor Space Billing not paid as of June 30 of the current Fiscal Year-end.

5) Reversals of previous Fiscal Year accrual documents.

6) Items with acquisition dates through June of the current Fiscal Year-ended reflected on the Fixed

Assets (FA) Property listing By the Capital Asset Deadline (regarding governmental funds only). [See Summary of Deadlines – Section 22-161]

7) Payables and due to other governments marked in AP as explained in section 22-020.

8) Prepaid amounts that were marked with the prepaid indicator as explained in section 22-020.

9) Amounts due to and due from other funds that were paid on “N” documents in July and August with

the fiscal year identified in the 4th position of the document ID, for the year that the service and/or product was received or provided. [Note: Refer to page 5 of the “Budgetary Control Module Procedures” manual for more information on the 4th position of the document ID.]

10) Eliminate intra-company transfer in/out balances from the current period. Also, identify transfers

in/out with discretely presented component units in the current period and reclassify amounts to revenues or expenditures.

Accrual entries regarding the following items will be done centrally for all companies:

1) Investment income proration. Note: Do not include investment income proration amounts in your

accrual entries, but do include the amounts on your completed financial statements to BFM. 2) Fair Market Value Reporting (GASB Statement 31, Accounting and Financial Reporting for Certain

Investments and for External Investment Pools) reporting for funds in the cash flow fund.

July 31, 2012 15 22-040

http://bfm.sd.gov/Caps/Manuals/Procedures_BC_Module.pdf

CAFR POLICIES AND PROCEDURES MANUAL ADJUSTMENTS NOT TO BE EARMARKED FOR REVERSAL IN THE NEXT FISCAL YEAR

Certain accrual adjustments must be earmarked so they are NOT reversed in the next Fiscal Year. All other accruals will be reversed. In order for the reversal process to be administered by BFM centrally, the following procedures must be followed by all agencies entering in the current Fiscal Year accruals.

Please note that these procedures do not apply to agencies when entering financial statements in lieu of accruals.

Expenditure and/or Revenue Line(s) of Coding:

When entering a revenue and/or expenditure line that doesn’t need to be reversed in the next Fiscal Year, enter the letters NOREV in the Description 3 Field on BC Screen 213.

NOTE: Improper coding, or lack of coding in this area, could cause an erroneous reversal entry in the next Fiscal Year.

Examples of items not to reverse would include: elimination of intra-company transfers, eliminating primary state agencies’ pass-thru grants given to other state agencies, any corrections to cash basis revenue and/or expenditure balances, reclassifications, etc.

July 31, 2012 16 22-045

CAFR POLICIES AND PROCEDURES MANUAL ENTRIES THAT AFFECT ONLY THE GOVERNMENT-WIDE FINANCIAL STATEMENTS

AND NOT THE FUND FINANCIAL STATEMENTS

Government-wide financial statements, consisting of a Statement of Net Position and a Statement of Activities, are prepared using the economic resources measurement focus and the accrual basis of accounting. They provide comprehensive information about the entire government, including all of its governmental activities, business-type activities, and component units. Fund financial statements consist of a series of statements that focus on information about the government’s major governmental and enterprise funds, including its blended component units. Fund financial statements also should report information about a government’s fiduciary funds and component units that are fiduciary in nature. Governmental fund financial statements (including financial data for the general fund and special revenue, capital projects, debt service, and permanent funds) should be prepared using the current financial resources measurement focus and the modified accrual basis of accounting. Proprietary fund financial statements (including financial data for enterprise and internal service funds) and fiduciary fund financial statements (including financial data for fiduciary funds and similar component units) should be prepared using the economic resources measurement focus and the accrual basis of accounting. Due to the different bases of accounting being required for the government-wide financial statements and the fund financial statements for the governmental fund types, certain accrual adjustments must be earmarked so that they only affect the government-wide financial statements and NOT the fund financial statements. When entering accrual adjustments to governmental fund types that affect ONLY the government-wide financial statements enter the letters GW in the Description 3 Field on BC Screen 213 in positions 6 and 7. NOTE: Positions 1 through 5 of the Description 3 Field are reserved for NOREV or XXXXX. The following procedure must be followed when making entries that affect only government-wide financial statements:

If this type of entry is to an expenditure and/or revenue line of coding that WILL NOT result in the next Fiscal Year reversal, enter the letters NOREVGW in the Description 3 Field on BC Screen 213.

If this type of entry is to an expenditure and/or a revenue line of coding that WILL result in the next Fiscal Year reversal, enter the letters XXXXXGW in the Description 3 Field on BC Screen 213.

If this type of entry is to an asset, liability, or equity line of coding, enter the letters XXXXXGW in the Description 3 Field on BC Screen 213.

For your convenience, please refer to Exhibit: E Reference 22-195 of this manual for guidance on determining which accrual entries would affect only the government-wide financial statements and not the fund financial statements. Certain accrual entries reflected in Exhibit: E References 22-195 have been addressed in reference 22-040 (Accrual Entries that will be Created Centrally) of this manual as being done centrally. Other accrual entries in Exhibit: E 22-195, if applicable, will need to be created by the agencies.

May 1, 2013 17 22-050

CAFR POLICIES AND PROCEDURES MANUAL PRIOR PERIOD ADJUSTMENTS

Agencies must provide a complete and full explanation for any prior period adjustment reported as part of the year-end accruals or financial statements.

May 30, 2007 18 22-055

CAFR POLICIES AND PROCEDURES MANUAL ELIMINATION OF INTRA-COMPANY TRANSFERS

All transfers in and out of the same company number must be eliminated from presentation in the CAFR. BFM will post the Intra-company transfer eliminations centrally, for non-statement funds only, which are in current year balances (see Accrual Entries That Will Be Created Centrally: Section 22-040). To eliminate intra-company transfers that are included in the central accounting system database, BFM will reverse the debit/credit code on the lines of coding used when the transfer was made. For example, assume that an intra-company transfer in the amount of $100 was originally transferred out of company number 1000 by debiting company number 1000, account number 5228000 and center number 01111 into company number 1000 by crediting company number 1000, account number 4910000 and center number 01113. To eliminate this entry, BFM will simply credit company number 1000, account number 5228000, center 01111 and debit company number 1000, account number 4910000, and center 01113. To eliminate intra-company transfers in and out that are not included in the central accounting system database, such as intra-company transfers reflected on completed financial statements not yet entered into period 13, agencies must deduct the intra-company transfer amount(s) before posting to period 13.

Additional analysis of outstanding transfers All agencies must analyze the remaining transfers to determine if any other transfers need to be eliminated or reclassified. This will require communication and consensus with the other side of the transfer whether the company is within your agency or in another agency. The most common procedures that can have an effect on eliminating, creating or reclassifying transfers is documented in 22-140 Elimination of Duplicate Revenues and Expenses between Governmental Funds of State Agencies. After processing the parameters outlined in that section any outstanding transfers should be revisited. Once it is determine that all remaining transfers are properly classified the required detail is add to Exhibit C.

July 31, 2012 19 22-060

CAFR POLICIES AND PROCEDURES MANUAL LOCAL FUNDS

Cash in local bank accounts is any cash amount maintained in a bank account, approved by the State Treasurer’s Office and State Auditor’s Office (SDCL 4-4-3), other than the state’s main bank account. Recording: Agencies are given one of two options when taking cash out of the state’s main bank account and depositing into a local bank account. 1) Debit the proper expenditure account(s). No other activity for the cash in the local bank accounts

should be recorded on the state’s accounting system. NOTE: This method MUST be used for any funds that are budgeted on the accounting system.

2) Debit account 1130000 “Cash in Local Checking Account”. NOTE: Departments/boards and

commissions that maintain balances on the accounting system for account 1130000 “Cash in Local Checking Account” should update these balances on a periodic basis, but MUST update these balances at the end of each fiscal year (cash basis). The 1130000 account “Cash in Local Checking Account” on the accounting system should accurately reflect the reconciled cash balances maintained in the local bank accounts. When updating the 1130000 account (Cash in Local Checking Account), offsetting entries must be made to the proper revenue accounts (for current year cash inflows), the proper expenditure accounts (for current year cash outlays), or the proper prior period adjustment accounts (for prior year cash inflows and outlays).

Reporting – “Nonstatement” Funds (funds not listed in section 22-025 of this manual): If option 1 above was followed, agencies/boards and commissions should prepare and enter an accrual entry into period 13 for inclusion in the state’s financial statements. The accrual entry should report the reconciled cash in local bank account balance, the proper revenue(s) (for current year cash inflows), and the proper expenditure(s) (for current year cash outlays, including any adjustments needed to the original expenditure(s) used to remove the cash from the state’s main bank account). If option 2 above was followed, the June 30 balance in account 1130000 “Cash in Local Checking Account” that is reflected on the state’s accounting system at June 30 will be carried into period 13 and subsequently reported in the state’s financial statements.

Reporting –“ Statement” Funds (funds listed in section 22-025 of this manual): If either option 1 or option 2 was followed, agencies/boards and commissions should report the reconciled cash in local bank account balance on their completed financial statement and enter the statement balances into period 13 for inclusion in the state’s financial statements.

May 30, 2007 20 22-065

CAFR POLICIES AND PROCEDURES MANUAL CASH ON HAND AT JUNE 30

If there is cash on hand at June 30 of the current Fiscal Year-end that will be deposited into a fund accounted for on the accounting system after June 30 of the current Fiscal Year-end, you must make an adjusting entry in period 13 to report the cash on hand and related revenue, or other credit account that is applicable. NOTE: Please use account number 1110000 when accounting for cash on hand.

May 30, 2007 21 22-070

CAFR POLICIES AND PROCEDURES MANUAL ASSETS AND LIABILITIES NOT ON THE CENTRAL ACCOUNTING SYSTEM

All assets and liabilities (such as inventory values, accounts receivable, due from other governments, accounts payable, other assets, other liabilities, etc.) that may exist on June 30 of the Fiscal Year-end that are not on the accounting system, must be entered into period 13.

May 30, 2007 22 22-075

CAFR POLICIES AND PROCEDURES MANUAL INVENTORY VALUATION

Inventories at June 30 of the current Fiscal Year-end must be valued at moving average cost. The value of inventories must be recorded in period 13 to the fund(s) purchasing the inventories based on the percentage of inventory expenditures made from each fund for the year.

For the Governmental Funds, accrual entries for inventory balances at June 30 should be made to the “Fund Balances – Reserved For Inventories” account to indicate that inventories do not represent expendable available financial resources. Accrual adjustment would be as follows:

Debit Account – 3240000 (Unreserved Ending Fund Balance)

Credit Account – 3210030 (Reserved For Inventories)

May 30, 2007 23 22-080

CAFR POLICIES AND PROCEDURES MANUAL This page intentionally left blank

This page intentionally left blank.

June 19, 2009 24 22-085

CAFR POLICIES AND PROCEDURES MANUAL MATERIALITY LIMIT FOR INTERAGENCY RECEIVABLES AND PAYABLES

Amounts due from one state fund to another state fund are not required to be accrued, if the individual amounts are less than $5,000. This policy EXCLUDES and does not apply to:

1) Billings created by the BFM, BOA, BIT, and BOP for central service billings. 2) DOT Airplane Billings 3) Pheasantland Industries. 4) South Dakota Health Lab. 5) Department of Labor Space Billings. 6) DPS Inspections.

If a fund has a large dollar amount of interagency receivables/payables that are under $5,000, excluding those listed above, BFM should be notified to assess the impact on the CAFR.

Any agency posting a due to/from document under this policy must inform the corresponding agency of the amount due to/from NO LATER THAN the Interagency Billings Deadline identified in 3.C. of Summary of Deadlines – Section 22-161.

All accrual documents submitted to BFM must be accompanied by the due to/from and transfer in/out worksheet (See Exhibit: C 22-193).

May 1, 2013 25 22-090

CAFR POLICIES AND PROCEDURES MANUAL DUE DATES FOR CENTRAL SERVICE BILLINGS AND OTHER INTERAGENCY BILLINGS

All interagency billings created by the BFM, BOA, BIT, and BOP for central service billings; and DOT Airplane, Pheasantland Industries, South Dakota Health Lab, Department of Labor Space and DPS Inspection billings for services provided prior to June 30 of the current Fiscal Year-end, must be distributed to user agencies as soon as possible, but NO LATER THAN the Interagency Billings Deadline identified in 3.A. of Summary of Deadlines – Section 22-161.

All interagency billings received for services provided by the BFM, BOA, BIT, and BOP for central service billings; and DOT Airplane, Pheasantland Industries, South Dakota Health Lab, Department of Labor Space and DPS Inspection billings prior to June 30 of the current Fiscal Year-end, that are not paid as of June 30 of the current Fiscal Year-end must be paid as soon as possible after received, but NO LATER THAN the

Interagency Billings Deadline 3.B. of Summary of Deadlines – Section 22-161. All other interagency billings between agencies for services provided prior to June 30 of the current Fiscal Year-end must be distributed to user agencies as soon as possible, but NO LATER THAN the Interagency Billings Deadline 3.A. of Summary of Deadlines – Section 22-161, and, must be paid as soon as possible after received, but NO LATER THAN the Interagency Billings Deadline 3.B. of Summary of Deadlines – Section 22-161.

June 19, 2009 26 22-095

CAFR POLICIES AND PROCEDURES MANUAL Federal Equity Reconciliation

Due from Federal Government for Grant Reimbursement Calculation

Agencies, for each of their federal fund companies, need to prepare a Federal Equity Reconciliation. This reconciliation has two main purposes: to prove that the Due from Federal Government for grant programs is correctly posted; and to verify that there is not an invalid or unexplained amount sitting in the equity balance of the fund. A copy of the federal fund reconciliation must be sent to BFM along with your accrual documents. See Exhibit K for a worksheet to use. If you are using another form to reconcile your federal equity please confer with your Accounting Analyst to confirm that the form satisfies the two purposes of this reconciliation. There is a link on the Exhibit K page to download an Excel copy of the reconciliation form. There are instructions on the form for what data goes in each column and formulas the various sub-totals. The following expands on those instructions. The reconciliation is filled out based on how entries would affect cash balance. Examples: If the 6/30 pooled cash balance is negative that amount would be entered on the sheet as a credit; For payables, cash would be reduced once the items where paid out, so payables would be entered as a credit; Receivables would be enter as a debit; A positive cash balance in a local bank account would be entered as a debit. In section J the balances for those items are being taken out of the overall balance so the reverse sign would be used. Example: If indirect cost pool has positive cash balance then the amount would be entered as a credit in section J. The amounts in section L would be entered with the same sign as the balance on the trial balance. Example: Inventory is a debit balance so the amount would be entered as a debit. Since the Due from Fed is calculated from the perspective of the effect on cash the total of column K would reflect what the cash balance would be after all the charges and revenues that are being accrued for are posted. The entry to the receivable, Due from Other Government Federal would be the opposite sign and the offset should be grant revenue. If the overall total for column K has a debit balance then the agency should review the form for errors and analyze the grant lines and grant types to determine if there are any amounts that should be categorized as fee or rate based reimbursements; or classified as unearned or unavailable revenue. If the overall total for column K has a credit balance then there is a need to post a Due from Other Government Federal. Since there is now a requirement that Center codes are 10 digits long this entry could be several lines. If some of the grant lines have small debit balances due to timing differences, not classification differences, then the entry pertaining to those amounts would still be the Due from Other Government & Federal Grant Revenue but with opposite signs. The total Due from Other Government net amount should match the total in column K. Some agencies post Due from Federal Government amounts with their various accrual documents as they are entered. This method can be continued and there is a section on the reconciliation form to track these entries. A formal reconciliation is still required. Fund Equity Balance In theory if all activity in a federal fund was reimbursement based grants, then the accrual fund balance would be zero. There are exceptions even within that category. The two most common are address in section L, Inventory and Pre-paids. Other common situations that cause fund balances are address in section J. All ending fund equity balances must be understood and documented. If an agency has an amount that does not fit in a category within section J or L, contact your Accounting Analyst.

May 1, 2013 27 22-100

CAFR POLICIES AND PROCEDURES MANUAL OTHER REIMBURSEMENT RECEIVABLES

If an agency provides service or product for another entity they may have un-reimbursed expenditures at June 30 of the ending fiscal year and may have additional expenditures as a result of payable accruals. These un-reimbursed costs require that a receivable is recorded. Depending on the entity involved the receivable can be: Due from Other Government, Due from Other Fund or a general Accounts Receivable. Due from Other Fund postings are discussed in sections 22-040 and 22-140. Many of the needed entries are created as a part of a centrally posted accrual or as outlined in 22-140. Any transactions between agencies that fall outside of the parameters in these two sections should be analyzed and a determination made if a Due From / Due To accrual is needed. The system of tracking and billing outside entities is agency and/or program specific. The agency’s staff in charge of producing yearend accruals should review the activity within their agency and determine if there is a need to post additional Due from Other Governments or Accounts Receivable.

July 31, 2012 28 22-105

CAFR POLICIES AND PROCEDURES MANUAL SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (SEFA)

A Schedule of Expenditures of Federal Awards (SEFA) must be prepared. The schedule will identify the name of the grant, catalog of federal domestic assistance number, the federal agency the grant originated from, the entity the grant was received from, and the amount expended (on the cash basis).

This schedule must be submitted to the Bureau of Finance and Management NO LATER THAN the Schedule of Expenditures of Federal Awards Deadline identified in item 4 of Summary of Deadlines – Section 22-161.

To facilitate data collection, the Bureau of Finance and Management will provide individual excel

spreadsheets for each state agency. These spreadsheets are entity specific and contain the submitted grant information from the prior Fiscal Year for all awards received.

These spreadsheets will be e-mailed to each entity’s finance officer and/or the prior years’ preparer, along

with specific instructions on how to complete the spreadsheets. NOTE: In addition, if during the current Fiscal Year, a state entity expends $500,000 or more of federal

funds sub-granted by a non- South Dakota state entity, then a listing should be prepared that contains the name of the non-state entity, its address, and the name of a contact person.

Preliminary or estimated schedule A request for a fiscal year estimated amount will be sent out to agencies in March. The excel spreadsheet

will be the same format as the yearend spreadsheet that will be sent out in June. The due date for this estimate will be mid-April. The purpose of the estimate is to assist in determining which grants are Type A versus Type B. and to aid DLA in their audit planning.

May 15, 2010 29 22-110

CAFR POLICIES AND PROCEDURES MANUAL ACCRUED EMPLOYEE BENEFITS PAYABLE

For those agencies entering accruals into non-statement funds (funds not listed in section 22-025 of this manual as “statement” funds), and who are on the BFM central payroll, accrual entries regarding accrued leave liability will be made centrally by BFM and posted to the individual funds.

NOTE: Agencies MUST NOT reverse these entries to short-term liabilities. For those agencies entering financial statements into “statement” funds (funds listed in section 22-025 of this manual as “statement” funds), and who are on the BFM central payroll, a list of the accrued leave liability amounts to be posted to the appropriate statement funds in your departments will be sent to you by BFM. Proper entries must then be made by your agency debiting the correct expenditure coding and crediting the correct payable account(s).

NOTE: Amounts should be posted as identified to the “statement” funds. Agencies MUST NOT make any adjustments to the payable amounts that are distributed.

For those agencies entering accruals and/or financial statements, and who are not on the BFM central payroll, entries must be made to the individual funds, debiting the correct expenditure coding and crediting the correct payable account(s) for amounts of accrued employee benefits payable at June 30 of the current Fiscal Year-end. For governmental funds, entries must identify beginning balance, additions and deductions, and must be separated between short-term (due within one year) account 2440000, and long-term account 2924000.

May 30, 2007 30 22-115

CAFR POLICIES AND PROCEDURES MANUAL CAPITAL ASSETS

All assets with a useful life of more than one year shall be capitalized and recorded in the Fixed Asset System (FAS) according to the following capitalization and reporting thresholds:

Land (ALL land is capitalized and reported regardless of cost) $ 0 Land Improvements $ 50,000 Equipment and off the shelf software $ 5,000 Intangible Assets $ 250,000 Building and Improvements $ 100,000 Infrastructure and Improvements

- Proprietary Funds and Component Units $ 50,000 - Governmental and Fiduciary Funds $ 1,000,000

Equipment Equipment includes, but is not limited to, items such as furniture, fixtures, machinery, vehicles, aircraft, computer equipment and major renovation of vehicles. Also with a $5,000 threshold are “over-the-counter” computer software licenses. Intangible Assets Intangible assets include, but are not limited to, easements, right of ways, patents, trademarks, copyrights, and internally generated software. Internally generated software (as defined by GASB 51) includes, but is not limited to, websites, computer systems, and other general software. Assets are considered “internally generated” if they are created or produced by the government or an entity contracted by the government, or if they are acquired from a third party but require more than minimal incremental effort on the part of the government to begin to achieve their expected level of service capacity. Internally generated software not capitalized before FY10 (July 1, 2009) will not be retroactively capitalized and/or added to FAS. Building Improvements Building improvements would include major remodeling of buildings owned, leased, or rented by the state. When considering the terms "major remodeling" or "major renovation" of buildings, vehicles, and equipment, please use the following criteria as a guide for qualification: 1) increases physical dimensions (such as a building addition); 2) increases productivity; 3) lengthens future life; or, 4) lowers future costs. The cost of a capital asset includes not only its purchase price or construction cost, but also ancillary charges to place the assets in its intended location and condition for use. Ancillary charges include costs such as freight and transportation charges, site preparation expenditures, and professional and legal fees directly attributable to asset acquisition. These costs do not typically include roof and window replacements and other normal maintenance and repair. Infrastructure All infrastructure assets acquired (purchased, constructed, or donated), or that received major renovations, restorations, or improvements that increased the asset’s serviceability or extends the asset’s original useful life, must be capitalized for financial reporting purposes at its historical cost, estimated historical cost, or fair market value at date of donation, if they are equal to or greater than the state’s capitalization threshold for infrastructure assets.

All infrastructure assets must be entered onto the fixed asset system (FAS), unless the reporting agency has a formal record keeping system that maintains sufficient information needed for financial reporting and support needed for audit purposes. All infrastructure assets must be depreciated over their estimated useful life, using the straight-line method for depreciation, with no salvage value. The estimated useful life is the estimated number of years that an asset will serve the purpose for which it was purchased or constructed.

April 16, 2014 31 22-120


Impairment of capital assets

The state’s policy for impairment of capital assets must be applied to all assets with a reporting value greater than or equal to $100,000, excluding land and infrastructure. This policy must be applied to all infrastructure assets with a reporting value greater than or equal to $10 million. If a fund has a large dollar amount of impaired capital assets that are under these thresholds BFM should be notified to assess the impact on the CAFR. Asset impairment is a significant, unexpected decline in the service utility of a capital asset. Service utility of a capital asset is the usable capacity that at acquisition was expected to be used to provide service, as distinguished from the level of utilization, which is the portion of the usable capacity currently being used. The current usable capacity of a capital asset may be less than its original usable capacity due to the normal or expected decline in useful life or to impairing events or changes in circumstances, such as physical damage, obsolescence, enactment or approval of laws or regulations or other changes in environmental factors, or change in manner or duration of use. Usable service capacity may be different from maximum service capacity in circumstances in which surplus capacity is needed for safety, economic, or other reasons. Decreases in utilization and existence of or increases in surplus capacity that are not associated with a decline in service utility are not considered to be impairment. Significant is identified as a 20% estimated reduction in the assets reported value, or estimated useful life, or usable service capacity. If your department has a capital asset that meets the above threshold for impairment of capital assets and you have identified the asset as having potential impairments, then you MUST test the asset for impairments. Capital assets that will continue to be used by your agency and have been identified as having an impairment that is considered permanent must be measured for the amount of impairment (the portion of historical cost that should be written off). The impairment should be measured using one of the following methods that appropriately reflect the decline of service utility of the capital asset: 1) Restoration cost approach; 2) Service units approach; or, 3) Deflated depreciated replacement cost approach. NOTE: Impairments resulting from physical damage generally should be measured using a restoration cost approach; impairments resulting from enactment or approval of laws or regulations or other changes in environmental factors or from technological development or obsolescence generally should be measured using a service units approach; and, impairments identified from a change in manner or duration of use generally should be measured using deflated depreciated replacement cost or using a service units approach. However, capital assets that will no longer be used by the government should be reported at the lower of carrying value or fair value. Capital assets impaired from construction stoppage also should be reported at the lower of carrying value or fair value. Unless the impairment is considered temporary the loss from impairment should be reported in the statement of activities and statement or revenues, expenses, and changes in fund net position, if appropriate, as a program or operating expense. Impairment losses should be reported as a direct expense of the program that uses or used the impaired capital asset. An accrual entry should be made debiting account 5208800 “Loss due to impairment of capital assets” for the impairment loss with offsetting entries reducing the cost of the capital asset and accumulated depreciation.

July 26, 2012 32 22-120


If an event or circumstance indicates that a capital asset may be impaired, but the test of impairment determines that impairment has not occurred, the estimates used in depreciation calculations (remaining estimated useful life and salvage value) should be reevaluated and changed, if necessary. The carrying amount of impaired capital assets that are idle at year-end should be reported to BFM to be disclosed in the notes to the financial statements, regardless of whether the impairment is considered permanent or temporary. In governmental fund financial statements, restoration or replacement of an impaired capital asset should be reported as a separate transaction from the associated insurance recovery, which is reported as an, other financial source. In governmental and business-type activities in government-wide financial statements and in proprietary fund financial statements, restoration or replacement of an impaired capital asset should be reported as a separate transaction from the impairment loss and associated insurance recovery. The impairment loss should be reported net of the associated insurance recovery when the recovery and loss occur in the same fiscal year. Insurance recoveries reported in subsequent years should be reported as other program revenue. Insurance recoveries should be recognized only when realized or realizable. Works of art Works of art, historical treasures, and similar assets must be capitalized and reported at their historical cost or fair value at date of donation (estimated if necessary) if they are held as individual items, but not if they are in a collection. Collections (and all additions to that collection) are not to be capitalized and reported, whether donated or purchased and that meets all of the following conditions. The collection is:

a) Held for public exhibition, education, or research in furtherance of public service, rather than

financial gain; b) Protected, kept unencumbered, cared for, and preserved; and, c) Subject to an organizational policy that requires the proceeds from the sales of collection items to

be used to acquire other items for collections. This does not have to be a formal policy; however, there should be some evidence to support the existence of the policy.

However, collections already capitalized at June 30, 1999 should remain capitalized and all additions to those collections should be capitalized, even if they meet the conditions for exemption from capitalization. For non-capitalized collections, a disclosure in the notes to the financial statements must be made for the description of the collection and the reasons these assets are not capitalized. Therefore, a list of the non-capitalized collections and reasons they are not capitalized must be submitted to the Bureau of Finance and Management. This list does not have to be detailed item by item; an overall description of the collection is fine. Revenue must be recognized (account 4894000 - “Restricted Donation”) for donations of works of art, historical treasures, and similar assets. When donated collection items are added to non-capitalized collections, a program expense (account 5228037 - “Non-capitalized Collections”) must also be recognized equal to the amount of revenues recognized. Capitalized collections or individual items that are exhaustible, such as exhibits with diminished useful lives due to display, or educational/research applications, should be depreciated over their estimated useful lives, using the straight-line method for depreciation. Depreciation is not required for collections or individual items that are inexhaustible.

July 26, 2012 33 22-120


Fixed asset system (FAS)

BFM will leave the fixed asset system open for all capital assets until the Capital Assets Deadline [See Summary of Deadlines – Section 22-161]. So that prior year unrecorded assets, or assets with incorrect financial criteria can be added, or updates made to the system before the final depreciation cycle is run. For unrecorded assets or updates discovered after the Capital Assets Deadline, these items can be added to the fixed asset system only through the Office of Property Management. When the Office of Property Management adds or updates the item, the life-to-date depreciation will be manually adjusted so that the item will depreciate in future years as if it had been added in the prior year. NOTE: It is required that you record any unrecorded capital assets (with acquisition dates through June of the current Fiscal Year) on the FAS prior to the Capital Assets Deadline date. This will save your agency additional work in the accrual process. For instances where an asset’s estimated life range does not accurately coincide with its applicable NIGP code, an adjustment must be made. Since these exceptions are rare and infrequent, we will not be creating new NIGP codes. Property Management will need to be contacted so that the life ranges can be properly adjusted for these asset exceptions. BFM will send the appropriate files out, after the final date for current year adds to FAS [See Summary of Deadlines – Section 22-161].

Fixed Asset Inventory Verification BFM will be sending a list to all departments of capital assets currently on the fixed asset system to be verified by each department, signed, and returned to BFM prior to June 30. The purpose of this verification is to assure that assets currently recorded on the fixed asset system are accurately recorded and still in use by your department. NOTE: Departments, Boards and Commissions are responsible to assure all capital assets are reported correctly for CAFR purposes, whether they are posted centrally by BFM from FAS or by the departments through the accrual process.

Accruals Fiscal Year End Reconciliations

Agencies must prepare two reconciliations of the fixed asset data. The first reconciliation reconciles all current fiscal year adds on the fixed asset system to expenditures on the accounting system. This reconciliation should encompass items that flow through construction in progress as well as donated items, etc. The purpose of this reconciliation is to ensure that all current fiscal year purchases of capital assets that meet the thresholds are entered onto the fixed assets system and subsequently reported in the CAFR. The second reconciliation reconciles the change from the beginning FAS balances (prior year ending balances) to current year ending balances. Your reconciliations should be submitted to BFM along with your accrual documents.

April 16, 2014 34 22-120


Centrally Posted Accruals

Accrual entries for capital asset items regarding governmental fund(s), with acquisition dates through June of the current Fiscal Year-end reflected on the Fixed Asset (FA) Property listing as of the Capital Assets Deadline will be prepared centrally. This includes recording the asset, depreciation expense for the year, and accumulation depreciation to date to the individual fund(s).

Agency Posted Accruals It is the agency’s responsibility to prepare accrual and/or completed financial statement entries for ALL nongovernmental fund capital asset items reflected on the FA Property listing and governmental fund capital asset items with acquisition dates prior to June 30 of the current fiscal year-end that were updated to FAS after the Capital Assets Deadline [See: Summary of Deadlines – Section 22-161]. Accrual and/or statement fund entries should be made directly to the individual fund. The entries should record the asset, depreciation expense for the year, and accumulated depreciation to date. NOTE: For governmental funds, these entries must also include the letters GW in the Description 3 field on BC Screen 213 in positions 6 and 7. See section 22-050 of this manual for further guidance on positions 1 through 5 regarding GW lines of coding (example: NOREVGW or XXXXXGW). Statement funds, when you post your capital assets, please break that number out between Beginning Assets, Additions to Assets, and Deletions from Assets. You can do all of this using the Description 1 field on the voucher. Please post the beginning capital assets (matches prior year’s ending) for the Fiscal Year with a Description 1 field Beginning Assets. Please post the additions to capital assets for the Fiscal Year with a Description 1 field Additions to Assets. Please post the deletions to capital assets for the Fiscal Year with a Description 1 field Deletions to Assets.

There are additional entries required for proprietary funds. Please see Exhibit L. For capital assets with acquisition dates prior to June 30 of the current fiscal year-end that were updated to FAS after the Capital Assets Deadline, please see Exhibit M for the required entry format and depreciation schedule.

Construction in progress

Construction in progress is not entered on the FAS and therefore, will be the responsibility of agencies to post accrual and/or completed financial statement entries to the individual funds in period 13. NOTE: A supporting schedule must be attached providing the breakdown of the amount(s) reported for construction in progress, with project description, type of asset (land improvement, building improvement, equipment, infrastructure, etc.) and listing of (1) Beginning Balance; (2) Increases; (3) Decreases; and, (4) Ending Balance for this account. (NOTE: Beginning amounts must agree with last year’s ending amounts unless you are reporting a prior year’s adjustment. Last year’s ending balances will be sent out to agencies at a later date.) For governmental funds, these entries must also include the letters GW in the Description 3 Field on BC Screen 213 in positions 6 and 7. See section 22-050 of this manual for further guidance on positions 1 through 5 regarding GW lines of coding (example: NOREVGW or XXXXXGW). As of FY14, there is a change to how these entries need to be entered. Please see Exhibit N.

April 16, 2014 34.1 22-120

CAFR POLICIES AND PROCEDURES MANUAL ITEMS ENCUMBERED AS OF JUNE 30, RECEIVED PRIOR

TO JUNE 30, AND PAID AFTER JUNE 30

If you have an encumbrance at June 30 of the current Fiscal Year-end on the central accounting system for an item that has been received and accepted prior to the close of June 30 of the current Fiscal Year-end business, but will be paid for after June 30 of the current Fiscal Year-end, the following actions should be taken:

a) Prepare an encumbrance adjustment document as a data type 1 transaction using the Budgetary Control Encumbrance Adjustment screen (241). Entries on this document should reverse lines of coding used when the item was originally encumbered on the central accounting system;

b) The accruals for related expenditures should be marked with the appropriate payable indicator as

outlined in section 1; and, c) If the item is to be capitalized, it must be added to the fixed asset property system by the Capital

Asset Deadline [See Summary of Deadlines – Section 22-161] with an acquisition date of the month it was received.

This procedure is for non-statement funds only. Encumbrance adjustments should not be performed for statement funds because balances for statement funds are zeroed out.

May 30, 2007 35 22-125

CAFR POLICIES AND PROCEDURES MANUAL LEASES

All agencies must compile a list of all leases, both operating and capital, that meets the criteria listed below and submit it to BFM. Please refer to Exhibit: F 22-196 for an example of what is required on your agency’s list. Please submit this list on an Excel spreadsheet to a BFM CAFR Representative as an e-mail attachment. All agencies that enter accruals (rather than completed financial statements) into period 13 must submit copies of, and pertinent information regarding, all (1) new leases entered into during the current Fiscal Year, (2) leases renewed during the current Fiscal Year and (3) leases canceled during the current Fiscal Year. The fund number, from which each lease will be paid, along with amount, must accompany information being submitted. All agencies that enter completed financial statements, rather than accruals, into period 13 are being asked to report lease information regarding only (1) single year leases with total payments exceeding $4,800, and (2) multi-year leases with monthly payments exceeding $400, or yearly payments exceeding $4,800, or the renewable lease term exceeding five years. The BFM is requesting only copies of current operating space lease agreements that meet the criteria listed above, including renewal and cancellation correspondence of each. However, the BFM is requesting copies of all current equipment lease agreements whether or not they are reported on your financial statements. The fund number from which each lease will be paid, along with amount, must accompany copies of leases and information being submitted to the BFM. All lease information must be submitted to BFM NO LATER THAN the Lease Information Deadline [See Summary of Deadlines – Section 22-161 ].

May 30, 2007 36 22-130

CAFR POLICIES AND PROCEDURES MANUAL UNEARNED/UNAVAILABLE REVENUE

Under the modified accrual basis of accounting, revenue cannot be recognized until the eligibility criteria, as displayed in GASB Statement No. 33 of the Governmental Accounting Standards Board, is met and it is available to liquidate liabilities of the current period. NOTE: For the State of South Dakota, “available” means that the state of South Dakota has collected the revenues in the current period, or expects to collect them within 60 days after the end of the current period to pay liabilities of the current period.

With respect to the recognition of receivables and revenue related to expenditure-driven grants, the revenue is considered earned once the eligibility criteria has been met, such as the expenditure being incurred and the providing of match or maintenance of effort. Unless reimbursement is not expected within a reasonable time, the revenue should not be deferred because of the availability criterion. This would include situations in which draw down of funds cannot be made because a federal appropriation has not been made yet.

Under the modified accrual basis of accounting, if the eligibility requirements have been met and the money is not available, an appropriate entry must be made; 1) debiting the appropriate receivable account; and 2) crediting account number 2520000 (Unavailable Revenue).

Under accrual basis of accounting, revenue must be recognized as soon as it is earned, regardless of availability.

If a revenue account has been credited during the current Fiscal Year for monies that have been received and remain unearned as of June 30 of the current Fiscal Year-end under both the modified accrual basis of accounting and the accrual basis of accounting, an appropriate entry/adjustment must be made; 1) debiting the revenue account that was used during the current Fiscal Year to record the cash received; and, 2) crediting account number 2510000 (Unearned Revenue) for the amount of unearned revenue.

May 1, 2013 37 22-135

CAFR POLICIES AND PROCEDURES MANUAL ELIMINATION OF DUPLICATE REVENUES AND EXPENSES BETWEEN GOVERNMENTAL

FUNDS OF STATE AGENCIES

There should be no duplication of revenues and expenses for sub-contractual relationship transactions within and between governmental funds on the final accrual basis financial statements. (Governmental funds are the General Fund and Special Revenue funds.) Any such duplication should be eliminated either by one agency netting their revenue and expenditure against each other; or both agencies reclassifying the transaction to a transfer in/transfer out.

Not all revenue/expenditure transactions between governmental funds create an actual duplication that needs to be eliminated. Sales or services transactions where one fund purchases a good or service that is the product of another fund in a direct transaction, as opposed to sub-contract relationship, is not a reimbursement, but rather a sale and should not be eliminated. Governmental fund transactions with proprietary funds (i.e. statement funds) should not be eliminated. Understanding both sides of a transaction is important to the yearend analysis. Communication between the agencies is vital in determining the proper accruals needed. Agencies should review their year fiscal activity for possible double revenue or expenditure transactions. Centrally posted accruals should also be analyzed. There are different types of transactions affected by this section.

RECORDING OF SUB-RECIPIENT TRANSACTIONS BETWEEN STATE AGENCIES/FUNDS

Sub-recipient transactions occur when one state agency receives financial assistance (grant) that is passed through to another state agency. The most common grant received is from a Federal agency, but grants can be received from other governments or private companies. During the fiscal year there are two types of transactions that agencies use to pass through these grant monies, an inter-agency billing non-cash document, debit to expenditure (primary recipient) and credit to revenue (sub-recipient); or a transfer document. These transactions, in effect, cause a double recording of revenue and/or expenditure on the statewide financial statements. In order for the final accrual basis financial statements to reflect only a single expenditure and single revenue, adjustment accrual entries must be made. Depending on the type of transaction used in the cash basis document an accrual needs to be done to eliminate the double recording of revenue and expenditure or a reclassification of the transfer in/out. With a couple of exceptions, recognition of the expenditure and revenue should remain with the sub-recipient. So the accrual entry for the elimination is usually done by the primary recipient. An example of an exception is FEMA grants. With these the primary recipient retains the recognition of revenue and expenditure. When a transfer is used to pass through the grant both agencies need to make an accrual adjustment entry. The primary recipient would need to eliminate their grant revenue and transfer out. The sub-recipient would need to reclassify their transfer in to grant revenue.

June 6, 2011 38 22-140



Agencies should review their reporting year cash basis fiscal activity for possible primary/sub-recipient transactions. Beyond accumulating a good knowledge and understanding of your agency’s program activity and how it’s presented fiscally, there are some general ledger accounts that can be reviewed in your analysis for these transactions. On the payer side review transactions for sub-objects 5204140 – Contract payments to state agencies and 5206090 – Grants to Other State Agencies. On the revenue, receiving side, review sub-objects beginning with 47 and source codes beginning with N. For reimbursements made via transfer documents, each document should be reviewed, but since agencies are reviewing all inter-company transfers to determine if they need to be reclassified or eliminated already, this is just a part of that procedure. The following are examples to help illustrate various situations and the entries needed.

Examples:

a) State Agency X provides federal assistance to State Agency Y during the current Fiscal Year. The

reimbursement transaction is processed on an inter-agency billing non-cash document (N document). Agency X (the primary recipient) will need to prepare an adjustment to eliminate the recognition of revenue and expenditures for these transactions in order to avoid duplication with Agency Y (the sub-recipient) who also recorded revenue and expenditures in the current Fiscal Year. The year-end accrual adjustment prepared by the primary recipient would be as follows:

Debit 471XXXX for revenue received from federal government and given to state

agency sub-recipients. (Non-Reversing)

Credit 5206XXXX or 5204XXXX for expenditures relating to amount disbursed to state agency sub-recipients during the fiscal year. (Non-Reversing)

b) State Agency X provides federal assistance to State Agency Y during the current Fiscal Year. The reimbursement transaction is processed on a transfer document. Agency X (the primary recipient) will need to prepare an adjustment to eliminate the revenue and the transfer out. Agency Y (the sub-recipient) will need to prepare an adjustment to reclassify the Transfer In to a revenue account. The year-end accrual adjustment prepared by the primary recipient would be as follows:

Debit 471XXXX for revenue received from federal government and given to state

agency sub-recipients. (Non-Reversing)

Credit 5228000 relating to amount disbursed to state agency sub-recipients during the fiscal year. (Non-Reversing)

The year-end accrual adjustment prepared by the sub-recipient would be as follows:

Debit 4910000 for relating to amount received from the state agency that is the primary

recipient during the fiscal year. (Non-Reversing)

Credit 47XXXXX for revenue received from federal government via the state agency that is the primary recipient. (Non-Reversing)

June 6, 2011 38.1 22-140



c) State Agency X receives federal reimbursement through a FEMA grant. Agency X provides federal assistance from this grant to State Agency Y during the current Fiscal Year. The reimbursement transaction is processed on a transfer document. Since FEMA requires that the primary recipient retain the recognition of revenue and expenditure, Agency X will need to prepare an adjustment to reclassify the transfer out to expenditure. Agency Y (the sub-recipient) will need to prepare an adjustment to eliminate the Transfer In and the expenditure.

The year-end accrual adjustment prepared by the primary recipient would be as follows:

Debit 5206XXXX or 5204XXXX for expenditures relating to amount disbursed to state agency sub-recipients during the fiscal year. (Non-Reversing)

Credit 5228000 relating to amount disbursed to state agency sub-recipients during the

fiscal year. (Non-Reversing)

The year-end accrual adjustment prepared by the sub-recipient would be as follows:

Debit 4910000 for relating to amount received from the state agency that is the primary recipient during the fiscal year. (Non-Reversing)

Credit 520XXXX for expenditures related to the reimbursement received from state

agency X. (Non-Reversing)

If there are any interagency billings of pass through grants in the new fiscal year that create receivables and payables, additional accrual entries may need to be done.

d) At June 30, the State Agency Y, sub-recipient, had incurred expenditures on a federal grant that will be reimbursed by Agency X in the next Fiscal Year. The inter-agency billing non-cash document (N document) was prepared and ended by the August cut off for inclusion in centrally posted accruals.

The centrally posted accrual would be:

For the primary:

Debit Expenditure used in new year cash document Credit 2200000 Due to Other Funds

For the sub recipient:

Debit 1251000 Due from Other Funds Credit Revenue used in new year cash document

June 6, 2011 38.2 22-140



The Primary Recipient, since this relates to a federal grant, will post an accrual adjustment as a part of Federal Fund Equity balancing.

Debit 1261000 Due from Other Governments

Credit 47XXXXX for revenue received from federal government

This entry creates a second revenue and the centrally posted accrual for the Primary Recipient created a second expenditure. These double recordings need to be eliminated by the Primary Recipient.

Debit 47XXXXX for revenue received from federal government

Credit Expenditure used in the new year cash document

This would leave only the balance sheet account entries on the Primary’s trial balance.

Debit 1261000 Due from Other Governments

Credit 2200000 Due to Other Funds

Note: If agencies have any other Due to/ Due from accruals in addition to what is centrally posted, they should analyze if federal funds are involved and communicate with each other the necessity of other yearend adjustments.

RECORDING OF STATE GRANT OR REIMBURSEMENT TRANSACTIONS BETWEEN AGENCIES/FUNDS

If an agency has awarded a grant or contract to another state agency to administer a program for them, using General Fund or Other Fund appropriation, then the revenue and expenditure recorded in the cash basis general ledger for the reimbursement transaction may need to be reclassified to a transfer in and transfer out in the accrual basis financial statements.

In analyzing the transactions relating to the program expenditure and reimbursement of said expenditure, there would be one revenue and two expenditures. After the accrual adjustments there should be no revenue booked and only one expenditure. There would not be a revenue transaction because the ability or permission to spend is via a budgeted appropriation, not current year revenue such as a non-state grant.

Once again this is only relevant when both sides of the transaction involve government funds.

The following are examples to help illustrate various situations and the entries needed.

e) State Agency X provides reimbursement to State Agency Y during the current Fiscal Year. The reimbursement transaction is processed on a non-cash voucher document. Agency X (the awarding agency) will need to prepare an adjustment to reclassify the expenditure account to a transfer out. Agency Y (the billing agency) will need to prepare an adjustment to reclassify the revenue account to a transfer in.

June 6, 2011 38.3 22-140



The year-end accrual adjustment prepared by the awarding agency would be as follows:

Debit 5228000 relating to amount reimbursed to the billing agency. (Non-Reversing)

Credit 520XXXX relating to amount reimbursed to the billing agency.

(Non-Reversing)

The year-end accrual adjustment prepared by the billing agency would be as follows:

Debit 4XXXXXX relating to the amount reimbursed from the awarding agency (Non-Reversing)

Credit 4910000 relating to the amount reimbursed from the awarding agency.

(Non-Reversing)

f) State Agency X provides reimbursement to State Agency Y during the current Fiscal Year. The reimbursement transaction is processed as a transfer. Since this transaction doesn’t create an additional revenue or expense there would be no year-end accrual adjustment needed for either agency.

g) State Agency X provides reimbursement to State Agency Y for purchases or expenditures Agency Y made on their behalf. These transactions are usually done like an expenditure correction where Agency Y credits their expenditure and Agency X debits the appropriate expenditure on their books. Since this transaction doesn’t create an additional expense no yearend accrual adjustment needs to be done.

PURCHASE OF GOODS AND SERVICES BETWEEN AGENCIES/FUNDS

There are times when a governmental fund purchases a good or service from another governmental fund for use in their work activity. This transaction is like an outside vendor relationship and does NOT create the type of duplicate revenues and/or expenditures that would need to be eliminated. Distinguishing between this type of transaction and a sub-contractual one can involve some analysis of the activity and communication between agencies. Examples of possible vendor base relationships: another agency’s employees consulting your employees on their area of expertise; hiring inspectors from another agency for specific task; purchase of a license; There would be no yearend accrual adjustment entry needed for this type of transaction.

July 7, 2011 38.4 22-140

CAFR POLICIES AND PROCEDURES MANUAL REPORTING NEGATIVE CASH BALANCES

All negative pooled cash balances (e.g., funds with negative cash amounts being reported on the state’s accounting system) must be eliminated from the fund(s) with the negative cash balance(s) and absorbed by the state general fund. Additionally, all local funds with negative cash balances that are not reported on the state’s accounting system must be reflected in period 13 as an accounts payable unless the negative local fund balance can be absorbed by a positive cash balance in the proper fund.

Exception: Agencies using Company 2000 (ARRA funding) should not make an accrual entry for negative cash. Company 2000 is used statewide, therefore, BFM will review the ending cash balance and will make any entry needed for the negative cash balance. Note: Each agency will need to enter accruals for federal receivables relating to their negative cash balance in company 2000.

All agencies that enter only their accruals (rather than completed financial statements) must initiate the following period 13 accrual entries for each fund with a negative cash balance on the state’s accounting system:

Fund with Negative Cash Balance:

Debit 1131000 Pooled Cash (Accruals Only) Credit 2200000 Due to Other Funds

State General Fund (Company 1000):

Debit 1251000 Due from Other Funds Credit 1131000 Pooled Cash (Accruals Only)

Agencies entering accruals must also enter local funds with negative cash balances into period 13. If the pooled fund cash amount is not sufficient to absorb the negative amount of the local fund, then an entry must be made crediting the accounts payable account (2110000) for the negative cash amount. If your agency is submitting statements in lieu of accruals, and the net effect of cash on the statements is a negative amount, the amount of negative pooled cash balance must be reflected in period 13 as due to other funds (2200000), with corresponding entries to company 1000 debiting due from other funds (1251000) and crediting cash account (1131000). The negative amount of local funds must be reflected in period 13 as accounts payable (2110000).

Description 1 Requirement for Negative Cash All negative cash documents need to have the following Description 1 field:

Negative Cash – Company number with the negative cash.

For Example: Company 2004 reporting due from 1000 for negative cash: Company 2004 Description 1: Negative Cash - 2004 Company 1000 Description 1: Negative Cash - 2004

May 1, 2013 39 22-145

CAFR POLICIES AND PROCEDURES MANUAL ELIMINATION OF COMPANY 8000 AND 8010 BALANCES

THAT ARE DUE FROM OR DUE TO OTHER FUNDS

Agency funds should be used to report resources held by the reporting governments in a purely custodial capacity. Agency funds typically involve only the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments. Therefore, for financial reporting purposes, any company 8000 and 8010 balance or receivable that is owed to or due to other funds within the reporting entity, must be eliminated and/or reported in the fund(s) that will ultimately receive the distribution or reimburse the company 8000 and 8010. NOTE: This is for financial reporting only; company 8000 and 8010 can still be used on the accounting system during the fiscal year to receive, hold, and transfer resources to other funds.

Accounting system balances at June 30

Any agency that has balances due from or due to other funds reported in company 8000 and 8010 on the accounting system at June 30 must prepare and enter accrual documents which:

a) Eliminate the receivable/payable in the 13th (accrual) period in company 8000 and 8010,and report/eliminate cash in company 8000 and 8010; and,

b) Report/eliminate the cash and appropriate revenue/expenditure account in the fund(s) that will

ultimately receive the distribution, or reimburse the company 8000 and 8010.

NOTE: If the agency does not know at June 30 what portion of the accounting system balance is going to be transferred to state funds, they should be estimated.

Account numbers and Center codes It is important to use the coding structure related to the Fiscal Year for which the CAFR is being prepared. Use actual liability/ payable account numbers and the full center codes for each program that were used in the cash basis transactions. Exhibit D Reporting When you report/eliminate accounting system balances for cash at June 30 in company 8000 and 8010 or post accrual entries for cash to the fund(s) that will ultimately receive the distribution or reimburse company 8000 or 8010, a worksheet must be completed and submitted (see Exhibit D Reference 22-194). This worksheet must include all reporting/elimination entries being made to cash in company 8000 and 8010 and entries made to cash in the other fund(s) that will ultimately receive the distribution, or reimburse company 8000 and 8010. The agency initiating the elimination of company 8000 and 8010 is responsible for contacting the agency that has the fund(s) that will ultimately receive the distribution, or reimburse the company 8000 and 8010. In this case, both agencies must fill out and submit Exhibit D Reference 22-194. NOTE: Any entries made to a “due to” or “due from” must be included and submitted on Exhibit C Reference 22-193.

Receivables at June 30

When company 8000 and 8010 are used to receipt monies that will ultimately be transferred to another fund(s), agencies should record the receivable and revenue directly in the fund(s) that will ultimately receive the monies, rather than recording the receivable in company 8000 and 8010, and offsetting due to/from other funds. For any accrual entry creating a receivable or payable in company 8000 and 8010 from a distribution accrual for monies owed to or due to other funds an additional accrual must be posted to reclassify posting to the other fund.

April 16, 2014 40 22-150

CAFR POLICIES AND PROCEDURES MANUAL INTERNAL SERVICE FUND ELIMINATION

GAAP requires the elimination of internal service fund activity in the government-wide Statement of Activities and reporting the internal fund balance in the government-wide Statement of Net Position. Eliminations must be made in the Statement of Activities to remove the “doubling up” effect of internal service fund activity. Internal service fund asset, liability, and equity balances will be reported in the governmental activities column of the Statement of Net Position.

NOTE: For internal service fund billings, you will need to identify the percentage of revenues generated between internal and external parties. External parties include parties external to the reporting entity (outside state government), component units identified in section 22-030 of the manual, and fiduciary funds. For this purpose, the only fiduciary fund material to this calculation is SDRS’s pension trust fund (company 8901). For revenues from internal parties, you will need to identify billings by department and for some centers (02103, 026, 027, 029, 109, 164, and 165). Internal revenue will also need to be identified between governmental activities and business-type activities. Business-type activities include: companies 3052, 3057, 6501, 6502, 6503, 6504, 6507, 6508, 6509, 6510, 6511, 6515, 6516, 6520, and 6521.

May 1, 2013 41 22-155

CAFR POLICIES AND PROCEDURES MANUAL ACCRUAL COMPLETION DEADLINE

All accrual and completed financial statements must be entered into period 13 and supporting documents must be sent to the BFM NO LATER THAN the Accruals Completion Deadline [See Summary of Deadlines – Section 22-161]. NOTE: Any extension to this deadline must be approved by BFM prior to Accrual Completion Deadline

May 30, 2007 42 22-160

CAFR POLICIES AND PROCEDURES MANUAL SUMMARY OF DEADLINES

Description Due Date Reference

FY14 CAFR Deadline Dates

1. Matrix of Agency Responsibility 6/03/14 2. Begin Marking Payables 6/30/14 22-020

Begin marking payables during entry into Accounts Payable (AP), using the appropriate mini-chart indicator on invoice lines.

3. Lease Information 7/18/14 22-130

4. Interagency Billings

A. All central service billings and other 7/30/14 22-095

interagency billings for services provided prior to June 30, 2014 must be distributed to user agencies for payment

B. All central service billings and other 8/08/14 22-095 interagency billings for services provided prior to June 30, 2014, but not paid as of June 30, 2014 must be paid.

C. All agencies initiating interagency due 8/15/14 22-090 to/ from accrual documents (other than central service billings and “N” documents picked up centrally) must inform corresponding agencies

5. Schedule of Expenditures of 8/01/14 22-110 Federal Awards (SEFA)

6. Capital Assets 7/25/14 22-040

Capital assets with acquisition dates 22-120 through June 30, 2014 accounted for in 22-125 FY 2014 must be added to Fixed Assets System (FAS)

7. Component Unit Review 6/13/14 22-031 8. Federal Equity Reconciliation 9/08/14 22-100

Due from Federal Government Reconciliation 22-105

9. Accruals Completion 9/08/14 22-160 All accruals entered into period 13 and documents sent to the Bureau of Finance and Management

10. Statement Accrual Completion 9/15/14 22-160 All completed financial statements entered

into period 13 and documents sent to the Bureau of Finance and Management

April 16, 2014 43 22-161

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT A

July 31, 2012 44 22-191

DEPARTMENT / AGENCY 5 - 7

Executive Management

Governor's Office, Executive Operations, Lt. Governor 010

Bureau of Finance & Management 011

Bureau of Administration 012

Bureau of Information & Telecommunications 013

South Dakota Public Broadcasting 013

Bureau of Personnel 014

Revenue 020-027, 029

South Dakota State Lottery 028

Agriculture 030-032, 034

Animal Industry Board 033

Tourism 040-049

Game Fish & Parks 060-069

Tribal Relations 070-079

Social Services 080-089

Health 090-099

Labor & Regulation 100-107

Retirement 108

Transportation 110-119

Education 120-129

Public Safety 140-149

Higher Education 150-157

School for the Deaf 158

School for the Visually Handicapped 159

Military 160-169

Veteran's Affairs 170-179

Corrections 180-189

Human Services 190-199

Environment & Natural Resources 200-209

Public Utilities Commission 260-269

Unified Judicial System 270-279

Legislative Research Council 280-287

Auditor General 288

Attorney General 290-299

School & Public Lands 300-309

Secretary of State 310-319

State Treasurer 320

Investment Council 321

State Auditor 330-339

Table for Positions 5 through 7 of

Accrual Adjustments Document ID

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT B

May 30, 2007 45 22-192

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT B.1

Detail Line Screen

July 27, 2012 45.1 22-192

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT C

Click HERE for a working electronic copy of Exhibit C (Excel file).

May 1, 2013 46 22-193

Du

e T

o/F

rom

an

d T

ran

sfe

rs In

/Ou

t W

ork

sh

ee

tE

XH

IBIT

C

No

te:

1)

Co

mp

lete

fo

r each

accru

al

do

cu

men

t p

ost

ed

in

to p

eri

od

13 t

hat

co

nta

ins

en

trie

s to

"d

ue t

o",

"d

ue f

rom

", "

tran

sfers

in

", a

nd

"tr

an

sfers

ou

t" a

cco

un

ts.

2)

Fo

r each

accru

al

do

cu

men

t en

try,

list

th

e a

sso

cia

ted

acco

un

tin

g s

yst

em

do

cu

men

t n

um

bers

, if

an

y (

e.g

. N

on

cash

, JV

, In

vo

ice #

, etc

.).

Off

sett

ing

Ag

en

cy(r

eq

uir

ed

),P

ers

on

we

co

nta

cte

dD

ate

Co

mp

an

yA

ccru

al

Do

cu

me

nt

Acco

un

tin

g S

yst

em

Pro

gra

m(r

eq

uir

ed

), a

nd

o

r w

ho

co

nta

cte

d u

sco

nta

ct

Nu

mb

er

Nu

mb

er

Do

cu

me

nt

ID/s

De

scri

pti

on

Am

ou

nt

Fu

nd

Nu

mb

er(

if k

no

wn

)fo

r o

ffse

ttin

g e

ntr

yw

as

ma

de

http://www.bfm.sd.gov/CAFR/CAFR_PPM_Exhibit_C.xlsx

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT D

Clink HERE for a working electronic copy of Exhibit D (Excel file).

May 1, 2013 47 22-194

En

trie

s t

o C

om

pa

ny

80

00

an

d 8

01

0 C

as

h B

ala

nce

s a

nd

S

ub

se

qu

en

t C

as

h E

ntr

ies

in

Oth

er

Fu

nd

s W

ork

sh

ee

t

No

te:

1

) C

om

ple

te f

or

each

accru

al

do

cu

men

t p

ost

ed

in

to p

eri

od

13 t

hat

co

nta

ins

en

trie

s to

cash

fo

r th

e e

lim

inati

on

of

co

mp

an

ies

8000 a

nd

8010 b

ala

nces.

2

) C

om

ple

te f

or

each

accru

al

do

cu

men

t p

ost

ed

in

to p

eri

od

13 t

hat

co

nta

ins

en

trie

s to

cash

fo

r fu

nd

/s t

hat

ult

imate

ly r

eceiv

e t

he d

istr

ibu

tio

n o

r re

imb

urs

e w

ith

co

mp

an

y 8

000 &

8010.

3

) F

or

each

accru

al

do

cu

men

t en

try,

list

th

e a

sso

cia

ted

acco

un

tin

g s

yst

em

do

cu

men

t n

um

bers

, if

an

y (

e.g

. N

on

cash

, JV

, In

vo

ice #

, etc

.).

Off

sett

ing

Ag

en

cy(r

eq

uir

ed

),P

ers

on

we

co

nta

cte

dD

ate

Co

mp

an

yA

ccru

al

Do

cu

me

nt

Acco

un

tin

g S

yst

em

Pro

gra

m(r

eq

uir

ed

), a

nd

o

r w

ho

co

nta

cte

d u

sco

nta

ct

Nu

mb

er

Nu

mb

er

Do

cu

me

nt

ID/s

De

scri

pti

on

Am

ou

nt

Fu

nd

Nu

mb

er(

if k

no

wn

)fo

r o

ffse

ttin

g e

ntr

yw

as

ma

de

EX

HIB

IT D

http://bfm.sd.gov/cafr/cafr_ppm_Exhibit_D.xlsx

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT E

May 30, 2007 48 22-195


May 30, 2007 49 22-195


______________________________________________________________________________________ May 30, 2007 50 22-195

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT F – LIST OF LEASES

Click HERE for a working electronic copy of Exhibit F (Excel file).

May 1, 2013 51 22-196

Exh

ibit

F - L

ist o

f Lea

ses

FY:

2013

Nam

e of

Pre

pare

r:__

____

____

____

____

____

____

____

____

____

____

_P

hone

Ext

:__

____

____

____

____

____

___

Agen

cy: _

____

____

____

____

____

____

____

____

____

N -

New

W -

Wee

kly

R -

Ren

ewal

M -

Mon

thly

E -

Exte

nsio

nQ

- Q

uart

erly

A -

Ann

ualy

SA

- S

emi

Ann

ualy

Com

pany

Cen

ter

Exam

ple:

Mar

coE

- E

xten

sion

#281

104

/04/

2013

No

Equ

ip

SD

Hw

y

Pat

rol -

Verm

illio

n03

/20/

2013

04/1

5/20

1304

/14/

2014

M -

Mon

thly

54.0

0$

12

2027

1421

1230

5664

8.00

$

Kon

ica

Min

olta

Biz

hub

222,

sn

a11w

0110

1242

3

Ask

you

rsel

f if i

t is

due

to

expi

re a

nd w

hat i

s yo

ur

inte

nsio

n w

ith th

e le

ase.

Amou

nt

Is th

ere

a

buyo

ut

optio

n? I

f

yes,

how

muc

h?Le

ssor

Ince

ptio

n

Dat

e

(Dat

e si

gned

)

Beg

in L

ease

Dat

e

End

Lea

se

Dat

e

Leas

e

Ren

tal

Num

ber

Loca

tion

Not

e: I

f you

sho

w c

hoos

e

to s

how

a le

ase

that

is s

plit

betw

een

com

pani

es /

cent

ers,

then

mak

e su

re

you

show

a to

tal f

or th

at

split

.Va

lue

of

Leas

e

If le

ase

is d

ue to

expi

re, w

hat a

re y

our

inte

nsio

n?T

- T

erm

inat

ed

/ Can

celle

d

Dat

e se

nt

to B

FM

# of

Pym

ts

Freq

uenc

y of

Pay

men

ts

& A

mou

nt

Des

crip

tion

/

Mod

el /

Ser

ial

Num

ber

Is th

is

Ren

tal

Equi

p or

Ren

tal

Spa

ce /

Land

http://bfm.sd.gov/cafr/CAFR_PPM_Exhibit_F.xlsx

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT G – IDENTIFYING AND CLASSIFYING PAYABLES FOR THE STATE’S CAFR

General definition: Any time goods or services are received prior to June 30 but not paid for until the next fiscal year (after June 30), you should record a payable for the year-end

accruals.

Example: Agency X prepares a purchase order for 10 widgets. The 10 widgets are received on June 23rd

by the agency receiving clerk. The receiving clerk verifies that the agency has

received all 10 widgets then marks on the purchase order the actual date the 10 widgets were received (June 23). The purchase order then is submitted to the agency’s claims clerk to be

paid. The claims clerk holds the purchase order until an invoice is received from the widget company. On July 2nd

, an invoice is received by the claims clerk for the 10 widgets that

were received on June 23rd

. Payment is then made for the 10 widgets. The claims clerk should mark the EXP field on the line of coding used to pay the invoice with the proper mini-

chart indicator.

NOTE #1: Purchase Orders must be marked with the date goods or services are actually received.

NOTE #2: If the payable type is “Due to other Governments” use payable indicator 230. If it is not, use the appropriate account (211-218).

Payable Type Payable

Indicator

Definition

Accounts Payable 211 A short-term liability account reflecting amounts owed to private persons or organizations for goods and services

received by a government.

Judgments

Payable

212 Amounts owed as the result of administrative or court decisions, including workers’ compensation, unemployment,

improper arrests, property damage, and condemnation awards.

Contracts Payable 213 Amounts due under contractual agreements entered into for goods or services furnished to a government.

Grants Payable 215 Amount owed by the government reporting entity to an individual or entity under terms of state or federal grant

agreement. Generally, the account coding should be 5206XXX.

Loans Payable 216 Generally this payable indicator should not be used. Contact BFM if you intend on using this payable indicator.

Notes Payable 217 Generally this payable indicator should not be used. Contact BFM if you intend on using this payable indicator.

Escrows Payable 218 Generally this payable indicator should not be used. Contact BFM if you intend on using this payable indicator.

Due to Other

Governments

230 Amounts owed by the government reporting entity to another government (example: federal government, cities and

towns, counties, school districts, vocational schools, and quasi governments), for both vendor and non-vendor

services.

June 19, 2009 52 22-197

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT G.1 – LIST OF OTHER GOVERNMENTS

230 - Due to Other Government

Mini Chart Indicator Listing

All Counties, Cities, and Townships and departments of these entities are to be treated as an other government

All Public School Districts are to be treated as an other government

All Conservation Districts are to be treated as an other government

All departments and agencies of other states outside of the state of South Dakota are to be treated as an other government

All departments of the federal government and are to be treated as an other government

Name of Other Government

ALLIED BUSINESS SCHOOLS INC

PARKER VFD

AMERICAN CREEK CONSERVATION

PORCUPINE DAY SCHOOL

AMERICAN HORSE SCHOOL-BIA

RAPID VALLEY VOLNTR FIRE DEPT

ANDES CENTRAL SCHOOL

RED CLOUD INDIAN SCHOOL

BIA PINE RIDGE SCHOOL

REDFIELD PUBLIC SCHOOL

BLACK HILLS COUNCIL LOCAL GOVT

ROCKY MOUNTAIN BIRD OBSERVATRY

BLACK HILLS SPECIAL SERVICES COOP

ROSEBUD SIOUX TRIBE

BUSHNELL VILLAGE

SD PARKS & WILDLIFE FOUNDATION

CHEYENNE RIVER SIOUX TRIBE

SECOG

CIVIL AIR PATROL

SOUTHEAST AREA COOPERATIVE

COLORADO COMMUNITY CLGE SYSTM

SOUTHEAST TECHNICAL INSTITUTE

CRAZY HORSE SCHOOL

STANDING ROCK SIOUX TRIBE

DAKOTA CENTRAL RC&D

TERRY TROJAN WATER DISTRICT

EAST DAKOTA EDUCATIONAL COOP

UNIVERSITY MISSOURI - COLUMBIA

EAST DAKOTA WATER DEVELOPMENT

UNIVERSITY OF FLORIDA

FIRST DISTRICT ASSN OF LOCAL GOVT

UNIVERSITY OF IDAHO (OSP)

FLORIDA METROPOLITAN UNIVERSITY

UNIVERSITY OF NEBRASKA-REGENTS

GRANT ROBERTS AMBULANCE INC

UNIVERSITY OF NEVADA-RENO

JAMES RIVER WATER DEVELOPMENT

UNIVERSITY OF NORTH DAKOTA

JAVA-TOWN OF

UNIVERSITY OF WISCONSIN

LAKE AREA MULTI-DISTR VOC CTR

US DEPT OF INTERIOR GEOLOGICAL

LAKE AREA TECHNICAL INSTITUTE

US POSTAL SERVICE

LAKOTA OYATA WAKANYEJA OWICAKI

USDA FOREST SERVICE

LITTLE WOUND SCHOOL INC

USDI-BUREAU OF LAND MANAGEMENT

LOWER BRULE SIOUX TRIBE

USGS SD WATER SCIENCE CENTER

MITCHELL TECHNICAL INSTITUTE

USPFO FOR SOUTH DAKOTA

ND DEPT OF CORRECTIONS & REHAB

VA BLACK HILLS HEALTHCARE SYST

NEBRASKA PUBLIC POWER DISTRICT

WEST RIVER WATER DEV DISTRICT

NORTH CENTRAL SPECIAL ED CO-OP

WESTERN DAKOTA TECHNICAL INST

NORTHEAST ED SERV CO-OP 28-201

YANKTON SIOUX TRIBE

NORTHEAST COUNCIL GOVERNMENTS

NORTHWEST AREA SCHOOLS

May 1, 2013 54 22-197

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT G.1 – LIST OF OTHER GOVERNMENTS

Component Units are not Other Governments Component units should be treated as a Due to Component Unit/Due from Component Unit

State of South Dakota Component Units DO NOT mark as 230 Other Governments BLACK HILLS STATE UNIVERSITY

BOARD OF REGENTS

DAKOTA STATE UNIVERSITY

NORTHERN STATE UNIVERSITY

SOUTH DAKOTA SCHOOL OF MINES &

TECHNOLOGY

SOUTH DAKOTA STATE UNIVERSITY

UNIVERSITY OF SOUTH DAKOTA

UNIVERSITY OF SOUTH DAKOTA CENTER FOR

DISABILITIES

Private Businesses that are Commonly Mistaken as an Other Government MID-DAKOTA RURAL WATER SYSTEMS

MONTANA DAKOTA UTILITIES

BLACK HILLS POWER

May 1, 2013 54.1 22-197

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT H – EXCEPTIONS TO THE FOUR DIGIT CENTER LEVEL FOR ACCRUAL ENTRY

Exhibit H has been removed due to implementation of GASB 54.

Starting FY12, the center coding for accrual entries must be entered to a minimum of 10 digits. Digits 8, 9 and 10 represent the funding source code which is needed by BFM to break out the equity by funding source code.

Please see section 22-035 for more information

August 1, 2012 55 22-198

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT I – Component Unit Worksheet

Click HERE for a working electronic copy of Exhibit I (Excel file).

May 1, 2013 56 22-199

AG

EN

CY

:F

Y:

Po

ten

tial C

om

po

ne

nt

Un

it N

am

eB

rie

f D

escri

pti

on

To

tal A

sse

ts -

En

d

of

Fis

cal Y

ear

To

tal F

iscal Y

ear

Re

ve

nu

e

Asse

ts >

$5,0

00,0

00?

Ye

s o

r N

o.

If Y

es S

ee

No

te B

elo

w

Re

ve

nu

e >

$1,0

00,0

00?

Ye

s o

r N

o.

If Y

es, S

ee

No

te B

elo

w

Re

su

lts o

f F

low

Ch

art

(Part

of P

G, D

iscre

te,

Ble

nd, or

Rela

ted)

1 2 3 4 5 6 7 8 9

10

11

12

13

14

15

16

17

18

19

20

No

te: If

asse

ts a

re g

rea

ter

tha

n $

5,0

00

,00

0 a

nd

/ o

r if r

eve

nue

s a

re g

rea

ter

tha

n $

1,0

00

,00

0 the

n c

om

ple

te a

nd

sub

mit flo

wcha

rt a

nd

re

co

rd r

esults

ab

ove

.

EX

HIB

IT I

De

term

inin

g W

he

the

r C

ert

ain

Org

aniz

atio

ns A

re C

om

po

ne

nt

Units -

Wo

rkshe

et

http://bfm.sd.gov/cafr/CAFR_PPM_Exhibit_I.xlsx

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT J – COMPONENT UNIT FLOWCHART

Note: A potential component unit for which a primary government is financially accountable may be fiscally dependent on and have a financial benefit or burden relationship

with another government. An organization should be included as a component unit of only one reporting entity. Professional judgment should be used to determine the most

appropriate reporting entity. A primary government that appoints a voting majority of the governing board of component unit of another government should make the disclosures required by paragraph 68 for related organizations.

July 26, 2012 57 22-200

NO

NO NO

YES

YES

NO NO NO

YES

YES

YES

NO

NO

YES

YES

NO

YES

Is the PCU legally

separate?

Does the PG hold the PCU’s

corporate powers?

Not part of

the PG

Part of this PG

Does the PG appoint

a voting majority of

the PCU’s board?

Does the PCU

meet the fiscal

dependency and

financial

benefits/burden

criteria?

Would it be misleading

to exclude the PCU?

The PCU is not a

CU of the

reporting entity.

(See JV reporting

requirements)

Related

organization

note

disclosure

Is there a financial

benefit/burden

relationship?

OR

Is the PG able to

impose its will on

the PCU?

Does the CU meet

the criteria of

paragraph 40a?

Blend

Does the CU meet any of the

blending criteria of paragraph

53a, b, or c?

Discrete

presentation

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT K – DUE FROM OTHER GOVERNMENT CALCULATION & FEDERAL EQUITY RECONCILIATION

Click HERE for a working electronic copy of Exhibit K (Excel file).

May 1, 2013 58 22-201

AG

EN

CY

:

CO

MP

AN

Y:

BC

DE

FG

HI

KM

Fu

nd

ing

Po

ole

d c

ash

Ce

ntr

all

y P

ost

ed

Ce

ntr

all

y P

ost

ed

Ag

en

cy

Ag

en

cy

Lu

mp

Su

mL

oca

lF

ee

Ba

seR

ate

Ind

ire

ct

Am

ou

nt

So

urc

eG

ran

t 06/3

0/2

0x

xA

ccru

ed

Accru

ed

Po

ste

dP

ost

ed

Gra

nt

Ba

nk A

cct

Ne

tA

cti

vit

y:

Ba

seC

ost

Du

e F

rom

Eq

uit

y

Co

de

De

scri

pti

on

Typ

eB

ala

nce

Pa

ya

ble

sR

ece

iv /

Ca

shA

ccr

Pa

ya

ble

sA

ccr

Re

ce

ivD

efe

rre

d R

ev

6/3

0/2

0x

xB

ala

nce

No

t G

ran

tR

eim

b.

Po

ol

Fe

ds

Inve

nto

ryP

re-p

aid

sB

ala

nce

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

TO

TA

L-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1261100

1310000

1510000

3220000

Due F

rom

Oth

1320000

1520000

Fund E

quity

Govts

- F

ed

1529000

Invento

ry types

Pre

paid

types

Lis

t fe

dera

l re

ceiv

able

poste

d b

y a

gency:

Doc ID

Fundin

g

Sourc

e C

ode

am

ount

INS

TR

UC

TIO

NS

:

Ente

r all

dolla

r am

ounts

as D

R o

r C

R

AE

nte

r th

e fund s

ourc

e (

positio

ns 8

-10 in t

he c

ente

r fie

ld)

& its

description

Ente

r th

e G

rant

type:

Reim

burs

em

ent,

Fee,

Rate

, O

ther

Tota

l 1261100 p

oste

d0.0

0 (

this

will

zero

out

K's

tota

l)

BE

nte

r th

e p

oole

d c

ash b

ala

nce for

period 1

2.

0.0

0 c

heck

CE

nte

r th

e c

entr

ally

poste

d a

ccru

ed p

ayable

s for

each fund s

ourc

e

DE

nte

r th

e c

entr

ally

poste

d a

ccru

ed r

eceiv

able

s/c

ash for

each fund s

ourc

e

EE

nte

r th

e a

gency p

oste

d a

ccru

ed p

ayable

s for

each fund s

ourc

e (

do n

ot

inclu

ded n

egative

cash loan f

rom

genera

l fu

nd in t

his

calc

ula

tion

)

FE

nte

r th

e a

gency p

oste

d a

ccru

ed r

eceiv

able

s/c

ash for

each fund s

ourc

e (

this

should

not

inclu

de e

ntr

ies p

oste

d a

s f

edera

l re

ceiv

ab

les

)

GE

nte

r th

e a

gency p

oste

d a

ccru

al fo

r adva

nce d

raw

dow

ns o

r up fro

nt

gra

nts

as d

efe

rred r

eve

nue

HE

nte

r th

e b

ala

nce o

f lo

cal bank a

ccounts

as o

f 6/3

0/2

0xx

IN

et

bala

nce (

form

ula

: s

um

of B

, C

, D

, E

, F

, G

, H

)

JR

eport

adju

stm

ents

: t

hese a

re a

mounts

that

need t

o b

e e

limin

ate

d fro

m t

he N

et

bala

nce a

s t

hey a

re ite

ms t

hat

are

not

due fro

m t

he federa

l gove

rnm

ent

w w

ill n

eed t

o b

ack o

ut

the e

ntr

ies/b

ala

nces for:

F

ee B

ase A

ctivi

ty;

Rate

Base R

eim

burs

em

ents

; In

direct

Cost

Pool

KThis

will

be t

he a

mount

that

will

be r

ecord

ed a

s "

Due F

rom

Federa

l G

ovt

" (form

ula

: s

um

of I &

Js)

w if your

agency d

oes m

ultip

le d

ue fro

m fed e

ntr

ies t

his

will

equal th

e t

ota

l of all

the e

ntr

ies

LThese a

re o

ther

non-c

ash ite

ms t

hat

will

cause a

n e

quity b

ala

nce

w w

ill n

eed t

o inclu

de b

ala

nces/a

ccru

als

for

inve

nto

ry a

nd p

re-p

aid

ite

ms

MThis

will

be t

he a

mount

that

will

equal th

e e

quity b

ala

nce for

the C

om

pany (

form

ula

: K

min

us I m

inus t

he s

um

of L's

)

DU

E F

RO

M F

ED

ER

AL

GO

VE

RN

ME

NT

CA

LC

UL

AT

ION

& F

ED

ER

AL

EQ

UIT

Y R

EC

ON

CIL

IAT

ION

JL

A

http://bfm.sd.gov/cafr/cafr_ppm_Exhibit_K.xlsx

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT L – Proprietary Fund Additional Entries

April 16, 2014 59 22-202

Sale of Capitalized Asset (w ith gain)

Cash Basis Transaction

Debit Credit

1131000 Pooled Fund Cash 1,000.00

4938000 Proceeds from Sale of Capital Assets (1,000.00)

Accrual Basis Reclassif ication Entry

Debit Credit

4938000 Proceeds from Sale of Capital Assets 1,000.00

1650000 Machinery and Equipment (10,000.00)

1750000 Accumulated Depreciation - Machinery 9,500.00

4920015 Gain on Disposal of Assets (500.00)

Sale of non-capitalized asset


Debit Credit

1131000 Pooled Fund Cash 1,000.00

4938000 Proceeds from Sale of Capital Assets (1,000.00)


Debit Credit

4938000 Proceeds from Sale of Capital Assets 1,000.00

4920015 Gain on Disposal of Assets (1,000.00)

Sale of Capitalized Asset (w ith loss)


Debit Credit

1131000 Pooled Fund Cash 400.00

4938000 Proceeds from Sale of Capital Assets (400.00)


Debit Credit

4938000 Proceeds from Sale of Capital Assets 400.00

1650000 Machinery and Equipment (10,000.00)

1750000 Accumulated Depreciation - Machinery 9,500.00

5228040 Loss on Disposal of Assets 100.00

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT M - Required entries for assets added to FAS after the deadline but for the current CAFR fiscal year

Click HERE for a working electronic copy of Exhibit M (Excel file).

April 16, 2014 60 22-203

Ca

pit

al

Ass

ets

La

te A

dd

En

try

Lin

eC

om

pany

Account

Account

Desc

Cente

rD

esc 1

D

esc 3

Am

ount

DR

/CR

1P

roper

Asset

Account

XXXXXG

WD

R

2P

roper

A/D

Account

XXXXXG

WC

R

35228030

Depre

cia

tion E

xpense

Curr

ent

Year

Depre

cia

tion

NO

RE

VG

WD

R

45207XXX

Capital O

utlay E

xpense

NO

RE

VG

WC

R

53320000

Unre

str

icte

d N

et

Assets

Inve

ste

d in C

apital A

ssets

XXXXXG

WD

R

63300100

Net

Inve

ste

d in C

apital A

ssets

Inve

ste

d in C

apital A

ssets

XXXXXG

WC

R

Lin

e 1

To p

ost

asset

cost

to p

roper

asset

account

Lin

e 2

To p

ost

accum

ula

ted d

epre

cia

tion e

xpense t

o p

roper

account

Lin

e 3

To p

ost

depre

cia

tion e

xpense for

the c

urr

ect

(CA

FR

) F

Y

Lin

e 4

To p

ost

capital outlay e

xpense in p

roper

account

Lin

es 5

- 6

Entr

y t

o r

efle

ct

endin

g C

IP in p

roper

net

inve

stm

ent

in c

apital assets

accounts

http://bfm.sd.gov/cafr/cafr_ppm_Exhibit_M1.xlsx

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT M - Required entries for assets added to FAS after the deadline but for the current CAFR fiscal year

Click HERE for a working electronic copy of Exhibit M (Excel file) – depreciation schedule.

April 16, 2014 60.1 22-203

Depreciation Schedule

Asset Number

Cost Salvage Useful Life FY14

Jul-13

Aug-13

Yearly Depr Mon Depr Sep-13

- - Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14

0.00

http://bfm.sd.gov/cafr/cafr_ppm_Exhibit_M2.xlsx

CAFR POLICIES AND PROCEDURES MANUAL EXHIBIT N – CIP Schedule and Entry

Click HERE for a working electronic copy of Exhibit N (Excel file).

April 16, 2014 61 22-204

FY

14 C

IP S

CH

ED

UL

E

Pri

or

Pe

rio

d

Pri

or

Pe

rio

d

FY

13

FY

14 T

ota

lE

xp

en

sed

CIP

FY

14 C

IP B

efo

reF

ixe

d A

sse

tD

ecre

ase

Incre

ase

En

din

g

Ass

et

Typ

eD

esc

rip

tio

nE

nd

ing

Co

sts

Co

sts

Ad

dit

ion

sC

ap

ita

liza

tio

nA

DD

ITIO

NS

Ad

just

me

nts

Ad

just

me

nts

FY

14 C

IP

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

-$

-

$

-

$

Tota

ls-

$

-$

-$

-

$

-

$

-

$

-$

-$

-$

-$

m

ust

equal zero

Co

ns

tru

cti

on

in

Pro

gre

ss

at

6/3

0/1

4

Lin

eC

om

pa

ny

Acco

un

tA

cco

un

t D

esc

Ce

nte

rD

esc

1

De

sc 3

Am

ou

nt

DR

/CR

11680000

Constr

uction In P

rogre

ss

Begin

nin

g C

IPXXXXXG

W-

DR

23300000

Begin

nin

g N

et

Positio

nB

egin

nin

g C

IPXXXXXG

W-

CR

31680000

Constr

uction In P

rogre

ss

Additio

ns t

o C

IPXXXXXG

W-

DR

45207XXX

Capital O

utlay E

xpenditure

sA

dditio

ns t

o C

IPN

OR

EV

GW

-

C

R

55207XXX

Capital O

utlay E

xpenditure

sD

ele

tions fro

m C

IPN

OR

EV

GW

-

C

R

61680000

Constr

uction In P

rogre

ss

Dele

tions fro

m C

IPXXXXXG

W-

DR

73320000

Unre

str

icte

d N

et

Assets

Inve

ste

d in C

apital A

ssets

XXXXXG

W-

DR

83300100

Net

Inve

ste

d in C

apital A

ssets

Inve

ste

d in C

apital A

ssets

XXXXXG

W-

CR

Lin

es 1

- 2

Entr

y t

o load b

egin

nin

g b

ala

nces for

CIP

Lin

es 3

- 4

Entr

y t

o e

limin

ate

curr

ent

year

capital outlay e

xpenses a

gain

st

CIP

Lin

es 5

- 6

Entr

y t

o r

efle

ct

move

ment

out

of C

IP t

o t

he F

AS

in c

urr

ent

FY

Lin

es 7

- 8

Entr

y t

o r

efle

ct

endin

g C

IP in p

roper

net

inve

stm

ent

in c

apital assets

accounts

http://bfm.sd.gov/cafr/cafr_ppm_Exhibit_N.xlsx