02-a-008 - Processing of Interfund Reimbursements in Compliance with GAAP (January 11, 2002)
|INFORMATIONAL CIRCULAR NO. 02-A-008|
|DATE:||January 11, 2002|
|SUBJECT:||Processing of Interfund Reimbursements in Compliance with GAAP|
|A & R CONTACT:||Suzie Yeh||(785) 296-3314||(firstname.lastname@example.org)|
|SUMMARY:||This document describes the appropriate transaction codes and procedures to record interfund reimbursements.|
As the Division of Accounts and Reports continues its efforts to publish the State of Kansas Annual Financial Report under the authority of Governmental Accounting Standards Board (GASB) Statement No. 34 and in compliance with Generally Accepted Accounting Principles (GAAP), this informational circular provides guidelines to all state agencies for recording interfund reimbursements related to prior expenditures occurring in the current fiscal year.
As directed in paragraph 112 of GASB 34, interfund reimbursements are defined as "repayments from the fund responsible for particular expenditures or expenses to the fund initially paid". Common examples of this type of interfund transaction are utility or phone charges in which one agency issues a warrant to pay outside vendors while distributing billings to and collecting payments from agencies or sub-divisions (in a centralized environment where business office issues one warrant) users. Other related examples would be agencies sharing the same rental facilities, computer online services or publication purchases. Whether inter-agency or intra-agency in nature, these repayments from the agencies or sub-divisions are not to be treated as revenues but as a reduction of expenditures. The appropriate procedure to record such non-reciprocal activity and non-revenue receipts requires the use of transaction code 631 (recorded in current fiscal year) or 637 (budget level) with the expenditure sub-obj code which was initially used in making the payment. A letter "R" is NOT required in the receipt funding line to represent a negative amount. Furthermore, the use of revenue sub-obj code 6211 is no longer recommended. It is anticipated that revenue sub-obj code 6211 will be phased out in the near future as the result of implementing this change.
Journal vouchers to correct transactions processed during fiscal year 2002 should be submitted to the Central Accounting Services Section, Division of Accounts and Reports or initiated at the agency level through the SOKI3+ system.
Your cooperation is greatly appreciated.