FY 2001

DATE:	June 30, 2000
SUBJECT:	FY 2001 Central Motor Pool Compact Car Rate
EFFECTIVE DATE:	July 1, 2000
A & R CONTACT:	Audit Services Team - Randy Kennedy	(785) 296-2125	(Randy.Kennedy@state.ks.us)
	Leroy Charbonneau	(785) 296-2255	(Leroy.Charbonneau@state.ks.us)
	Shirley Gilchrist	(785) 296-2882	(Shirley.Gilchrist@state.ks.us)
	Mark Handshy	(785) 296-7021	(Mark.Handshy@state.ks.us)
APPROVAL:
SUMMARY:	Effective July 1, 2000, Central Motor Pool has increased the compact car rate, thereby increasing the reimbursement rate for employees choosing to drive a private vehicle when a state car is available.

K.A.R. 1-18-1a establishes the private vehicle mileage reimbursement rates for employees traveling on official business. Subsection (d)(3) provides that if an employee chooses to use a privately-owned vehicle when a state-owned or leased vehicle is available shall be reimbursed at the central motor pool rate for compact cars. For FY 2001, this rate has been established at 25 cents per mile.

The complete schedule of new motor pool rates will be distributed to all state agencies in a memorandum from the Division of Facilities Management.

Please communicate this information to all affected employees of your agency.

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DATE:	June 30, 2000
SUBJECT:	Revised Reference Materials Pertaining to Employee Travel Reimbursement
EFFECTIVE DATE:	July 1, 2000
A & R CONTACT:	Audit Services Team - Randy Kennedy	(785) 296-2125	(Randy.Kennedy@state.ks.us)
	Leroy Charbonneau	(785) 296-2255	(Leroy.Charbonneau@state.ks.us)
	Shirley Gilchrist	(785) 296-2882	(Shirley.Gilchrist@state.ks.us)
	Mark Handshy	(785) 296-7021	(Mark.Handshy@da.state.ks.us)
APPROVAL:
SUMMARY:	Notification that the Employee Travel Expense Reimbursement Summary (travel tri-fold), and On-line Employee Travel Expense Reimbursement Handbook, and Policy and Procedure Manual Filing 3,903 have been revised to reflect the FY 2001 Central Motor Pool compact car rate which is effective July 1, 2000.

The Employee Travel Expense Reimbursement Summary (travel tri-fold) has been revised to reflect the FY 2001 Central Motor Pool compact car rate. This document is available at http://www.da.ks.gov/ar/employee/travel/. Please destroy any remaining copies of the FY 2000 document. You may copy this document and distribute to your employees as you choose.

The On-line Employee Travel Expense Reimbursement Handbook has also been revised to reflect the FY 2001 Central Motor Pool compact car rate. Policy and Procedure Manual Filing 3,903 continues to include a link to the on-line version of this document. You may access these two documents at http://www.da.ks.gov/ar/employee/travel/travbk.htm and http://www.da.ks.gov/ar/ppm/ and distribute throughout your organization as you choose.

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DATE:	July 10, 2000
SUBJECT:	Private Vehicle Mileage
EFFECTIVE DATE:	July 15, 2000
A & R CONTACT:	Randy Kennedy	(785) 296-2125	(randy.kennedy@state.ks.us)
	Leroy Charbonneau	(785) 296-2255	(leroy.charbonneau@state.ks.us)
	Shirley Gilchrist	(785) 296-2882	(shirley.gilchrist@state.ks.us)
	Mark Handshy	(785) 296-7021	(mark.handshy@state.ks.us)
APPROVAL:
SUMMARY:	Private Vehicle Mileage Reimbursement Rates Increasing Effective July 15, 2000.

A temporary regulation has been enacted to amend K.A.R. 1-18-1a. This regulation is effective July 15, 2000, and establishes reimbursement rates for privately owned vehicles as follows:

• 16¢ per mile for privately owned motorcycle
• 32.5¢ per mile for privately owned automobile
• 44¢ per mile for privately owned airplane
• 44¢ per mile for privately owned specially equipped vehicle for the physically disabled. (Examples of specially equipped vehicles include, but are not limited to, those equipped with hand controls or lift devices. Other situations may be evaluated on a case-by-case basis if you are uncertain about the applicability of this rate.)

Please note that the provision to reimburse mileage at the central motor pool rate for compact cars remains in effect for any state employee choosing to use a privately owned automobile, when a state-owned or leased vehicle is available for use. For FY 2001, this rate has been established by Central Motor Pool at 25¢. The complete schedule of motor pool rates was distributed to all state agencies in a June 30, 2000 memorandum from the Central Motor Pool Director.

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DATE:	July 14, 2000
SUBJECT:	Revised Reference Materials Pertaining to Employee Travel Reimbursement
EFFECTIVE DATE:	July 15, 2000
A & R CONTACT:	Audit Services Team - Randy Kennedy	(785) 296-2125	(Randy.Kennedy@state.ks.us)
	Leroy Charbonneau	(785) 296-2255	(Leroy.Charbonneau@state.ks.us)
	Shirley Gilchrist	(785) 296-2882	(Shirley.Gilchrist@state.ks.us)
	Mark Handshy	(785) 296-7021	(Mark.Handshy@state.ks.us)
APPROVAL:
SUMMARY:	Notification that the Employee Travel Expense Reimbursement Summary (travel tri-fold), and On-line Employee Travel Expense Reimbursement Handbook, and Policy and Procedure Manual Filing 3,903 have been revised to reflect the revised private vehicle mileage reimbursement rates effective July 15, 2000 and the new Business Travel Card Program vendor.

The Employee Travel Expense Reimbursement Summary (travel tri-fold) has been revised to reflect the revised private vehicle mileage reimbursement rates that are effective July 15, 2000. This document is available at http://www.da.ks.gov/ar/employee/travel/. Please destroy any remaining copies of the previous document. You may copy this document and distribute to your employees as you choose.

The On-line Employee Travel Expense Reimbursement Handbook has also been revised to reflect the revised private vehicle mileage reimbursement rates and the new Business Travel Card Program vendor. Policy and Procedure Manual Filing 3,903 continues to include a link to the on-line version of this document. You may access these two documents at http://www.da.ks.gov/ar/employee/travel/travbk.htm and http://www.da.ks.gov/ar/ppm/ppm03903.pdf and distribute throughout your organization as you choose.

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DATE:	August 4, 2000
SUBJECT:	Budgetary Worksheet Reports
EFFECTIVE DATE:	Immediate
A & R CONTACT:	Customer Services Team	(785) 296-2311
APPROVAL:
SUMMARY:	Transmittal of budget worksheet reports for preparation of fiscal year 2002 budget.

Enclosed are three budget worksheet reports prepared from the records of the Division of Accounts and Reports as well as a listing of your agency's summary sub-accounts titled Corresponding Budget Units for Summary Sub Accounts. [enclosures mailed to agencies with hard copies of circular]   A brief explanation of the budget worksheet reports follows.

The budget worksheets have a category of expenditures listed as an informational total titled "Non-Reportable Expenditures". Non-reportable expenditures have been defined by the Division of the Budget as expenditures which represent duplication within an agency's budget. The following expenditures shown on the DA-406 budget worksheet, if made from other than the State General Fund (1000), are classified as non-reportable.

5150 -- Local City-County Sales Tax Payments
5170 -- State Aid to Other State Agencies
5180 -- Local City-County Transient Guest Tax Payments
All -- 7XXX Primary Classification Object Codes

The first two enclosed reports (DA-406 and DA-410 worksheets) contain budgetary expenditures for fiscal year 2000 classified by program and by object of expenditure. These reports can be used by the agency in preparing the "Expenditures" form (DA-406) and the "Plan for Financing" form (DA-410) for submission to the Division of the Budget, as part of the fiscal year 2002 budget. The third report (DA-404 worksheet) can be used in preparing the "Resource Estimate by Fund" (form DA-404) for the fiscal year 2002 budget.

The expenditures shown in the DA-406 and DA-410 worksheet reports conform to the definition of expenditures used for budget purposes; i.e., "all expenses, liquidated and unliquidated encumbrances, that were charged against an agency's funds during the particular fiscal year regardless of the fiscal year in which cash disbursements for these expenses were made". Expenditures reported for fiscal year 2000 include the outstanding encumbrances at June 30, 2000, reported on your "List(s) of Outstanding Obligations" (form DA-118), printers requisitions, unpaid purchase orders, contract cover sheets, as well as the actual cash disbursements charged to the fiscal year. The combination of actual cash expenditures and unpaid encumbrances at June 30 represents the total budgetary expenditures.

Reappropriations of savings were authorized by the 2000 legislature. These Kansas Savings Incentive Program (KSIP) reappropriations are reflected as separate summary sub-accounts in the Budget worksheets for both appropriated and special Revenue funds.

If errors in program or object classification have been made in either cash expenditures or the coding of outstanding encumbrances, it will be necessary for the agency to correct those errors prior to preparing fiscal year 2000 expenditure data for inclusion on all of the forms (DA-402, DA-404, DA-406, DA-410 and DA-412) of the fiscal year 2002 budget submission.

____________________________
Dale Brunton, Acting Director
Division of Accounts and Reports

______________________________
Mr. Duane A. Goossen, Director
Division of the Budget

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The explanation for appropriations made from the State General Fund (1000), Children's Initiatives Fund (2000), State Budget Stabilization Fund (2295), Flexible Spending Fund (2555), Kansas Endowment for Youth Fund (7000), Kansas Educational Building Fund (8001), State Institutions Building Fund (8100), Kansas Special Capital Improvements Fund (8110), and the Correctional Institutions Building Fund (8600) follows:

The explanation of items applicable to agency Special Revenue Funds follows:

DATE:	August 4, 2000
SUBJECT:	Credit Card Acceptance Questionnaire
EFFECTIVE DATE:	N/A
A & R CONTACT:	Jerry Serk	(785) 296-2318	(Jerry.Serk@state.ks.us)
APPROVAL:
SUMMARY:	Credit Card Acceptance Questionnaire

Bids have been received on a contract to provide a credit card acceptance program for all state agencies. A Procurement Negotiating Committee (PNC) comprised of representatives from the Office of State Treasurer, Division of Purchases and the Division of Accounts and Reports is currently studying the bid proposals.

A survey was mailed to all state agencies in September 1999 to determine their credit card needs. The results of that survey disclosed 13 agencies currently accepting credit cards and an additional 27 agencies with a desire to implement credit card programs. However, the 2000 Legislative Session enacted a law (House Bill No. 2323) that makes it mandatory for all state agencies to accept credit cards after June 30, 2001. This law also allows agencies to impose a fee to recover the actual amount of any cost incurred for accepting credit card payments. Because of this law, the Credit Card Acceptance PNC needs to obtain additional information to assist us in determining how to structure the State's response to the bid proposals.

We would appreciate your taking the time to complete the following questions as they pertain to your agency.

Note: Due to limited time constraints, please submit your response to these questions no later than August 9, 2000

.

Agency Number or Name:

Question 1

House Bill 2323 allows, but does not require, the imposition of a fee to recover the cost of accepting credit cards.  Would your agency be willing to absorb a 2 - 3% discount fee for the convenience of accepting credit cards? If you have more than one program or source of fees, tuition or other charges, please list them separately if the response is different for different programs.

Question 2

Do you currently have, or are you planning to develop a website or interactive voice response (IVR) system to allow your customers to pay fees or charges in a non face-to-face environment? If so, please describe.

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DATE:	August 28, 2000
SUBJECT:	Business Travel Card Program
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Nickie Roberts	(785) 296-7917	(nickie.roberts@state.ks.us)
	Tim Hund	(785) 368-6347	(tim.hund@state.ks.us)
APPROVAL:
SUMMARY:	Business Travel Accounts

Use of Business Travel Accounts

• As stated in Informational Circular No. 00-A-020, Business Travel Accounts (BTAs) are restricted to the purchase of transportation tickets when purchased from the State Travel Center for official travel.

• BTAs may not be used for the purchase of transportation tickets from Internet vendors.

• Please distribute this information to all appropriate individuals in your organization who may have access to the BTA number.

Payment Information 

• Please use the following vendor number when paying UMB Bank's monthly BTA billing(s):

  - The vendor number for UMB Bank per the STARS vendor file

  - Vendor suffix "06" for all BTA billings

• Agencies are strongly encouraged to use the ACH payment option. Please note that if your agency uses the ACH payment option, it is important that only one control account be paid per voucher. In other words, if your agency receives multiple monthly billings from UMB Bank, it is important that billings not be combined on one payment voucher.
• To ensure correct application of electronic payments by UMB Bank, remittance information must be included in the first STARS funding line in the "invoice" field. The format for the invoice field should be:
  
  BTA 12345678
  
  "12345678" represents the last 8 digits of your agency's VISA BTA number to which the payment is to be posted.

Questions

Please refer to the Business Travel Card website (http://www.da.ks.gov/ar/genacct/audit/BTC.htm) for answers to commonly asked questions about BTAs. Also, feel free to contact our staff if you have additional questions.

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DATE:	September 27, 2000
SUBJECT:	Warrant Images
EFFECTIVE DATE:	October 1, 2000
A & R CONTACT:	Bill Perry	(785) 296-7217	( bill.perry@da.state.ks.us)
APPROVAL:
SUMMARY:	Requesting Warrant Images From the Federal Reserve

Agencies have requested warrant images directly from the Federal Reserve Bank of Kansas City (FRB) since October 1997. During fiscal year close, it came to our attention that the FRB had significantly increased the cost to the Division of Accounts and Reports for each warrant image provided to state agencies based on the service level selected nearly three years ago.

In seeking a more cost-effective service option for the warrant image retrieval service, the Division of Accounts and Reports has requested that the service schedule be amended for warrant image retrievals effective October 1, 2000. Under the new agreement, all FAX image requests received by 2:00 P.M. will be returned to the requestor by the end of the next business day. While this means the warrant images will not be received in exactly the same time frame that agencies have become accustomed, we believe that selection of this service option will allow the State of Kansas to retain the convenience of the FRB image retrieval service while taking advantage of a significant cost savings with only a slight change in the service level.

Agencies should continue to use Form AR-70, Request for Warrant Image. All requests must be made by FAX to the number shown on the form - no telephone calls will be accepted by the FRB.

The following information must be completed on each request:

Date - The date you are requesting the warrant image.

Agency Number - Your three-digit STARS agency number.

Agency Name - The name of your agency.

Agency Contact - The name of the person making the request. This is the person who will be contacted for additional information or clarification if problems are encountered in retrieving the warrant image.

Phone (Voice) - This is the agency contact's telephone number.

Please return images to the following FAX number - This is the fax machine number to which the FRB should transmit the images. You may use a different FAX number on each request submitted, but all images requested on a form will be returned to the same FAX number shown on the form.

Warrant Number - This is the warrant type followed by the seven digit warrant number. A list of the valid warrant types is shown at the bottom of Form AR-70. In order to retrieve a warrant image, this field must be eight digits, and must be shown with the warrant type first.

Warrant Amount - The amount of the warrant.

Warrant Paid Date - This is the date the warrant was redeemed by the State Treasurer.

DIN Number - This is the Document Identification Number.

The Warrant Paid Date and the DIN Number may be obtained using the State Treasurer's Web Site, State Agency Warrant Search Page (http://www.treasurer.state.ks.us/quiklook.htm). Please remember that the FRB can retrieve images of only those warrants paid on or after July 1, 1996. Copies of warrants paid prior to that date should continue to be requested from the Central Accounting Services Section.

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DATE:	November 9, 2000
SUBJECT:	Statewide Credit Card Acceptance Contract
EFFECTIVE DATE:	N/A
A & R CONTACT:	Jerry Serk	(785) 296-2318	(jerry.serk@da.state.ks.us)
	Chris Howe	(785) 296-2374	(chris.howe@da.state.ks.us)
APPROVAL:
SUMMARY:	Informational Meeting for Implementing Credit Card Acceptance

Most of you are familiar with House Bill 2323 of the 2000 Legislative Session and its provisions requiring the acceptance of credit cards by all state agencies after June 30, 2001. A statewide contract has been awarded to Paymentech, LLC to process credit card transactions for the State of Kansas. Paymentech, LLC is the second largest processor of credit cards in the country and it is their only business. There have been many questions asked about why we need a statewide contract instead of letting agencies use their local banks or existing contracts. The fee structure for processing credit cards is extremely complex and can be quite expensive. By awarding a statewide contract, the State can obtain further discounts as most credit card fees are based on the number of transactions and the average dollar value of each charge transaction. With the statewide contract, all charges and transactions are aggregated on a statewide basis by all agencies instead of on an agency by agency basis. The statewide contract also includes contracts with Official Payments Corp., Discover Card and American Express.

To assist in implementing a credit card acceptance program at your agency, representatives from each of these companies have been asked to attend the November 29th ASTRA meeting. The ASTRA agenda has been blocked from 1:00 - 4:00 P.M. for the vendors to discuss their portion of the contract and to answer any questions you may have for them about implementing a credit card acceptance program at your agency. In addition, the vendors will remain in Topeka and be available from 9:00 - 12:00 on the morning of November 30th for additional questions or discussions as may be required. The reason for having contracts with four vendors rather than one will be apparent to you after attending this meeting.

We strongly urge your agency to send a representative to this meeting. Before attending, it would be beneficial to put some thought into discussing and writing down answers to the following questions:

• What applications will your agency have for credit card payments
• How will customers access your agency's services
  • Walk-in (face-to-face)
  • Website
  • Interactive Voice Response (IVR) system
  • Mail
  • Telephone
  • FAX
• Is your agency willing to absorb the fees associated with accepting credit cards
• Is your agency going to charge a convenience/surcharge fee for accepting credit cards (require the customer pay the fee for the convenience of using a credit card)
• What kind of equipment do you need (swipe machine, printer, PC software, telephone line, what brand, etc.)
• How many pieces of equipment will you need
• Are you going to purchase or lease the equipment
• How many employees will have to be trained to accept/process the transactions
• How will you market your policy for accepting credit card payments
• Do you have insurmountable problems involving the acceptance of credit cards

For more information and to register for the ASTRA meeting, please visit the ASTRA website at:

http://www.da.ks.gov/ar/forum/astra/

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DATE:	November 13, 2000
SUBJECT:	Expenditure/Receipt Object Classification-Federal Aid to Other State Agencies
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Financial Integrity Team Pam Karns Mike Lovich	(785) 296-2660 (785) 296-2131	(pam.karns@da.state.ks.us) (mike.lovich@da.state.ks.us)
APPROVAL:
SUMMARY:	Consistent Usage of Expenditure Classification for Federal Aid between Agencies

It has come to our attention that agencies are not recording transfers in a consistent manner. This is to remind everyone of the policy established by Informational Circular No. 1084 effective with fiscal year 1992 business.

All Federal Aid to Other State Agencies should be classified as expenditure sub-object 7310 (Inter-Agency Transfer [Federal]) by the paying agency. Receiving agencies should classify the receipt of moneys using receipt sub-object 6605 (Operating Transfers In - Federal Aid from Other State Agencies). Journal voucher requests should be submitted to the Audit Services Section of the Division of Accounts and Reports to correct any transactions which have already processed as fiscal year 2001 business using the other codes.

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DATE:	December 21, 2000
SUBJECT:	Procedures for filing 2000 Form 1099 Information Returns
EFFECTIVE DATE:	December 21, 2000
A & R CONTACT:	Don Beck	(785) 296-7291	(don.beck@da.state.ks.us)
APPROVAL:
SUMMARY:	Procedures for Filing 2000 Form 1099 Information Returns

Agencies of the State of Kansas are considered to be a single payer by the Internal Revenue Service (IRS) and payment information is required to be filed by one transmitter. In addition, federal laws and regulations require the filing of information returns to be submitted by magnetic media. In order to comply with the reporting requirements of the IRS and to avoid the assessment of penalties, the Division of

Accounts and Reports will transmit all 2000 calendar year 1099 information returns for the State of Kansas on magnetic tape.

Some payments by state agencies are IRS reportable but are not included in the Statewide Accounting and Reporting System (STARS) or required data is not provided by STARS. These payments require unique reporting procedures. Such expenditures include certain interest payments, State Fair premiums and purchases of real property.

Locally administered interest payments exceeding $10 are to be reported on Form 1099-INT. An example of these payments is interest paid from trust funds to clients by institutions like the Department of Social and Rehabilitation Services and the Department of Corrections.

IRS regulations require the State of Kansas to report on Form 1099-S any purchases of real property exceeding $600. Additional requirements for this form include a description or address of the property and the closing date of the purchase transaction. (Rental and construction costs are not to be included).

State Fair premiums are to be reported on form 1099-MISC.

Procedures for handling 1099 information returns for calendar year 2000 are as follows:

1. Agencies that have made expenditures as described, will be responsible for the preparation and delivery of the appropriate 1099 forms to the payees prior to January 31, 2001. Do not mail forms directly to the IRS or to the Kansas Department of Revenue. 
2. Agencies reporting applicable purchases of real property may submit the IRS and/or the State of Kansas copies of the 1099-S forms to the address below, and the Division of Accounts and Reports will key this information onto magnetic tape. For those agencies with other expenditures to report, the DA-43 form ( http://www.da.ks.gov/ar/forms), or a form of your own design with the same basic format, should be used. All data should be remitted by February 15, 2001 to:
   
   Division of Accounts and Reports
   Central Accounting Services Section
   900 SW Jackson, Room 351-S, LSOB
   Topeka, Kansas 66612-1248
   
   Attention: Don Beck
3. Agencies may submit data to the Division of Accounts and Reports on magnetic media in lieu of paper. However, the Division of Accounts and Reports should be contacted for proper reporting format. In addition, a completed Transmittal Form 4804 is necessary, as well as, the following information on the Media Label: operating system/hardware, type of returns, number of payees, and transmitter's number for media.  
4. The Division of Accounts and Reports will consolidate the data received from state agencies on magnetic tape. The tapes will be forwarded to the IRS National Computer Center prior to February 28, 2001.  
5. If any agency finds it necessary to issue a corrected information return, the payee should be provided a copy as soon as possible. The IRS copy of the corrected form (marked "corrected") should be forwarded promptly to the Central Accounting Services Section of the Division of Accounts and Reports.

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DATE:	December 26, 2000
SUBJECT:	Private Vehicle Mileage
EFFECTIVE DATE:	Immediate
A & R CONTACT:	Randy Kennedy	(785) 296-2125	(randy.kennedy@da.state.ks.us)
	Leroy Charbonneau	(785) 296-2255	(leroy.charbonneau@da.state.ks.us)
	Shirley Gilchrist	(785) 296-2882	(shirley.gilchrist@da.state.ks.us)
	Mark Handshy	(785) 296-7021	(mark.handshy@da.state.ks.us)
APPROVAL:
SUMMARY:	Private Vehicle Mileage Reimbursement Rates

The IRS raised the standard business mileage rate as of January 1, 2001. However, there will be no change, at this time, in the private vehicle mileage reimbursement rates allowed by the state. As established by K.A.R.1-18-1a, they will remain at:

16¢ per mile for privately owned motorcycle

32.5¢ per mile for privately owned automobile

44¢per mile for privately owned airplane

44¢ per mile for privately owned specially equipped vehicle for the physically disabled
(Examples of specially equipped vehicles include, but are not limited to, those equipped with hand controls or lift devices. Other situations may be evaluated on a case-by-case basis if you are uncertain about the applicability of this rate.)

Please note that the provision to reimburse mileage at the central motor pool rate for compact cars remains in effect for any state employee choosing to use a privately owned automobile, when a state-owned or leased vehicle is available for use. For FY 2001, this rate has been established by Central Motor Pool at 25¢. The complete schedule of motor pool rates was distributed to all state agencies in a June 30, 2000 memorandum from the Central Motor Pool Director.

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DATE:	February 14, 2001
SUBJECT:	Processing of Transactions for Federal Grants
EFFECTIVE DATE:	Immediate
A & R CONTACT:	Pam Karns Mike Lovich	(785) 296-2660 (785) 296-2131	(pam.karns@da.state.ks.us) (mike.lovich@da.state.ks.us)
APPROVAL:
SUMMARY:	Guidance on Federal Grant Procedures

The State receives over $2 billion in federal grants annually. These grants/awards are received and used by many different state agencies. Each individual grant agreement usually includes certain specific language related to the use or distribution of the grant monies. The general categories of requirements are described in federal Office of Management and Budget (OMB) Circular A-133. We have attached a listing of certain definitions from the OMB Circular A-133 (Attachment 1). It is recommended that those agencies receiving federal grant awards obtain a copy of this circular. A copy of the circular may be obtained from the OMB home page at http://www.whitehouse.gov/omb/ under the caption OMB documents, circulars.

While performing the State of Kansas single audit for fiscal year 2000, the auditors found that some agencies did not fully comply with grant requirements. Noncompliance with grant requirements may result in a refund of grant monies or the loss of funding for grant programs. Each state agency is responsible for identifying the federal awards received and expended and the programs under which they were received. This includes the Catalog of Federal Domestic Assistance (CFDA) number and name, award number and name, name of the federal agency, and applicable compliance requirements. Not only is this a federal requirement but much of this information is also necessary for preparation of the "Schedule of Expenditures of Federal Awards" contained in the "Financial and Compliance Audit Report State of Kansas Single Audit". This schedule lists all federal awards by federal agency, by federal CFDA/contract number, the name of the federal grantor/program/pass-through grantor, the dollar amount of the expenditures, and the amount of the funds passed through to subrecipient entities. The agency is also responsible for monitoring the subrecipient's activities. This is to provide reasonable assurance that the award is administered in compliance with federal requirements, for ensuring required audits are performed and prompt corrective action is taken, and for evaluating the impact of subrecipient activities on the pass-through entity's ability to comply with applicable federal regulations.

Non-federal entities that expend $300,000 or more in a year in federal awards shall have a single audit or program specific audit conducted for that year. Non-federal entities that expend less than $300,000 a year in federal awards are exempt from federal audit requirements for that year, but records must be available for review or audit by appropriate officials of the federal agency, pass-through entity and the General Accounting Office (GAO) of the federal government. Subpart B-Audits_.200 Audit requirements, page 17 of OMB Circular A-133 should be referred to for more specific details.

It is each agency's responsibility to identify each type of grant receipt or payment which includes a recipient deposit, a pass-through deposit, a transfer of federal funds where the pass-through entity and the subrecipient entity are both state agencies, a vendor payment for goods or services, and expenditures to subrecipients outside the state. The CFDA number and name, the name of the federal agency from which the grant is received, and type of grant monies described above should be included on each voucher.

State agency is a recipient

When a state agency is a recipient, it should record the receipt of federal funds as revenue sub-object (RSO) code 40xx. When the agency expends the federal funds to the beneficiary of the program, it should record them as expenditure sub-object (ESO) code 50xx or 55xx. When the agency expends the federal funds as program expenditures to a vendor, it should record them using the appropriate ESO code.

State agency is a pass-through entity

When a state agency is a pass-through entity, it should record the receipt of federal funds as RSO code 40xx. When it passes through (expends) the federal funds to an outside entity, it should record it as ESO code 50xx. When the agency passes through (expends) the federal funds to the subrecipient state agency, it should record them as ESO code 7310.

State agency is a subrecipient

When a state agency is a subrecipient from another state agency, it should record the receipt of federal funds as RSO code 6605. When the agency expends the federal funds as program expenditures to a vendor, the agency should record them using the appropriate ESO code.

Recipient and subrecipient entities may both make payments to vendors with grant monies. Vendors may be other state agencies, other governments, or may be non-governmental entities. Attachment 2 reviews vendor indicators in detail as does paragraph_.210, page 18, of OMB Circular A-133.

A complete discussion of the responsibilities and obligations of recipient, subrecipient, pass-through and vendor entities is contained in OMB Circular A-133. Attachment 2 is a checklist to assist agencies in determining subrecipient, vendor, and pass-through entity. The auditing firm of Allen, Gibbs & Houlik, LLC provided the checklist which should assist state agencies in determining which agency is responsible to meet OMB Circular A-133 requirements. Policy and Procedure Manual Filing Numbers 6,002 and 7,002, OMB Circular A-133, and Characteristics of Subrecipients and Vendors (Attachment 2) will guide agencies in their coding for federal grant transactions.

Agency use of the following expenditure and revenue sub-object codes should be reviewed closely:

Journal voucher requests should be submitted to the Central Accounting Services Section of the Division of Accounts and Reports to correct any transactions inadvertently processed in error during fiscal year 2001.

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Attachment 1: Certain Definitions from OMB Circular No. A-133  (.pdf)
Attachment 2: Characteristics of Subrecipients and Vendors  (.pdf)

DATE:	February 23, 2001
SUBJECT:	Statewide Credit Card Acceptance Contract
EFFECTIVE DATE:	N/A
A & R CONTACT:	Jerry Serk	(785) 296-2318	(Jerry.Serk@da.state.ks.us)
APPROVAL:
SUMMARY:	Credit Card Acceptance Processing

The deadline for having a credit card acceptance program in place is quickly approaching. This informational circular is intended to assist you in the implementation of your program.

Those agencies choosing to absorb the cost of credit card fees can accept the four major credit cards in their operations. Credit cards may be accepted face-to-face, by website, over the telephone, mail-in, or through interactive voice response systems (IVR). We have been advised that an agency may accept credit cards through one or more of these modes and meet the requirements of K.S.A. 75-30,100 (H.B. 2323 of the 2000 Legislative Session).

Those agencies obligated to charge a fee for accepting credit cards due to budgetary or statutory reasons are more limited in their credit card acceptance policy. As a general rule, if the agency charges an additional fee to recover credit card costs to all customers, licensees or clients, including cash and check payments, any credit card may be accepted. On the other hand, if an agency at a minimum simply wants to comply with the law, Discover Card may be accepted and a convenience or surcharge fee may be charged only to those customers, licensees or clients who pay with the Discover Card.

The procedure for processing credit card transactions through the STARS system will require the creation of a Credit Card Clearing Fund in some agencies. In most cases, this procedure will not apply to those agencies having a fee bank account. Credit card transactions will settle through the fee bank accounts when possible rather than the Office of State Treasurer. Please bear in mind the provisions of K.S.A. 75-4215(b) pertaining to the frequency of depositing state moneys if you process credit card transactions through your fee bank account.

Under this procedure, agency officials may request the establishment of a Credit Card Clearing Fund in their agency. In most situations, where the agency charges a convenience fee for accepting credit cards, this clearing fund will enable agencies to pass on their credit card fees without requesting additional budget authority. The fund will be in the 9XXX series of fund numbers. The fund would only be used for processing credit card transactions and would work as follows:

1. As often as daily, the State Treasurer will process an electronic receipt voucher to deposit revenue from credit card transactions to the Credit Card Clearing Fund.

   • The transaction will use a transaction code (T/C) 606 (Due to other funds and appropriations) and revenue sub-object 6700 (Suspense).

2. Each agency will be responsible for reconciling this deposit with their credit card transaction report and processing a journal voucher to transfer these receipts out of the Credit Card Clearing Fund to the proper budgetary fund(s) within the agency.

   • The journal voucher will use T/C 606R and revenue sub-object 6700 to move the credit card receipts out of the clearing fund and T/C 602 (fund level deposits) or T/C 604 (account level deposits) with the applicable revenue sub-object (example - 2110), to deposit the credit card receipts into the correct fund of the agency.
   • For those agencies charging a convenience fee, a balance sufficient to pay the monthly credit card fees and charges should remain in the clearing fund to allow for the monthly debit processed by the State Treasurer.
   • For those agencies choosing to absorb the credit card fees and for those agencies whose surcharge fee deposits are not sufficient to cover the credit card fees, a journal voucher must be processed. This journal voucher will charge expenditures to the agency's budgetary accounts and transfer cash to the Credit Card Clearing Fund (see Step D).

3. Once each month the Treasurer will debit the Credit Card Clearing Fund to charge each agency the credit card fees debited to the state bank account by each of the three credit card processors - Paymentech, American Express and Discover Card.

   • The transaction is a negative receipt voucher and will use a T/C 609R with expenditure sub-object 2691 (Credit Card Fees and Charges) to charge the credit card fees to your agency Credit Card Clearing Fund.
   • This expenditure will not affect your agency appropriations or expenditure authority.

4. An agency without a sufficient balance in its clearing fund to cover the credit card fees must process a journal voucher to make a balance available.

   • The expenditure portion of the transaction will use T/C 733 and expenditure sub-object 2691. This will be charged to one or more agency funds depending on the allocation of agency credit card convenience fees.
   • The receipt portion of the transaction will use T/C 606 and revenue sub-object 6290 (Other Reimbursements and Refunds) to increase cash in the clearing fund.

5. It is conceivable that those agencies charging a convenience fee will allocate the fee among their cash, check and credit card customers. In other words, if the agency knows it is going to cost them $3.00 to accept a credit card, and they have estimated that one third of their customers will pay by credit card, all customers will pay $1.00 in additional fees to recover those costs. This is because credit card payments cannot be disadvantaged against cash or check payments. When these payments are deposited into the Treasury, the agency will have the choice of depositing the convenience fee portion of the payment directly into the Credit Card Clearing Fund, or into agency budgetary accounts.

   • Convenience fees received in the form of cash, checks or credit cards and deposited to a fund, other than the Credit Card Clearing Fund, should be deposited using revenue sub-object 5912 to identify the fees as convenience fees.
   • If deposited directly to the Credit Card Clearing Fund, the convenience fees should be deposited using T/C 606 and revenue sub-object 6700.
   • When the clearing fund has to be subsidized from the convenience fees directly deposited to budgetary accounts, a journal voucher must be processed.
   • The receipt reduction transaction of the journal voucher will use T/C 602R or T/C 604R (depending on the type of fund) and revenue sub-object 5912 to reduce convenience fee revenue in the budgeted account(s) of the agency.
   • The transaction to increase convenience fee revenue in the Credit Card Clearing Fund will use T/C 606 and revenue sub-object 6700 thus increasing the amount available for the payment of the debit charge processed by the State Treasurer each month.
   • In those instances where sufficient convenience fees are not available in the budgeted funds of the agency, process a journal voucher as outlined in "Step D". When an agency has not collected enough convenience fees to pay its credit card fees, then the agency must use operating moneys to pay the credit card fees.

Please bear in mind the concern of the Legislature for agencies to recover as closely as possible the exact costs for using credit cards. To the extent that the balance in revenue sub-object 5912 for an agency is greater than $0.00, you have collected too much in convenience fees.

The State Treasurer's Office and the Division of Accounts and Reports are partnering in developing an internet journal voucher system similar to the State of Kansas Interactive Internet Interfund (SOKI3+) System. It is anticipated that this system will be available prior to July 1, 2001, in time to expedite the processing of your credit card journal voucher transactions.

The Division of Purchases is conducting informational sessions to answer questions and assist with decisions on the type of equipment best suited to your credit card program needs. Please contact Chris Howe at (785) 296-2374 or e-mail him at chris.howe@da.state.ks.us.

If you would like to contact the vendor in charge of administering the statewide credit card acceptance program, please contact Sylvia Dunham at (303) 399-6985 or e-mail her at sdunham@paymentech.com.

Questions regarding the functions of the State Treasurer's Office in this process may be directed to Peggy Hanna at (785) 296-5464 or e-mail her at peggy@treasurer.state.ks.us.

For questions pertaining to the establishment of a Credit Card Clearing fund or the STARS transactions process, please contact Jerry Serk at (785) 296-2318 or e-mail may be sent to jerry.serk@da.state.ks.us.

DB:JS 

DATE:	March 30, 2001
SUBJECT:	Processing of Transactions for Federal Grants
EFFECTIVE DATE:	Immediate
A & R CONTACT:	Pam Karns Mike Lovich	(785) 296-2660 (785) 296-2131	(pam.karns@da.state.ks.us) (mike.lovich@da.state.ks.us)
APPROVAL:
SUMMARY:	Guidance on Federal Grant Procedures and Clarification of Requirements of Informational Circular 01-A-013

Informational Circular 01-A-013 issued guidelines for processing the receipt and expenditure of federal grant moneys. After input from several state agencies and receipt of further information from the A-133 statewide auditors, this informational circular clarifies and revises the documentation required for federal grant moneys. The revisions to the original guidelines are in italics on page two.

The State receives over $2 billion in federal grants annually. These grants/awards are received and used by many different state agencies. Each individual grant agreement usually includes certain specific language related to the use or distribution of the grant monies. The general categories of requirements are described in federal Office of Management and Budget (OMB) Circular A-133. We have attached a listing of certain definitions from the OMB Circular A-133 (Attachment 1). It is recommended that those agencies receiving federal grant awards obtain a copy of this circular. A copy of the circular may be obtained from the OMB home page at http://www.whitehouse.gov/omb/ under the caption OMB documents, circulars. 

While performing the State of Kansas single audit for fiscal year 2000, the auditors found that some agencies did not fully comply with grant requirements. Noncompliance with grant requirements may result in a refund of grant monies or the loss of funding for grant programs. Each state agency is responsible for identifying the federal awards received and expended and the programs under which they were received. This includes the Catalog of Federal Domestic Assistance (CFDA) number and name, award number and name, name of the federal agency, and applicable compliance requirements. Not only is this a federal requirement but much of this information is also necessary for preparation of the "Schedule of Expenditures of FederalAwards" contained in the "Financial and Compliance Audit Report State of Kansas Single Audit". This schedule lists all federal awards by federal agency, by federal CFDA/contract number, the name of the federal grantor/program/pass-through grantor, the dollar amount of the expenditures, and the amount of the funds passed through to subrecipient entities. The agency is also responsible for monitoring the subrecipients activities. This is to provide reasonable assurance that the award is administered in compliance with federal requirements, for ensuring required audits are performed and prompt corrective action is taken, and for evaluating the impact of subrecipient activities on the pass-through entitys ability to comply with applicable federal regulations.

Non-federal entities that expend $300,000 or more in a year in federal awards shall have a single audit or program specific audit conducted for that year. Non-federal entities that expend less than $300,000 a year in federal awards are exempt from federal audit requirements for that year, but records must be available for review or audit by appropriate officials of the federal agency, pass-through entity and the General Accounting Office (GAO) of the federal government. Subpart B-Audits_.200 Audit requirements, page 17 of OMB Circular A-133 should be referred to for more specific details.

Note: It is the responsibility of each agency to maintain information to identify its federal receipts and expenditures by CFDA number and name, the name of the federal agency from which the grant is received, and each grant type. The grant receipt or payment types include: receipt (or payment includes a recipient deposit), a pass-through deposit, a transfer of federal funds where the pass-through entity and the subrecipient entity are both state agencies, a vendor payment for goods or services, and expenditures to subrecipients outside the state system. Payment documents for internal agency operations will not require federal grant information to be included on the vouchers. However, this information must be readily accessible by the auditors during the annual A-133 audits. Grant receipt documents, transfers of federal funds to another state agency by interfund voucher (expenditure subobject code 7310) and warrant payments to entities outside of the State (expenditure subobject codes 5010-5080 and 7940) must have this information on the receipt and payment documents to enable the A-133 auditors to discern the source and type of federal grant payments.

State agency is a recipient

When a state agency is a recipient, it should record the receipt of federal funds as revenue sub-object (RSO) code 40xx. When the agency expends the federal funds to the beneficiary of the program, it should record them as expenditure sub-object (ESO) code 50xx or 55xx. When the agency expends the federal funds as program expenditures to a vendor, it should record them using the appropriate ESO code. 

State agency is a pass-through entity

When a state agency is a pass-through entity, it should record the receipt of federal funds as RSO code 40xx. When it passes through (expends) the federal funds to an outside entity, it should record it as ESO code 50xx. When the agency passes through (expends) the federal funds to the subrecipient state agency, it should record them as ESO code 7310.

State agency is a subrecipient

When a state agency is a subrecipient from another state agency, it should record the receipt of federal funds as RSO code 6605. When the agency expends the federal funds as program expenditures to a vendor, the agency should record them using the appropriate ESO code.

Recipient and subrecipient entities may both make payments to vendors with grant monies. Vendors may be other state agencies, other governments, or may be non-governmental entities. Attachment 2 reviews vendor indicators in detail as does paragraph_.210, page 18, of OMB Circular A-133.

A complete discussion of the responsibilities and obligations of recipient, subrecipient, pass-through and vendor entities is contained in OMB Circular A-133. Attachment 2 is a checklist to assist agencies in determining subrecipient, vendor, and pass-through entity. The auditing firm of Allen, Gibbs & Houlik, LLC provided the checklist which should assist state agencies in determining which agency is responsible to meet OMB Circular A-133 requirements. Policy and Procedure Manual Filing Numbers 6,002 and 7,002, OMB Circular A-133, and Characteristics of Subrecipients and Vendors (Attachment 2) will guide agencies in their coding for federal grant transactions.

Agency use of the following expenditure and revenue sub-object codes should be reviewed closely:

Journal voucher requests should be submitted to the Central Accounting Services Section of the Division of Accounts and Reports to correct any transactions inadvertently processed in error during fiscal year 2001.

DB:PK

Attachment 1: Certain Definitions from OMB Circular No. A-133
Attachment 2: Characteristics of Subrecipients and Vendors (pdf format)

DATE:	April 4, 2001
SUBJECT:	SOKI3+ Enhancements
EFFECTIVE DATE:	April 6, 2001
A & R CONTACT:	Audit Services Team Randy Kennedy	(785) 296-2125	(Randy.Kennedy@da.state.ks.us)
	Appropriations / Master Lease Purchase Team
	Annette Witt	(785) 296-8083	(Annette.Witt@da.state.ks.us)
	Payroll Processing Team
	Steve Banning	(785) 296-7059	Steve.Banning@da.state.ks.us
APPROVAL:
SUMMARY:	Additional functionality added to the SOKI3 System. Agencies must implement by June 1, 2001.

We are pleased to announce that the Division of Accounts and Reports, in partnership with the Office of the State Treasurer, will implement additional document processing capabilities in the State of Kansas Interactive Internet Interfund System (SOKI3+) effective after the 3:00 p.m. upload on Friday April 6, 2001. The additional functionality available after that time will not affect the current interfund voucher processing.

The information included in this circular is intended to update the existing "Agreement for Operation of the Electronic Interfund System" which was signed by your agency head and chief fiscal officer when your agency implemented SOKI3+ processing. This information supplements and should be made a part of your existing SOKI3+ agreement.

The enhanced electronic document processing system will be known as SOKI3+, and will include the capability for agencies to initiate many of the journal vouchers currently processed by the Audit Services Team, the Appropriations / Master Lease Purchase Team, and the Payroll Processing Team. Agencies will also be able to process receipt distributions from suspense funds and the transactions necessary for credit card processing. Payroll prior period funding adjustments will also be initiated and processed by the SHARP agencies in SOKI3+. Regent Institutions will continue to use the automated DA-35 process for their prior period payroll adjustments.

We believe that these enhancements will provide several benefits for agency users. Among these are increased accuracy and timeliness in processing the transactions, elimination of duplicate data entry functions at the agency and central level, and that the documents processed through SOKI3+ will be available online for review and research for a longer time than they are currently available in STARS.

Our goal is that journal voucher documents requiring central approval (as identified below) that are available for central review by noon each day will be uploaded for STARS processing at 3:00 p.m. that same day. Documents for which no central approval is required that are error free, and have been approved and released by the agency, by 3:00 p.m. each day will be uploaded to STARS at that time.

Agencies must process all eligible journal vouchers through this system after June 1, 2001. Some of these transactions will no longer require central approval. Edits have been incorporated into SOKI3+, and these edits along with the standard STARS processing edits provide sufficient controls for processing to occur without central review prior to processing. Many of these same transactions will also now be batched by SOKI3+ under the agency's batching agency number (rather than centrally). Therefore, error correction on these batches will be your responsibility.

To start processing the additional documents in SOKI3+, the following security-related information should be helpful:

• Security functions differently for JVs than for interfund vouchers. A person with JV authority has access agency-wide, rather than being restricted only to the group in which they reside as with interfund vouchers.
• The Primary Contact Person continues to be responsible for ensuring that the approval and release authorizations are appropriate for each particular document type within the agency. The primary contact person will initially be given access to enter, release, and approve JVs within the agency.
• Anyone who has been designated in SOKI3+ as an agency supervisor or a group supervisor will be able to grant JV entry, JV approval, and JV release authority to the agency users to which the supervisor has access. Form DA-116a, SOKI3+ User ID Request and Maintenance, has been revised to assist your agency and group supervisors in assigning the additional authorities. This form is available at http://www.da.ks.gov/ar/forms/.
• The primary contact person, agency supervisor, or group supervisor will also be able to direct new users to the appropriate web address and provide security information and the necessary passwords to access SOKI3+.

During the year-end concurrent processing period, the agency will designate which transaction year the document is to be processed in by selecting the appropriate year on the journal voucher screen. Old year transactions will have an effective date of June 30. The effective date for new year transactions will be the calendar date the document is uploaded to STARS. New year transactions can be input and processed beginning the first business day of July.

Listed below is a description of each transaction type that agencies will initiate and process through SOKI3+:

Certified Transfers - These transactions are transfers authorized by statute and certified by the preparing agency in writing to the Central Accounting Services Appropriations/Master Lease Purchase Team. When selecting the "type of document" on the manual JV initiation option, you will see "Certified Trnsfr". These will be designated at the top of each document in SOKI3+ as CERTTRSFR. The agency will assign (or allow the system to assign) the last three digits of the document number in the format J3AGYXXX, with AGY defined as the agency number. Central approval will be required prior to uploading the transaction to STARS, and the transactions will continue to be batched by SOKI3+ at the central level. Central approval and release will be granted only after receipt of the standard transfer certification correspondence from the agency. It will be helpful for agencies to note the JV number assigned by the agency on the transfer certification letter correspondence. The Appropriations/Master Lease Purchase Team is responsible for approving and releasing this document type.

Credit Card Transactions - These transactions are those required to (1) move credit card receipts from the Credit Card Clearing Fund to the proper budgetary fund(s) within the agency, or (2) move funds to the Credit Card Clearing Fund so that sufficient funds are available for payment of the credit card processing fees. When selecting the "type of document" on the manual JV initiation option, you will see "Credit Card". These will be designated at the top of each document in SOKI3+ as CREDIT. The agency will assign (or allow the system to assign) the last three digits of the document number in the format JCAGYXXX, with AGY defined as the agency number. If the document is error free, and has been approved and released by the agency by 3:00 p.m., the document will be uploaded to STARS that night. Central approval will NOT be required for this transaction type prior to the STARS upload. These transactions will be batched by SOKI3+ at the agency level and will be batch number 961, batch type T, except during concurrent processing. During that time, the old year documents will be batched as batch number 961, and new year documents as batch number 971. Any transactions that suspend in STARS on screen 53 must be corrected by the agency. Additional information regarding these transactions can be found in Informational Circular 01-A-014. 

Receipt/Expenditure Account Cash Transfers - These transactions are those required to move cash within the same fund/index code to a different budget fiscal year to provide the cash needed to process payments against contingent encumbrances. Transactions can move cash either from the current fiscal year back to a prior fiscal year or from a prior to the current fiscal year. When selecting the "type of document" on the manual JV initiation option, you will see "Cash Adjust - PY Contingent Encumbrances". These will be designated at the top of each document in SOKI3+ as RECEXPADJ. The agency will assign (or allow the system to assign) the last three digits of the document number in the format J3AGYXXX, with AGY defined as the agency number. If the document is error free, and has been approved and released by the agency by 3:00 p.m., the document will be uploaded to STARS that night. Central approval will NOT be required for this transaction type prior to the STARS upload. These transactions will be batched by SOKI3+ at the central level. The Appropriations/Master Lease Purchase Team is responsible for addressing any procedural questions related to this document type.

Payment and Receipt Voucher Corrections - These transactions are those currently processed by the Audit Services Team to change funding, subobject codes, etc. on payment and receipt documents which have processed in STARS. When selecting the "type of document" on the manual JV initiation option, you will see "Correct Payment/receipt Prefix V & S". These will be designated at the top of each document in SOKI3+ as PMT-REC. The agency will assign (or allow the system to assign) the last three digits of the document number in the format J2AGYXXX, with AGY defined as the agency number. Central approval will be required prior to uploading the transaction to STARS, and the transactions will continue to be batched by SOKI3+ at the central level. Central approval and release will be granted after a member of the Audit Services Team has reviewed the requested correction. The Audit Services Team is responsible for approving and releasing this document type.

Payroll Prior Period Funding Adjustments - These transactions adjust prior period funding of payroll expenditures for SHARP agencies only. Regent Institutions are to continue with the automated DA-35 process that is currently in place for their prior period funding adjustments. When selecting the "type of document" on the manual JV initiation option, you will see "Payroll Prior Period Funding Adjustments". These will be designated at the top of each document in SOKI3+> as PAYROLL. The agency will assign (or allow the system to assign) the last three digits of the document number in the format J1AGYXXX, with AGY defined as the agency number. If the document is error free, and has been approved and released by the agency by 3:00 p.m., the document will be uploaded to STARS that night. Central approval will NOT be required for this transaction type prior to the STARS upload, and the transactions will be batched by SOKI3+ at the central level. The Payroll Processing Team is responsible for addressing any procedural questions related to this document type.

Receipt Distributions - These transactions are currently processed on receipt vouchers (with a zero dollar net effect) to distribute receipts from an agency suspense fund to the appropriate agency budgetary accounts. When selecting the "type of document" on the manual JV initiation option, you will see "Receipt Distribution". These will be designated at the top of each document in SOKI3+ as RECEIPTDIS. The agency will assign (or allow the system to assign) the last three digits of the document number in the format JRAGYXXX, with AGY defined as the agency number. If the document is error free, and has been approved and released by the agency by 3:00 p.m., the document will be uploaded to STARS that night. Central approval will NOT be required for this transaction type prior to the STARS upload. These transactions will be batched by SOKI3+ at the agency level and will be batch number 966, batch type T, except during concurrent processing. During that time, the old year documents will be batched as batch number 966, and new year documents as batch number 976. Any transactions that suspend in STARS on screen 53 must be corrected by the agency. The State Treasurer's Office is responsible for addressing any procedural questions related to this document type. Carol Sprague is the contact person, and can be reached at 785-296-4151 or carol@treasurer.state.ks.us.

Summarized Corrections - These transactions are corrections to receipt and expenditure documents, which are summarized due to the volume of individual transactions that are affected by the correction. Only agencies that have been previously approved to make these types of adjustment transactions may use this transaction type in SOKI3+. When selecting the "type of document" on the manual JV initiation option, you will see "Summarized Corrections". These will be designated at the top of each document in SOKI3+ as SUMMARY. The agency will assign (or allow the system to assign) the last three digits of the document number in the format J3AGYXXX, with AGY defined as the agency number. Central approval will be required prior to uploading the transaction to STARS, and the transactions will continue to be batched by SOKI3+ at the central level. Central approval and release will be granted after a member of the Appropriations/Master Lease Purchase Team has reviewed the requested correction. The Appropriations/Master Lease Purchase Team is responsible for approving and releasing this document type.

The following transaction types will be initiated centrally by the Division of Accounts and Reports and processed through SOKI3+:

Preaudit Balanced Journal Vouchers - These transactions are similar to the corrections identified as payment and receipt voucher corrections. The journal vouchers processed under this type are corrections initiated by the Audit Services Team. These will be designated at the top of each document in SOKI3+ as 002J2. The Audit Services Team will assign the current document number in the format J2XXXXXX. These transactions are entered, approved, and released by the Audit Services team, and will be batched by SOKI3+ at the central level. Agencies will continue to be notified of these transactions.

Average Daily Balance Distribution - These transactions transfer interest earnings to eligible agency accounts each month. These will be designated at the top of each document in SOKI3+ as 003ADB. The Appropriations/Master Lease Purchase Team will assign the current document number in the format J3ADBXXX. These transactions are entered, approved, and released by the Appropriations/Master Lease Purchase Team, and will be batched by SOKI3+ at the central level. Agencies will continue to be notified of these transactions.

Appropriation Team Journal Vouchers - These transactions are journal vouchers initiated by the Appropriations/Master Lease Purchase Team. These will be designated at the top of each document in SOKI3+ as 003J3. The Appropriations/Master Lease Purchase Team will assign the document number in the format J3XXXXXX. These transactions are entered, approved, and released by the Appropriations/Master Lease Purchase Team, and will be batched by SOKI3+ at the central level. Agencies will continue to be notified of these transactions.

TJ Transactions - These are treasurer's journal vouchers initiated by the Audit Services Team. These will be designated at the top of each document in SOKI3+ as TJ002. The Audit Services Team will assign the current document number in the format T2XXXXXX. These transactions are entered, approved, and released by the Audit Services Team, and will be batched by SOKI3+ at the central level. Agencies will continue to be notified of these transactions.

The "User Instruction Manual" and the "How Do I?" information is currently being revised to reflect these changes in SOKI3+. We anticipate that these documents will be available by April 16. These documents can be accessed through SOKI3+ Help (www.interfunds.state.ks.us) or at the SOKI3+ page of the Accounts and Reports web site (www.da.ks.gov/ar/genacct/soki3/).

DB:JR

DATE:	April 5, 2001
SUBJECT:	Establishment of Additional and Revision of Revenue Subobject for Grants
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Financial Integrity Team Pam Karns Mike Lovich	(785) 296-2660 (785) 296-2131	(pam.karns@da.state.ks.us) (mike.lovich@da.state.ks.us)
APPROVAL:
SUMMARY:	According to Governmental Accounting Standard Board (GASB) Statement 34, revenues from grants should be classified as operating or capital.

These changes are based on a survey sent to agencies who receive large amounts of grant money. This survey revealed that most of the revenues received for grants were for operating grants. In those situations where grant revenues are received for capital projects, additional revenue subobject codes are being established to report these capital grant revenues. The reporting of operating and capital grants is necessary to comply with Generally Accepted Accounting Principles (GAAP) and GASB Statement 34.

The following revenue subobject codes for grants have been revised to report operating grants. Operating grants are defined as grants used for the operation of a specific program. The following changes in descriptions for operating grants are effective immediately:

The following federal grants revenue subobject codes are being established to report capital grants revenues. Paragraph 50 of GASB Statement 34 states that a capital grant is used to purchase, construct or renovate a capital asset associated with a specific program. The following additions for capital grants are effective immediately:

These revisions will be reflected in the Uniform Receipt Classification Revenue Sub-object Codes filing (PPM Filing Number 6,002) on the Division of Accounts and Reports web site http://www.da.ks.gov/ar/ppm/ppm01001.htm.

DB:PK:lmm 

DATE:	April 11, 2001
SUBJECT:	Capitalization of Buildings and Building Improvements
EFFECTIVE DATE:	July 1, 2001
A & R CONTACT:	Financial Integrity Team Pam Karns (785) 296-2660 ( Pam.Karns@da.state.ks.us) Mike Lovich (785) 296-2131 (Mike.Lovich@da.state.ks.us) Gail Barnhart (785) 296-3314 (Gail.Barnhart@da.state.ks.us)
APPROVAL:
SUMMARY:	Increasing limitation on Capitalization of Buildings and Building Improvements to $100,000

Current policy requires agencies to capitalize any building or building improvement greater than $2,000. In order to reduce the capitalization of small amounts, the Division of Accounts and Reports is increasing the building and improvement limitation to $100,000 effective July 1, 2001. This limit should be applied to an entire building or improvement project, not each individual payment on the building or improvement. Policy and Procedure Manual Filing No. 7,002 will be updated to reflect this change as follows:
 

Professional judgment should be used by the agency to determine whether an improvement is a normal maintenance repair, paid using expenditure sub-object code (ESO) 2440, or an improvement paid using ESO 4200 or 4209. Generally, an addition or improvement either enhances the assets functionality (effectiveness or efficiency), or extends the assets expected useful life.

All payment vouchers submitted to the Division of Accounts and Reports must clearly indicate if the payment is a maintenance repair or a capital improvement. Please state on the face of the voucher "Total improvement amount less than $100,000" when applicable.

Any payments charged to ESO 4209 will not be included on your monthly Capital Outlay Expenditure Report (DAFR 8460) nor should they be included on Form DA-80A Inventory General Reconciliation worksheet submitted at year-end.

DB:GB:lmm 

DATE:	April 19, 2001
SUBJECT:	Closing of Fiscal Year 2001 and Opening of Fiscal Year 2002
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Annette Witt	(785) 296-8083	(annette.witt@da.state.ks.us)
APPROVAL:
SUMMARY:	Schedule of Accounting Events Relative to Fiscal Year Closing

This Informational Circular provides the scheduled dates for closing fiscal year 2001 and beginning fiscal year 2002. Additional information concerning fiscal year end closing and DA-118 List of Outstanding Obligations instructions is contained in the Division of Accounts and Reports Policy and Procedure Manual filing nos. 14,002 and 14,003. The Policy and Procedure Manual is located at http://www.da.ks.gov/ar/ppm/ppm01001.htm. Other web resources available for fiscal year end processing information can be found at http://www.da.ks.gov/ar/yearend/.

K.S.A. 75-3002 establishes the state fiscal year as commencing on the first day of July in each year and closing on the thirtieth day of June of the succeeding year. However, to allow state agencies time to process as much old year business as possible, the old year records remain open through the second Monday of July (PPM No. 14,002). For the fiscal year 2001 closing, that date has been extended to Wednesday, July 11, 2001. During this period the Statewide Accounting and Reporting System (STARS) processes old and new fiscal year business concurrently.

The workload both at your agency and the Division of Accounts and Reports is greatly increased during the fiscal year end closing period. We ask that you use the following reminders and guidelines to help facilitate the fiscal year end processing.

• FY2001 documents receive a higher processing priority than do FY2002 documents during the concurrent processing period. 
• There is a two or three day period after the third Monday in July in which no daily transactions are processed.
• State agencies should review the May monthly reports and process the necessary corrections through the SOKI3+ journal voucher system before June 30.
• Transaction year 2001 and 2002 documents must be batched separately.
• During the concurrent processing period, STARS batch sheets for FY2001 transaction year should have a batch date of "06/30/01", an effective date of "06/30/01" and BFY of 2001.
• During the concurrent processing period, STARS edits FY2002 transactions charged to "expenditure only" type accounts against fund level receipts (both FY2001 and FY2002). FY2001 transactions edit only against FY2001 receipts.
• The available cash in prior fiscal year "receipt and expenditure" type budget units will not be available to fund FY2002 expenditures until FY2001 is closed and balances carried forward.
• During the concurrent processing period, both FY2001 and FY2002 documents may be processed in the SOKI3+ systems; FY2002 interfund vouchers require a BFY of 2002 for both the receipt and expenditure transactions and FY2001 interfund vouchers process as normal. FY2002 JV documents must use a BFY of 2002 throughout. 
• Beginning July 13th through year-end closing, agencies should not release any SOKI3+ transactions with a BFY of 2001. Only transactions with a BFY of 2002 will be processed during this period.
• On July 23rd, after year-end processing is complete, all fiscal year 2002 SOKI3+ transactions, including encumbered expenditures can be processed and released for upload to STARS.  
• All SOKI3+ transactions not uploaded to STARS on July 13th in the final FY2001 upload will be FY2002 business; any SOKI3+ interfund receipt transactions will need to have BFY 2002 and any SOKI3+ unencumbered interfund expenditure transactions will require an encumbrance number and appropriate transaction code changes.
• Transactions characterized as emergency payments should be batched separately and sent to the attention of Jerry Serk, Division of Accounts and Reports, Central Accounting Services Section, 900 SW Jackson, Room 351-S, Topeka, Kansas.

The scheduled dates for closing FY2001 and beginning FY2002 are as follows:

DB:JS:aw 

DATE:	April 25, 2001
SUBJECT:	Expenditure Subobject Codes for reporting 1099 Information
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Financial Integrity Team Pam Karns (785) 296-2660 (Pam.Karns@da.state.ks.us) Mike Lovich (785) 296-2131 (Mike.Lovich@da.state.ks.us)
APPROVAL:
SUMMARY:	Establishment of additional expenditures sub-object codes for 1099 reporting of gross proceeds payments to attorneys for claims

Beginning in calendar year 1998, the Internal Revenue Service (IRS) required workers compensation claims paid to an attorney, or the recipient and the attorney jointly, be reported on form 1099. Expenditure subobject code 5241 was established to report these payments. The IRS now requires all settlement payments made to the attorney or to the recipient and attorney jointly be reported as gross proceeds on form 1099. In order to report these payments, claims currently being paid were reviewed to detect the need for new expenditure subobject codes. New expenditure subobject codes currently required are being established under the category of "Claims" as follows:
 

These revisions will be reflected in the Uniform Expenditure Classification of Expenditure Sub-object Codes filing (PPM No 7,002) on the Division of Accounts and Reports web site http://www.da.ks.gov/ar/ppm/ppm01001.htm. 

If a new expenditure sub-object code is needed in another category in order to capture 1099 reportable gross proceeds payments to attorneys, please contact Pam Karns at (785) 296-2660.

DB:pk:mp 

DATE:	June 21, 2001
SUBJECT:	Capital Outlay Policy Raising Capitalization Threshold to $5,000 and Policy for Safeguarding Assets
EFFECTIVE DATE:	July 1, 2001
A & R CONTACT:	Bill Perry	(785) 296-7217	(bill.perry@da.state.ks.us)
	Gary Bond	(785) 296-2287	(gary.bond@da.state.ks.us)
APPROVAL:
SUMMARY:	Raise the capitalization threshold to $5,000 for inventory purposes and establish requirement for agencies to establish a policy for safeguarding assets.

Effective with fiscal year 2002 business, the capital outlay/inventory items will be defined as any item with a useful life expectancy of one year or more and costing $5,000 or more. These items must be coded to the sub-object 4XX0 series. Items purchased in fiscal year 2002 and costing between $500-$4,999.99 will be considered as "non-inventory capital outlay."

Agencies have the option of coding items costing between $500-$4,999.99 to either sub-object 4XX0 or 4XX9. If coded to 4XX9 these items will not appear on the Capital Outlay Report (DAFR8460). If your agency wishes to use this report as a tool to track items with a unit cost between $500 and $4,999.99 for internal purposes, you may do so by coding the items to 4XX0.

Note: Only those items with a useful life expectancy of one year or more and costing $5,000 or more are to be (1) maintained on the agency's inventory listing that is used by the Division of Accounts and Reports during the periodic physical inventory inspections and (2) included in the inventory summary totals submitted annually to the Division of Accounts and Reports.

The capitalization policy for buildings and building improvements (sub-objects 4200 and 4209) remains as stated in Informational Circular 01-A-018.

Although the threshold for reporting capital outlay/inventory items has been raised, agency managers are reminded that they continue to be responsible for safeguarding all assets for which they are responsible. In order to make employees aware of this responsibility, and also to ensure that there is one person in each agency responsible for the tracking of agency assets, all agencies should establish a policy for the safeguarding of state assets. Each agency should also appoint a property management officer to serve as the lead person within the agency for all asset management issues. As the Division of Accounts and Reports conducts the periodic agency reviews of inventory, we will be verifying that the agency has such a policy in place. The policy on the safeguarding of assets should address the topics listed on the attachment to this informational circular.

When submitting encumbered items for DA-118 transactions for fiscal year 2001, agencies should continue to use the current capital outlay coding policy to record these items in STARS.

Note: Items under $5,000 may be deleted from the agency inventory listing immediately and should not be included in the FY 2001 summary totals provided to the Division of Accounts and Reports. Items that appear on your Capital Outlay Report (DAFR8460) in amounts less than $5,000 for the remainder of FY 2001 should be disregarded and not added to the agency inventory listing used by the Division of Accounts and Reports during the periodic physical inventory inspections.

These revisions will be updated in the Uniform Expenditure Classification of Expenditure Sub-object Codes filing (P.P.M. No 7,002) on the Division of Accounts and Reports web site (www.da.ks.gov/ar/ppm/ppm01001.htm) in the future.

DB:JR

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