FY 2002

DATE:	January 11, 2002
SUBJECT:	Processing of Interfund Reimbursements in Compliance with GAAP
EFFECTIVE DATE:	Immediately
A & R CONTACT:	Suzie Yeh	(785) 296-3314	(suzie.yeh@da.state.ks.us)
APPROVAL:
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.

DB:sy

DATE:	February 1, 2002
SUBJECT:	Announcement of Subsistence Rates; Reimbursement of a Meal without Overnight Travel
EFFECTIVE DATE:	February 15, 2002
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:	Rates for subsistence (meals and lodging) reimbursement are no longer included in Kansas Administrative Regulations. A new provision allows the option to pay for one meal in certain situations even though the employee does not travel overnight.

K.A.R. 1-16-18 has been amended effective February 15, 2002, to implement laws passed in the 2001 Legislative Session (L. 2001, ch. 109). Subsistence (meals and lodging) rates are no longer required to be published through Kansas Administrative Regulations. This provides the Secretary of Administration greater flexibility in setting and implementing the rates in a timely manner. Users of the rates will continue to receive notification through Informational Circulars of the Division of Accounts and Reports and on our website. Current rates and limitations also are available in the Employee Travel Expense Reimbursement Handbook and the travel tri-fold document.

An additional provision of this regulation allows for a new option to reimburse a traveling employee for a meal. One meal may be reimbursed in limited situations to an employee conducting official state business, but not traveling overnight. Previously, a meal could not be reimbursed when an employee leaves and returns on the same day. K.A.R. 1-16-18(c)(3) allows meal reimbursement for the following single-day travel situations in which an employee is likely to pay out-of-pocket expenses:

1. when an employee is required to travel on official state business, and the employee's workday, including travel time, is extended three hours or more beyond the employee's regularly scheduled work day; or
2. when an employee is required to attend a conference or a meeting as an official guest or participant, and a meal is served during the required attendance time.

The following additional conditions apply to the meal reimbursement:

• The reimbursement for one meal per day is optional, at the discretion of the agency head or designee.
• In either of the qualifying travel situations, the point where the official business is conducted must be more than 30 miles from the employee's official station.
• No reimbursement is allowed when a meal is provided at no cost to the employee.
• Only one meal per qualifying trip may be reimbursed.
• The reimbursement must be paid at the rates set for breakfast, lunch, or dinner. The current rates are:

 (Please note that these meal rates are the same as those used to determine meal reductions.)

• This is a meal allowance type of reimbursement. Actual receipts are not required. There is no provision to reimburse an employee if the actual cost of a meal exceeds the per-meal reimbursement rate.
• The reimbursement of meals by the quarterly allowance method is not allowed unless overnight travel is necessary.

When travel qualifies for reimbursement of a meal, and the reimbursement is approved by the agency head or designee, Form DA-121, Travel Expense Detail, or Form DA-125, Travel Payment Voucher, must include the following information: date, departure time, arrival time, destination, meal (the amount of the meal requested), and the purpose of travel. The meal requested for reimbursement (e.g., lunch) should be shown in the "Description of Expense or Purpose of Travel" column, as well as the employee's scheduled work hours for the day (e.g., 8 a.m. - 5 p.m.).

Please remember that these same-day travel provisions apply only to travel on or after February 15, 2002. The Employee Travel Expense Reimbursement Handbook (Appendix B) and the travel tri-fold have been updated to reflect this reimbursement provision. These documents may be found at http://www.da.ks.gov/ar/employee/travel/.

DB:JR

DATE:	April 5, 2002
SUBJECT:	State General Fund Encumbrances
EFFECTIVE DATE:	April 15, 2002
A & R CONTACT:	Jo Ann Remp	(785) 296-2277	(Joann.Remp@da.state.ks.us)
	Randy Kennedy	(785) 296-2125	(Randy.Kennedy@da.state.ks.us)
APPROVAL:
SUMMARY:	State General Fund encumbrances should now be established as contingent encumbrances instead of firm encumbrances.

Historically, policy adopted by the Department of Administration has mandated that all encumbrances against the State General Fund be classified as firm. This policy was adopted at a time when State General Fund balances were sufficient to cover all daily cash flow requirements.

In view of the State's current fiscal situation, State General Fund encumbrance policy is being changed to require that all State General Fund encumbrances established on and after April 15, 2002 must be classified as contingent instead of firm. STARS transaction codes currently used to determine firm or contingent encumbrances will remain the same, i.e., agencies should use existing transaction codes to classify State General Fund encumbrances as contingent.

K.S.A. 75-3730 provides that "All commitments and claims shall be preaudited by the division of accounts and reports as provided in K.S.A. 75-3731. No payment shall be made and no obligation shall be incurred against any fund, allotment, or appropriation . . .unless the director of accounts and reports shall first certify that his or her records disclose there is sufficient unencumbered balance available in such fund, allotment, or appropriation . . . ." STARS has been programmed to identify, and suspend transactions in those cases where available appropriation/limitation and/or cash balances are not sufficient to cover the transaction being processed. STARS edits encumbrances coded firm in the same manner. Contingent encumbrances are allowed to process if the available appropriation/limitation balance is sufficient to cover the transaction, even though unencumbered "cash" may not be sufficient to cover the transaction.

In order to accomplish this policy change, the following information should be noted:

• Firm encumbrances currently in STARS will continue to be paid and ultimately liquidated as firm encumbrances. The current State General Fund firm encumbrances will not be converted to contingent encumbrances.
• All SHARP payroll encumbrances will continue to be classified as firm.
• Agencies should submit all new encumbrances against the State General Fund using the transaction code for contingent encumbrances . If the document is submitted with a transaction code for a firm encumbrance, the Audit Services Team will change the transaction code to establish a contingent encumbrance. Agencies will not be notified of each individual change.
• Policy and Procedure Manual filing 10,206 will be updated soon to reflect this policy change.

DB:rr:jr