FY 2021

NOTIFICATION OF REIMBURSEMENT:

On August 3, 2020, the Strengthening People and Revitalizing Kansas (SPARK) Taskforce and Governor’s Office of Recovery approved a recommendation for state agencies to receive distributions from the Coronavirus Relief Fund for the operational COVID-19 costs incurred in FY20.  On August 10, 2020 the State Finance Council (SFC) approved the SPARK recommendations for reimbursement. A full list of agencies and amounts is provided as Attachment A, summarized by the following categories of reimbursed expenses:

1. Non-Personnel COVID-19 coded expenses between 3/1/20 and 6/30/20 that were not included in the first round of reimbursement disbursements from CRF and were not charged to other federal funds. 

2. Agency requests for FY 2020 operational transactions that did not get properly coded as COVID-19 related in SMART.

REVIEW & CERTIFICATION OF COMPLIANCE:

A general ledger journal was processed on August 11, 2020 to transfer the total approved reimbursement amount to the agency’s Coronavirus Relief Fund.  On August 12, 2020 the SMART Team will send a list of expenditures, summarized by funding source, to each agency through a ManageEngine Service Desk ticket. Your agency must review all lines to ensure the amount represents expenditures qualifying for reimbursement based on the federal guidelines in the CARES Act. See 42 U.S.C. § 801(d).

Upon further review by your agency, if all or part of the amounts on the list do not meet the requirements for reimbursement, the amount must be left out of the general ledger journal so that the expense amount is not transferred to the Coronavirus Relief Fund (CRF).  Then, contact your Division of Budget analyst to request for the amount to be returned to the Governor’s Office.  Amounts to be returned will be transferred back to the Governor’s Office CRF by the Office of Accounts and Reports, SMART Team.

PROCESSING INSTRUCTIONS:

Executive Directive 20-517 was implemented to create a CRF for use by each state agency for both FY 2020 and FY 2021. 

Immediate action is necessary for each agency to process a general ledger (GL) journal to reflect the expenditures, less any amounts to be returned, in the CRF by August 18, 2020.  To ensure expenditures are not duplicated in both FY 2020 and FY 2021, the instructions outlined in Attachment B must be followed.

Federal reporting requirements for CARES Act funds were released on July 31, 2020 and included categories that must be used to report expenditures.  To facilitate the federal reporting, values have been added to ChartField 2 in SMART so that each agency can assign the appropriate value corresponding to the correct federal category.  Each GL journal processed to record expenditures to the CRF must include the appropriate ChartField 2 value on every expenditure row for Fund 3753.  The rows can be split as needed to correctly report the federal category.  The ChartField 2 federal reporting values are shown below:

Questions about which category should be used for a specific expenditure should be directed to the Recovery Office contact listed below.  

IMPACT ON FY21 SPENDING AUTHORITY:

Any COVID expenditures that were funded from the State General Fund and that are approved for CRF reimbursement will be proposed to be lapsed during the upcoming 2021 Legislative Session in the Governor’s revised budget. During the Division of Budget review of your agency's revised FY 2021 budget report, a recommendation will include the lapse of any of the State General Fund moneys that are reimbursed. You should not consider this reimbursement as additional spending authority in FY 2021.  If a subsequent allotment by the Governor occurs in FY 2021 prior to the 2021 Legislature’s return, these funds would be lapsed at that time.  The goal of this lapse exercise is to reduce the magnitude of future budget cuts if the state’s fiscal situation does not improve.

IMPACT ON REPORTING TO DIVISION OF BUDGET:

With regards of showing these transactions in IBARS for the September 15, 2020, budget submission, the Division of the Budget will send out a separate communication to all agencies when IBARS opens on or around August 14, 2020.

FEDERAL REPORTING:

Your agency should be aware that receipt of these funds may require additional internal controls to comply with federal requirements. This includes compliance requirements that are established by Uniform Guidance (specifically reference Subpart F, section 200.501 for Audit Requirement thresholds).  Please make sure you are familiar with the documents required to be submitted for FY 2020 to the Office of Accounts and Reports related to the expenditure of federal funds.  

While you should have all other information on your DA-89 complete and ready to go, we will extend the final deadline for the DA-89 from August 14, 2020 to August 21, 2020, to ensure CFDA 21.019 (fund 3753) accurately reflects all receipts of CRF funds, net of any returns based on your final review and compliance certification, due August 21, 2020. 

If you have already submitted a certification and/or DA-89, an updated one may need to be submitted based on any changes with reimbursement amounts. If submitting an updated DA-89 or certification form, please put “revised” in the subject line of your email.

OTHER CRF AWARDS:

While COVID-19 personnel costs and admin leave expenses, for FY20, were not approved for reimbursement at this time, these expenses will remain in the pool of eligible expenses to be considered for future use of CRF funds. For further explanation of FY20 reimbursements and information regarding the request of additional CRF funds for FY21, please see the attached memo from Secretary of Administration, DeAngela Burns-Wallace.

If there are additional questions or concerns, you may submit a ManageEngine Service Desk ticket, or you may contact the following individuals:

Sunni Zentner             Manager, Statewide Accounting                      Sunni.Zentner@ks.gov

Nancy Ruoff                Manager, Statewide Payroll                            Nancy.Ruoff@ks.gov

Jill Martin                    Team Lead, Federal Reporting                        Jill.Martin@ks.gov

Jeff Arpin                     Principal Analyst, Division of Budget              Jeff.Arpin@ks.gov

Taylor Hawkins           Recovery Office                                               Taylor.Hawkins@ks.gov

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Attachment A

Attachment B

FY 2021 Agency CRF Update Memo

In accordance with KSA 75-3729 and the Department of Administration’s Policy Manual Filing 13,001 - Capital Asset Records, agencies must enter capital assets into the SMART Asset Management (AM) module when the asset is received and/or the asset is functional to accurately reflect the correct transactions for reporting on the Comprehensive Annual Financial Report (CAFR). To ensure compliance with state policies, the DA-87 Capital Asset Reporting Log will be required to record all capital asset transactions over the capitalization thresholds noted below. This includes the acquisition, disposal, and transfer of capital assets and any changes to existing capital assets reported in the SMART AM module.

NOTE: KDOT & Regent Institutions are exempt from the reporting requirements of the DA-87.

Assets with a cost meeting the established threshold and a useful life exceeding one year are reported as capital assets in the CAFR. It is the agency’s responsibility to ensure all capital assets are properly recorded in the SMART AM module.

The statewide capitalization thresholds for assets are as follows: 

Please note, two SMART queries are available to assist agencies in reviewing and reconciling capital asset transactions: 

• Capital Asset Inventory List Query - KS_AM_ASSET_CAPITAL_INV_LIST – The query provides a complete agency inventory of capital assets recorded in the SMART AM module (use data filters to select CAFR asset book).
• Capital Outlay Purchase Query - KS_AM_VCHRS_WITH_54XXXX_ACCT – The query provides  a list of vouchers using the capital outlay account codes for the specified dates.

DA-87 Capital Asset Reporting Log due dates:

For FY 2020 the DA-87 forms were due on October 15, January 15, April 15 and July 15 for the previous quarters (cumulative). 

Beginning in FY2021 the DA-87 forms will only be required twice a year.  On January 15 agencies must submit data for the first six months of the fiscal year (July 1 to December 31) and on July 15^th, agencies must submit data for the entire year (July 1 to June 30).  It is important to keep your capital asset entries up-to-date to avoid delays in getting the DA-87 submitted timely. 

Please submit the completed DA-87 log to the Financial Integrity Team (FIT) email: OCFO-FIT@ks.gov. For detailed instructions on completing the DA-87, please see the “Instructions” tab on the workbook.

If the agency does not have any capital asset changes to report for the period, please send an email to the FIT team noting that no assets were purchased or updated within the reporting period.  

Assets are entered in the SMART AM module in one of two ways.

1. Directly in AM via Express Add.  SMART Job Aid:  Adding An Asset Using Express Add
2. Via asset integration on the requisition, the purchase order or the voucher

Each agency must determine which method will be used and ensure all parties involved are aware of how assets will be entered.

SMART Asset Integration Tools:  Asset integration is a process by which asset information included on the requisition, purchase order and voucher can flow to the Asset Management Loader Tables. This allows assets to be loaded to the Asset Management module directly, eliminating the need to hand-key asset details such as profile ID, tag number, custodian, location and chartfield values in the AM module. It also links the asset to its originating voucher.

In SMART asset integration can begin on either the requisition or the purchase order for the purchase of new assets or on the voucher for new or existing assets. Agencies have the option of deciding where to begin asset integration in SMART. Detailed job aids are available for entering assets at each level of integration: http://www.smartweb.ks.gov/training/integration-materials/am-po-and-ap.

• Linking Vouchers with Asset Module  
  • AM Tool 5 - Beginning Asset Integration on Voucher
  • Reviewing the Transaction Loader Tables Job Aid
  • Agency Asset Processor's Role in Integration
• Construction-In-Progress (CIP) is recommended to be entered in SMART AM at the beginning of the project.
  • It is essential that all costs associated with a CIP asset are captured in AM. Agency staff must determine if integration will be used or if asset costs will be manually adjusted in AM. The agency must determine the best process to communicate CIP costs between the Accounts Payable and Asset Management modules. SMART Job Aid: CIP Assets

Capital Asset Reporting Reminders:  Agencies should keep SMART AM up-to-date to ensure all assets are entered before FY closing. If an error or omission is found after year-end closing, in addition to entering the correction in SMART AM, a detailed explanation should be included on the Form DA-82 Capital Asset Supplemental Information.

The following guidance is provided to assist in completing capital asset reporting:

• Capital asset physical inventories are to be completed annually. Inventories are recommended to be conducted prior to June 15th to allow for corrections/additions to be recorded in the SMART AM module prior to SMART Year-End deadlines.
• Verify correct Profile ID and Category Code are used for assets. Asset Profiles drive the depreciation and accounting entry creation for CAFR purposes, it is crucial that the correct Asset Profile is used.
  SMART Job Aid: Incorrect Asset Profiles and Corrections / Profile ID Section Job Aid
• Agencies should review Construction-In-Progress (CIP) before year-end closing to ensure all costs are included in the asset module. CIP costs can be entered directly into AM as an addition/adjustment on the Cost Adjust/Transfer page to add costs as expenditures are incurred.
  SMART Job Aid: CIP Assets
• Completed CIP Assets need to be recategorized, the profile ID updated to a non-CIP profile, and other requirements completed as further defined in the job aid.
  SMART Job Aid: CIP Assets Assets (See Section: Steps to Perform After CIP Asset is Complete)
• All assets that have been sent to state surplus, sold, or otherwise no longer in the agency’s possession should be disposed of in the SMART AM module accordingly.
  SMART Job Aid: Retiring and Reinstating Assets
• Verify reported asset cost allocations, and update asset costs, if necessary.
  SMART Job Aid: Adjustments and Additions to Cost and/or Quantity
• For agencies utilizing integration, all outstanding Asset Integration Interface ID’s must be processed.
  SMART Job Aid: Reviewing Transaction Loader Tables

For assistance with entering/updating assets in SMART, please submit a SMART Service Desk ticket. For policy/recording questions please email the Statewide Agency Audit Services team at ARpreaudit@ks.gov.         

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Resources:
Policy Manual 13,001 Capital Asset Records
Form DA-87 Capital Asset Reporting Log
SMART Module of the Month Training – Safeguarding Assets

Additional SMART Asset Management job aids are available online via SMART Web.

Summary: New 1099 Classes and Types, Updated Job Aids for Entering and Updating New Suppliers, Updating Voucher Withholding

• The IRS has redesigned the 1099 Forms for reporting of calendar year 2020 payments:
  1. The 1099-MISC has been revised and rearranged for certain types of income. For SMART purposes the following Class and Type changes have been made:
     • 1099-01 is now 1099M-01 – Rental Income
     • 1099-02 is now 1099M-02 – Royalties
     • 1099-03 is now 1099M-03 – Other Income
     • 1099-06 is now 1099M-06 – Medical and Health Care Services
     • 1099-14 is now 1099M-10 – Gross Proceeds Paid to an Attorney
  2. All other 1099 Forms (S, D, G, and I) had no significant revisions.
  3. The 1099-NEC has been created to report all income that falls under Non-Employee Compensation, formerly box 7 of the 1099-MISC. For SMART purposes the Class and Type is now 1099N-01.

• Updates to previously entered data in SMART for calendar year 2020:
  1. The Office of Accounts and Reports is currently working on updating all previously paid SMART vouchers for Calendar Year 2020, with payment dates from 01/01/2020 through the end of the year 12/31/2020, to the new Classes and Types.  This update occurred after nightly batch has completed on Monday, December 21, 2020.
  2. The Office of Accounts and Reports is currently working on updating all reportable Suppliers to include the new Classes and Types. The current default flag for these suppliers will mirror to the new Class and Type of its equal.  This update occurred after nightly batch has completed on Monday, December 21, 2020.
• Entering new suppliers in SMART:
  1. In order to ensure the integrity of past data, the Office of Accounts and Reports will not be removing the Class Type of 1099. Please do not use for future setup of suppliers.
  2. For new suppliers, the Classes 1099M or 1099N will need to be used on the 1099 withholding page for those suppliers that previously would have fallen under the Class of 1099. All other Classes (I, G, and S) will still be available to use as needed.
  3. Please review the updated Job Aids below.
•  Updating voucher withholding:

1. This process has not significantly changed. Please review Classes and Types available for the Supplier. If the Class and Type needed is not available for use on the specific location, a TM-21 will need to be completed and submitted to the Supplier Maintenance team via a ManageEngine Service Desk ticket.
2. Once the voucher has been entered, click on the Withholding link and choose the Class and Type that corresponds to the specific payment.
3. Please review the updated Job Aids below.

Additional Resources:

Training guide for setting up Suppliers for 1099 reporting and an account code guide: 

https://www.smartweb.ks.gov/docs/default-source/ap---vendors---training-guides/1099-and-withholding-training-guide.doc?sfvrsn=2c36263b_10

Training guide for Entering New Suppliers:

https://www.smartweb.ks.gov/docs/default-source/ap---vendors---training-guides/creating-new-smart-supplier-record.docx?sfvrsn=41ae263b_12

Training guide for Checking for Existing Suppliers:

https://www.smartweb.ks.gov/docs/default-source/ap---vendors---training-guides/check-for-existing-supplier-record.docx?sfvrsn=a4dc273b_16

IRS guide to each Type of 1099, including instructions for each:

IRS Online Instructions for Forms

Summary: Agencies must segregate all new COVID relief awards in SMART.

As the Recovery Office shifts its focus from fund allocation and administration to providing targeted support and strategic guidance to recipient agencies, the Office of Accounts and Reports will support the ongoing tracking and reporting of statewide COVID-19 related spending.

Accounting for federal expenditures in SMART should clearly delineate between:

• CARES Act Coronavirus Relief Funds (CRF) (tracked in fund 3753 and in accordance with specific guidance in the attached checklist)
• CARES Act Non-CRF Awards
• New awards received under the December 2020 HR133 bill
• Additional federal relief packages/bills received in the future
• Other COVID-19 related spending from existing federal funds (identified with use of program code 21662 and not in a funding stream for one of the other categories listed here)

Therefore, the Director of Accounts and Reports is directing all agencies in receipt of COVID-19 relief awards to create and communicate unique funding streams using a combination of budget units, project codes, and/or program codes.  Please note this does not supersede any accounting guidance or policies regarding the tracking of the Coronavirus Relief Funds (per attached checklist) or regarding the relationship between SMART funds and federal CFDA #s.  This requirement is retroactive to the beginning of fiscal year 2021.

Agencies can submit an online SMART ChartField Request to add new budget unit(s) for federal funds as is deemed necessary.  At the time of the request, please also confirm the full award amount allocated or received, by uploading the award letter or other document in the SMART ChartField Request page.  If project codes are used instead of a new budget unit, please submit a ManageEngine Service Desk ticket to send documentation of the award amount and provide the fund, budget unit, and project code where the award will be tracked.  When establishing new budget units or project codes, please include either CARES or HR133 (or future relief bills as is appropriate) in the description for clarity in tracking/reporting.

If there are additional questions or concerns, you may submit a ManageEngine Service Desk ticket, or you may contact the following individuals:

Sunni Zentner            Manager, Statewide Accounting                   Sunni.Zentner@ks.gov

Nancy Haufler            Team Lead, SMART Processing Team        Nancy.Haufler@ks.gov

Jill Martin                     Team Lead, Federal Reporting                   Jill.Martin@ks.gov

Jeff Arpin                     Principal Analyst, Division of Budget          Jeff.Arpin@ks.gov

State Agency CRF Tracking and Reporting FAQ Checklist

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