Accruals - Prior Year Accrual Reversals

The reversal of the prior fiscal year accruals in the thirteenth financial accounting period is necessary to prevent the misstatement of the current fiscal year financial data. Asset and liability entries must be reversed with an offsetting entry to the appropriate revenue or expenditure accounts. Fund balance/retained earnings should not be adjusted in the reversal entry. Reversing entries are either automated or manual.

Automated reversals are created for any manual accruals entered in NCAS with the document id 33 and for the following automatic accruals:

• Accounts Payable Accruals
• Accounts Receivable Accruals
• Items Received but not Invoiced Accruals
• Payroll Accruals
• Mail Center Accruals

Prior year reversal batches are programmatically created when the original accrual batches are automatically generated. The prior year reversal batches generated by the document id 33 are programmatically created when the accrual entry posted to the general ledger. Both types of automated reversals are processed as future dated transactions with an effective date of 06/30/xx and are placed in the Suspended Batch Master (SBM) file. The reversal batches will automatically post to the General Ledger during the normal processing cycle on June 30.

Manual journal voucher entries are prepared to record prior year accrual reversals that have not been programmatically identified and posted through an automated accrual reversal process. These manual reversal entries can be entered in NCAS prior to June 30 using an effective date of June 30, a closed period indicator, and a document id of 32. These batches will reside in SBM file until the normal processing cycle for June 30, when they will post automatically to the General Ledger. An agency may elect to enter these manual reversal entries after the thirteenth period is available for keying rather than having them reside in the SBM file.
 
A listing of prior year accrual reversing transactions residing in the SBM file is available through the IE report series, C-U-GL-LISTING-EFFECT-DATE, located in the GLPUBLIC library. Each NCAS agency should review the suspended prior year reversal batches to verify the batch totals and the accuracy of the detail transactions. Corrections to the suspended batches are made on-line in the General Ledger module.

OSC recommends that each agency retain a hard copy of the Suspended Batch Master Listing for their Comprehensive Annual Financial Report files. The SBM is subject to daily maintenance by agency personnel. The accidental purging of year-end accrual reversals from the SBM will make it necessary for the agency to manually re-key the accrual reversals as journal voucher entries in Budgetary Control with an effective date of June 30 of the next fiscal year. Agency personnel responsible for maintaining the SBM should be instructed not to purge any prior year accrual reversing entries from the SBM.