BD704 Information & Monthly Review Process
Non-general fund and non-CI budget codes are reported in the BD704 Statement of Cash, Receipts, Disbursements, and Balances Report. The report is designed to determine if the receipts and expenditures reported at the Budget Code and Budget Fund (within a budget code) levels correctly report the monthly and yearly net cash based on transactional activity.
In each budget code, there are budget funds that are used to account for the receipts/expenditures of specific programs or activities within a budget code. The purpose of the BD704 report is to ensure that receipts and expenditures for these types of budget funds are recorded in NCAS with the correct cash balances, thus representing the true fiscal activity of each budget fund within a budget code.
The BD704 report provides a “calculated” cash balance based on the following:
Actual General Ledger Beginning Cash Balance + Receipts – Expenditures = CALCULATED Ending Cash Balance
The report also displays the ACTUAL General Ledger Ending Cash Balance for each budget fund as a comparison to the “calculated” ending cash balance. A budget fund is “IN BALANCE” when the “calculated” ending cash balance equals the “actual” ending cash balance from the ledger. These calculations are provided on a year-to-date and month-to date basis in the report. If the “calculated” and “actual” ending cash balances are not aligned at the budget fund level, then an entry has erroneously posted in the ledger that did not have the correct cash offset. This frequently occurs when a receipt or expenditure is reclassified without moving the corresponding cash offset.
It is possible to have one or more budget funds within a budget code that legitimately have a negative Ending Cash Balance. This scenario will not prevent an agency from certifying for the month if the “calculated” cash at the budget fund level equals the “actual” ledger cash balance at the budget fund level, AND the ending cash balance at the budget code level is NOT NEGATIVE.
At year end, OSBM does not allow negative cash balances at the budget fund level. Agencies may request an exception from their OSBM analyst. OSC should be notified of any exceptions granted for our records.
There are no exceptions for negative cash balances at the budget code level.
Agencies should review the BD704 report monthly (at a minimum) and correct any discrepancies at the budget fund level in NCAS. They should also review any negative balances at the budget fund level that do not change from month-to-month and year-to-year. For example, if a budget fund has carried the same negative cash balance for the past couple of years without any other transactional activity, then an agency should research the exception.
Release 3 of NCFS will combine NCAS financial transactions with cash activity in a single environment. Under the balancing rules in this future environment, all transactions will be required to balance at the budget fund level. Preparing for this inevitability by maintaining correct budget fund balances now will ensure the proper conversion of NCAS data to NCFS and fewer reconciliation exceptions.
Please distribute this information within your organization to those who would benefit. If you have additional questions or concerns, please submit a ticket to OSC Help Desk.