FINANCIAL INFORMATION RECORD MANAGEMENT (FIRMS)

CHAPTER3

FINANCIAL INFORMATION RECORD MANAGEMENT SYSTEM (FIRMS)

300.2

1.0OVERVIEW AND DEFINITIONS:

1.1 FIRMS Overview

The Financial Information Record Management System (FIRMS) is a corporate financial information management system that allows the Chancellor's Office to fulfill its system-wide financial reporting requirements from campus-submitted data. At the end of each month, each campus extracts accounting data from its local financial system and formats the information in a FIRMS compatible format. Data are transmitted electronically to the Chancellor’s Office via FIRMS for validation and to fulfill internal information requirements. For the quarterly submissions, the data are subjected to edit criteria and are given final acceptance by the Chancellor’s Office only when all errors have been resolved.

2.0FUND SPECIFICS:

Not applicable.

3.0FUND MANAGEMENT AND ACCOUNTING PRACTICES:

Not applicable.

4.0REPORTING REQUIREMENTS:

4.1 Data Quality Review

Before submitting financial data to the Chancellor’s Office via FIRMS and preparing reports as mandated by the state (discussed in Chapter 5), it is important that such data undergo a thorough review to ensure all transactions have been properly recorded and classified. Throughout this manual, guidance is provided to assist campuses in correctly recording their transactions so that similar events are accounted for in a consistent manner across the system and to ensure the quality of the financial data. Additional information is provided below to assist campuses in achieving a higher level of data integrity.

4.2 Quarterly Submissions

Campuses are required to submit data to FIRMS on a quarterly basis: for the periods ending September 30, December 31, March 31 and June 30. The June 30 submission is discussed in more detail in Section 4.4, Year-End Submissions. Each quarter’s data is cumulative, meaning the September 30 submission includes financial data for July 1 through September 30; the December 31 submission includes financial data for July 1 through December 31; the March 31 submission includes financial data for July 1 through March 31; and, the June 30 submission includes financial data for July 1 through June 30.

Each quarter’s submission is subject to the automated edits discussed further at 4.5, Automated FIRMS Edits/Chancellor’s Office Manual Edits. The submission will generally not be accepted by the Chancellor’s Office until all errors identified by the program have been resolved. However, on occasion there may be circumstances necessitating an override of these errors by the Chancellor’s Office. In this event, campuses are required to request acceptance of their submission via an email directed to the Chancellor’s Office FIRMS contacts as listed on the Contact List accessed at CSU Legal Accounting & Reporting Manual web page. The request must explain the reason(s) for the errors and why correction cannot be made. An electronic copy of the FIRMS validation report, with the errors that can’t be corrected highlighted, must be attached. The Chancellor’s Office, in response to these requests, will either document acceptance of the file containing the error or will provide guidance on correction and request re-submission of a “clean” file. If an accepted error is repeated in subsequent quarters, the campus must file a new acceptance request in that subsequent quarter, with a copy of the current validation report reflecting the repeated errors and a copy of the previous correspondence explaining the reason for the errors and reflecting the Chancellor’s Office acceptance of them.

The Chancellor’s Office only performs the manual edits detailed at 4.4for the fourth quarter. However, the Chancellor’s Office will identify abnormal balances at the conclusion of the 3rd quarter and report their findings to the campuses in preparation for year-end procedures. Control accounts will also be checked at the end of the 3rd quarter to confirm they are not being used to record transactions; exceptions are reported to the campuses.

Quarterly submissions are due no later than the 10th business day following the end of the quarter. Before the end of the first quarter of each fiscal year, the Chancellor’s Office updates the specific deadlines for the quarterly submissions at the Systemwide Financial Standards and Reporting (SFSR) website (see the FIRMS Submission Guidelines and Datesoption).

4.3 Year-End Submissions

For year end, three FIRMS files are submitted by all campuses:

  1. Campus Pre-Closing File

This file must reflect the status of the accounts after all accruals consistent with legal basis accounting and adjusting entries have been posted, but beforeclosing entries are recorded. Campuses are required to report all assets, liabilities, fund equity, revenues and expenditures. The account balances in the FIRMS file must agree with the pre-closing data reported to the SCO as of June 30.

The pre-closing file can be submitted any time after June 30, but no later than the date specified in the master timeline posted at the Systemwide Financial Standards and Reporting (SFSR) website. (The timeline can be accessed from the drop-down menu for either “Legal” or “GAAP” for the most current fiscal year displayed.) The Chancellor’s Office performs certain analytical procedures on the data as described at4.4 of this manual and notifies the campus of the results via email. The campus will be directed either to proceed to submit its post-closing file, if no errors have been identified, or to correct identified errors and re-submit the pre-closing file. If the latter direction is given, campuses will continue to submit pre-closing files until all errors have been cleared, no later than the specified due date described above.

  1. Campus Post-Closing File

This file must reflect the status of the accounts after the closing entries have been posted. Campuses are required to report all assets, liabilities and fund equities after revenue and expenditure accounts have been closed to fund equity. The account balances in this FIRMS file must agree with the post-closing data reported to the SCO as of June 30.

Just as with the pre-closing file, the Chancellor’s Office will perform analytical procedures on the data as described in 4.4 of this manual. Results will be communicated via email and campuses will be required to continue submissions until all identified errors have been cleared. The post-closing file must also be submitted no later than the date specified in the master timeline posted at the Systemwide Financial Standards and Reporting (SFSR) website.

  1. Auxiliary Organization File

In addition to submitting their own financial data via the files described in (1) and (2) of this section, campuses must submit on behalf of their auxiliary organizations pre-closing financial data in FIRMS format. This data, submitted in July (see the master timeline at the SFSR website for auxiliary submission deadlines), is used in state budgetary reports. , The following line items are required for each auxiliary organization:

Total assets

Total liabilities

Total fund equity

Revenues

  • Federal grants and contracts
  • State grants and contracts
  • Local government grants and contracts
  • Private contributions
  • Federal facilities and administrative (F&A) cost recovery
  • State facilities and administrative (F&A) cost recovery
  • Local government facilities and administrative (F&A) cost recovery
  • Other facilities and administrative (F&A) cost recovery
  • Sales and services of auxiliary enterprises
  • Other revenues

Expenses

  • Salaries and wages
  • Benefits
  • Miscellaneous expenses

A template is provided for submission of these line items at the SFSR Website(click on “Aux Org Legal Basis Template”). When the data entry into the template is complete, it should be converted to a text file and submitted to FIRMS using the submission process described in the FIRMS Data Submission Guide --- see link at the bottom of this section.

A later submission in October will include more detailed information that should tie to the audited financial statements. (Refer to the CSU GAAP Reporting Manual for details concerning the information required for the October submission.) This data is used for part of the Integrated Postsecondary Education Data System (IPEDS) annual report and for analysis of historical data in connection with the preparation of the consolidated financial statements.

In addition to using the data uploaded to FIRMS as indicated in (3) above, various other consolidated reports generated from these three files are submitted to the State Controller's Office (SCO), the California State Auditor (CSA), the Department of Finance, bond auditors, and other stakeholders. It is, therefore, very important that the necessary steps be taken to ensure the reliability of the data. It is the responsibility of the campus accounting officer/financial manager to immediately notify the Chancellor’s Office Systemwide Financial Standards & Reporting Department of any known errors contained in the files and to coordinate file resubmissionwith them.

For further information concerning the campus FIRMS submission process, see the FIRMS DataSubmission Guide.

4.4 Automated FIRMS Edits/Chancellor’s Office Manual Edits

The submissions described in Section 4.3 are subjected to two types of edits, those that are built into FIRMS and those performed by the Chancellor’s Office.

Automated FIRMS Edits

The automated edits generally fall into two categories:

  • Edits which check for invalid values;
  • Edits which evaluate the data against established business rules (including combination edits).

The first type, the check for invalid values, includes an edit that compares each campus’s interagency transfers and interagency receivables/payables transactions against data which are generated by the Chancellor’s Office accounting group and which they record in a report known as the Accounts Payable/Accounts Receivable Report. Differences between the interagency transfers and interagency receivables/payables transactions reported by the campus and recorded by the Chancellor’s Office in its report will appear on the FIRMS Validation Report. The system also confirms that intra-agency transfers and intra-agencyreceivables/payables net to zero.

The second type, the validation against business rules, checksdata compliance against standard business practice. For example,

  • Transactions in the scholarship and fellowship program group can only use financial aid object codes;
  • FTEs can only be associated with salary and wage object codes;
  • Interagency receivables must equal interagency payables.

In addition, in 2010, the Chancellor’s Office developed an automated tool, known as the Legal Edits Table, to ensure that certain combinations of data were valid. Thistable determines the validity of CSU fund, Fund Processing Type, and object code combinations. It is maintained by the Chancellor’s Office and is downloaded into PeopleSoft CFS each night via an automated process. Activation of the table is at the option of the campus, but is highly recommended to ensure data integrity.

Shortly after its implementation in CFS, the Chancellor’s Office incorporated these same edits in FIRMS, meaning that campus data failing to comply with the edits will not be accepted until the errors are cleared. Campuses need to be cognizant of the valid combinations to avoid delay in completing a quarterly submission, particularly at year end.

The Legal Edits Tableis posted in Excel format on the Chancellor’s Office website, along with the procedures followed in updating the CFS table.

For more information about the Legal Edits Table, visit the FAST-ED website. After logging on, click the tutorial Legal Edits. Also see the CFS 9.0 User Guide and select FIRMS Legal Edits.

For a complete list of automated edits, refer to the Data Validation section of the FIRMS Data Submission Guide.

Chancellor’s Office Manual Edits

In addition to the edits built into FIRMS, the Chancellor’s Office performs manual reviews of certain data included in the year end pre-close file as follows:

  • Balances in object code 690003, RMP Expenditure Offset, reported by the campuses will be validated against information provided by the Systemwide Budget Office. The rules below are applicable:

If there are no SWAP transactions, the transfers between state fund 0001, General Fund, and state fund 0948, Trust Fund, must net to zero on the campus books.

If there are SWAP transactions, the transfers between state fund 0001, General Fund, and state fund 0948, Trust Fund, must net to zero at the system-wide level.

  • Type codes associated with governmental and non-governmental accounts receivable will be checked.

Object code 103003, Accounts Receivable – Revenue, must carry a code of “G” (for governmental).

Object code 103004, Accounts Receivable – Operating Revenue, must carry a code of “P” (for proprietary) or “F” (for fiduciary).

  • All accounts will be reviewed for “abnormal” balances, generally defined as:

For asset and expense object codes, a credit balance;

For liability, equity and revenue object codes, a debit balance.

There are exceptions to the general definition. For example,

Contra-asset accounts, such as accounts receivable allowances, carry credit balances;

Object code 304099, Offset for Reserves/Fund Balance, an equity account, will carry a debit balance;

Object codes 690002, Prior Year Expenditure Adjustment, and 590002, Prior Year Surplus Adjustment, can have either a debit or credit balance.

The check for “abnormal” balances will not automatically result in rejection of a campus’s data, but campus personnel will be required to supply explanations for the existence of such balances. Appendix 20, Abnormal Balance Explanation Template, is provided to facilitate the documentation of explanations in a standard format for the Chancellor’s Office. (Note that this template is to be used for internal reporting purposes only and not for the SCO abnormal balance reporting requirement. See Appendix 22 for a suggested format for the provision of explanations of abnormal balances to the SCO.) Information provided by the campus should be in enough detail to allow the Chancellor’s Office to evaluate the propriety of the balance. Campuses should also be aware that if “abnormal” balances exist and are not corrected, the SCO may question them upon receipt of the SAM 99 file (see Chapter 5 for further information about the SAM 99 file) or the hard copy reports prepared by the Chancellor’s Office.

FIRMS has been programmed to identify all cash and investment accounts possessing credit balances. The system will return a WARNING message rather than an ERROR message. The former does not prevent the campus from making an acceptable (also known as a “clean”) submission to FIRMS, but the latter will. Although the campus can complete its year-end pre-close submission with credit balances in cash and investments, the Chancellor’s Office will also identify these balances in its manual review and can request further explanations.

Campuses are urged to analyze “abnormal” balances at the CSU fund level before making their FIRMS and SCO submissions (further discussed in Chapter 5) to ensure the accuracy of the data.

Finally, campuses are encouraged to transmit a completed Abnormal Balance Explanation Template to the legal reporting contacts on the Contacts List in the Legal Accounting and Reporting Manual at the time the FIRMS legal-basis file is submitted to expedite the CO’s review of the data. This is not mandatory. If a campus chooses not to do this, SFSR will prepare the form in conjunction with their review of the FIRMS data and transmit it to the campus for entry of explanations of identified abnormal balances.

NOTE: Scholarship and/or grant funds will frequently have negative cash balances because of the difference in the timing of issuance of funds and recovery of funds. Campuses will need to explain the abnormal cash balance in these funds upon submission of the FIRMS data, but if negative balances are due to this timing difference, the explanation will be accepted.

  • Trial balances will be reviewed to confirm control accounts are not being used by the campuses to record transactions. To help campuses identify control accounts in FIRMS, the Chancellor’s Office added the words “Control Account” at the end of each control account’s object code description. FIRMS control accounts are used to describe the numbering convention used for a group of accounts. Like the tiered state general ledger accounts in the Uniform Codes Manual, the control accounts provide the logical structure for the detail accounts and may be used for roll-up in summary level reports. For example, 250000 is the Other Current Liabilities group of accounts and each object code in the group begins with the digits 2500. Therefore, Other Current Liabilities detail object codes include: 250001, Cash Overages; 250002, Uncleared Collections; 250003, Accrued Leave Time; etc.
  • The designation of funds established in all CSU funds listed in ICSUAM 2001.00, Campus Reserves, will be compared both to object code 304099, Offset for Reserves/Fund Balance, and to the fund’s equity balance to confirm (1) the designations and the offset net to zero and (2) the entire equity balance of these funds has been distributed to the designation object codes, with any residual undesignated amount being credited to object code 304015, Fund Balance-Undesignated/Unallocated. Designation object codes include:

304010Designated for Capital Improvements/Construction