REVOLVING FUND AND ACCOUNTS PAYABLE
CHAPTER26
REVOLVING FUND AND ACCOUNTS PAYABLE
CSU FUND:499 – Revolving Fund
FUND TYPE:Proprietary – Internal Service Fund
AUTHORITY:EO 1000 – Section IIIA
1.0OVERVIEW:
The intent is not to provide a full discourse on the Accounts Payable Cycle but instead to point out selected aspects of managing accounts payable which are unique to CSU.
CSU Fund 499 is referred to as the Revolving Fund.It may be used to issue advances, and pay invoices charged to claimable funds. This fundwill typically have a negativecash balance throughout the fiscal year due to the timing differences between cash paid and reimbursement received.
Topics discussed in this chapter include:
Types of Advances
The CSU Claim Process
Year End Obligations
Online Payments to the IRS via Electronic Federal Tax Payment System (EFTPS)
Many of the Accounts Payable policies and procedures are documented via CFS User Guides, ICSUAM policies, and other miscellaneous documents. Please see Section 7.0 Resources for hyperlinks to these documents.
2.0FUND SPECIFICS:
CSU Fund 499 Revolving Fund:Used to record expenditures made on behalf of other funds as a means to simplify reconciliation and tracking. It then receives reimbursements from the ultimate payer funds. Due to its nature, this fund should not have revenues, expenses, or fund balance, but only assets and liabilities.
3.0FUND MANAGEMENT AND ACCOUNTING:
3.1Unique FIRMS Object Codes
The FIRMS Object Codes listed below are used specifically with the Revolving Fund.Refer to the Tables of Object Code and CSU Fund Definitionson the Systemwide Financial Standards & Reporting, SFSR website for object code definitions.
130499Due from CSU 499 -TF Revolving Fund
131499Due from CSU 499 - TF CSU Revolving Fund - Fund 0948 (Inter-agency)
230499Due to CSU 499 -TF Revolving Fund
231499Due to CSU 499 - TF CSU Revolving Fund within Fund 0948 between agencies
A complete listing of valid accounts for CSU Fund 499 can be found in the Legal Edits Table at the SFSR website.
3.2 Types of Advances
Campuses may use the Revolving Fund to issue advances that are not recorded in the fund where the expense will ultimately be charged.Consolidating advances in one fund simplifies the reconciliation, tracking, and follow up processes.
Advances must be issued in accordance with established campus procedures and may include, but are not limited to:
a)Travel advances may beissued to assist employees with estimated out of pocket travel expenses when other corporate or personal resources are not available.
b)Salaryadvance payments may be issued to employees for salary earned when the SCO payroll warrant is incorrect or upon separating from the CSU.
3.3The CSU Claims Process
The State Controller’s Office (SCO) has given CSU the authority to process payments through a CSU local bank (i.e. Wells Fargo Bank).Payments made by the CSU using funds classified as claimable funds must be reimbursed by the SCO from the appropriate state expenditure fund. Reimbursement requests are submitted using claim schedules.
The CSU claims process within PeopleSoft gives campuses the ability to identify reimbursable payments and to submit a claim schedule with the required informationto the SCO for reimbursement.It is recommended that campuses submit claim schedules at mid-month and month end. Claimable funds include, but are not limited to the SCO Funds 0576, 6028, 6041 and 6048. Refer to Section 7.0 for the CFS Business Process Guide: CSU Claims Process.
A claims clearing account (FIRMS object code 103xxx, where “xxx” represents campus specific coding) within the Revolving Fund (CSU fund 499)is used to track claim schedules that have been submitted, but not yet reimbursed by the SCO. In other words, the balance in this account represents all claims that have not yet been paid by the State Controller’s Office.
During the claims process, vouchers that have been charged to a claimable fund are identified and the related voucher distribution lines are extracted to a CSU Claims Staging Table. The Claims Post process creates accounting entries that result in a debit to the claims clearing account (103xxx) and a credit to cash (101xxx) within the Revolving Fund.
Following is an example of a claims clearing account balance per the PeopleSoft Trial Balance Report for SCO Fund = 0948; CSU Fund = 499; andPeopleSoft Fund = DVP01. Please note that the PeopleSoft Fund is campus specific and each campus should use their appropriate value when running this report.
The claims clearing account is reconciled on a monthly basis. The SCO should be contacted for a status on items outstanding for more than 30 days. A request for stop payment and reissue should be submitted to the SCO for warrants lost or not received.
Unpaid items in the claims clearing account (103xxx)as of June 30 will need to be evaluated in order to determine which unpaid claims to reclassify to Due To/Due From accounts at year end.Claim warrants issued by the State in June that were not deposited by the campus on or before June 30 will be considered in transit and the related outstanding claim should not be reclassified.Refer to Chapter 4, Section 3.2 Reclassifying Claims Due from SCO of this manual for detailed instructions.
State Pay Vendor (SPV) Claims
The State Pay Vendor (SPV) process is used to create a claim that is sent to the SCO requesting they pay the supplier directly. This may be used for payment of large invoices related to capital projects. The SPV form of payment will be assigned to the voucher allowing it to be selected in the Claims Extract process if the Fund Reimb flag is set up at the fund level.
Refer to the CFS 9.2 Business Process Guide: CSU Claims Process for detailed information on this process.
Any outstanding SPV claims at June 30 must be reclassed in accordance with Chapter 4, Section 3.2 Reclassifying Claims Due from SCO of this manual.REMINDER: Unpaid SPV claims may cause Recon Factors on campus SAM99 reports due to timing differences.
3.4Year End Obligations
Goods and services received by the campus as of June 30 but not yet invoiced, must be obligated, or accrued, for financial reporting. Throughout the year, legal reporting combines posted vouchers not yet paid and encumbrances in State GL account 3010 – Accounts Payable.
Obligations with an encumbrance require journal entries at year end to reclassify the amount from an encumbrance balance to an Actual ledger balance.Refer to Chapter 4, Section 3.3 CSU Year End Obligations Process (CSUGL015) for further details regarding this process.
3.5Online Payments to the IRS via Electronic Federal Tax Payment System (EFTPS)
Effective January 1, 2011, all campuses were required to implement the EFTPS process when depositing federal taxes to the IRS. When deposits/payments are made using EFTPS, the campus Wells Fargo electronic account is directly debited instead of the campus issuing a check to the IRS for payment of the federal taxes.
Following are the implementation documents for EFTPS and Wells Fargo Bank. These should be used in the indicated order.
- EFTPS Account Setup Instructions
- EFTPS Wells Fargo Account Setup
- EFTPS Making a Payment Instructions
To record payments made via EFTPS the campuses may do one of the following:
- Recommended: The payment will be entered through AP as a regular voucher with Wire as the form payment. Payment will be manually recorded after the voucher has been budget checked and posted. ‘Wire Transfer’ is available in CFS in connection to the campus Wells Fargo account as an additional bank setup.
- The payment will be entered in PeopleSoft as a manual journal entry.
See the last page of the document provided in Step 3 above for a sample of how to manually record the payment in PeopleSoft.
3.6Payments to out of state vendors
Payments made to non-resident vendors (those from outside California)
A withholding agent is required to withhold from all payments or distributions of California source income made to a nonresident payee unless the withholding agent receives a certified FTB Form 590, Withholding Exemption Certificate, or authorization for a waiver, or an approved reduced withholding amount. Withholding is optional, at the discretion of the withholding agent, on the first $1,500 in payments made during the calendar year.
California source income includes:
• Payments made for personal services performed in California. The location where the personal services are performed determines the source of income.
• Payments made to nonresident entertainers for services rendered in California.
The current withholding rate is 7% on gross payments made to nonresident contractors.
See the attached FTB 1017 for further information.
4.0REPORTING REQUIREMENTS:
IRS Form 1099-Misc
Mailed to recipients annually by January 31 with IRS filing deadline of February 28 (paper) or April 1 (electronic)
State of California 592B
Mailed to both recipients and the Franchise Tax board by January 31
5.0FUND BALANCE:
Not Applicable.
6.0GAAP IMPACT:
There will be manual adjustments required to the GAAP financial statements for invoices, retention for construction projects, and other obligations notrecorded or accrued for on legal basis as of June 30th due to timing differences between legalbasis close and completion of the reporting package. Refer to Chapter 4.3.1, Accounts Payable Obligation, of the CSU GAAP Manual for further discussion.
7.0RESOURCES:
FTB 1017
CFS 9.2 - Accounts Payable
Business Process Guide: CSU Claims Process
Business Process Guide: Travel Advance and Expense Reporting
Business Process Guide:Setting Up Payables for Federal and State Suppliers - Reporting and Processing
GAAP Manual:
Chapter 4.3.1 – Accounts Payable
ICSUAM
3103.01Disbursements General
3103.02Outgoing Payments – Electronic and Paper
5250.00Procurement Cards (University Liability Credit Cards) - Superseded 3103.03
5251.00Corporate Cards (Employee Personal Liability Credit Cards) - Superseded 3103.04
3103.05Payroll Payments Issued by Accounts Payable
3601.01Travel Policy
REVISION CONTROL
Document Title:CHAPTER 26 - CSU FUND 499 REVOLVING FUND AND ACCOUNTS PAYABLE
Contributor:Lauri Reilly
Reviewer:Jean Gill
CO Owner:S. Pickering
Issuance Date:April 15, 2014
Revision and Approval History
Section(s) Revised / Summary of Revisions / Revised By / Reviewed by / Approved by / Revision Date7.0 / Updated ICSUAM referencesinResources section. / Michelle Baker / Kristina Randig / R. McNiel / 3/23/15
3.6 / Added section relating to nonresident payees / Bryn Siegel / S. Pickering / S. Pickering / 1/23/2018
6.0 and 7.0 / Updated reference to chapter 4.3.1 / Cinthia
Santamaria / S. Pickering / S. Pickering / 2/26/2018
26-1 / California State University| CSU Legal Accounting and Reporting Manual