Overview
Reversions and carry forwards are computed at year-end to handle excess budgeted resources or deficits. The process is governed by a set of rules (sometimes known as lapsing rules). These rules may be self-imposed or mandated by an outside funding source such as the state, federal government, or a sponsoring agency. This process is intended to encourage good fiscal practices. The process is comprised of three primary actions:
- Budget Reversion: A pair of pending ledger entries is generated for the year being closed. One entry adjusts the budget in the actual account. The other adjusts the budget in a budget reversion account.
- Budget Carry Forward: At least one pair of pending ledger entries is generated for the next fiscal year. For each pair the accounts remain unchanged. However, one uses the beginning budget cash object code, and the other uses the carry-forward object code (if carrying forward by object code) or the unallocated object code (when consolidating carrying forward transactions).
- Cash Reversion: Two pairs of pending ledger entries are generated for the current fiscal year. One moves the cash out of the actual account and into a cash reversion account. The other moves the corresponding fund balance out of the actual account and into a cash reversion account.
The reversion/carry forward rules are defined in the organization reversion function via two standard documents called the Organization Reversion (ORGR) document and the Organization Reversion Category (ORGC) document.
Files
The organizationReversionJobs create two files that are placed in the staging/gl/originEntry directory: org_reversion_pre_closing and org_reversion_closing. These files contain year-end entries to revert and carry forward current budget and cash according to the established reversion rules. These files need to be loaded and processed via the General Ledger Correction Process document.
Carry Forward and Reversion Example
At the fiscal year-end, the Ichthyology Department (Org Code ICH) has an account 1234567 in chart BL. The cash object code in the account's Chart of Accounts is 8000. The Organization Reversion table for the department specifies that its
- budget reversion account is 1023295.
- cash reversion account is 1023299.
Reversion codes (rules) and carry forward object codes are shown in the carry forward and reversion actions summarized in the following table.
Category | Object Code | Rule | Budget Amt | Actual Amt | Budget Balance | Encumbrances |
Org Wages | 3000 | N2 | 6000 | 5000 | 1000 | 100 |
Action: Encumbrance not covered; 1000 reverted to 1023295 | ||||||
Salary /Fringes | 2004 | R2 | 20000 | 18000 | 2000 | 200 |
Action: Encumbrance not covered; 2000 reverted to 1023295 | ||||||
Financial Aid | 5800 | N1 | 3000 | 4000 | -1000 | 500 |
Action: Encumbrance not covered (- budget balance); -1000 carried forward to 1234567 | ||||||
Capital Equipment | 7000 | N1 | 1000 | 800 | 200 | 300 |
Action: 200 carried forward to 1234567 to cover part of encumbrance | ||||||
Reserve | 7900 | N1 | 1000 | 500 | 500 | 400 |
Action: 400 carried forward to 1234567 to cover encumbrance; 100 reverted to 1023295 for positive balance | ||||||
Transfer Out | 5199 | R2 | 500 | 500 | 0 | 200 |
Action: Encumbrance not covered; nothing reverted; nothing carried forward | ||||||
Transfer In (income) | 1699 | R2 | 300 | 500 | 200 | 300 |
Action: Encumbrance not covered; 200 reverted to 1023295 | ||||||
Travel | 6000 | N1 | 1000 | 900 | 100 | 100 |
Action: 100 carried forward to 1234567 to cover encumbrance; nothing else remains to revert or carry forward | ||||||
Other Expense | 5000 | N1 | 500 | 500 | 0 | 200 |
Action: Encumbrance not covered (0 budget balance); nothing reverted; nothing carried forward. | ||||||
Assess Expend | 7900 | C1 | 400 | 250 | 150 | 100 |
Action: 100 carried forward to 1234567 to cover encumbrance; 50 carried forward to 1234567 from positive balance; nothing reverted | ||||||
Revenue (income) | 1800 | N2 | 1200 | 1000 | -200 | 800 |
Action: Encumbrance not covered (- budget balance); -200 carried forward to 1234567 | ||||||
Cash | 8000 | n/a | 10000 | 4000 | 6000 | n/a |
Action: 6000 reverted to 1023299 |
Note that the object code for each category is used only if the Carry Forward by Object Code attribute of the Organization Reversion table is set to Yes. The Transactions Generated table (see below) illustrates both sets of results—one set when the Carry Forward by Object Code Indicator is Yes and another set when it is No).
Transactions generated (example)
Transaction | Account | CF by Obj/ Category |
Account | Object Code | Amount | DrCr |
Budget Reversion | Actual | Any | 1234567 | 7900 | -3300 | |
Budget Reversion | Reversion | Any | 1023295 | 7900 | 3300 | |
Budget Carry Forward | Actual | No Consoli- dated |
1234567 | 0110 | -350 | |
Budget Carry Forward | Actual | No Consoli- dated |
1234567 | 7900 | -350 | |
Budget Carry Forward | Actual |
Yes Fin Aid |
1234567 | 0110 | -1000 | |
Budget Carry Forward | Actual |
Yes Fin Aid |
1234567 | 5800 | -1000 | |
Budget Carry Forward | Actual |
Yes Cap Equip |
1234567 | 0110 | 200 | |
Budget Carry Forward | Actual |
Yes Cap Equip |
1234567 | 7000 | 200 | |
Budget Carry Forward | Actual |
Yes Reserve |
1234567 | 0110 | 400 | |
Budget Carry Forward | Actual |
Yes Reserve |
1234567 | 7900 | 400 | |
Budget Carry Forward | Actual |
Yes Travel |
1234567 | 0110 | 100 | |
Budget Carry Forward | Actual |
Yes Travel |
1234567 | 6000 | 100 | |
Budget Carry Forward | Actual |
Yes Assess Expend |
1234567 | 0110 | 150 | |
Budget Carry Forward | Actual |
Yes Assess Expend |
1234567 | 7900 | 150 | |
Budget Carry Forward | Actual |
Yes Revenue |
1234567 | 0110 | -200 | |
Budget Carry Forward | Actual |
Yes Revenue |
1234567 | 1800 | -200 | |
Cash Reversion | Actual | Yes | 1234567 | 8000 | 6000 | Cr |
Cash Reversion | Reversion | Yes | 1023299 | 8000 | 6000 | Dr |
Fund Balance Reversion | Actual | Yes | 1234567 | 9899 | 6000 | Dr |
Fund Balance Reversion | Reversion | Yes | 1023299 | 9899 | 6000 | Cr |
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