Fiscal Year-End (FYE)
May 31, 2020
Memo for FY2020 year-end published for the community. If there are changes or clarifications, a note will be made in this section of the memo.
Each fiscal year, the University is required to prepare consolidated financial statements in accordance with Generally Accepted Accounting Principles (GAAP). These financial statements provide an overview of the University’s financial position as of June 30 and its activities for the fiscal year (July 1 through June 30). The statements cover the entire University system and its legally separate component units, for example, the University of Minnesota Foundation.
Why is fiscal year-end important to departments?
Fiscal year-end is important to departments because accurate reports are required for management accounting, sponsors and donors want accurate reporting, and the University must receive clean audits to maintain funding. To ensure that the University can meet these requirements, all revenues must be recorded when they are earned and all expenses must be recorded when incurred.
Revenues are earned when a business transaction to sell goods or services has been completed, and those goods or services have been delivered or completed.
Expenses are incurred when a business transaction to purchase goods or services has been completed, and those goods or services have been received by the University.
All revenue and expense transactions must be recorded in a timely manner so the University’s financial records can be closed to allow for sufficient time for preparation of the financial statements and allow timely management reporting within the departments and for the University as a whole. Therefore, it is imperative that all departments follow the transaction and reporting deadlines.
How does PeopleSoft Financials affect the year-end closing process?
PeopleSoft Financials is modular in nature. This means some modules are dependent on processing being completed in other modules before they can be closed. Transactions from other modules, e.g., vouchers from Accounts Payable and bills from Accounts Receivable/Billing, will need to be completed earlier to allow for complete processing in the module and posting in the General Ledger.
Also, active purchase orders are rolled over to the next fiscal year. There is a period of time at the end of each fiscal year where a number of roles in the system are locked down so this can happen. No new transactions can be created in PeopleSoft Financials for a brief period of time, while we are closing purchase orders and rolling things to the new fiscal year. Roles that are typically restricted from creating a new transaction in the system or updating an existing transaction:
- Requisition preparers (including U Market only req prepaprers)
- Procurement specialists
- Requisition and PO change order approvers
- Voucher specialists (payment entry) and voucher approvers
- PCard reconcilers (expense reports in EFS) and approvers
- EFS travel authorization, cash advance, and expense report preparers and approvers
The full fiscal year-end memo and procedures is now a Google Doc. This change was based on feedback from the community about formatting and usability. It also allows us to update the memo in real time, should a need arise. Keep in mind that in the past it's been necessary to make updates to the memo throughout the year-end process, either to clarify matters, fix errors, or provide updates, so please check back on this page or the Google Doc periodically throughout the process.
Every year the University has a pause in recording purchasing transactions in the financial system that lasts about five business days. During this pause, people are unable to create, edit, or approve requisitions, receipts, and purchase orders (POs). Please carefully plan ahead to help minimize disruptions and ensure that your department has its needed equipment, services, and supplies (including oxygen, dry ice, and food/bedding for animals). During the purchasing pause, U Market shoppers may still create carts in U Market but those carts cannot be turned into requisitions in EFS until July 1. Once the new fiscal year is available in EFS, full access is restored and the recording of procurement activities may continue.
Why can't people process or approve transactions in EFS during the pause in recording transactions in EFS? Those activities interfere with the year-end roll process. Inquiry in the reporting instance and other reporting functions will not affect this processing and so may be performed during the cut-off period.
What if I need to make a purchase after the cutoff/before July 1?
Departments should plan ahead and place all orders prior to the cutoff. If a purchase does need to be made after the cutoff, see the special year-end purchasing procedures below. Everyone understands that purchasing activities cannot completely cease, even though transactions may not be entered into the financial system. If you encounter a true emergency situation where the purchase cannot wait and none of the processes below are acceptable to the supplier, contact Purchasing Services 612-624-2828 or the Financial Helpline at 612-624-1617 for further assistance.
U Market year-end
The deadline for departments to pull U Market shopping carts over into EFS and turn them into requisitions for the fiscal year being closed will be the same as for any requisition. U Market will remain open, irrespective of whether shopping carts can be brought into EFS for final processing and dispatch to suppliers. After the deadline, shoppers will still be able to put items in carts and assign carts but no carts can be turned into EFS requisitions until July 1. Billing in the fiscal year being closed for U Market purchases ends with invoices received from the suppliers by the deadline for processing vouchers.
Each year there is a period of time (about five business days) at the end of the year where requisitions, receipts, purchase orders, and PO change orders may not be entered in the financial system (the cut-off period). To minimize disruptions and problems, please work with your departments to plan ahead as much as possible. Everyone understands that purchasing activities cannot completely cease during this window. Please start planning now to ensure adequate supplies (including oxygen, dry ice, and food/bedding for animals), equipment, and services are ordered ahead of time.
There are a number of other methods for urgently needed purchases during this window when POs may not be processed, including the following:
Phone orders may be accepted by U Market Services for select items
Only items sold by the supplier "U Market Stock" or “U Market Controlled Stock” in U Market may be ordered by contacting 612-624-4878 or firstname.lastname@example.org. Departments must provide ChartField string information that is valid in the new fiscal year because these orders cannot be billed until the new fiscal year opens.
$0 to $2,500
Use the PCard up to the limits ($2,500 per order and $10,000 per month). All normal PCard rules and procedures apply. Capital equipment or professional services must NOT be paid for out-of-pocket, using the PCard, or Travel Card.
An emergency situation that requires a PO
There should be very few of these emergency orders. If a situation arises, email email@example.com and request assistance from Purchasing Services.
Existing Blanket Orders
Continue to order off existing blanket orders and enter the transactions after the new fiscal year opens.
Professional Services up to $2,999.99
Direct the supplier to perform the work and enter the transaction in the new fiscal year on or after July 1. Services must NOT be paid for out-of-pocket, using the PCard, or Travel Card.
For services $3,000 and greater, email firstname.lastname@example.org and request assistance from Purchasing Services. Services must NOT be paid for out-of-pocket, using the PCard, or Travel Card.
If emergency situations arise where goods or services are needed and it is unclear what action to take, contact your campus or college Chief Financial Manager or the Financial Helpline at 612-624-1617 or email@example.com.