How To: Clear a Fund Overdraft at Year-End
Who does this? Department Staff
When? The balance of a Fund / Award is overdrawn. Fund overdrafts can and should be cleared throughout the year. All fund overdrafts in excess of $1000 MUST be cleared by fiscal year-end.
How? By identifying the source of overdraft, determining the appropriate course of action, and completing correcting journals. Fund transfers, as needed, are generally submitted to Fund Accounting.
Clear a Fund Overdraft (3 steps)
Identify Fund s/ Awards which are in overdraft and need to be cleared:
- Run the Year-To-Date Deficit Fund Balance Listing Report (ReportMart3: FIN_FUND_158_YTD_Deficit_Balance).
- Identify all Awards with a deficit balance of $1000, or more.
Determine the source of the overdraft:
- Examine the Award activity to determine what created the overdraft. This will assist in determining what corrective action is needed. Be attentive to the following possibilities:
- Determine if overdraft was caused by an improper journal posting.
- Examine the expenditures recorded on the Award to determine if those expenditures would be more appropriately recorded to another Award.
- If all activity recorded to this Award is appropriate, determine if it would be appropriate to transfer funds into this Award to clear the overdraft.
Clear the Overdraft:
- If the overdraft was caused by an improper posting, initiate a correcting journal which would move the activity to the appropriate Award. Reference iJournals How To instructions.
- If the overdraft resulted from expenditures which should have been posted to another Award, prepare a journal to move the expenditures to the correct Award. Reference iJournals How To instructions.
- If the activity recorded to the Award is appropriate, identify another Award which would be the source for a fund transfer. Reference How To: Request a Fund Transfer.
What Happens Next?
- Fund Transfer Requests are processed throughout the month.
- To ensure that all deficits have been cleared, departments can run an updated Year-To-Date Deficit Fund Balance Listing Report (ReportMart3: FIN_FUND_158_YTD_Deficit_Balance).
- Contact your School / Department Fund Accountant.
- If there are further questions, email Lynette Kruger, Interim Fund Accounting Manager, or call 650-723-9773.
- For specific questions regarding the year-end close calendar and cutoff dates for entries, expenditure movements and fund transfers, contact Information Systems and Reporting.