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)

step 1

Identify Fund s/ Awards which are in overdraft and need to be cleared:

  1. Run the Year-To-Date Deficit Fund Balance Listing Report (ReportMart3: FIN_FUND_158_YTD_Deficit_Balance).
  2. Identify all Awards with a deficit balance of $1000, or more.
step 2

Determine the source of the overdraft:

  1. 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.
step 3

Clear the Overdraft:

  1. If the overdraft was caused by an improper posting, initiate a correcting journal which would move the activity to the appropriate Award. Reference How To: Create or Upload an iJournals.
  2. 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 How To: Create or Upload an iJournals.
  3. 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.
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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).

Questions?

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