6/4/2020 Schedule H - Capital Leases AUDITOR-CONTROLLER’S OFFICE Presented By: Caroline Santos 1 2020 YEAR-END TRAINING Schedule H – Capital Leases CAPITAL LEASE A lease that substantially transfers all the risks and benefits of ownership of the property to the lessee. 2020 YEAR-END TRAINING 2 1
6/4/2020 Schedule H – Capital Leases Criteria Title transfer at the end of the lease term Bargain purchase option Lease term is 75% or more of economic life of leased property Present value of lease payments are equal to 90% or more of the fair value of property 3 2020 YEAR-END TRAINING Schedule H – Capital Lease Test Sheet Capital Lease Test link: http://www.auditorcontroller.org/ReportsPublications.aspx 2020 YEAR-END TRAINING 4 2
6/4/2020 Schedule H – Capital Lease Test Sheet 5 2020 YEAR-END TRAINING Schedule H – Capital Leases Scenario The ACO has two new leases which meet the requirement to be recorded as capital leases. 1) The beginning fiscal year lease principal balance is $1,266,885 2) Additions of $531,754 were made during the fiscal year 3) Principal payments of $214,601 were made during the fiscal year 2020 YEAR-END TRAINING 6 3
6/4/2020 Schedule H – Capital Leases 7 2020 YEAR-END TRAINING Schedule H – Capital Lease Payment Schedule 2020 YEAR-END TRAINING 8 4
6/4/2020 Schedule H – Capital Lease Supporting Document 9 2020 YEAR-END TRAINING Schedule H – Capital Leases Question The ACO has been making a $1,700 monthly payment for 5 copiers. The payments will end in 2 more years at which time the copiers will be owned by the ACO. What kind of lease agreement do we have? A. Capital lease B. Operating lease 2020 YEAR-END TRAINING 10 5
6/4/2020 Schedule H – Capital Leases Answer Capital Lease. Reason: Title transfers to ACO at the end of the lease term. 11 2020 YEAR-END TRAINING Schedule H – Capital Leases Submit Schedule H and Supporting Documents via email to: ACO Year-End acoyearend@rivco.org Schedule H is Due August 7, 2020 Questions? Submit them by email to acoyearend@rivco.org 2020 YEAR-END TRAINING 12 6
class of capital assets, which is used to track Construction in Progress completed as of June 30. still under construction or/and that have been substantially ready to be placed into service. tangible or intangible capital asset before it is costs incurred to construct or develop a Schedule Q 6/4/2020 Schedule Q – Construction In Progress AUDITOR-CONTROLLER’S OFFICE Presented By: Echel Ybanez 13 2020 YEAR-END TRAINING Construction In Progress (CIP) is a major Schedule Q is used for capital assets that are There is no depreciation expense for CIP 2020 YEAR-END TRAINING 14 7
Schedule Q - Construction in Progress 1) 1) Total expense do not match the Actual project cost. 2) 2) Incomplete or missing information 3) 3) Missing supporting documents for closed projects 4) 4) Late submission Common Issues and Errors: 6/4/2020 2020 YEAR-END TRAINING 15 2020 YEAR-END TRAINING 16 8
Cost to date in PS Asset Management Location 6/4/2020 17 2020 YEAR-END TRAINING 2020 YEAR-END TRAINING 18 9
Cost to date in PS Asset Management Location Cost to date in PS Asset Management Location 6/4/2020 19 2020 YEAR-END TRAINING 2020 YEAR-END TRAINING 20 10
Schedule Q - Construction in Progress Supporting Document 6/4/2020 21 2020 YEAR-END TRAINING 22 2020 YEAR-END TRAINING 11
Schedule Q - Construction in Progress Supporting Document 6/4/2020 23 2020 YEAR-END TRAINING 24 2020 YEAR-END TRAINING 12
acoyearend@rivco.org Email all documents and files to E-mail all of the following: 1. Signed copy of Schedule Q 2. Supporting Documents 3. Excel version of Schedule Q 6/4/2020 Questions? Please submit them to: Echel Ybanez (EYbanez@RIVCO.ORG , 951-955-3556) 25 2020 YEAR-END TRAINING Schedules L and S AUDITOR-CONTROLLER’S OFFICE Presented By: Mary Yip 2020 YEAR-END TRAINING 26 13
6/4/2020 Overview • Purpose of Year-end Schedules for: o Deferred Inflows of Resources o Advances From Grantors and Third Parties • Scenarios, Schedules & JE Walk Thru • Commonly Ask Questions • Checklist For Year-end 27 2020 YEAR-END TRAINING Purpose of Year-end Schedules Deferred Inflows of Resources: Schedule L-1 and L-2 Schedule S-12 Deferred Inflows of Resources Advances From Grantors and Third Parties: Schedule L-3 Schedule S-12 Advances 2020 YEAR-END TRAINING 28 14
6/4/2020 Deferred Inflows of Resources (Schedule L-1 / L-2) Time Restriction – 2 Types: 1. When a cash grant is received in advance and all of the eligible requirements have been met except for a time requirement. For example, the grant may be not used until next fiscal year. The grant should be recognized as a Deferred Inflows of Resources. (Schedule L-1) 2. When services are performed or taxes are levied, but revenue is not “available” to cover current year expenditures. (Governmental Funds only, Schedule L-2) 29 2020 YEAR-END TRAINING Deferred Inflows of Resources (Schedule L-2) Revenue Availability Period •60 Days - Taxes •12 Mons - Expenditure-driven Grants •90 Days - Other Revenue Streams 2020 YEAR-END TRAINING 30 15
6/4/2020 Scenario for Schedule L-1 On June 1, 2020, the Health Department received a $500,000 grant from the State for meeting all of the requirements eligible for the grant. The purpose of the grant is for supporting health related program activities and can only be used in the next fiscal year. The revenue was recorded at the time of receipt. Debit Credit Cash 101100 500,000 Revenue 751600 500,000 31 2020 YEAR-END TRAINING Schedule L-1 Accrual/Adjusting Entry 2020 YEAR-END TRAINING 32 16
6/4/2020 Schedule L-1 Reversal Entry 33 2020 YEAR-END TRAINING Schedule L-1 2020 YEAR-END TRAINING 34 17
6/4/2020 Schedule S-12 35 2020 YEAR-END TRAINING Scenario for Schedule L-2 The Department of Animal Services provided services to the City of Banning on June 2, 2020. The invoice was generated in PeopleSoft billing module for $25,000. The revenue was recorded at the time when invoice was generated. The payment is not expected by June 30 until October 2, 2020. Debit Credit DFOG 118601 25,000 Revenue 720000 25,000 2020 YEAR-END TRAINING 36 18
6/4/2020 Schedule L-2 Adjusting Entry ACARC 37 2020 YEAR-END TRAINING Schedule L-2 Reversal Entry ACARC 2020 YEAR-END TRAINING 38 19
6/4/2020 Schedule L-2 39 2020 YEAR-END TRAINING Schedule S-12 2020 YEAR-END TRAINING 40 20
6/4/2020 Advances from Grantors and Third Parties (Schedule L-3) When grants are made before the recipient has met all of the eligible requirements. If a government receives $500 grant payment but has not yet met all of the requirements necessary to be eligible for the grant, it technically owes that grant payment back to the grantor until it meets the requirements. The recipient should report Advances from Grantors as a liability until all of the requirements have been met. 41 2020 YEAR-END TRAINING Scenario for Schedule L-3 Sheriffs Dept. received a federal grant on June 01, 2020 for $400,000. The requirements are the proceed needs to be spent by the end of fiscal year 20/21 and it can only be used to fund activities related to off road vehicles. Only $75,000 was used as of June 30, 2020. The revenue was recorded at the time of receipt. Debit Credit Cash 101100 400,000 Revenue 767140 400,000 2020 YEAR-END TRAINING 42 21
6/4/2020 Schedule L-3 Adjusting Entry ACARC 43 2020 YEAR-END TRAINING Schedule L-3 Reversal Entry ACARC 2020 YEAR-END TRAINING 44 22
6/4/2020 Schedule L-3 45 2020 YEAR-END TRAINING Schedule S-12 2020 YEAR-END TRAINING 46 23
6/4/2020 Commonly Ask Questions Are all departments expected to submit Schedule S-12? Yes. If there’s no activity incurred during the year, indicate no activity or zero balance. What is the difference between Schedule L and S? Schedule L is used to report the year-end accrual or adjusting entry. Schedule S is used to report the year-to-date balance in G/L. Some accounts might have prior year balance carried forward. Does ACO validate the account balances? Yes. We validate the account balances to the Year-end schedules and supporting documents. How much information should be included in the Description column? The information you provide should be sufficient or helpful for everybody. 47 2020 YEAR-END TRAINING Checklist Start Early! Reconcile, Reconcile, Reconcile Accounts Must Have a Credit Balance Confirm Data on Year-end Schedules: - Is it accurate? - Does it tie to the general ledger? - Is all supporting documentation included? 2020 YEAR-END TRAINING 48 24
6/4/2020 Schedule L and S Submit Schedule L and S with Supporting Documents via email to: ACO Year-End acoyearend@rivco.org Questions? Submit them by email to acoyearend@rivco.org 49 2020 YEAR-END TRAINING QUESTIONS ? If you have any general questions you can type them in the Chat box. Any department specific questions please email them to acoyearend@RIVCO.ORG 2020 YEAR-END TRAINING 50 25
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