Policy
FIACCT 07-02_11 Federal Revenues- Receipt of Federal Funds
Effective: July 1, 1994
Revised: April 1, 2013
Purpose
This policy provides procedures on how to make a request for federal funds, record the revenue and the date federal funds are requested and record the cash and the date the cash is received.
Procedures
Responsibility
Action
Setting up Customer Account
Departments
Enter and submit VCC (new customer account) or CCM (modification to existing customer accounts) documents in FINET. Set up a customer account for each letter of credit if letters of credit are used to make federal drawdowns. If letters of credit are not used to make federal drawdowns, set up a customer account for each federal agency from which the funds are received. For instructions on how to enter VCC or CCM documents, see FIACCT 06-01.04 Setting Up Customers
Division of Finance
Review, approve or reject with comment, department submitted VCC and CCM documents.
Setting up Program Codes
Departments
- Set up program codes (or obtain an exemption from and approval for alternative coding) as needed to account for federal grant revenues. Each federal grant will be set up using a program code that includes a combination of Major Program, Program, and Program Period (use of Phase is optional). See FIACCT 14 Grant Accounting for details.
Making Requests for Federal Funds
Departments
Request from applicable federal agency that federal funds be sent via wire transfer or other method.
Recording the Request for Federal Funds
Departments
- Enter the federal funds request into FINET using a Receivable (RE) document. Enter the date that the federal funds were officially requested on the RE. The RE transaction should be entered the day the request for funds is made
- A separate Receivable (RE) document will have to be prepared for each Customer Account. For instructions on how to do a Receivable (RE) document, see on-line at www.finance.utah.gov: FINET: FINET HELP: RECEIVABLES.
- A separate accounting line will be needed on each RE document for each Program Code related to that draw.
- Code the RE line with the appropriate account coding to include federal revenue source codes in the range of 3000–3999 for federal revenue or revenue source codes in the range of 4750–4758 for pass thru funds. The expenditure of pass thru funds should be recorded to expenditure object codes in the range of 7601–7604.
- When the RE transaction is processed to FINET, it will record the accounts receivable amount and recognize the revenue. It also establishes the date the request for federal funds was made. It is very important that departments establish the date that federal funds were officially requested and that the Federal RE document be dated the same day that the request for federal funds is made.
- If a federal draw is for $25,000,000 or more, the agency needs to contact the State Treasurer. The State Treasurer needs to know the amount of the draw, the bank name, and the FINET bank code.
Division of Finance
Update the RE documents to the FINET system in the overnight processing cycle.
Receiving of Federal Funds
Departments
- When federal funds are received in a department’s bank account, the deposit is recorded in FINET using a Cash Receipts (CR) transaction that references the Receivable (RE) transaction. It is very important that departments establish the date the funds were received in its’ bank account and that the date is entered on the CR. This transaction establishes the date the cash was received, and it also records the cash and reverses the accounts receivable in FINET. For instructions on how to enter a CR referencing an RE, see on-line at www.finance.utah.gov: FINET: FINET HELP and search for “reference RE”.
Division of Finance
Update the CR documents to the FINET System in the overnight processing cycle.
Amount of Cash Received is Less Than the RE Amount
Departments
Determine the difference and re-bill or close out the RE transaction.
Amount of Cash Received is Greater Than the RE Amount
Departments
Record the additional cash received on the same CR VENDOR LINE, check the AUTO APPLY box, select AUTO APPLY in the CR HEADER and then validate. This will create a separate ACCOUNTING LINE using ACCOUNT TYPE AR40 (a liability).