FIACCT 07-02_18 Federal Revenues – Correcting Federal Invoice Errors

Effective: October 2, 2000
Revised: April 7, 2003

Purpose

This policy describes when and how a Federal Invoice (IN) document in FINET should be corrected for billing and payment errors. Unless otherwise noted, fiscal year refers to the state’s accounting period from July to June and not to the federal government’s fiscal year which runs from October to September or to any other local governmental accounting cycle.

Policy

An original “negative” or decrease IN will not be used for any purpose.

All open IN transactions shall be reviewed for validity and accuracy and adjusted by the fiscal year close out date.

A modifying IN document will be used to decrease or increase a Federal Invoice (IN) document to correct billing errors.

Generally, a $0 CR marked Final, or a modifying IN will be used to decrease an IN document for the following reasons:

To cancel a balance on an IN entered in error.
To close an IN for which payment was recorded on a Cash Receipt (CR) document that did not reference the IN.

However, if the IN fiscal year is closed, see the Procedures section of this policy for alternate procedures.

A $0 CR will be used to move funds from an IN referenced in error to the IN where the payment should have been applied.

A decrease CR referencing the IN to which the payment was applied in error will be used to reverse a payment applied in error.

Definitions

Current Fiscal Year

A current fiscal year is the fiscal year that FINET documents default to if the accounting period is left blank. For instance, an IN entered on 7/15/00 will default to Fiscal Year 2001.

Prior Fiscal Year

A prior fiscal year is any fiscal year preceding the current fiscal year.

Closed Fiscal Year

For this policy, closed fiscal year means a prior fiscal year that has been closed for budget purposes. A fiscal year is usually closed for budget purposes when closing packages are due to the Division of Finance.

Background

There are five basic instances when a Federal Invoice may need to be adjusted:

To cancel an IN recorded in error or to decrease an IN to the proper amount;
To increase an IN to the proper amount;
To change coding block or Header information;
To correct the following CR referencing errors:
- The IN was not referenced on the CR when the payment was received.
- The IN was referenced but no payment was actually received.
- The wrong IN was referenced, and the payment needs to be applied to a different IN.
- The IN has a acredit balance and the credit balance needs to be refunded.
If the IN was referenced in error in any other manner than those listed above, please contact the State Revenue Accountant at the Division of Finance for assistance.

In each case, FINET users will need to determine if the fiscal year that the original IN posted to is still open. This will determine whether the IN document can still be modified or if alternative procedures are necessary.

If any of the Header information on an IN needs to be changed (e.g., Provider code or off-set balance sheet account), the original IN must be canceled and a new IN entered.

Current and Prior Year Considerations

Often when IN documents are adjusted, an adjustment to revenues or expenditures is also needed. When IN adjustments are processed, FINET will try to post these adjustments to the original IN fiscal year. However, if the original IN fiscal year is closed, revenues or expenditures cannot be changed in the closed fiscal year. These corrections will need to be made in the current fiscal year. Therefore, special handling is required if you are going to make adjustments to an IN that was set up in a closed fiscal year.

INs that are adjusted in a subsequent fiscal year will create exceptions that will need to be noted on the Single Audit. Questions relating to Single Audit issues should be resolved with the State Single Audit Coordinator at the Division of Finance. Questions relating to the documents, revenue, or Receivables should be resolved with the State Revenue Accountant.