I posted this discussion on the GL platform, but they recommended I post it to Procurement, instead....
Upon our monthly reconciliation of the Encumbrance Detail Report to the Encumbrance Trial Balance report, a balance was found on the Encumbrance Trial Balance report which is not showing up on the Encumbrance Detail Report. In the prior two months, the reverse happened - the balance was showing on the Encumbrance Detail Report but not on the Trial Balance report. Our action plan was to close the PO (an old PO that needed to be closed anyway) which would make the balance drop off the Encumbrance Detail Report, therefore clearing any discrepency. However, it appears that caused the reverse to happen in the month of January. The balance is ($6,577.63) in the GL Account. The PO is closed.
I actually have two questions:
1) We believe a manual encumbrance entry is the correct fix for the issue, however, we do not generally do those types of entries adn would like some advice on how to do such an entry.
2) What is the root cause of the issue. We believe that the timing of closing the account at the beginning of the FY and before the PO was closed has something to do with this. Also note that we do carry forwards on the first day of the fiscal year, so is it possible that the encumbrance didn’t carry forward with the account being closed?
Here is the timeline of events:
SEP-13: This account (0xx.00xxx.00000000.00.15xxxx.40xx.0000) with the $6,577 was opened through the end of FY13. The $6,577 showed as positive on the Trial Balance and there was no issue.
OCT-13: The account with the $6,577 encumbrance was closed as of the beginning of FY14. Thus, it disappeared from the Trial Balance, yet the PO was still opened with a remaining balance of $6,577 and therefore showing up on the Encumbrance Detail Report.
NOV-13: Issue was caught during November’s reconciliation. There was a balance of $6,577 on the Encumbrance Detail Report (since the PO was still open) under PO 96134, however it was not showing up on Trial Balance (I
assume since the account was closed). After discussion with Fuels group, it was determined that this PO was no longer needed and action plan was to close the PO for it to disappear from Encumbrance Detail Report, which would theoretically cause the reports to reconcile.
DEC-13: Request to cancel PO was entered. Purchasing came back and said they could not close the PO due to error message. It was determined that the account needed to be reopened in order to close the PO.
JAN-14: Request sent to Accounting Dept to reopen account. This was done and Purchasing was able to close the PO, releasing the $6,577 in unused funds. Accounting re-closed the account once the PO was closed.
FEB-14: During January’s reconciliation, the PO cleared on the Encumbrance Detail Report, however the above actions caused the $6,577 to pop back up again on the Trial Balance, this time as a negative number. Help Desk
Thank you, in advance, for you help.
JEA, Jacksonville, FL