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Transition Session 4 Q&A's
Transition Session 4
January 11, 2007
Questions and Answers
Q: Federal funds are part of all processing, not Revenue recognition. To have automatic recognition of revenue is incorrect, should be recognized when earned.
A: Currently when agencies request an allotment in BudgetNet, they specify state, federal and other funds. But from Treasury’s perspective, OTFS is only concerned with state funds and does not move monies related to federal and other funds based on the allotment. Agencies are responsible for collecting and depositing federal and other funds.
Under streamlined banking, Treasury is still only concerned with controlling state funds. The allotment process will generate 3 entries into Peoplesoft:
- An entry to the allotment ledger (budget) to establish spending authority
- An entry to the Agency’s GL to record the revenue and cash for the allotment(state funds only) – increasing the 151
- An entry to OTFS reducing OTFS’s 151
Please note:
- Revenue will be recorded in GL based on the allotment request. This means if you request the allotment for 3 programs, the revenue will be recorded against those same three programs in GL.
- The allotment ledger will only contain state funds by program for streamlined banking agencies.
Q: Is there an automatic cash sweep into the concentration account?
A: SAO is working on creating a process to sweep local agency accounts to the Bank of America Main Depository accounts. The goal is to have the cleared funds swept daily.
Q: Is there just one cash account to be used on both Treasury and the agencies books?
A: Yes. The same account number will be used because of its used by different business units. The same Agency Cash Account (101005) will be used between OTFS and all Streamlined Banking agencies. This will be the main cash account, but if you have a local depository account, the local cash accounts will still be used (e.g. 101060). Business Units is how you differentiate the activity in the 101005 account.
Q: Will there be a need to reconcile the sweep and allocation entries?
A: Yes. When reconciled, you will get a bank exception if entries are not made in PeopleSoft. The agency will also monitor the allocation entries by viewing their Agency Cash account “101005”. If the deposits they made and booked in PeopleSoft the day before are not reflected in their Agency Cash, they should raise the issue with SAO. The sweep transactions will occur in the 49900 business unit and will be reconciled by SAO an OTFS.
Q: I’m confused on using Business Unit 49900. We only have access to our own business unit.
A: Agencies will not see Business unit 49900. The bank account will default on vouchers to the bank account associated with Business Unit 49900. The bank account selected on the voucher determines the SLB process in Business Unit 49900.
Q: What is the purpose in using different distribution codes?
A. It is a method that isolates system generated streamlined banking entries from non-streamlined banking entries and will aid in identifying system entries in reconciliation. When a payment is made between two streamlined banking agencies distribution code 141001 is used and the payment is generated through bilateral netting, which is system generated When a payment is made between an agency not on streamlined banking and a streamlined banking agency or vice versa the payment is not system generated and the 140001 account is used.
Q: What causes the need for reconciliation? What can we do to avoid reconciliation problems?
A: Make sure deposits are made daily with correct transaction types and amounts and that the Peoplesoft entry is made on the same day as the deposit.
Q: At my agency, we don’t make deposits daily. We use an armored carrier once a week to make our deposits.
A: We are looking at ways to assist the agencies in making this process more efficient. We may consider using a bank courier pickup to facilitate daily deposits. It is important for the state accounting office to define ways to safeguard state funds. Many states enact laws requiring agencies to make timely deposits to ensure they obtain full investment value for their state.
Q: Our agency has received bank statements from Bank of America with fees on them.
A: The Pilot agencies have received analysis statements in the past for the sub accounts that sweep funds into the master state concentration account. All fees are paid at the state concentration level and in addition all fees related to the Streamlined Banking accounts have been reversed and will continue to be reversed until we implement Streamlined Banking. The SLB Project Team has informed both banks to discontinue sending the paper statements to the agencies. If you continue to receive statements please send an email to Streamlined Banking Feedback and we will contact the banks again.