# Presentation: 115024

## Upward/Downward Adjustments

- Presented by**Ella Robertson**

## Upward/Downward Adjustments

**Invoking Prior Year Adjustments**
- For prior year adjustments logic to be invoked, the following conditions must be true:
- The No Year Flag on FUND is set to N and the FY is greater than the EBFY;
- The net obligations expenditures are increased or decreased;and
- In FY 2008, the Fiscal Year of the system date minus the ending budget fiscal year must be greater than 0 and less than 6 (I.e., the fund is expired, but not closed).
-       Adjustments are always posted for each line of a document.  The adjustment can be a downward adjustment or an upward adjustment, depending on whether funds are freed up or additional funds are obligated or expended.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**Posting Prior Year Adjustments**
- A prior year adjustment is used to permanently record when spending against an expired appropriation is increased or decreased.   If a spending adjustment is a net negative,  then funds are freed up and the Appropriation Inquiry Table (APPR) Downward Adjustment (DN SPEND ADJ AMT) field is increased for the impacted Fund.
- If a spending adjustment is a net positive,  then additional funds are used up and the APPR Upward Adjustments (UP SPEND ADJ AMT) field is increased for the impacted Fund.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**Posting Prior Year Adjustments (Continued)**
- The prior year adjustment posting model is determined by the derived General Ledger Transaction Type (GLTT) Table Process Activity using the Appropriation Transaction Code and Type on the APPR for the referenced BFY and Fund.
- Accounting Entries Definition Reference Table (ACED) Transaction Code/Transaction Type AA/UP records an upward spending adjustment, while Transaction Code/Transaction Type AA/DN records a downward spending adjustment.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

***Exhibit 1‐1     ******	******	******	***

***	******ACED and ACEN Screens for Transaction Code/Transaction Type AA/UP***
-  ACTION: G TABLEID: ACED USERID: FV23
-  ACCOUNTING ENTRIES DEFINITION REFERENCE TABLE
-  KEY IS FY, TRANS CODE, TRANS TYPE, VENDOR CATG/TYPE, BOC/RSRC,
-         PROJECT POST TYPE, FUND CAT
-                          VENDOR                                         PROMPT
-           TRANS  TRANS    CATG/    BOC/     PROJECT   FUND  ACCOUNTING   PAY
-      FY   CODE   TYPE     TYPE     RSRC    POST TYPE  CATG   ENTRY ID    FLAG
-      --   ----   ----    ------   ------   ---------  ----  ----------  ------
-  01- 06    AA     UP                                           1230       N
-                DESCRIPTION: UPWARD ADJUSTMENTS
-  02-
-                DESCRIPTION:

-  ACTION: R TABLEID: ACEN USERID: FV23
-  ACCOUNTING ENTRIES REFERENCE TABLE
-  KEY IS FISCAL YEAR, ACCOUNTING ENTRY ID, SEQUENCE NUMBER
-      FISCAL YEAR: 06   ACCOUNTING ENTRY ID: 1230   ACCOUNTING EVENT TYPE: BE26
-      SEQUENCE  JOURNAL  INCREASE  ----- DEBIT ------ ----- CREDIT -----  FLAGS
-      NUMBER    CODE    LINE D/C  ACCT TYPE OVERRIDE ACCT TYPE OVERRIDE REV FIP
-     --------  -------  --------  ---- ---- -------- ---- ---- -------- --- ---
-  01-   0001     GENJ        D     4801  47      N    4610  44      N     N   N
-  02-   0002     GENJ        D     4650  39      N    4881  58      N     N   N
-  03-

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

***	******	******ACED and ACEN Screens for Transaction Code/Transaction Type AA/DN***

-  ACTION: G TABLEID: ACED USERID: FV23
-  ACCOUNTING ENTRIES DEFINITION REFERENCE TABLE
-  KEY IS FY, TRANS CODE, TRANS TYPE, VENDOR CATG/TYPE, BOC/RSRC,
-         PROJECT POST TYPE, FUND CAT
-                          VENDOR                                         PROMPT
-           TRANS  TRANS    CATG/    BOC/     PROJECT   FUND  ACCOUNTING   PAY
-      FY   CODE   TYPE     TYPE     RSRC    POST TYPE  CATG   ENTRY ID    FLAG
-      --   ----   ----    ------   ------   ---------  ----  ----------  ------
-  01- 06    AA     DN                                           1235       N
-                DESCRIPTION: DOWNWARD ADJUSTMENTS
-  02-
-                DESCRIPTION:

-  ACTION: R TABLEID: ACEN USERID: FV23
-  ACCOUNTING ENTRIES REFERENCE TABLE
-  KEY IS FISCAL YEAR, ACCOUNTING ENTRY ID, SEQUENCE NUMBER
-      FISCAL YEAR: 06   ACCOUNTING ENTRY ID: 1235   ACCOUNTING EVENT TYPE: BE27
-      SEQUENCE  JOURNAL  INCREASE  ----- DEBIT ------ ----- CREDIT -----  FLAGS
-      NUMBER    CODE    LINE D/C  ACCT TYPE OVERRIDE ACCT TYPE OVERRIDE REV FIP
-     --------  -------  --------  ---- ---- -------- ---- ---- -------- --- ---
-  01-   0001     GENJ        D     4610  44      N    4801  47      N     N   N
-  02-   0002     GENJ        D     4871  59      N    4650  39      N     N   N
-  03-

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**APPR Screen with All Fields Impacted by Prior Year Adjustments**
- ACTION: S TABLEID: APPR USERID: FV23
-                      *** APPROPRIATION INQUIRY TABLE ***
-  KEY IS BUDGET FISCAL YEARS, FUND
-  BUDGET FISCAL YEARS:        FUND:         STATUS IND:     EST REIM OPT:
-  ORIGINAL APPR AMT:                         TRANSFERS IN:
-  APPROVED APPR AMT:                        TRANSFERS OUT:
-       EST REIM AMT:                           LAPSED AMT:
-    ACTUAL REIM AMT:                        CARRYOVER AMT:
-   STAT RESERVE AMT:                          EXPIRED AMT:
-  REIM AGREEMNT AMT:                     UP SPEND ADJ AMT:
-  DIR AGREEMENT AMT:                     DN SPEND ADJ AMT:
-   EST RECOVERY AMT:                     ACT RECOVERY AMT:
-    PY REC WITH AMT:
-     UNLIQ COMM AMT:                        YTD APPOR AMT:
-     UNLIQ OBLG AMT:                        YTD ALLOC AMT:
-       EXPENDED AMT:                     UNAPPOR APPR AMT:
-    APPR TRANS CODE:              APPORTIONMENT AVAIL AMT:
-    APPR TRANS TYPE:              APPROPRIATION AVAIL AMT:
-                               UNDISTRIBUTED EST REIM AMT:
- 		        RESTORATIONS / WITHDRAWALS AMT:

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

-   **Correcting Prior Year Adjustments**
- APPR and GLBL should be examined before and after the SV is processed.
- Before the SV is processed, a screenshot should be taken of the impacted table records for the applicable BFY and Fund (APPR and GLBL).

- Office of the Chief Financial Officer

## Upward Downward Adjustments

**Standard Voucher Document Settings**
- The following are the key SV document settings for the correction of a prior year adjustment:
-   On the SV header screen, the Budget/Exp/Rev/GL flag         should be set to **B**.
-   On the SV line screen, a Transaction Type of **97** is used on the SV for Downward Adjustments and a Transaction Type of **98** is used on the SV for Upward Adjustments.  The Obligation FY field should be left blank.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**        ****Fields Impact**
- The impact on the APPR table is determined by the amount entered on the line of the SV document.
-  If the amount entered on the SV line is an increase, then the APPR adjustment field will increase.
- If the amount entered on the line is a decrease, then the APPR adjustment field will decrease.

- Office of the Chief Financial Officer

## Upward Downward Adjustments

**Impact of Prior Year Adjustments on External Reporting**
- On the SBR and SF-133, an Upward Prior Year Adjustment (SGL account 4881) increases line 8, which shows the gross amount of obligations incurred.
- Upward adjustments of obligations reduce unobligated balances.
- Because Downward Prior Year Adjustment (SGL account 4871) recovers funds, it is reflected on line 2A as a funding source.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**Letters of Credit Activity**
- Typically agencies that have letters of credit activity usually obligate the funds (MO document) based upon agreements.  During the fiscal year whether the budget fiscal year is current or expired, when the payment document (ND/LC) is processed, the MO is referenced.  The Undelivered Order is reclassified to expenditures paid.  Due to lag time in processing the ND/LC, there are usually cash differences at the end of the fiscal year.  At the end of the fiscal year, cash adjustments are processed using YF/LH documents.  The YF/LH document is normally accompanied by YF/UN document to reflect the decrease to the previously processed MO document
- Since the combination of the two ”YF” documents are basically a reclassification from undelivered orders to expenditures paid, no upward/downward adjustment entry should be created.  As it relates to expired budget fiscal years, FFIS does not recognize the connection between the two entries because a SV or YF (SV Clone) cannot use document referencing.  The appropriate SV document should be processed to reverse the impact of the upward/downward adjustment.    In addition, when the cash adjustment (YF/LH) and undelivered order (YF/UN) is reversed in the subsequent fiscal year, the upward/downward spending adjustment should be reversed.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**PCMS Activity**
- When the V5 documents are processed, there may be changes between budget object class codes or some other data element within the same Treasury Symbol which will result in upward/downward spending in prior budget fiscal years.  These transactions at the Treasury symbol level do not increase or decrease your budgetary authority.  Therefore, in this scenario the appropriate SV should be processed to offset the upward/downward adjustment.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**Foreign Activity**
- Some agencies that have foreign activity usually obligate the funds (MO).  During the fiscal year whether the budget fiscal year is current or expired, when the payment document (ND/FP) is processed, the MO is referenced.  The Undelivered Order is reclassified to expenditures paid.  Due to lag time in processing the ND/FP, there are usually cash differences at the end of the fiscal year.  At the end of the fiscal year, cash adjustments are processed using YF/EF documents.  The YF/EF document is normally accompanied by YF/UN document to reflect the decrease to previously processed MO.  The scenario is the same as letters of credit.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**Undelivered Orders/Accruals**
- The agency processed a YE/UN document at fiscal year end.  The following occurs in the first quarter of the next fiscal year.  The document is reversed and an upward/downward spending adjustment is created.
- The functional document (MO) is processed in month one of the subsequent fiscal year.  The appropriate SV should be processed to offset the upward/downward adjustment created by the reversal of the accrual.  The appropriate SV should also be processed to offset the upward/downward adjustment created from processing of the functional document.
- The same scenario occurs except that the functional document is not processed.  The agency must make a determination whether the accrual processed in the previous fiscal year is still valid.  If the accrual is still valid, the agency should restate the estimate and process the appropriate SV to offset the upward/downward adjustment created from the reversal of the accrual.  The agency should perform funds control to ensure all functional documents entered as accruals are processed timely in the system.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**Payable/Accruals**
- The agency processed an MO document during the year.  At fiscal year-end, it is determined that goods and/or services have been received or performed.  The receiving document or invoice did not process before the period 12 closed.  The agency processes an accrual document for a payable (YE/DE) and a decrease to undelivered orders (YE/UN) is processed.
- The functional document (PV) is processed in month one of the subsequent fiscal year.  The appropriate SV’s should be processed to offset the upward/downward adjustment created by the reversal of the two accruals.  The appropriate SV should be processed to offset the upward/downward adjustment created by the processing of the functional document.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**Payable/Accruals (Continued)**
- The same scenario occurs except that the functional document is not processed.  The agency must make a determination whether the accrual processed in the previous fiscal year is still valid.  If the accrual is still valid, the agency should restate the estimates and process the appropriate SV to offset the upward/downward adjustment created from the reversal of the accrual.  The agency should perform funds control to ensure all functional documents entered as accruals are processed timely in the system.

- Office of the Chief Financial Officer

## Upward/Downward Adjustments

**Summary**
- In summary, when the following conditions are met the upward/downward spending adjustment should be offset by the appropriate SV document:
- (1)  The reversal of the accrual document and functional document has been processed.
- (2) A cash adjustment document for outlays (e.g., YF/LC) is processed with and accompanying document to impact undelivered orders (i.e., YF/UN).
- (3) When adjustment are made to SV’s or SV clones within the same Treasury Symbol while changing some other data element i.e. budget object class, fund, program, etc.

- Office of the Chief Financial Officer