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Systemwide Accounting Procedures

Accounting Integrated Statewide Record System Procedures

Clearing Funds/Impresh Cash Fund

(MnSCU Funds 998, 999, and 190--Appropriations LSO, CLR and IMP)

Zero Fund Balance

Clearing fund cost centers and general ledgers are temporary accounts used to simplify the processing of transactions. Any assets, liability, revenue, or expense must be posted to the appropriate fund prior to fiscal year closing. Typically you would use these Fund/Appropriation combinations for payroll clearing accounts, Stafford Loans or Scholarships where you do not determine the recipient. You could also use these if you are disbursing funds from one bank account when the funds are held in another account.

Recording Activity at the General Ledger

Transactions posted to these accounts can be handled several ways. The preferred method for Imprest Cash is the use of balance sheet object codes to receipt and disburse the funds. Revenue and expense codes are used for Stafford Loans. Some examples are:

• Stafford Bank Loans: The Accounts Receivable Module processes Stafford Loans through the Aid Apply and Funds Apply programs. These awards should be set up in a cost center in Fund 940, appropriation LSO. Revenue is to be recorded as 9401, expenses are 7040.

  Note: Stafford Loans and scholarships should be recorded as Fund 940, but they would still need to show a zero fund balance at fiscal year closing.

• Imprest Cash: Use object code 8212 (due from State Treasury) to record all disbursements that will be reimbursed from your state treasury accounts. Any balance in this account needs to be reimbursed from the state treasury. Salary Advances to employees could be recorded in 8210 (advances) and if there is a balance, that would indicate the employee has yet to re-pay that amount. By using Balance Sheet object codes, there will be no effect on your fund balance. To reimburse the Imprest Cash account, make a payment out of the appropriate cost center and expense object code with the vendor number for your local bank account. Then receipt the check/eft into the Imprest Cash account General Ledger and object code the original imprest check was paid from.

For 1099 recipients you should use the appropriate object code. This will eliminate problems with vendors not receiving accurate 1099's at the end of the fiscal year.

Note: Imprest cash fund balance must be the authorized amount approved by the Department of Finance.

Recording Activity at the Cost Center level

Institutions may find it more convenient to record activity with revenue and expense object codes. If you receipt funds using a revenue code, you should disburse those funds using that same revenue code. If you disburse funds using an expense object codes, the receipt of funds should use the same expense object code. This would wipe out all activity and eliminate the need for further action. However, if you choose to use revenue and expense object codes, they need to be eliminated at the end of the fiscal year. You would do this by using the General Journal transaction(AC0208UG). You would DR the revenue and CR the expense, thereby wiping each other out. Clearing funds are eliminated from any system-wide reports.

There may be timing differences that cause a temporary fund balance. The institution will need to be able to explain this amount.

If you have questions or comments please email us (accounting@so.mnscu.edu), refer to the staff directory link at the top of this page or contact your Campus Assistance contact for additional information.