Closeout Procedures for AES Federal Formula Funds

Jun 04, 2013 Debra Cheung

AES Federal Formula Funds (AES/FFF) Closeout Procedures for Hatch, Hatch/Multistate, and Animal Health accounts

The CA&ES incorporates specific Agricultural Experiment Station / Federal Formula Funds (AES/FFF) into the campus fiscal year end closing processes.  The CA&ES is responsible for closing FFF accounts in a manner very similar to Extramural Accounting closeout of other federal extramural funds. Important information follows and directly below is a departmental list showing your AES Analyst contact, should you have AES/FFF closing questions.

AES Federal Formula Fund Closeout Assignments

: CA&ES departments

ClusterDepartment
Cheddar Agricultural & Resource Economics
Cheddar Human Ecology
Cheddar Environmental Science & Policy
Phoenix Entomology & Nematology
Phoenix Plant Pathology
Food Chain Animal Science
Food Chain Nutrition

 

Brian McEligot: CA&ES and CBS departments

ClusterDepartment
BFTV Bio & Ag Engineering
BFTV Food Science & Technology
BFTV Textiles & Clothing
BFTV Viticulture & Enology
Metro Environmental Toxicology
Metro Land, Air & Water Resources
Metro Wildlife, Fish & Conservation Bio
Plant Sciences Plant Sciences
College of Bio Sci Evolution & Ecology
College of Bio Sci Molecular & Cellular Biology
College of Bio Sci Microbiology
College of Bio Sci Neurobiology, Physiology & Behavior
College of Bio Sci Plant Biology

 

AES Federal Formula Fund Closeout Information

As background, federal formula funds are monies provided by the USDA to the UC (the UC Davis CA&ES is a substation), as a result of our designation as an Agricultural Experiment Station (AES) and our corresponding obligation to maintain Hatch, Hatch/Multistate and Animal Health AES research projects.  The college receives AES federal formula funds within two sets of OP fund numbers representing alternating years.   

Odd Year funds

Formula funds allocated in a Federal Fiscal Year (FFY) ending with an “odd year” number, such as 2012-2013, are referred to as “odd year” AES/FFF. 

Even Year funds

Formula funds allocated in a FFY ending with an “even year” number, such as 2013-2014, are referred to as “even year” AES/FFF. 

* NOTE: Hatch and Hatch/Multistate funds include an automatic one-year no cost extension period and therefore must be fully expended within the 2 year allocation period.  

* NOTE: Animal Health funds are not eligible for the one-year no cost extension, and must therefore be fully expended within the same FFY funding allocation period.

 

AES Federal Formula Fund Closeout Schedule

*NOTE: "Closing Period" refers to the June Final ledgers of that year
AES Fund TypeOP Fund NumberClosing Period
Odd-year Hatch Regular 21005 The following even year
Even-year Hatch Regular 21006 The following odd year
Odd-year Hatch Integrated 21009 The following even year
Even-year Hatch Integrated 21010 The following odd year
Odd-year Multistate Regular 21015 The following even year
Even-year Multistate Regular 21016 The following odd year
Odd-year Multistate Integrated 21013 The following even year
Even-year Multistate Integrated 21014 The following odd year
Odd-year Animal Health 21003 The same odd year
Even-year Animal Health 21004 The same even year

For Example:

  • An odd-year Multistate Integrated (OP Fund 21013) account with a funding allocation period of FFY 2012-2013 will need to close out during the following even year, which would be by the June Final 2014 ledgers.
  • An even-year Hatch Regular (OP Fund 21006) account with a funding allocation period of FFY 2011-2012 will need to close out during the following odd year, which would be by the June Final 2013 ledgers.
  • An odd-year Animal Health (OP Fund 21003) account with a funding allocation period of FFY 2012-2013 will need to close out during the same odd year, which would be by the June Final 2013 ledgers.


AES Federal Formula Fund Closeout Procedures

Below is a description of the closing steps that departments must undertake in time for the June Final ledgers to close out AES Federal Formula Fund accounts.   The overall goal is for departments to fully expend AES Federal Formula Funds on appropriate and allowable expenditures.

  1. April-May: Departments should evaluate the balances in AES/FFF accounts that are closing with the June Final ledgers.  A recommended report is  DaFIS DS Query # 1, set to include the following parameters: 
  • Month Range:  Current/Current to Current/Current
  • Chart(s): 3
  • Organization(s): enter the 4 alpha characters representing your departmental highest level org, e.g., AANS, AARE, APLS, etc.
  • OP Fund(s): enter the appropriate set of OP fund numbers for FFF that will be closing (see schedule above)
  • Balance Summary Options: include “pending transactions”
  • Process Query
  • The resulting report should reflect your departmental AES/FFF account balances, by object consolidation, that close June 30th
  • April-June: Based on the results of DaFIS DS Report #1 (or others if preferred), departments determine the actions necessary to close out the above account balances as of June ledgers.
    • If net credit balances remain, departments should determine if appropriate and allowable new expenses (e.g., direct charging AES PI payroll expenses for the month of Apr- June) can be charged so they appear by the June Prelim ledgers.  NOTE: BENEFIT EXPENSES FOR LADDER RANK PI’S WITH AES FTE DIRECTLY CHARGED TO THEIR OWN AES/FFF PROJECTS ARE NOW DIVERTED AUTOMATICALLY FROM THE AES/FFF ACCOUNT TO THE DEPARTMENT’S GENERAL FUNDED MAIN AES ACCOUNT (AxxRGAA) – THUS, AES FACULTY BENEFITS ARE NOT A REAL COST ON AES/FFF ACCOUNTS.  Alternatively, appropriate and allowable existing expenses on other accounts may be transferred to utilize remaining funds. 
    • If net deficits exist, departments must consider other fund sources to which they can transfer the excess expenses.
    • Within individual departmental accounts, budgetary transactions (BA’s) should be generated to zero out object consolidation balances to the fullest possible extent (adjusting to actual).
    • Departments may generate budgetary transactions (BA’s) to reallocate surplus funds from one project account (with credit balance) to another project account (with a deficit balance) within the same OP fund number.
    • All departmental transactions to fully expend or zero out Hatch, Hatch/Multistate, or Animal Health accounts need to be completed in time to appear on the June Prelim ledgers. 
  • July 15th-October 15th:  No departmental transactions are to be processed on Hatch, Hatch/Multistate accounts Animal Health fund accounts that close in the current FFY from July 15th through October 15th without prior authorization from the Dean’s Office. 
  •  

    After fiscal closing the Dean’s Office will use the July 15 – October 15th period to conduct a final review of Hatch, Hatch/Multistate, and Animal Health project accounts, and generate needed final adjustments.  Remaining credit balances on departmental accounts will be withdrawn.  Remaining deficit balances will be transferred to the department’s   “19900” accounts or otherwise charged to departmental funds.  

    Whether processing new expense transactions, or transferring expenses between now and June closing, it is important to continue to apply the basic rules for valid expenses charged to these funds.  The federal formula funds allocated to departments in support of related research projects must be used in a manner such that:

    • Expenses are directly identifiable and support the Hatch, Hatch/Multistate, or Animal Health project or projects for which they are expended
    • Expenses are allowableallocable, and reasonable under the federal guidelines that apply to their use.  For example, AES formula funds cannot be used for administrative expenses, tuition or fee remissions.
    • CA&ES supports and encourages the practice of departments direct charging a portion of ladder rank faculty AES salaries to their AES federal formula fund accounts as a means of utilizing the funds.  In such cases the college releases the faculty member’s “19900” salary savings to the account provided by the department upon notification.  

     

    References

    Administrative Manual for the Hatch (Experiment Station) Act as Amended (applicable to both Hatch and Hatch/Multistate projects and funding): 

    http://www.nifa.usda.gov/business/awards/formula/manuals/hatch.pdf

    Administrative Manual for the Animal Health Research and Disease Formula Grants (applicable to Animal Health projects and funding): 

    http://www.nifa.usda.gov/business/awards/formula/manuals/animalhealth.pdf

     

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