1. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios Next Financial Reporting with IRT IRT Correction Scenarios May 2005 It’s unlikely that you will make any errors, but just in case… Thanks for the vote of confidence, ZIP!

2. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 2 of 22 Introduction Lesson Topics: Adjusting Clerk IRT 1412 Errors AIC Review Rules for Supervisor Disk Entries Adjusting Errors Found at Unit Level Issuing a PS Form 1908 Logging Entries on a PS Form 25 Case Studies Reason Codes Checkpoint Summary Resources Approximate time to complete: 30 minutes After completing this lesson, you will be able to detect and correct IRT errors prior to an IRT transmission of PS 1412 data and process adjustments correctly, without affecting AIC 752.

3. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 3 of 22 Adjusting Clerk IRT 1412 Errors Making adjustments for incorrect entries on clerk IRT 1412s that have been consolidated can be simple. An adjustment made to correct an AIC on a clerk’s final 1412 is always made on the Unit 1412, unless the adjustment pertains to a clerk’s stamp stock accountability.

4. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 4 of 22 Adjusting Clerk IRT 1412 Errors, continued The adjustment entry is made on the Consolidated Unit 1412 to correct the incorrect AIC on the clerk’s IRT 1412. The offsetting entry keeps the Consolidated Unit IRT 1412 in balance without changing AIC 752, the bank deposit.

5. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 5 of 22 AIC Review Remember what we learned in the Daily Financial Basics course about AICs? Receipt AICs are 001 to 400. Disbursement AICs are 401 to 800. The IRT will make an automatic entry to AIC 752 for every entry you make, keeping the IRT 1412 in balance, (excluding entries to AICs 057 and 767, which are automatically offset with AIC 090). Important: The bank deposit should always reflect the actual amount of the total checks and cash sent to the bank. Therefore, it is important to keep AIC 752 accurate.

6. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 6 of 22 Rules for Supervisor Disk Entries Rule #1: Never use any stamp sales AIC as an offsetting entry. Rule # 2: Any time an adjustment is performed on an AIC, an offsetting adjustment is required. Later, we will look at a table that helps explain Rule #2. Key Words: AIC 247, Financial Differences Overage AIC 647, Financial Differences Shortage These two AICs are used most often as offsetting entries when adjusting clerk errors at the unit level.

7. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 7 of 22 Adjusting Errors Found at the Unit Level To adjust errors found at the unit level: Determine the error and identify the AIC that must be adjusted at the unit level. Determine the type of offset and make necessary entries to the IRT. Use the Adjustment Table on the next slide as a guideline. Corrections made at the unit level are, in turn, offset at the clerk level. This keeps the clerk in balance and maintains the correct accountability.

8. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 8 of 22 Adjustment Table Remember Rule # 2 (from the Rules for Supervisor Disk Entries on slide 6): Any time an adjustment is performed on an AIC, an offsetting adjustment is required. ErrorCorrection EntryOffset Entry Overstated receiptReduce the receipt AICIncrease AIC 247, Financial Differences Overage Understated receiptIncrease the receipt AICIncrease AIC 647, Financial Differences Shortage Understated disbursement Increase the disbursement AIC Increase AIC 247, Financial Differences Overage Overstated disbursement Reduce the disbursement AIC Increase AIC 647, Financial Differences Shortage

9. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 9 of 22 Issuing a PS Form 1908 If an adjustment needs to be made, the Postal employee responsible for verifying the Consolidated Unit 1412 should issue a PS Form 1908, Financial Adjustment Memorandum. The PS Form 1908 provides a paper trail record of your adjustment. You may need to go back and review what you entered on the 1412 and why, if questions arise later.

10. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 10 of 22 Logging Entries on a PS Form 25 All AIC 247 and 647 entries should also be logged on PS Form 25, Trust Fund Account. A new PS Form 25 for financial differences is being designed to replace this form.

11. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 11 of 22 Case Studies Let’s look at some real life situations and how to handle them. That would be very helpful, ZIP!

12. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 12 of 22 Case Study 1 While consolidating Clerk #1’s PS Form 1412, you discover that the box rent (AIC 115) is overstated by $10.00. What is the solution? On the Consolidated Unit PS Form 1412, you must decrease AIC 115 by $10.00 and offset with AIC 247 for $10.00. Issue Clerk #1 a PS Form 1908 with instructions to make an entry to AIC 647 for $10.00 on the next business day. Enter AIC 247 on PS Form 25 now. Enter AIC 647 on PS Form 25 when the clerk makes the adjustment.

13. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 13 of 22 Case Study 1, continued How does this adjustment affect the clerk’s accountability? Let’s think about what we learned in our first course on the manual PS Form 1412… If the clerk had overstated his box rents and turned in money to cover the overstated AIC 115, where did the extra money come from? He must have understated his postage sales, because that is the only thing that does not have a supporting document. Now let’s move on to the next case study.

14. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 14 of 22 Case Study 2 While consolidating the clerks’ PS Form 1412s, you discover that Clerk #2 has overstated credit card sales (AIC 762) and understated debit card sales (AIC 772) by $50.00. What is the solution? On the consolidated Unit PS Form 1412, decrease AIC 762 and increase AIC 772 by $50.00. No clerk adjustment is required because the disbursements total was correct. Only the AIC was wrong. Inform the clerk of the error to help prevent future incorrect AIC entries. Tranz 380 Credit Card Terminal

15. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 15 of 22 Case Study 3 While consolidating the clerks’ PS Form 1412s, you discover that Clerk #1 has understated Sure Money Fees (AIC 106) by $20.00. How would you correct this? 1. On the unit PS Form 1412, increase AIC 106 and AIC 647 for $20.00. 2. Issue Clerk #1 a PS Form 1908 with instructions to make an entry to AIC 247 for $20.00 on the next day’s individual 1412. 3. Retain the PS Form 1908 locally as support for the entries on the unit 1412. 4.Enter the AIC 647 on PS Form 25 now. 5.Then, enter the AIC 247 on PS Form 25 when the clerk makes the adjustment. This shows that the item has been cleared.

16. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 16 of 22 Case Studies, continued Are these case studies helpful, Stella? When an office gets busy, even the most careful clerk can make an occasional mistake. Are these case studies helpful, Stella? When an office gets busy, even the most careful clerk can make an occasional mistake. It is good to see what errors I might actually find at close- out, ZIP! Now let’s look at another case study.

17. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 17 of 22 Case Study 4 While consolidating the clerks’ PS Form 1412s, you discover that Clerk #2 has understated Debit Cards (AIC 772) by $50.00. How would you handle this? 1. On the unit PS Form 1412, increase AIC 772 and AIC 247 for $50.00. 2. Issue Clerk #2 a PS Form 1908 with instructions to make an entry to AIC 647 for $50.00 on the next business day’s individual PS Form 1412. Enter the AIC 247 on PS Form 25 now. Enter AIC 647 on PS Form 25 when the clerk makes the adjustment.

18. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 18 of 22 Case Study 5 While consolidating the clerks’ PS Form 1412s, you discover that Clerk #2 has overstated Local Transportation (AIC 538) by $10.00. 1.On the unit PS Form 1412, decrease AIC 538 and increase AIC 647 for $10.00. 2.Issue Clerk #2 a PS Form 1908 with instructions to make an entry to AIC 247 for $10.00 on the next business day’s individual PS Form 1412. Enter the AIC 647 on PS Form 25 now. Enter the AIC 247 on PS Form 25 when the clerk makes the adjustment.

19. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 19 of 22 Reason Codes When you enter AIC 247 or 647 on the IRT, you are asked for a reason code. The reason codes are listed in Postal Bulletin dated 3-4-2004, on page 65 and in the Postmaster/Field Guide. Reason Codes Used for Overage/Shortage The following are the reason codes authorized for financial differences. CodeReason/Explanation 01Bank Discrepancy 021412 Discrepancy 03Credit/Debit Card 04Money Order 05Stock Difference 06Stamps by Mail 07Burglary/Theft 08Fire/Flood 09Grievance Unresolved 10Grievance Settlement 11Cash Transfer 12Employee Credit Shortage 13Other: (explanation)

20. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 20 of 22 Checkpoint 1. Why is checking AIC 752 so important? (Refer to slide 5.) B. AIC 752 should always match the actual amount of checks and cash sent to the bank. A.The IRT automatically offsets other entries to AIC 752. C. Both of the above. 2. When a PS Form 1908 is issued, clerks should make the adjustment: (Refer to slide 12.) B.On the next business day. A.Before the next audit. C.Never. 3. Adjustments, other than stamp stock accountability, are always made on: (Refer to slide 3.) A.The Supervisor disk B.Another clerk’s disk C.The RCU disk Multiple Choice: Now, let’s check what you have learned about IRT corrections scenarios. Click the Question Mark to check your answer.

21. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousNextBeginning of Lesson 21 of 22 Summary Let’s review what you have learned about making Unit IRT 1412 corrections: An adjustment made to correct a clerk’s final IRT 1412 is always made on the Supervisor disk, unless it pertains to stamp accountability. The adjustment entry is made on the Consolidated Unit 1412. The offsetting expense entry is made to keep the Consolidated Unit 1412 in balance. A PS Form 1908 should be issued for all AIC 247 and 647 adjustments, instructing the clerk which additional entry to make. The clearing expense entry is made on the clerk’s IRT 1412. All AIC 247 and 647 entries should be logged on a PS Form 25. Reason codes for overage/shortage used on the IRT are listed in the Postal Bulletin and the Postmaster/Field Guide. If Banking Deposit Error occurs, this will change AIC 752, the Bank Deposit.

22. Course: Financial Reporting with IRT Lesson 3: IRT Correction Scenarios PreviousBeginning of LessonNext Lesson 22 of 22 Resources Postal Bulletin March 4, 2004 http://www.usps.com/cpim/ftp/bulletin/2004/pb 22123.pdf http://www.usps.com/cpim/ftp/bulletin/2004/pb 22123.pdf Postmaster/Field Guide http://acs.usps.gov/pubs/currentPMGuide.pdf http://acs.usps.gov/pubs/currentPMGuide.pdf Close the Browser to end this lesson or click Next Lesson to go to the next lesson. Here are some resources for more information.