1. Department of Finance and Administration Financial Control Division Document Standards September 26, 2011
Presented by Vivian Montoya, Financial Management Bureau Chief and by Sandra Steckler, Audit Bureau Chief

2. Financial Control Division (FCD) Audit Bureau and Financial Management Bureau
Ensure all financial transactions comply with state laws, rules, regulations by preauditing and approving all financial transactions
Monitoring accounting practices
Determining the legality of and authority of proposed expenditures
Request for Policy Exemptions from Processing Procedures
State of New Mexico Manual of Model Accounting Practices

3. FINANCAL CONTROL DIVISION
AUDIT BUREAU

4. Why create Purchase Orders?
Creating Purchase Orders will provide the following:
Tracking all purchase orders in SHARE results in an accurate monthly budget status report. Consequently, the purchase order is required for all transactions (refer to example 1 - Section 6-5-3, NMSA, 2003, as amended).
Agencies are required to prepare purchase orders as documented in the Manual of Model Accounting Practices (i.e. PO-10 Purchasing Directly Create Purchase Order – DPO (By Pass Requisitions) Page 178
Note: The exception where purchase orders are not created is for employee less than $1,500; replenishment of petty cash, procurement violation, or a request to prior year bill providing the agency is within the thirty day approval period.

5. Processing Purchase Orders
The FCD Audit Bureau staff review and approve purchase orders or change orders daily utilizing a query purchase order report for their assigned agencies between 8:00 a.m. – 10:00 a.m. (Note: This time is subject to change at the end of the fiscal year and starting of a new fiscal year).
Purchase orders not approved in the allotted time will be approved the next day.
Emergency Purchase Orders, Professional Services Contract Purchase Orders, Joint Power Agreement Purchase Orders and Memorandum of Understanding (MOU’s) are approved daily as required and received from the state agencies, DFA Contracts Review Bureau, and the DFA Cabinet Secretary’s Office).

6. Purchase Order Origins
Types of Purchase Order Origins:
Requisition (REQ) – No REQ origins on a Purchase Order; these will be rejected or recycled by FCD Audit Bureau
Contract (CON) – Purchase orders against existing approved contracts. Contract ID required on the purchase order line.
Excluded (EXC) – Excluded from purchasing through SPD.
Direct Purchase Order (DPO) – Purchase Order under $10K.
Encumbrances (ENC) – Purchase Order under $20K (did not go through General Services Department, State Purchasing Division); Quotes and awards are done by the agency. Procurement Code Violations.
Exempt (EXE) – Exempt from the procurement code.

7. Purchase Order Origins (continued)
Excluded (EXC) – Excluded from purchasing through General Services Department, State Purchasing Division; for professional services contracts, use EXC A.
Excluded (EXC) – Emergency purchases; excluded from General Services Department, State Purchasing Division, use C with documentation signed by the agency head or agency chief financial officer.
Sole Source (SOL) – Require an approved letter from General Services Department, State Purchasing Division before FCD Audit Bureau will approve the purchase order.
General Services Agreement (GSA) – Require General Services Department, State Purchasing Division approval. In which they will award it has a one time procurement, or statewide price agreement.
Manual of Model Accounting Practices FIN 4.4 Type of Purchase Page 135

8. Why Create Vouchers?
A payment voucher for goods are services must be supported by an invoice (refer to example 2 - Section 6-5-8, NMSA, 2003 as amended). An invoice is an itemized list of goods received with an accounting of all costs.
Vouchers are created to process vendor invoices, employee travel expenses, or liability adjustments.
Vouchers are used to track the vendors invoices (i.e., one voucher, one invoice).
Vouchers can be entered manually or automatically through the voucher build load process.

9. Accounts Payable Module
The types of vouchers processed are Regular Vouchers, Journal Vouchers, Prepaid Vouchers, Adjustment Vouchers, Reversal Vouchers and Single Payment Vouchers.
Itemized Schedule of Travel Form (refer to example 3)
Regulations Governing the Per Diem and Mileage Act
SHARE Account Chart Field White Paper Expenditure Chart of Accounts
FCD Rejection Form

10. Accounts Payable Module
FCD Audit includes:
Expenditure Chart of Accounts
Invoice – Original or Certified Copy
Invoice Date and Service Dates
Remittance Address on Invoice must match the Vendor Address in the system
Voucher Batch Report
Non-Employee Travel Reimbursement - (refer to example 4 – Section Other Reimbursements, NMSA).
Request for Policy Exemption on File
White Paper Authority and the Propriety of Expenditures
Other state laws, DFA rules and regulations

11. Request for Policy Exemptions
Agencies request, from Financial Control Division (FCD), an exemption from processing requirements.
Examples of exemptions from processing requirements include exemptions from:
Single Payment Voucher
Attaching supporting documentation to processing documents.
Budgeting
Restrictions on making payments/refunds using balance sheet accounts and revenue source codes instead of object codes.

12. Request for Policy Exemptions
FCD reviews and selects the exemptions to be reauthorized.
FCD does not allow all exemptions to be reauthorized.
Agency reviews existing exemptions.
Agency returns renewal of exemptions to FCD.
Exemption will carry forward into the new fiscal year.
All exemptions terminate at the end of a four years and have to be reauthorized for all state agencies.

13. Fiscal Year End Close
The FCD Audit Bureau staff adheres to the year end closing schedule dates as written in our annual closing instructions to state agencies.

14. FINANCAL CONTROL DIVISION
FINANCIAL MANAGEMENT BUREAU

15. Journal Entries
Before you create your journal entry, determine if a journal entry should be used instead of a journal voucher through the Accounts Payable Module.
What’s the difference?
Journal Vouchers are done through the Accounts Payable Module (A/P) and are used to correct: department, account, sub account, reporting category and operating unit. This document is approved by the Audit Bureau (AB). (Note: You cannot use the journal voucher method to correct the fund).

16. Journal Entries (continued)
Journal Entries are done through the General Ledger Module (GL) and are used to correct: fund, department, account, sub account, reporting category, operating unit, project, (activity, source, analysis type), bud ref and class. This document is approved by the Financial Management Bureau (FMB);

17. Journal Entries (continued)
Once you have determined that a journal entry must be done, next identify the documentation needed to facilitate your entry.
The following is a brief description of what is necessary:
Organize your documentation in the order the adjustments appear in the journal entry
Each journal entry needs to stand on its’ own
Documentation should easily identify the adjustment in the journal entry

18. Journal Entries (continued)
If the adjustment is a sum of several amounts, a calculation needs to be provided summing all applicable amounts including notations next to the amounts included in the calculation.
A book is unnecessary to support the adjustment, only the applicable document(s) are required.
For imaging purposes: Only 8-1/2 x 11 is accepted, any documents submitted larger than 8-1/2 x 11 will be rejected. Because the highlighting of information does not image correctly, please underline pertinent information instead. Only one staple in the middle of the journal is allowed.

19. Journal Entries (continued)
Similar adjustments should be kept together in one journal entry.
Adjustments can be made at a summary level as long as the details are included in the supporting documentation.
If the adjustment is correcting an original transaction, then the same chart-fields must be used to correctly reverse the original transaction(see example 1-A and 1-B).
Query information from SHARE would be the best documentation for all chartfields used in the original transaction. If a query is used, provide information on the query ran such as a time and date stamp.

20. Journal Entries (continued)
Mark the appropriate radio buttons in SHARE when using a revenue source code(s). This will ensure that your budget reports reflect the correct information.
When using balance sheet accounts, a Bud Ref and Class should not be used, unless they were referenced on the original transaction that you are adjusting. A department value may or may not be used. For instance; if you establish a liability through the GL, and you anticipate using the A/P module to relieve the liability, then a department value is required on both transactions. If you do not anticipate using the A/P module then a department value is not required on the journal.

21. Journal Entries (continued)
Department values are required on the first line of all CFR type journals in order for the journal to go through the “workflow” process. This allows agency to approve the journal and allows FCD to give final approval. Please note, if your entries do not require department values, you can still accomplish this by using the first line with a department value as a “dummy” line. (see example 2)
All Expenditure and Revenue accounts require a Department, Bud Ref and Class. These are all budgeted and should be accurately accounted for on the journal.

22. Journal Entries (continued)
Edit the journal entry (see example 3). This step will insure that your debits and credits are in balance, sufficient budget exists and the agency/fund combination is accurate.
Submit the journal entry. This process approves the journal at the agency level and ensures the journal is ready to be submitted to FMB for further processing. (see example 4)
Print the journal entry (see example 5)
Make any notations in RED ink on the hard copy of the journal entry, such as audit, P-code information.

23. Journal Entries (continued)
The journal entry must be signed in BLUE ink by an authorized signor. Black ink will no longer be accepted because it is difficult to determine if it is original. Note: This signature must be the same that appears on the Signature/Transaction Authorization form.
Attach the documentation to the original journal entry and staple in the middle (see example 6). Attach a copy of the journal entry behind the original, to be returned to your agency when posted. The one staple is necessary for imaging purposes. Each type of documentation attached should not be stapled separately.

24. Journal Entries (continued)
If the journal entry is rejected, the agency must make the correction and resubmit within seven calendar days.
If you are correcting the journal entry on-line, remember to re-edit, re-submit, reprint and re-sign the journal entry and verify that all requested information is attached before submitting the document to the FMB.

25. Operating Transfers
An Operating Transfer is used to record the movement of cash from one state agency to another as authorized under Chapter 6-5-2, NMSA This document is used to accurately reflect the financial events being recorded in SHARE.
Agencies must follow the process provided on upload template found on our website:

26. Operating Transfers (continued)
The documentation needed to facilitate the transfer depends on the type of transaction. For example: When paying another agency for services rendered, the original invoice must be attached.
Do not include the 1019xx entries on your operating transfer. Once the transfer has been uploaded into SHARE and FMB has edited the document, the 1019xx entries are automatically populated.
Agencies must follow the same process as outlined in the journal entry process for submitting the proper documentation.

27. Operating Transfers (continued)
The Long Description – Authority/Purpose must clearly define the purpose of the transfer and must cite the laws in which the authority has been given. An explanation of “to make a payment” is not a clear description or purpose of the transfer. The explanation should say “Payment to DoIT for HCM Assessment Fees, FY12” (see example 7)
Since cash transactions cannot be backdated, do not submit transfers if it is close to the end of the month, instead submit them the following month. This will allow FMB sufficient time to review, load and post.

28. Operating Transfers (continued)
At year-end, it is important that your operating transfers be submitted timely. Otherwise, you will have to record the entry as a due to/due from, provided the other agency affected has sufficient data to record their entry as well. Both agencies must reference each other’s journal in order to set up a due to/due from, otherwise neither entry will be posted.

29. Operating Transfers (continued)
Once the operating transfer has been approved and posted by the Financial Control Division, it is the agency’s responsibility to provide a copy of the transfer to the affected agency. This step is necessary so that the receiving agency can properly account for the transaction when preparing for their monthly “Verifying the Trial Balance” process.

30. Useful Websites Financial Control Division General Services Department
General Services Department
Randal McNally Map
New Mexico Administrative Code

31. Questions