San Benito County staff urges year-end accounting to record projected revenues and encumbrances

An unidentified county finance staff member said San Benito County departments must enter projected revenues, unpaid receivables and contract encumbrances into the county’s financial system before the end of the year to ensure accurate fund balances and reporting.

The comment, made during a county meeting, warned that the county needs to “show those revenues” and the signatures proving payments in the system so fund balances roll forward correctly into the next fiscal year. “We should have these in place before the end of this year,” the staff member said, adding that departments should be thinking about contract spending that has not yet been recorded.

The staff member described three specific recordkeeping steps: 1) record all projected and built-out revenues in the financial system even if cash has not yet been received; 2) record signatures or other documentation that payments were made in the year being closed; and 3) identify and record encumbrances for contract spend that has been authorized but not yet expended. The staff member said failing to record those items makes it difficult to “keep track of” fund balances and the county’s fiscal position.

The speaker cautioned that public departments that do not see those records could miss the impacts on fund balances and longer-term consequences for multi-year budgeting. The staff member said the county must account for “all your contract spenders that not been yet, that you have spent all the revenue that you collected that you’ve not received, and that has to be in your obligation,” and described potential uncertainty if the entries are not made.

No formal motion or vote was recorded on this item during the meeting. The discussion consisted of a staff advisory to departments about year-end closing procedures and the need to document revenues and encumbrances in the county’s financial system.