If all journals created by FACTS were posted without deletion or modification and new adjusting journals were created using a GJ journal key, rarely would there be variances.
How does FACTS get out of balance? Here are various real scenarios:
Journal modification before posting: If a journal entry is created in FACTS during the FACTS edit and post, FACTS assumes that the entry will be posted without adjustment. Thus the earnings associated with a particular fund- let us use Hunt1, will post in FACTS into the FACTS tables and the journal entries created with FA journal keys will be posted in the GL and change the Hunt1 pooled asset balance.
- If the user halts the GL posting and modifies the amount or fund associated with the entry, then the value FACTS assumes is going to the Hunt1 fund will perhaps now go to the Hunt2 fund in the GL. Perhaps there was a gift entry error and the user calculates that half the earnings that Hunt1 received should really be Hunt2's earnings. So they edit the FACTS entry to split the earnings and give more to Hunt2.
- Another possibility is that they are closing the Hunt1 fund and NO earnings should have gone to Hunt1. They change the fundid on the FA journals from Hunt1 to Hunt2.
- Alternately they delete the Hunt1 journals and add the Hunt1 values to existing Hunt 2 journals.
Improper use of Journal Keys:
To correct the posting of entries to the Hunt1 fund ( above), you use the Entries from Journal History Utility and Reverse the original Hunt1 entries and either manually create new Hunt2 entries or use the same feature to copy entries and modify the fundid's to Hunt2.
On the surface this seems correct. You properly posted all the entries that were created from FACTS without modifying them. This is good. You used the tool to create copies and reversing entries. This is also good. What you failed to do is change the journal key from FA to GJ.
Because the entries used the FA journal key, none of the changes made to the pooled asset account will flow back into FACTS to let it know that the Hunt1 fund didn't get those earnings for the month.
When using the Entries from Journal History Utility, if you are working with FACTS entries, remember to change the journal key during the set-up:
Instead of fixing, modifying or creating entries, deleting entries is one way to insure a fund doesn't have earnings. Unless entries are made to add the lost revenue to another fund, the FACTS to GL report variance will show a variance at the total line as well as the fund line. Thus, a variance at the total level will indicate entry deletion or unbalanced modification. The only way to correct it is to find out what the correct balances should be and make the correcting entries.
Deletion of Journal entries from FACTS reconciliations:
Occasionally, transactions on the transaction tab in the FACTS module are deleted when they cause issues with the reconciliation. Instead of investigating why entries were made that appear to not agree with the activity in the statements, people will remove the entries. Since pools are set up with the Prevent Manual Transaction flag checked off, a conscious effort has to be made to remove the entry from the module. Missing entries can be brought back by running the Restore FACTS transactions Utility found in Tools > System Utilities > Admin Utilities > Finance Utilities. Finding the missing entries can be done by comparing the Transaction Listing and History report contents to the Journal History contents. Please check the Prevent Manual Transaction box on the Pool record if found unchecked to minimize this kind of error.
The report might indicate problems where there are none:
- If there are unposted FACTS cycle entries in the Journal entry tab, this will cause FACTS to see the earnings, but the GL to not. Once you post the earnings, the variance should disappear if that is the only issue.
- Another false variance occurs in FIMS versions prior to 14.1. If a fund is retired and there is no GL asset account in the GL, but the fund hasn't completely closed in FACTS, the report will indicate a variance. If you add the GL account back ( just the pooled asset account is necessary), the variance should vanish. This typically happens when you close a fund/retire a fund properly in month 12 and no GL accounts get created in the following year ( not needed since the fund is retired), but the closing transactions flow to the pool for day1, period 1. This will result in the fund closing in the pool properly, but a report run before the month 1 cycle is reconciled and processed will indicate a variance when there is none.