Closing out the year: An MIT-wide collaboration
Administrators in individual departments play a crucial role to support VPF’s efforts to close out the books at the end of the fiscal year. Each year there are more dimensions to it as MIT is involved in new projects, initiatives, and engagements. While all of these changes are reflected in our financials, the close out is fundamentally the same repeatable process that many generations at MIT have completed before us for more than 150 years.
From June 30 onward there are a few accounting “periods” with very specific activities and tight deadlines that we follow. As you finalize your General Institute Budget (GIB) accounts, it leads to a series of accounting milestones that result in the eventual publication of the annual Report of the Treasurer and Consolidated Statements of Financial Position. We depend on this partnership with you each year to successfully close out one year as we begin the next.
As a first step, VPF publishes a closing schedule and offers training workshops on the close-out process. During Period 12, your department does the important on-the-ground work to identify expenses that will happen toward the end of the month and to prepare your list of accruals and deferrals for expenses that do not make the closing schedule cut-off dates.
Starting the first business day in July, VPF opens Period 13 to enable you to make accruals via journal vouchers for invoices you have not received for activities in the closing year, so these expenses can eventually be charged to the correct year. You can also use Period 13 to account for revenue you are expecting but have not yet received for this year. (See chart on the accrual process)
Then in Period 14, you and your budget officer work to close out your GIB account—with academic units addressing carryforwards and/or funding shortfalls via discretionary accounts—and all GIB accounts getting to net zero by the end of the period. VPF holds quarterly budget reviews and works closely with your unit throughout the year so there are no surprises!
As Period 15 begins, the books are closed to everyone except the VPF Financial Accounting and Reporting (FAR) team. This team then makes final accounting entries and works to complete the Consolidated Statements of Financial Position.
In September—usually on the second Friday of the month, we publish the Report of the Treasurer on the VPF website and the MIT News Office publishes a story about the release of the report. By then we are almost at the end of the first quarter of the next fiscal year, and ready to partner with you on another year of Institute activity.