2001–2002
Year-End Closing
June, 2002
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Clearing Acct Closing
Clearing Accounts
Over the years, the use of clearing accounts has been growing. This article will try to clear up some of the confusion related to clearing accounts.
Clearing accounts (68 accounts) are designed to be a holding area for funds when it is unclear which operating account is appropriate to use for a given transaction. It is appropriate for an item to remain in a clearing account for a period up to 30 days. This should provide sufficient time for each clearing account manager to identify the appropriate operating account for a transaction, and transfer the funds to that operating account. Items remaining in clearing accounts over 30 days should have the approval of FMS.
The balances in clearing accounts are not included in the annual financial report. The material nature of the activity in these accounts over the past several years has forced balances in clearing accounts to be "booked" for financial presentation purposes, by moving the funds to an operating account. Recently, the balances and activity in clearing accounts has become an issue with State Board of Accounts. There is a concern that it is not possible to correctly identify the activity in the clearing accounts to produce an accurate financial report.
Please make a special effort to move as many transactions out of your clearing accounts to their appropriate operating account by June 30, 2002.
Any questions regarding clearing accounts should be addressed to Ron Payton (rpayton@indiana.edu) at (812) 855-5448 or Joan Hagen (jhagen@indiana.edu) at (812) 855-5630.