Adjustment for Disallowed Expenses Policy Number and Last Update
(01.09.24/01-2011)
When the audited copy of the Monthly Expenditure Report is received by the center, it should be reviewed. If the amount approved by DHS is not the same as the amount submitted, adjusting entries must be made.
Example:
The Monthly Manager Report (PA22) submitted to DHS totaled $8,500.00. The audited report received by the center was approved for $8,300.00. The following lines items had been adjusted:
- 12. Director's Salary (over maximum amount of funding source) ($ 100.00)
- 1. FICA (over maximum amount of funding source) ($ 6.70)
- 1. Supplies (photocopy not submitted) ($ 10.00)
- Travel - Meals (over $28.00 maximum per day) ($ 2.30)
- 3. Kool-Aid and doughnuts (non-reimbursable by DHS) ($ 81.00)
The following entry must be made in the General Journal:
Revenue (PA22) $ 200.00
Accounts Receivable (PA22)$ 200.00
In the month the expenses were claimed, below the ruled lines and breakdown of funding sources, the following entries must be made in the appropriate journals.
Invoice Register:
DHS Disallowed Expenses $ 93.30
Supplies (PA22)$ 10.00
Travel - Meals (PA22)$ 2.30
Food (PA22)$ 81.00
Cash Disbursement Journal:
DHS Disallow Expenses $ 106.70
Salaries - Director (PA22)$ 100.00
Employer FICA (PA22)$ 6.70
A. If the expense is non-reimbursable by DHS, it must be distributed to another funding source.
Invoice Register:
Kool-Aid and doughnuts $ 81.00
DHS Disallowed Expense$ 81.00
A. In the case of Transportation - Meals, the traveler must refund the center the amount disallowed. When the money is received, the following entry must be made.
Invoice Register:
Cash $ 2.30
DHS Disallowed Expense$ 2.30
If the traveler had not been paid for her travel expenses, the following entry would be made in the month it was claimed.
Invoice Register:
Accounts Payable $ 2.30
DHS Disallowed Expense$ 2.30
A. If the reason the expense was disallowed was that a photocopy was not submitted, the following entry would be made to claim it the next month.
Invoice Register:
Supplies (PA22) $ 10.00
DHS Disallowed Expense$ 10.00
A. If the expense was disallowed due to its being over the maximum amount of the funding source, the following entry must be made.
a. Transferred to another funding source by DHS accountant.
Cash Distribution Journal: (in month claimed)
Salary - Director (General Revenue) $ 100.00
Employer - FICA (General Revenue) 6.70
DHS Disallowed Expense$ 106.70
b. Disallowed can be reclaimed the following month.
Cash Distribution Journal: (month to be reclaimed)
Salary - Director $ 100.00
Employer - FICA 6.70
DHS Disallowed Expense$ 106.70
