Understand Disbursement Cancellation
In order to understand Disbursement cancellation and reclassification in Advantage Financial, you will need to know the following:
-
Request Reversal or Cancellation of EFT Payments through the EFT Reversal table
-
Disbursement Reclassification (DC) Transaction Type (discussed in another section)
Criteria for Cancellation or Reclassification
To cancel a disbursement, the payment must be eligible for cancellation. The following must be true for the cancellation event:
-
The payment cannot have cleared the bank, as evident by the payment being listed on Paid Checks instead of Check Reconciliation.
-
The current status of the disbursement on the Check Reconciliation (CHREC) table must be one of the following:
-
Disbursed or Warranted.
-
Pending Stop Cancel or Pending Stop Reissue
-
Disbursement must be posted.
Disbursement Cancellation Parameters
Disbursement Cancellation Parameters allows the establishment of selection criteria for an automated cancellation of disbursements. Each record on this page is a complete set of cancellation parameters and will select a group of records for cancellation. This parameter page is used by the Mass Cancellation batch process. Refer to the associated run sheet in the CGI Advantage Accounts Payable Run Sheets guide for more information about the batch process.
Reclassification Types
To account for a variety of possible accounting scenarios, different cancellation and reclassification types have been identified for canceling or reclassifying disbursements in CGI Advantage Financial. They are as follows: Reschedule, Hold, Close, PR Cancellation, Stale, Escheat, Cancel, and Warrant Reconciliation.
The first four cancellation types are used to reverse the effects of the original disbursement and are initiated via a Discard to the original disbursement transaction, or by running the Mass Cancellation batch process. These first four are referred to as cancellation types. When the disbursement transactions with Transaction Types of AD, EFT and MD are cancelled using the cancellation type of PR Cancellation, Hold, or Reschedule, the value for the Interest Ineligible flag on the referenced Payment Request transactions will be checked (set to True). When the value for this flag is checked, it will not be considered during the Automated Interest Calculation batch process to determine interest eligibility. The value comes from the payment request transaction to the Disbursement Request (DISRQ) table and the AD Chain will update the AD disbursement transaction. This is to ensure that during the Automated Interest Calculation batch process the disbursement record and all its accounting lines will be excluded from interest payment. Please refer the “Automated Interest Calculation” topic in this user guide for more information on this process.
|
Retain Discount from Cancelled Disbursement (RET_DISC_FROM_CANCELLED_DISB) |
This parameter indicates Discount Terms on a cancelled disbursement with a Cancellation Type of Reschedule, Hold, or PR Cancellation will be retained for any re-issued disbursement. If True, the Discount Terms will be retained. If False, the Discount Terms will not be retained. |
When a disbursement is cancelled with the reasons of PR Cancellation, Hold, or Rescheduled the system will update the Payment Request information to the DISRQ table. There are three parameters on Application Parameter that may impact how some of the fields on DISRQ are set (depending upon your site’s setup).
-
The Create DISRQ Records from Disbursement Transactions (CREA_DISRQ_FRM_DISB_DOC) parameter determines where the disbursement options will be obtained that updates DISRQ.
-
If this parameter is set to False, the system will load the disbursement options from the payment request (PR/ABS) transaction.
-
If this parameter is set to True, the system will load the disbursement options from the disbursement transaction to DISRQ.
-
In both cases, the system will update DISRQ with accounting lines from the Disbursement transaction and a single entry will be made for each accounting line of a disbursement transaction.
-
The Retain Discount from Cancelled Disbursement (RET_DISC_FROM_CANCELLED_DISB) parameter indicates Discount Terms on cancelled disbursement will be retained for any re-issued disbursement.
-
If the parameter is True, the Discount Terms will be retained.
-
If False, the Discount Terms will not be retained.
-
The Transaction Codes for Payment Consolidation by Payment Request Transaction Dept (CONSOLIDATE_PR_DEPT) parameter determines how Consolidation Object 6 will be populated.
-
If the parameter is blank then no update to Consolidation Object 6 will occur.
-
If the parameter is set to ALL, upon inserting the record into the DISRQ table, the system populates the Consolidation Object 6 field with the Transaction Dept of the corresponding PR/ABS Transaction Type transaction for any PR or ABS transaction that updates DISRQ when it is submitted to Final.
-
If the parameter is set to a specific PR/ABS Transaction Code, or a list of specific PR/ABS Transaction Codes, upon inserting the record into the DISRQ table, the system populates the Consolidation Object 6 field with the Transaction Dept of the corresponding PR/ABS transaction code, if the Transaction Code being inserted is available in the parameter value, the transaction is submitted to final, and the PR/ABS updates DISRQ.
-
If no match is found, either because the Transaction Code is not there, or it was incorrectly entered, then no update to Consolidation Object 6 will occur for the transaction.
For Payment Requests of transaction type “PR”, the Commodity Information on DISRQ will be populated from original Payment Request transactions since there will be no commodity information on the Disbursement Transaction. A combination of Referenced Transaction Code, Referenced Transaction Department, Referenced Transaction ID, Referenced Vendor Line, Referenced Accounting Line, and Referenced Commodity Line in the Reference tab of the disbursement transaction will be used to get the original Payment Request transaction.
The Cancellation Types of Stale, Escheat, and Cancel are used to re-classify the original expenditure to a liability account, while Warrant Reconciliation is used to re-classify the monies booked by the disbursement to warrants payable as cash. These four reclassification types are processed via the Disbursement Cancellation (DC) transaction.
PR CancellationPR Cancellation
The PR Cancellation type creates a cancellation version of both the disbursement and the PRC, reversing all entries as if the payment/disbursement never was created in Advantage.
The Reschedule cancellation type reverses the effects of the original disbursement, and allows you to reschedule the disbursement by specifying a new Schedule Payment Date. This type of cancellation is done via a Discard action to the original disbursement resulting in the following updates:
The referenced line amounts on the associated Payment Request(s) are re-opened and updated to an Outstanding status.
The Disbursement Request (DISRQ) table is updated with the Accounting Lines (and corresponding Posting Lines) of the original Disbursement. In addition, it is updated with the new Schedule Payment Date.
The disbursement record on the Check Reconciliation (CHREC) table is updated with a status of Cancelled and the Cancellation Reason designated on the discarded disbursement.
The Hold cancellation type reverses the effects of the original disbursement, and allows you to place the payment on hold. This type of cancellation is done via a Discard action to the original disbursement resulting in the following updates:
The referenced line amounts on the associated Payment Request(s) are re-opened and updated to an Outstanding status.
The Disbursement Request (DISRQ) table is updated with the Accounting Lines (and corresponding Posting Lines) of the original Disbursement. In addition, the Disbursement Request (DISRQ) table is updated with a Hold Type of User Hold, and the Reason of Disbursement Cancellation of Hold. This hold will remain in effect until it is removed from the table taken off hold and a Schedule Payment Date is defined.
The disbursement record on the Check Reconciliation (CHREC) table is updated with a status of Cancelled and the Cancellation Reason designated on the discarded disbursement.
The Close cancellation will reverse the effects of the disbursement, but will keep the lines of the referenced Payment Request(s) closed (these lines would be ‘expended’ at the time of Payment Request). The Payment Request is never modified or reprocessed. When this Disbursement Cancellation method is selected, the payment is not rescheduled for disbursement. Cancelling the Disbursement transaction and not rescheduling the payment will reclaim the associated funds. When a disbursement is cancelled using Type 3 (Close), any backup withholding, contract withholding, intercepts and 1099 ledger postings will be readjusted as well. This type of cancellation is done via a Discard action to the original disbursement. This updates the disbursement record on the Check Reconciliation (CHREC) table with a status of Cancelled and the Cancellation Reason designated on the disbursement cancellation transaction.
This cancellation type is not recommended during a cross-year scenario when the budget fiscal year is not equal to the accounting fiscal year. For cross-year cancellations see Type 6 (Cancel) below.
Once a check is issued, there is usually an established number of days in which the check must be redeemed. A check is stale when it has not been redeemed within the established number of days. When this happens, you have the right to reclaim the funds in question until such time as the holder of the check claims the funds. The Stale cancellation type creates a memo reference to the accounting transactions of the disbursement to ‘Credit’ the Cash Expenditure and ‘Debit’ the specified Stale Date Payable Balance Sheet account. When this Disbursement Cancellation method is selected, the payment is not rescheduled for disbursement, and the Payment Request(s) is never modified or reprocessed. This type of cancellation is done via the Disbursement Reclassification (DC) transaction. This updates the disbursement record on the Check Reconciliation (CHREC) table with a status of Stale Dated and the Reclassification Reason designated on the disbursement reclassification transaction.
An escheat is the succession of abandoned property to the state. It is commonly associated with property that comes from the estate of a person dying without a will and without any known heirs. However, this concept has been broadened to include the recovery of any property that results from the failure of a person legally entitled to that property to make a valid claim against the holder of the property within a prescribed period of time. Consequently, the terms escheat and unclaimed property are used interchangeably. The types of property that are often unclaimed may include checking and savings accounts and even uncashed checks. The Escheat Cancellation type creates a memo reference to the accounting transactions on the disbursement to ‘Credit’ the Cash Expenditure, and ‘Debit’ the specified Escheat Payable Balance Sheet account. When this Disbursement Reclassification method is selected, the payment is not rescheduled for disbursement, and the Payment Request(s) is never modified or reprocessed. This type of reclassification is done via the Disbursement Cancellation (DC) transaction. This updates the disbursement record on the Check Reconciliation (CHREC) table with a status of Escheat and the Reclassification Reason designated on the disbursement cancellation transaction.
The Cancel reclassification type will leave the expenditure open but cancels the disbursement to a Cancel Disbursement Payable account defined on System Special Accounts (SPEC) table. This reclassification type is typically used during cross-year cancellations but can be used during the normal fiscal year as well. This type of cancellation is done via the Disbursement Cancellation (DC) transaction. This updates the disbursement record on the Check Reconciliation (CHREC) table with a status of Cancelled and the Cancellation Reason designated on the disbursement cancellation transaction.
Warrant ReconciliationWarrant Reconciliation
The Warrant Reconciliation reclassification type will reduce the warrants payable amount pending and reclassify it as a reduction in cash. This reclassification type is typically used if a standard warrant or clearing fund warrant disbursement option model, as defined by the Disbursement Option setting on SOPT, is used. In addition, this reclassification type will update the memo referenced disbursement transactions status to Outstanding on the Check Reconciliation table.
Request Reversal or Cancellation of EFT Payments through the EFT Reversal Table
The EFT Reversal (EFTREV) table is a user-maintained table that allows authorized users to:
-
Request the reversal of EFT payments that went to the bank for processing.
-
Request the cancellation of EFT payments that were reversed successfully by the bank.
Requests to reverse applicable EFT transactions can only be inserted manually on the EFT Reversal table when the ACH File Generation status on the EFT transaction Header is Generated or Re-generated. However, records on this table can be updated manually by authorized users, the Reversal ACH Transaction batch process or the Returned ACH Transaction batch process (see run sheet for more information on these processes). The Generate Reversal ACH file batch process selects the records with the EFT Reversal Status set to Request Reversal and builds the ACH file. The file will be sent to the bank. Once the bank confirms the reversal of the ACH transactions, the status will be changed to Reversal Confirmed. The Initiate Disbursement Cancellation batch process selects the records with status set to Reversal Confirmed and initiates the disbursement cancellation by inserting the records into the Disbursement Cancellation parameter table. This table supports EFT transactions with the Disbursement Type of EFT and the Disbursement Format of CTX, CCD, or PPD.
An EFT reclamation is a procedure used to recover government funds when a death or legal incapacity terminates the rights of the recipient or a beneficiary of the recipient to receive certain payments such as pension, annuity, or other benefit payments. This is a special case of EFT reversal. Since reclamation may not happen in the same year as when the disbursement was made, the cancellation of the disbursement may occur in a different year.
Note: If an EFT was processed under the Warrant model and a WR transaction has already reclassified the Warrants Payable into Cash, any subsequent cancellation of the EFT will reverse the Warrants Payable but not the Cash. Therefore, additional manual accounting adjustments will be needed.
The EFTREV table has the following edits.
-
The entered combination of Bank Account Code and EFT Number must exist on the Check Recon table, the EFT Status on the Check Recon table must be set to Disbursed or Warranted, and the entered amount must match the net amount on the Check Reconciliation table.
-
Requests to reverse EFT transactions with $0 net amount are not allowed.
-
Requests for reversal are only applicable to EFT transactions.
-
Only records with the Reversal Status of Request Reversal can be deleted by authorized users.
-
This table provides the capability to manually set the Reversal Status to Reversal Confirmed for records with the Reversal Status of Reversal Sent to the Bank when the bank sends a notification (via fax, letter, email, phone call, and so forth) indicating the successful reversal of corresponding EFT payment. In this case, an explanation can be entered on the Comment field.
-
When records are added to the EFTREV table to request a reversal or reclamation, the system has edits to verify that the request is initiated within the applicable timeframe specified by the EFT Reversal Request Lag Days (EFT_REV_RQST_LAG_DAYS) and EFT Reclamation Request Lag Days (EFT_RECLAIM_RQST_LAG_DAYS) APPCTRL parameters.
-
If the request to reverse an EFT payment is returned by the bank on the ACH file (that is the reversal is rejected), then the Returned ACH Transaction batch process will set the Reversal Status to Reversal Returned by the Bank and the Date Reversal Returned to the Application Control Date. However, an authorized user could manually change the Reversal Status of applicable transactions to Reversal Confirmed if the bank confirmed the reversal of the EFT payment. You are encouraged to enter an explanation on the Comment field. Transactions on the EFT Reversal table with the Reversal Status of Reversal Confirmed will be picked up by the Reversal ACH Transaction batch process when it runs next time. The EFT Return table stores the information of the returned EFT payments and EFT reversals by the bank.
-
If an EFT payment is reversed successfully by the bank but its cancellation in the Advantage system request fails, then the Reversal ACH Transaction batch process will set the Reversal Status to EFT Cancel Request Failed. However, an authorized user could manually change the Reversal Status of applicable transactions to Reversal Confirmed after conducting adequate research. You are encouraged to enter an explanation on the Comment field. Transactions on the EFT Reversal table with the Reversal Status of Reversal Confirmed will be picked up by the Reversal ACH Transaction batch process when it runs next time.
-
Even authorized users cannot change the Reversal Status to one of the following values for existing records on the EFT Reversal tables:
-
Request Reversal
-
Reversal Sent to the Bank
-
Reversal Returned by the bank
-
EFT Cancel Request Failed
-
EFT Cancel Initiated
-
If a Hold Type is entered, it must exist on the Payment Hold Maintenance by Department table (PHLDTD), where the Hold Level equals User Hold or Automated Payment Request and the Payment Type Hold Department and Payment Hold Type Unit combination must be either ALL / ALL, Transaction Department / ALL, or Transaction Department / Transaction Unit.
-
If a Hold Type is entered but the Payment Hold Type Department and/or Payment Hold Type Unit fields are blank, the Payment Hold Type Department and/or the Payment Hold Type Unit fields are defaulted to ALL.
-
If the Cancellation Type is set to Hold, then the Hold Type, Hold Request Description, Payment Hold Type Department, and Payment Hold Type Unit fields must be populated.
The following table summarizes allowable / not allowable manual changes of the Reversal Status field on the EFT Reversal table:
|
From |
To |
Allowed vs. Not Allowed |
|
Any valid value |
One of the following values:
|
Not Allowed |
|
Request Reversal EFT cancel initiated |
Reversal confirmed |
Not Allowed |
|
Reversal sent to the bank Reversal returned to the bank EFT cancel request Failed Payment and Reversal Returned by the Bank |
Reversal confirmed |
Allowed |
