Ron Woolf used to wish everyone in his office a happy New Year on July 1. Marci Sablan rings in the New Year on Oct. 1. Denise Liccioli celebrates both days. And David Richards, well, he recognizes the day on Jan. 1, like most of the rest of the world.
This confusion about Father Time is the result of what we'll refer to as the "Fiscal Factor." The afflicted are accountants, controllers and chief financial officers across the land. The symptoms are forgetting what year it is, displaying an uncanny obsession with Excel files and exhibiting an uncontrollable urge to make a space for visiting auditors as uncomfortable as possible.
Fiscal years drive many financial specialists batty, according to several in the business.
Woolf, Sablan, Liccioli and Richards all work with numbers and budgets for government agencies.
Sablan is a program analyst for the U.S. Army Corps of Engineers. Federal agencies run on a fiscal year from Oct. 1 through Sept. 30.
Liccioli works as the assistant director for the state Department of Labor and Workforce Development, where she oversees both state and federal money. The state fiscal year is from July 1 to June 30.
Woolf is the chief financial officer for the city of Fairbanks and Richards is a controller for the municipality of Anchorage. Both operate on a calendar year.
Woolf used to run the books for the nonprofit Fairbanks Community Mental Health Center. Its fiscal year began on July 1.
Barron's Dictionary of Business Terms defines a fiscal year as an accounting period covering 12 consecutive months, at the end of which the books are closed and profit or loss is determined.
Companies generally have their fiscal years follow the calendar, but a seasonal business sometimes has a fiscal rather than a calendar year so that its year-end figures will show it in its most liquid condition, which also means having less inventory to verify physically, Barron's says.
Accountant-types around the nation are now gearing up to issue W-2 forms to company employees. Ordinarily, that'd be no big deal. A few keystrokes, maybe a couple of calculations and print out the form.
But if the payroll is tied someway to a different fiscal year, such as for a federal grant, things start getting more complicated. Accountants then must do a few extra calculations to figure out the amounts.
But that's what accountants do. Payroll, closing the books at the end of the year and preparing for auditors are the main job functions of folks like Liccioli.
But the year-end fiscal factor never ends for some.
Crystal Coulter, financial program specialist for the Alaska Native Tribal Health Consortium, said that because her organization receives so many grants from so many entities, the consortium faces year-end reporting during five months out of the year.
"It usually starts in May," Coulter said. "We have some year-end reports due in May, June, July, a lot in September. December's always busy. Really, we've been doing year-end stuff since August and will continue that through January. Then we'll start doing adjustments."
The consortium's year follows that of the federal government because much of its budget is federally driven. It is a private nonprofit organization owned by the 229 federally recognized tribes and their regional health organizations.
Bruce Hilton, CFO for Cook Inlet Tribal Council, also faces year-ends throughout the year. The council offers financial services for about 40 organizations and must prepare all the payroll, financial statements and audits for each one.
"Three months out of the year, auditors are here," he said. "The most uncomfortable room in the building is the office where the auditors work, because we hope they won't stay long."
Auditors scour virtually every line in every book to ensure organizations are keeping with the legal standards of accounting practices. New accounting laws passed after the Enron scandal have enticed auditors to be more stringent in their reviews. This year, auditors at the tribal council pulled more than 400 transactions, Hilton said. Last year, they pulled only 350.
Liccioli and her staff her staff at the labor department face two year-end reports every year. The department has a budget of $153 million, about $98.5 million of which comes from the federal government.
The main challenge for the department, she said, was keeping up with the codes. Every item in the department's budget has a code, many have several codes. For example, one item has a code that indicates federal money, another code indicates state matching money, and there's a code to join those two items.
"That's a simple example," she said. "Some might have 10 to 20 or more codes. We have thousands of codes on our books. Tracking the codes, there's our first problem. It's just a number, it's not like it's the end of the world, but it can add to the challenges."
One error can spur many headaches
The more codes you have, Liccioli said, the more chance for mistakes and the more hours you can put in finding an error.
Microsoft Excel is an accountant's best friend on most days. But when an error gets slipped into a spreadsheet ... yikes! Simply transposing one number in a personal checkbook can frazzle anyone, but when working on a budget report that is hundreds of pages long, and many items on many pages are merged or connected, that could take hours to figure out.
"We do a lot of back-up checking," Liccioli said. "But sometimes it's not easy to see right off the bat, and it can be very tedious to find it. You know it's there, you just can't find it."
The state of Alaska budget is 213 pages long, said Kim Garnero, with the state division of finance. "A lot of things could go wrong."
Working late nights and weekends leading up to year-end and audits add to the error factor.
"In September and October, everyone is working six-day weeks," Garnero said. "On nights when you're here till one in the morning, you're not the sharpest. In accounting, there are a lot of double entries that tells you something is wrong. You just have to find it."
Working in multiple years can throw off financial folks, too. Most state finance offices, for example, have just closed the books on 2004, are working in 2005 and are putting the finishing touches on the 2006 budget.
"At the same time, the state budget people are developing the 2006 budget, we're counting the beans for FY '04," Garnero said. "Both the 2004 financial statements and the '06 budget are due to the governor on the same day, Dec. 15. But because the budget is such a big thing, the financial statements get no press, and that's OK with us."
"It's amazing how quickly you lose track of what year you're in," Liccioli said.
Woolf and Richards, who both work for city governments on calendar years, say they have it best. Their biggest time crunches come at the beginning of the year, from January to March. Then, they're free for summer fun.
"The city looked at changing it a few times, but from my perspective, the calendar year works better," said Richards, of Anchorage. "It's a quality of life issue: 99 percent of the people who work here don't want to work overtime in the summer in Alaska."
"I'd much rather be working late a lot closing the books during the first of the year rather than in the summer," said Fairbanks' Woolf. "The summers are too short. I'd rather be out chasing fish than numbers."
