Jack TenneyExtra Point

by Jack Tenney, Publisher

September 2006

Fiscal Years

Well, well — September. Back-to-school, turning leaves, football games and fiscal year magic-time.

Because the federal government has a Sept. 30 fiscal year-end, lots and lots of entities with close ties to the fiscal fortunes of earmarks, grants, gimmees, gotchas, RFPs, RIFs and all that, also have chosen Sept. 30 (or even June 30 to make sure “fresh” numbers are available for the Feds) as the right day to close the books on another year’s transactions. 

Most businesses keep their books on an accrual basis while most governmental or quasi-governmental enterprises (universities, hospitals, etc.) keep theirs on hybrid systems, which tend to make the process of closing the books an acquired skill, almost an art form yielding results that can confound accountants, economists, budget officers and administrators.

There are a couple of reasons.

First, budgets for governmental departments are not meant to be maximums, they are meant to be spent. There is no reward for under-spending a budget as there might be in a for-profit enterprise. In fact, there is great bureaucratic and budgetary danger in under-spending one’s budget, namely, next year’s (or more precisely, the year after next year’s) budget is likely to be cut.

Second, for a decent part of September and, occasionally, a bit of August, two years’ books are open — this year’s and next year’s. If one is already spending next year’s budget in late August, early September, it typically means that this year’s budget is spent (sometimes as early as last October!).

Therefore, coding purchase requisitions, encumbrances, vouchers, chits, placeholders, dog-ears and the like must be precise and unequivocally machine-readable. In the good ole days, you could color-code things (red tags for this year, blue for next) but now all these things are directly captured keystrokes from networked desktops, laptops, LANS, WANS and WiFis.

Some receiving areas for physical goods (books, furniture, carafes, file cabinets and the like) have separate pens for next year’s stuff that, even if received the day after Labor Day, won’t be “received” until October. Business people don’t do stuff like that, do they? 

Our fiscal year ends Dec. 31. Yours?

Correction: In our August story about Thatcher Brook Inn, we misidentified its location. It is not in Waterbury Center, but in the village of Waterbury.