MERGING AND CLOSING FUNDS

 

The objective of this Knowledge Article is to define the steps needed to transfer the balances of a fund to another so it can be closed. This is done with the intention of leaving it with a zero balance.

Ideally, the fund to be closed will be free of payables and receivables and only have asset balances in its designated DT account(s). If not, those should be resolved prior to completing this process.

TRANSFERING FUND BALANCE

 

In this example we will be closing the Robinson Family Fund (Fund #00014) into the RNC Family Fund (Fund #00008).

 

Step 1: Find the most recent posted activity for the fund to be closed

 

From Business Central’s home screen navigate to Finance>G/L Entries.

 

 

Filter the ledger for the fund to be closed and sort the entries in descending order by Posting Date.

 

 

The top entry is the most recent posted activity for the fund and is the earliest date on which the fund should have its balances transferred.

 

 

Step 2. Find the fund’s final balances

 

From Business Central’s home screen navigate to Reports>Balance Sheet by Account.

 

 

Filter your report for the fund needing to be closed using an Ending Date that is on or after the posting date discovered in the previous section. Select “Print” or “Send to…” to run the report. (If the fund has not had posted activity within the filtered timeframe you may need to use the Consolidated option to produce a report).

 

 

Make note of Balance at Date Net Assets. These are the balances that will need to be transferred.

 

 

Post adjusting entries to transfer fund balances.

 

From Business Central’s home screen navigate to Finance>General Journals.

 

 

 

Open the Default Journal (or your preferred journal for adjusting entries).

 

 

The first three lines of the adjusting entry are transferring all the net assets of the fund to be closed to the spendable net asset of the fund (the account 3010 and 3020 balances found in the previous section). The Posting Date should on or after the Posting Date found in the first section.

 

 

The next line will use the same posting date. Expense the fund to be closed for the total net asset balance using an expense account that nets to spendable net asset used in the previous step.

 

 

The next line will use the same posting date. Give income to the fund to that will remain post-merger/closure for the total net asset balance using a revenue account that nets to spendable net asset used in the previously.

 

The next three lines mirror the first three lines. They move the spendable balance that the remaining fund just received to original net asset accounts.

 

 

When complete you should have three journal entries.

1. One that transfers the net assets to the spendable net asset in the fund to be closed (yellow).
2. One that transfers the balance from the fund to be closed to the fund that will remain (green).
3. One that transfers the spendable net assets back to the original net asset accounts in the remaining fund (blue).

 

Choose Post>Post when ready to complete the transfer.

 

 

Allow Autobalance to move the assets

 

After posting the entry specified in the prior step autobalance will be triggered and will post an entry within five minutes automatically. This entry will:

 

• Deduct assets from the fund to be closed in its specified DT account (yellow).
• Add assets to the remaining fund in its specified DT account (green).
• Rebalance in General Fund (blue).

 

 

 

From Business Central’s home screen navigate to Reports>Balance Sheet by Account.

 

 

Filter your report for both funds using an ending date that is on or after the posting date discovered in the previous section. Select “Print” or “Send to…” to run the report.

 

 

Confirm the fund to be closed has all zero ending balances and the remaining fund has correctly received the assets/net assets.

 

 

         

 

Deactivate the Fund in CRM

 

In akoyaGO CRM navigate to the Fund Management workplace’s Funds entity and search for the fund to be closed.

 

 

 

Open the fund and choose Deactivate and confirm the deactivation.

 

          

 

 

The fund will not display a banner indicating it is inactive.

 

 

 

Inactive funds cannot no longer be updated, receive gifts/income, pay grants/expenses, be assessed fund fees, receive spendable allotment, receive joint investment allocation, or be posted to in Business Central.