Author: Financial Management Resource Bureau
With the fiscal year quickly coming to a close, municipal accounting offices are focused on preparing for the year-end financial process. However, a successful year-end closing involves coordination amongst the finance team and all city or town departments. We recommend the following best practices to ensure a successful fiscal year close. In addition, DLS offers a helpful frequently asked questions on the subject.
Develop and Distribute a Year-End Schedule: It is important for the finance team to develop a comprehensive schedule that details the steps, timeframes, and deliverables required for a successful year-end close. This provides a framework for municipal officials to complete the process in a timely and consistent manner. It is recommended to distribute a year-end memo to department heads which summarizes key timetables and details such as:
- Split Fiscal Year Payroll
- Split Fiscal Year AP Warrant Schedule
- Departmental Turnover Submission Deadlines
- Grant Accounting Requirements
- Encumbrance Request Procedures
- Year-End Transfers
We recommend including the year-end schedule on agendas for financial team meetings and department head meetings. This best practice provides regular check-ins on year-end activities and encourages frequent communication amongst financial officials and department heads.
Follow DLS for Annual Year-End Letters: Each year the Director of the Bureau of Accounts (BOA) releases letters for accountants, auditors, treasurers, collectors, clerks, and regional school business officials which detail important dates, changes, and deadlines specific to municipal roles and their corresponding responsibilities. To ensure receipt of the year-end letter, finance officials should confirm that the city or town clerk has accurately entered their contact information in the DLS Gateway application. Additionally, local officials should sign up for DLS alerts.
Review Financial Activity: It is essential that the accounting office works with department heads to review all accounts by early June, so that these accounts are reconciled by June 30. Accounting officials have a responsibility to ensure there are no accounts with deficit balances and to deny an expenditure to an appropriation account that lacks sufficient funds. Department heads should collaborate with the accounting office on a prescribed schedule to review all general fund and special revenue accounts, verify that all revenues and expenditures have been correctly recorded, confirm that there will be no deficit balances, and submit all available invoices for payment.
We recommend the following checklist to review at year-end:
- General fund accounts
- Grant & Special Revenue Funds
- Capital Projects & Special Articles
- Dormant Accounts
- Internal Borrowings
Potential year-end deficits should be identified early and addressed in a timely manner. Officials can download the DLS informational guideline release on year-end transfers.
We provide a sample template of core financial policies, including a standard Year-End policy.
Helpful Resources
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Editor: Dan Bertrand
Editorial Board: Tracy Callahan, Sean Cronin, Janie Dretler, Jessica Ferry, Brianna Ortiz, Christopher Ketchen, Paula King, Jen McAllister and Tony Rassias
| Date published: | May 21, 2026 |
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