All transactions will be reconciled to the supporting documentation.
The department must maintain appropriate separation of duties by distributing the functions of authorizing and recording transactions, performing reconciliations, and the physical control of related assets among several people or departments. The reconciliation must be performed by an individual that does not initiate or process the transactions. The reviewer of the reconciliation must be a more senior level unit business manager or the responsible officer for the program/ sponsored program. Cash operations, payroll, purchasing (including procurement card management), and receiving are examples of areas where separation of duties is essential. Note that in a small office where separation of duties is difficult, it is imperative that the supervisor review and approve all activity.
Any discrepancies or errors must be corrected as soon as possible and always within 60 days of the month end closing date, with the exception of those occurring in June. Those must be corrected prior to fiscal year-end close by the date specified in the schedule published annually by University Accounting. See the Transfer of Previously Charged Expenses and Timely Posting of Transactions policies.
Some accounts may not have independent supporting documentation, including:
· Cash - considered reconciled if all other accounts are reconciled, as it generally represents the offset to all other entries.
· System Accounts Payable (214110) - represents system AP transactions and entries should net to zero once payment has been made.
· Fringe Benefit - cannot be reconciled against outside documentation. This account should be reviewed to ensure charges related to expected personnel.
· Sponsored Program accounts receivable/billing – accounts should be reviewed for reasonableness. Questions should be directed to Sponsored Programs Financial Administration.
Below are general guidelines for the reconciliation process. Each unit should have written procedures that document the unit’s process for implementation of this policy.
Once the fiscal period has closed, the reconciler should:
1. GENERATE the necessary system University Reports for the program or project being reconciled. The main report would be the CONT-03A/B, which provides budget and actual data by month for a program (CONT-03A) or project (CONT-03B).
2. GATHER any supporting documentation for the month. Examples include purchasing documents, procard reconciliations/submissions, payroll estimates, submitted journal vouchers, etc.
3. VERIFY that the current month’s beginning balance agrees with the prior month’s ending balance and that the prior month’s discrepancies have been corrected.
4. COMPARE supporting documentation to system generated (University Reports) line item reports ensuring all transactions are allowable, reasonable, allocable, accurate, and approved for the program or project. Review both actual line items and budget line items (i.e. budget transfers and revisions) during the reconciliation process.
5. CHECK payroll summary reports to ensure all personnel charges are allowable, reasonable, allocable, accurate, and approved for the program or project charged.
6. CLEAR any discrepancies found during the reconciliation process by preparing the required JV’s or payroll corrections immediately. For those discrepancies that require action outside your department, contact the appropriate office or individual to have the discrepancy corrected immediately. Correct payroll postings in the HR module of PeopleSoft using the Payroll Expense Transfer process. Prepare a JV for all other corrections to actual amounts and submit to the Controller’s Office. Any JVs involving sponsored programs (grants) must be routed to the Sponsored Programs Financial Accounting department first.
7. REVIEW pre-encumbrances and encumbrances to ensure all encumbrances are allowable, reasonable, allocable, accurate, and approved for the speedtype.
8. CERTIFY the reconciliation for the month by having both the reconciler and the approver sign as appropriate.
Keep reconciliation records per University Records Program or Sponsor Record Retention Policies, whichever is longer, in either hardcopy or electronic format. Generally the retention policy for non-Sponsored Programs is three years. For all Sponsored Programs, please refer to the specific agreement, as retention requirements may vary.