RECONCILIATIONS - MONTHLY EXPENDITURE BUDGET STATUS
Effective: June 1, 2000
Revised: February 9, 2017
Departmental expenditure transactions are to be reviewed monthly to help ensure the validity of financial transactions by comparing supporting documents to the transactions listed on the monthly status reports.
Based on the Separation of Financial Administrative Duties policy, individuals assigned responsibility for performing these reviews should be independent of the expenditure transaction process. Where complete separation of duties and responsibilities is not feasible, the reconciliation should be reviewed and approved. The review and approval of the reconciliation is the responsibility of the department head or their documented designee. Employees should be adequately trained to perform the reconciliation procedures. The reconciliation and certification process is to be adequately documented in order to allow for future review and verification of the reconciliation. While printed documentation and certification is allowed, electronic documentation and certification is preferred. Reconciling items should be resolved in a timely manner.
- After each month is closed, notification is sent out when the Budget Status Reports (BSR) are available.
- Budget centers/departments may distribute these reports to the appropriate independent personnel for reconciliation of the University accounting records to the departments' source documents.
- Ensure that documentation exists for each amount that is recorded in the accounting records, and the item is posted to the correct chartfield for the correct amount. Examples of supporting documentation follow:
- Payroll and related transactions should be verified and reconciled to the Monthly Payroll Report distributed by the Accounting Services office, which identifies all payments to employees by pay period.
- Other expense transactions should be verified to documentation, indicating supporting expenses and with an authorization by an employee with assigned responsibility for expending departmental resources.
- Exception: Based on volume of activity in an account, the department head may establish an internal policy that eliminates the need to reconcile amounts below a certain amount. If a department head has established such a policy, ensure that documentation exists for each amount above the established threshold.
- Inquire about items for which there is documentation (i.e. invoice, voucher, etc.), but no accounting entry reflected.
- Items that are identified as reconciling items should be cleared or resolved as soon as possible.
- Upon completion of the reconciliation, document by indicating: "Reconciled by (reconciler's name) on (date)."
- The reconciler should inform a responsible individual (Budget Center Director, Department Head, etc.) that the reconciliation(s) has been performed and that all items agree with the supporting documentation. This communication should be by paper copy memo or via e-mail. An example of the statement that the reconciler should make is: "I have reconciled all expenditure accounts for department numbers _____, ____, and _____. Accounting entries are in agreement with our documentation. Reconciler's Name _____________ and Date __________."
- University procedures do not require a review of the reconciliations if adequate separation of duties is accomplished. However, if it is not feasible to have complete separation of duties an authorized individual should review and approve the reconciliation. With or without complete separation of duties, as indicated in step 7 above, a responsible employee should monitor to help ensure that reconciliations are being performed in a timely manner.