- Reconciliation is the responsibility of each university department that manages one or more university funds.
- Each fund should be reconciled monthly.
- All financial transactions entered on-line by the department should be reconciled monthly to their internal source document or log.
- All financial transactions from all source systems - Human Resources, Procurement, Stores, service operations, billing units and other entities that provide financial data to the General Ledger should be reconciled to supporting documentation.
- Supporting documentation, either paper or electronic, should be adequate to support the financial transaction.
- Supporting documentation should be maintained in the department.
- Fund managers should recognize the transaction information that appears on the university financial reports.
- Fund managers have the responsibility for identifying financial problems and resolving errors.
- The Fund Exception report should be reviewed periodically to ensure that no one has used your org/fund combination inappropriately.
- Workflow should be set up appropriately to ensure that proper approvals occur for your department's financial transactions.
These reconciliation packets are comprised of three components: a narrative, a sample 91, and a sample reconciliation document. Some packets (e.g., AP/PO) may include more than one narrative, 91, or reconciliation document. Others (e.g., Allocations) may not include a reconciliation document, because there is none for that kind of transaction.
At the top of the narrative is a summary table, that tells you how to recognize each type of transaction on the 91, and describes the associated billing cycle. Then the narrative provides key information about how the transaction will appear on the 91, and on the reconciliation document. Finally, it describes how to compare the 91 to the reconciliation document. For your convenience, fields referred to in the narrative are labeled on the sample 91 and reconciliation document.
In some cases, you will want to go beyond simply verifying the data on the 91; you may also want to verify the reconciliation documents (especially billing statements) against your own records. These packets do not discuss that verification.
Transactions in the General Ledger
Documenting Financial Transactions in the General Ledger
Millions of financial transactions are processed annually by the university's general ledger. These include journal entries, deposits, procurement activity, personnel appointments and adjustments, etc. In a paper based system, documentation for these transactions followed three basic principles:
- A paper-based system requires paper documentation that supports the transaction with the appropriate approvals and final review by the appropriate office that processed the financial transaction.
- The requirements of the Ohio Revised Code specific to retention of paper records must be followed.
- Additionally, documentation has always been associated with internal controls and level of risk associated with each. From this perspective, required documentation is not the same for all transactions. For example, an adjustment to an expense between accounts within a department is not as critical from the perspective of internal controls and risk as processing additional pay in the human resources system.
With the advent of the new general ledger, two of these basic principles have been revised to reflect an electronic environment.
- In an electronic system review and approvals for many entries are processed and stored electronically.
- According to Ohio Revised Code, records that are created in an electronic environment can be retained electronically.
The third basic principle of aligning required documentation with internal controls and level of risk is true regardless of the medium used to process the transaction. Required documentation for transactions, therefore, depends closely on the level of risk associated with them.
Documenting general ledger entries including adjustments, transfers, and deposits, human resources payroll related entries, procurement activity, and entries from the university's source systems such as UNITS, Bookstores, Stores, etc. are based on the following considerations.
Minimal documentation is required when:
- There are system controls that minimize errors. Examples are transactions that have workflow associated with them. These transactions are reviewed and approved by someone other than the initiator before it posts to the general ledger.
- The transactions can be fully documented in the system itself. Comments describing the transaction and its purpose as well as the operator ID of the person who initiated the transaction are available in the on-line system. The transaction can be audited from the system itself.
Increased documentation is required when:
- The transaction is for a large dollar amount.
- The transaction is part of a legally binding contract.
- The transaction is created via the Procurement Card.
- The transaction is created using an Internal Order form or 100W (there is no upper dollar limit for transactions that use the 100W)
- The transaction in part of the procurement process.
- The transaction pertains to personnel actions.
Given these considerations and in an effort to assist users in determining the level of documentation for each type of transaction processed by the general ledger, the Office of the Controller has developed a matrix which includes transactions by type, level of security and risk and appropriate documentation. These guidelines should be used in your record-keeping process.
|Transaction Type||Description and Level of Security||Documentation|
(Currently record retention is four years as required by University Archives.)
|Journal Entries and Adjustments|
|Budget and Fund Transfers|
|Deposits and Other Bank Activity|
|Interdepartmental Billings - Customer purchases from Stores, Units, Bookstores, etc.|
|Purchase Orders and Change Orders|
|Human Resources||Retain the following:|
The university provides monthly detail financial transaction reports, GLUOO4OS-91, which should be used for reconciliation to department records. Retain copies of the documentation along with the detail reports with reconciliation approved by supervisor signature.