Policy and Procedure
NOTE - POLICY HAS
BEEN SUPERSEDED SEE NEW POLICY AT: |
ACCOUNT RECONCILIATION
POLICY AND PROCEDURE
POLICY
Every financial activity must be monitored to ensure that all revenues
earned/collected by a department/unit were credited to the correct account and
to ensure that expenditures were allowable, properly approved, and charged to
the correct account. This policy sets general guidelines for departments/units
to follow in developing account reconciliation procedures.
PROCEDURE
Account reconciliation is a comparison of detailed information as contained
within the university’s financial system (such as Banner Monthly Ledger Reports
FWREXEG & FWREXDP) to supporting documentation retained within the
department/unit (for example, department/unit copies of cash receipt vouchers,
purchase orders, and procurement card statements). The Controller and
Treasurer’s Office will provide to each budget unit (as noted by mail stop in
the Banner table FZBFOVP) a list of Banner fund and organization combinations
that incurred activity for the most current month closed to posting activity.
A. Each department/unit shall develop procedures for reconciliation of all departmental/unit accounts. Although departments/units may review their ongoing ledger activity on the university's accounting system and print the ledgers at any time, a formal reconciliation of the accounting records should be performed periodically, preferably on a monthly basis. In addition to ensuring the completeness, accuracy, and appropriateness of revenues and expenditures being reported, the reconciliation process should also include a comparison of actual revenues and expenditures to budget to ensure that overspending does not occur.
Each department/unit head is responsible for ensuring that adequate documentation is maintained to support the reconciliation process. Documentation should include the signatures of both a reconciler and a reviewer (the reconciler and reviewer should not be the same person). The reviewer is normally the department/unit head; however, review responsibilities may be delegated by the department/unit head to a designee such as a business manager. Principal investigators should always review their own account reconciliations. Reconciler and reviewer signature lines are provided on the summary page of Banner Monthly Ledger Reports FWREXEG & FWREXDP.
B. Account reconciliations, including evidence of review and approval by the appropriate person, shall be maintained at the department/unit and made available to internal or external auditors upon request. Periodic/monthly account reconciliations are to be retained for a minimum of one year. Fiscal year-end reconciliations are to be maintained for a minimum of three years beyond the current fiscal year.
C. The oversight and control value of account reconciliation is greatly enhanced when performed by an employee who is independent of the processing of cash receipts/revenue and expenditure transactions. Therefore, it is recommend that the duties of account reconciliation be separated, if possible, from the duties of processing cash receipts/revenues and expenditures.
REVIEW
The Vice President for Finance
and Administration is responsible for the review of this operating policy
every four years or as needed.
OP 61.01
11/19/07
For information about this policy, contact the responsible/reviewing department hyperlinked above.
