FIN-023: Reconciling Unit Accounting Records

Date: 08/11/2009 Status: Final
Last Revised: 11/16/2017
Policy Type: University
Contact Office: Financial Operations
Oversight Executive: Vice President for Finance
Applies To: Academic Division and the College at Wise.
Reason for Policy:

Reconciliations of all Revenue Projects, Expenditure Projects, and Clearing Projects (Projects) are required to maintain the integrity of the University’s accounting records and to protect the interests of the University. Reconciliations are essential for an effective internal control environment so that:

  • The information transmitted to, contained in, and reported from the University's financial systems is accurate, complete, and recorded in a timely manner;
  • The information can be relied upon for making financial and administrative decisions; and
  • Irregularities are quickly detected, reported to the appropriate authorities, and resolved to prevent recurrences.
Definition of Terms in Statement:
  • Approver:

    The employee who has the authority and knowledge to approve transactions on the account.

  • Clearing Project:

    A project (in the UVa account structure) used to temporarily hold transactions that are to be transferred to another account.

  • Expenditure Project:

    A project (in the UVa account structure) used to record expenditure activity (spending money) that must be funded by an Award

  • Preparer:

    The employee who performs the monthly detailed reconciliation and prepares documentation for approval.

  • Reconciliation:

    A systematic review of accounts against source documents to verify that all charges are accurate and appropriate, and to identify expected charges that have not yet occurred. 

  • Revenue Project:

    A Project used to record revenue in the General Ledger. A Sponsored Program is not permitted to be a Revenue Project.

Policy Statement:

The timely reconciliation of transactions is an important part of responsible stewardship of University resources and an effective system of internal controls, thus the following requirements have been established:

  1. Reconciliation of Unit Accounting Records:
    Units must reconcile their Revenue Projects and Expenditure Projects no later than 30 calendar days after the end of the month. Both the preparer and the approver must certify that all transactions are appropriate, necessary, and supported by documentation filed in the department. Any discrepancies must be documented, including the time frame for expected resolution. (See procedures below.)

    The timely review of transactions and reconciliation of all Projects are critical to maintaining the integrity of the University’s accounting records. Units must maintain files that are sufficient to support the accuracy and completeness of data entered into the financial system(s) of record. This documentation must be retained by the unit to satisfy University, state, federal, and, if applicable, sponsor records retention requirements (see policy IRM-017, Records Management) and to support transactions in case of audit.

    Unit leaders/supervisors are responsible for verifying that preparers and approvers complete all required training and comply with applicable University policies, procedures, and standards related to reconciliation, system access/use, and record retention.

  2. Use of University System(s) of Record:
    The University system(s) of record must be used for reconciling projects in accordance with University reconciliation procedures. University units are not permitted to establish or operate independent accounting systems without approval by the Assistant Vice President for Financial Operations. For those units that have an approved independent system, that system can be referenced for supplemental detail in support of unit reconciliations.

  3. Compliance with Policy:
    Failure to comply with the requirements of this policy may result in disciplinary action up to and including termination in accordance with relevant University policies.

    Questions about this policy should be directed to the Contact Office.

Procedures:

1-4, Monthly Review of GA Project or Award Activity
1-5A, Monthly Review and Certification of Sponsored Program Project or Award Expenditures
Monthly General Ledger (GL) Reconciliation Procedure

Related Information:

FIN-021, Internal Control
IRM-017, Records Management

Major Category: Finance and Business Operations
Next Scheduled Review: 11/16/2020
Approved by, Date: Policy Review Committee, 08/11/2009
Revision History: Updated 11/16/17, 10/12/17, 6/30/11.
Supersedes (previous policy):
II.B.2, University Reviews and Reconciliations.