FIN-048: Safeguarding and Stewardship of University Assets

Date: 05/06/2016 Status: Final
Policy Type: University
Oversight Executive: Vice President for Finance
Applies To: Academic Division, the Medical Center, the College at Wise, and University-Related Foundations.
Table of Contents:

Policy Statement

  1. Responsibilities
Reason for Policy:

This policy establishes the University’s standards on financial reporting and defines the responsibilities of University and Medical Center personnel related to accounting standards. In order to provide our external constituents with reliable and accurate financial statements, the University must follow generally accepted accounting principles (GAAP) and comply with related federal, state, and local regulations.

The University must also provide management information required for financial planning, coordination, and control, as well as financial reporting required to respond to the various external entities that provide financial support for the University to ensure them that the University is exercising fiscal stewardship over those funds.

Definition of Terms in Statement:
  • Accounting System:

    The integrated modules used to process the University’s transactions that collectively serve as the University’s official system of financial record. This includes the following modules: General Ledger (GL), Grants Accounting (GA), Student Information System (SIS), Fixed Assets, Accounts Receivable (AR), and HR/Payroll.

  • Component Units:

    A University-Related Foundation that has been determined to be significant enough under GASB guidance that it must be included in the University’s financial statements.

  • Financial Accounting Standards Board (FASB):

    The independent organization that establishes standards of accounting and financial reporting for non-governmental entities (e.g., private industry, non-profit organizations). This includes University-Related Foundations.

  • Generally Accepted Accounting Principles (GAAP):

    Widely accepted set of rules, conventions, standards, and procedures for reporting financial information.

  • Governmental Accounting Standards Board (GASB):

    The independent organization that establishes standards of accounting and financial reporting for U.S. state and local governments, including public institutions of higher education.

  • University Funds:

    All funds appropriated, generated, awarded, donated or otherwise received by the University regardless of their source. The term University Funds does not include Agency Funds that the University maintains for legally separate external student organizations or other entities.

Policy Statement:

As an agency of the Commonwealth of Virginia, the primary GAAP guidance for the University is issued by the Governmental Accounting Standards Board (GASB). The University must provide financial reporting consistent with generally accepted accounting principles for higher education and hospitals, which may include other standards in addition to GASB.

All University-Related Foundations that use the institution’s accounting systems must follow the standards for their industry. University-Related Foundations follow the standards issued by the Financial Accounting Standards Board (FASB). Under GASB standards, the financial activity and position of University-Related Foundations determined to be “significant” qualify as component units and must be included in the University’s financial statements. However, the University shows this activity in a separate page display, rather than combined with University activity, as permitted by GASB reporting regulations.

Proper stewardship of University Funds is the responsibility of all University employees. University funds may only be used for ordinary, necessary, and reasonable business-related expenses incurred in furtherance of the University's mission and in accordance with University policy FIN-038, Receiving Goods and Services and Timely Disbursements of University Funds. Items purchased with University funds are the property of the institution and must be cared for appropriately and in accordance with the aforementioned policy. Each University fund transaction must be processed promptly, accurately, and reported in the University’s accounting system.

  1. Responsibilities:
    The University Comptroller is responsible for:

  • Establishing University financial accounting policies and procedures;

  • Managing the financial data contained in the University's accounting system with appropriate controls and audit trails;

  • Authorizing certain staff/employees to approve changes, additions, and deletions to key financial values in the accounting system tables; and

  • Creating all audited financial statements and other external institutional level financial reports for the University.

The Chief Financial and Business Development Officer for the Health System is responsible for:

  • Establishing Medical Center financial accounting policies and procedures that are not in conflict with University policies;

  • Ensuring compliance with University policies and procedures;

  • Processing transactions promptly, accurately, and reported in an accounting information system with appropriate controls and audit trails; and

  • Providing the Office of the Comptroller with Medical Center financial statements recast in the required GASB format and any supporting materials needed by the Office of the Comptroller or Auditor of Public Accounts in accordance with a pre-established timetable.

Vice Presidents, Chancellor at Wise, Deans, and Unit Heads are responsible for:

  • Ensuring that their units comply with University policies.

Unit employees with financial duties are responsible for:

  • Processing transactions timely and accurately in the accounting system.
Related Information:

FIN-038, Receiving Goods and Services and Timely Disbursements of University Funds
Integrated System (Finance)

Major Category: Finance and Business Operations
Next Scheduled Review: 05/06/2019
Approved by, Date: Policy Review Committee, 05/06/2016
Supersedes (previous policy):
II.A.1, Financial Accounting Policy - General; II.A.2, Financial Accounting Policy - University; II.B.1, University Accounting System