Printed on: 01/19/2020. Please go to http://policy.umn.edu for the most current version of the Policy or related document.
University of Minnisota  Administrative Policy

Reconciling and Verifying General Ledger Accounts and Other Financial Information

Responsible University Officer(s):
  • Controller
Policy Owner(s):
  • Director of Accounting Services
Policy contact(s):
  • Mollie Viola, Terri Hall
Date Revised:
Jan 14, 2020
Effective Date:
Sep 1, 2002

Policy Statement

This policy governs reconciling, verifying, and substantiating financial information used by University personnel for administrative and programmatic decision-making.

Units must:

  • Review monetary and non-monetary financial information on a regular and timely basis, monthly (at a minimum) by using reports to verify revenue and expense transactions, payroll transactions, and other financial transactions for accuracy and completeness. Several reports are available in MyU Reporting Center to aid the review process; and
  • reconcile balance sheet accounts quarterly (at a minimum) on a timely basis. Balance sheet account reconciliations must have both a preparer and approver review to ensure the transactions are reconciled and appropriate for the account.

Units must assign accountability to unit employees and procedures must be in place in each unit to reconcile, verify, and substantiate financial information. Units are responsible for investigating and correcting any inaccuracies or incomplete financial information identified during the reconciliation or verification process in a timely manner in accordance with the Processing Accounting Transactions policy guidelines.

Units must consider significance of activity, compliance risk, transaction detail volume, knowledge, and experience of personnel performing analyses, in the design and implementation of account reconciliations and the subsequent review process.

Reason for Policy

University personnel must comply with the requirements of this policy to ensure that an effective internal control environment is maintained. Reconciliation, verification, and substantiation are essential for an effective internal control environment to ensure that:

  • the financial information transmitted to, contained in, and reported from the University's financial systems is accurate, complete and recorded in a timely manner;
  • the financial information can be relied upon for making financial and administrative decisions; and
  • units can identify and quickly report fraud, theft, compliance violations, and other irregularities to the appropriate authorities.

Procedures

Forms/Instructions

Appendices

Frequently Asked Questions

Contacts

SubjectContactPhoneFax/Email
Primary Contact(s) Mollie Viola, Director or Terri Hall, Senior Manager 612-625-0126 viola17@umn.edu or carl0769@umn.edu
Policy or Accounting Questions Financial Helpline 612-624-1617 controller@umn.edu

Definitions

Note: (*) Specific examples are provided in Appendix: Techniques Used in Reviewing Financial Information.

Analysis*
The process of evaluating and interpreting financial information, which includes breaking the information as a whole down into various parts to determine the makeup of the parts.
Balance Sheet Account
An account in the University's general ledger that records and summarizes financial transactions representing assets and liabilities of the University. Assets represent economic resources that benefit future accounting periods such as accounts receivable and investments, while liabilities represent external obligations of the University, such as bonds and leases payable.
Comparison
The process of examining financial information for similarities or differences.
General Ledger
The official record of financial transactions used to record, summarize and report financial data for the University.
Reconciliation*
The process of comparing information that exists in two systems or locations, analyzing differences and making corrections so that the information is accurate, complete and consistent in both systems or locations. For financial reporting purposes, the process includes comparing the local unit's record of financial information to the general ledger and identifying transactions which account for any difference.
Review and Verification*
A review is the process of examining financial information at a high level for accuracy and reasonableness. If determined to appear inaccurate or unreasonable, further investigation is needed. Verification is the further investigation of details (chartstring, individual employee, voucher information, etc.) to review the transaction that may be inaccurate.
Subsidiary System
A separate, independent information technology system that is used to record, process and report specialized or selective financial information. An example of a subsidiary system is an information technology system used to track costs for a University auxiliary and create internal or external billings.
Substantiation*
The process of corroborating or confirming financial information contained in a chartstring, report or system to ensure that the information is accurate and complete.
Units
Any organizational entity within the University that has budgetary authority. Includes, but is not limited to colleges, departments, centers, institutes, offices and programs.

Responsibilities

Accounting Services
Perform regular and timely reconciliations of balance sheet accounts. Monitor the reconciliation processes performed by other University units that have primary responsibility for reconciling accounts to ensure they are completed regularly, timely, accurately, and consistently and all reconciling items are corrected timely.
Units
Review financial data and information relevant to their operating activities for accuracy, and completeness. Perform regular and timely reconciliations of balance sheet accounts as assigned by Accounting Services. Investigate and correct inaccuracies, discrepancies, or errors timely. Units will assign the appropriate preparer and approver for assigned balance sheet reconciliations.
Chief Financial Manager
Ensure all reconciliations and revenue and/or expense verifications are completed regularly, timely, accurately and consistently. Ensure all reconciliation issues are resolved timely.

Related Information

History

Amended:
January 2020 -

Comprehensive Review, Minor Revision.

  1. “Departments” changed to “units” to provide clarity and match glossary definition ;
  2. Minor editorial changes for clarification;
  3. Updated contact information
Amended:
July 2015 - Comprehensive Review, Minor Revision.
Effective:
September 2002

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