Printed on: 06/23/2017. Please go to http://policy.umn.edu for the most current version of the Policy or related document.

ADMINISTRATIVE POLICY

Reconciling and Verifying General Ledger Accounts and Other Financial Information

Responsible University Officer(s):

  • Associate Vice President and Controller

Policy Owner(s):

  • Director of Accounting Services

Policy contact(s):

Date Revised:

July 2015

Effective Date:

September 2002

POLICY STATEMENT

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

Departments must:

  • review financial information on a regular and timely basis;
  • use reports to verify revenue and expenditure transactions, payroll transactions, and other financial transactions for accuracy and completeness ,monthly (at a minimum); and
  • reconcile balance sheet accounts monthly. Balance sheet account reconciliations must have both a preparer and approver review to ensure the transactions are reconciled and appropriate for the account.

Departments must assign accountability to departmental employees and procedures must be in place in each department. Departments are responsible for investigating and correcting any inaccuracies or incomplete financial information identified during the reconciliation or verification process in a timely manner.

Departments must consider materiality, 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

Reconciliation, verification, and substantiation are essential for an effective internal control environment to ensure 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
  • departments can identify and quickly report fraud, theft, compliance violations, and other irregularities to the appropriate authorities. University personnel must comply with the requirements of this policy to ensure that an effective internal control environment is maintained.

PROCEDURES

FORMS/INSTRUCTIONS

APPENDICES

FREQUENTLY ASKED QUESTIONS

CONTACTS

SubjectContactPhoneFax/Email
Primary Contact(s) Sherrie Kutzler 612-625-0126 kutzl013@umn.edu
Primary Contact University Financial Helpline 612-624-1617 finsys@umn.edu
Overall Policy / Process Warren Skallman, Associate Director
Accounting Services Sherrie Kutzler, Director Accounting Services
612-624-5061 612-625-0126 skall008@umn.edu
kutzl013@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 financial system used to record, summarize and report financial data for the University of Minnesota.
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.
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 at a lower level (chartstring, individual employee, voucher information, etc.) to review the transaction that may be inaccurate.
Subsidiary System
A separate, independent computer system that is used to record, process and report specialized or selective financial information. An example of a subsidiary system is a computer 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 an account, report or system to ensure that the information is accurate and complete. See Procedure: Reviewing and Verifying Revenue, Expenditures, and Other Financial Transactions for specific examples of corroborating financial information.

RESPONSIBILITIES

Accounting Services
Perform regular and timely reconciliations of balance sheet accounts. Monitor the reconciliation processes performed by other University departments that have primary responsibility for reconciling accounts to ensure they are completed regularly, timely, consistently and all reconciling items are corrected timely.
Departments
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.
Chief Financial Manager
Ensure all reconciliations and revenue and/or expense verifications are completed timely, accurately and consistently. Ensure all reconciliation issues are resolved timely.

RELATED INFORMATION

HISTORY

Amended:
July 2015 - Comprehensive Review, Minor Revision.
Effective:
September 2002
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