Revenue and expenditure reports, payroll reports, and other financial transactions should be verified for accuracy and completeness. Various methods may be employed to determine the accuracy of financial information. . Guidance is provided for reviewing and verifying revenue & expenditures as well as payroll reports.
Review of Data
A review of revenue and expenses should begin at a high level. In UM Reports, the Account Budget Status Report run at an RRC or ZDeptID level is a good place to start a review of departmental revenue and expense activity. The report can be run for nonsponsored activity, sponsored activity or both. As this report is being reviewed, the reconciler can drill down to specific DeptIDs to determine where variances exist to identify unusual activity that needs to be investigated. The Chartfield String Budget Status Report can be used for reviewing activity at the detailed department chartstring (program, ChartField 1, ChartField 2, etc.) if that level of review is required. High level comparisons to a similar time period of the prior year may also help assist with a review.
The UM Report -Transaction Detail Report, can be used to identify specific transactions recorded on a chartstring, to identify errors or unusual activity.
Note: a review of financial data does not require verifying every transaction that occurred for each period. A reviewer’s focus should be on unanticipated revenue or expense activity. One of the purposes for the review is to determine if general ledger adjustments may be required in order to properly reflect revenues and expenses of the department.
Since salary and fringe expenses are typically the largest expense for a department, payroll activity should be reviewed for accuracy. The HRMS Payroll Abstract Report, which should be reviewed and approved each pay period by departments; is an excellent source to verify that salary expenses on the general ledger for the department are correct. UMReports that are useful in locating variances include:
- UM Report - Payroll Detail Report provides salary and fringe expense by employee. A comparison of this general ledger report with the Payroll Abstract is a quick way to reconcile salary and fringe expenses.
- UM Report - Salary Cost Transfers Report can be used to help identify reconciling differences.
When performing a review look for unusual activity or balances:
- Review unusual fluctuations in balances or activity levels for the period.
- Review activity for reasonableness.
- Review chartstrings for expected balances.
- Review chartstrings with static (no) activity.
- Review for balances in clearing accounts with a "normal" zero balance.
- Identify deficit spending.
Comparison of Data
Look for unusual activity or balances by comparing actual data for different periods to source data. For example, a comparison of the Account Budget Status Report for second quarter of the current and prior fiscal years could indicate variances that may be caused by timing differences, errors, etc. Performing a comparison can include:
- Compare beginning balances for current period to ending balances from prior period.
- Compare budgeted revenue and expenditures with actual activity for the period.
- Compare current period activity with prior period activity.
- Compare current year activity and balances with same-period last year.
Types of analysis that may be useful in the review would include:
- Compute variances.
- Prepare a roll-forward.
- Perform Trend Analysis.
- Track key ratios and statistical data.
- Investigate unusual and significant variances to budget or prior periods.
Substantiation of Data
Types of substantiation that may be useful in the review would include:
- Perform computations (e.g., amortization of a value).
- Validate calculations.
- Foot columns and cross foot rows of numbers.
- Compare activity and balances in general ledger to source documents when differences or unexpected results are noted.
Distribution of Data
- Distribute appropriate financial information internally to respective units for review.
UMReports that may be helpful in reconciling various financial transactions including revenues, expenses and payroll are listed below.
High Level Summary Reports:
- Account Budget Status for Current Non-sponsored Funds
- Actual Account Summary by Accounting Period for Current Funds
Transaction Detail Reports:
- Transaction Detail
- Payroll Detail
- Position Budget vs. Actual
- Accounts Receivable Status by Chart String
Additional UMReports are available depending upon the specific need of the reconciler. UMReports can be found at:
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