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Section 1: Internal Control

Statement of Accounts (SOA) Reconciliation Process

Effective Date:

05/04/11

Approved By:

Lenora Chapman, Associate Vice President, Financial Affairs

Last Revised On:

04/25/13

For Assistance Contact:

Accounting Services
Management Reporting and Administrative Systems - DEFINE Support

PURPOSE/SCOPE

To assist Account Administrators and Reconcilers with completion of the monthly reconciliation of the Statement of Accounts report.

AUTHORITY

UT System Policy UTS142.1


UNIVERSITY GUIDELINES

Table of Contents

A. Responsibilities

Responsibilities related to the SOA reconciliation process include, but are not limited to, the following:

Account Administrators

  • Stewardship of UTSA's assets including preventing overspending of departmental budgets.

  • Ensuring that accounts are reviewed each month and accurate accounting records are maintained, and certifying that the reconciliation of all accounts has been completed.

  • Reviewing the reconciliation and signing the Certification Statement. The Account Administrator's signature indicates approval of all activity and agreement that all financial transactions are included and appropriate. See the Reconciliation Workbook section for details.

Reconcilers

  • Keeping track of all transactions and related documents for any commitment or receipt of funds for the account throughout the month. This can be accomplished by keeping a detailed log and documentation for all transactions approved for an account (see the SOA Reconciliation Checklist for more information on documentation).

  • Completing a monthly reconciliation of departmental records against the Transactional Detail Report for all accounts.

  • Promptly notifying the appropriate department of errors and omissions, and coordinating corrections to the university accounting records as appropriate. For more detail on corrections of accounting records, see Statement of Account - Corrections on the Accounting Services website.

  • Signing the Certification Statement and obtaining the signature of the Account Administrator. See the Reconciliation Workbook section for details.

  • Retaining the SOA reports, a signed reconciliation document, supporting documentation and related records for the current year plus three (a total of four fiscal years). See the SOA Reconciliation Checklist for more examples of documentation. Documentation may be paper or electronic. All documentation must be readily available for inspection for audits, Quality Assurance Reviews, and other examinations.

B. Reconciliation Process

The SOA reconciliation process is a control activity to compare departmental records to the official accounting record for the accounts shown in the SOA reports. Account Administrators are required to certify annually that all monthly Statements of Accounts have been reconciled.

Reconciliation helps management:

    1. Identify errors and inconsistencies
    2. Determine availability of funds
    3. Identify internal control deficiencies

For more information on reconciliations see UTSA Financial Management Operational Guideline (FMOG) - Control Activities.

Because of the importance of SOA reconciliation in effective internal control, completion of the monthly reconciliation and timely correction of errors and omissions are factors in Quality Assurance Reviews (QARs) performed by the Office of Institutional Compliance and Risk Services. These reviews are intended to provide management with assurance that internal controls in a department are in place and are operating effectively.

For more information on QARs see FMOG - Monitoring Plan for Segregation of Duties and Reconciliation of Accounts, and the Quality Assurance Review section of the Institutional Compliance website.

See the SOA Reconciliation Checklist for detailed instructions to complete the SOA Reconciliation Process. Once completed, departments must retain the following documents for the current fiscal year plus three additional years:

    1. Transactional Detail Report,
    2. Balances by Budget Group and Subaccount Report,
    3. Signed Certification Worksheet (from the SOA Reconciliation Workbook) or departmental worksheet with official certification statement and appropriate signatures.
    4. Supporting documentation and related records: This includes the list of transactions in departmental records that are not included in the SOA, other reconciling items, and documentation of corrections.

C. Statement of Accounts (SOA) Reports

The following make up the Statement of Accounts (SOA) reporting package and include details of accounting transactions posted to the financial accounting system for each unit code:

    1. Transactional Detail Report
    2. Balances by Budget Group and Subaccount Report
    3. Balances by Budget Group Report
    4. Monthly Income and Expenditures Workbook, includes the Monthly Income Report and Monthly Expenditures Report
    5. Reconciliation Workbook, includes the Certification Worksheet and Supplemental Information Report

After the month's financial activities have closed, these reports are generated for budget groups within each unit code and distributed as follows:

NOTE: Although the reports are consolidated by unit, each budget group must be individually reviewed and reconciled.

    • Each report is saved into a main folder as a read-only file.
    • The Account Administrator and designated Reconciler receives an email — by the 7th business day of each month — that contains a hyperlink to access the main file folder.
    • NOTE: To add or change a Reconciler (report recipient), complete Section IV of the DEFINE Departmental User Access Form.
    • The Account Administrator or designated Reconciler must retrieve these reports from the main file folder and save them to another.

IMPORTANT:

  • These reports become editable once they are downloaded from the main file folder and saved to another location.
  • Only the most recently closed month and prior month reports are available in the main file folder.

Additionally, reports at the sub divisional and divisional levels can be accessed by those individuals with that level of responsibility. Those folders include the following:

  • Subdivisional folders include a Balances by Budget Group report for each unit one level below that subdivision and one Monthly Income and Expenditures Workbook listing all budget groups within that subdivision.

  • Divisional folders include a Year-to-Date Balances by Subdivision report and one Monthly Income and Expenditures Workbook listing all budget groups within that division.

1. Transactional Detail Report

The Transactional Detail Report must be reviewed to ensure all financial transactions for the month are included and appropriate.

NOTE: This information can also be accessed electronically by logging into DEFINE or UTDirect (preferred method). For more information, see the Understanding the Statement of Accounts – UTDirect instructions.

This report provides a listing at the budget group and subaccount level for all financial transactions that have been posted to the financial accounting system during the month for a unit. The following fields are included:

NOTE: You may view a sample of the Transactional Detail Report.

Column

Description

Additional Information

Budget Group

Eight-digit budget group formatted as XX-XXXX-XX, with the first two digits referring to the fund.

For more information on chart of accounts elements, see FMOG - Chart of Accounts.

Sub

Two digit subaccount that relates to an expenditure category such as Maintenance & Operations -50.

Sub Title

Title of the subaccount.

OCC

Four-digit object code (object class code).

OCC Title

Title of the object code (object class code).

Date

Date the transaction was recorded in the accounting records (commonly referred to as the "record date").

 

Description

Name or description of the transaction. In some cases, the vendor name may be displayed in this field.

 

Document ID

Eleven-digit number automatically assigned to each document upon creation.

For more information on Document ID, see the
GMB Account Balances and GTM Account Transactions training manual.

PO Number

Purchase Order (PO) number assigned when a purchase requisition is authorized by Purchasing. For documents that do not have PO numbers, the applicable document number is displayed.

 

PT/DTN

 

 

Includes the transfer type (P=permanent, T=temporary) for transfer transactions, or DTN (Departmental Transaction Number), or a number assigned by the user/department for non-transfer transactions.

 

Tfs/Adj

Budget transfers and adjustments for the month

 

Income

Income transactions for the month

 

Expense

Expense transactions for the month

 

Enc/Inv

Encumbrance and Investment transactions for the month

 

Current Month Activity

Net effect of the transaction for the month.

 
 
2. Balances by Budget Group and Subaccount Report

The Balances by Budget Group and Subaccount Report can be used to ensure balances are appropriate. Additionally, this report is useful for financial assessment and planning purposes. For additional information on variances and trends see the Supplemental Information Report, located in the Reconciliation Workbook.

The Balances by Budget Group and Subaccount Report provides year-to-date balances of budget group and subaccounts within a unit, with totals for the unit. It includes only those budget groups and subaccounts that had activity or balances during the month. The report includes the following fields:

NOTE: You may view a sample of the Balances by Budget Group and Subaccount Report.

Column

Description

Additional Information

Budget Group

Title and number of budget group (see the Transactional Detail Report section).

 

Sub Account

Title and number of subaccount (see the Transactional Detail Report section).

 

BalFwd

The Balances Forward are balances carried forward from prior fiscal years, such as material encumbrances (those with Object Class Code 0200) that are open at the end of the fiscal year.

Email Accounting Services.

Orig Bud Expenses

Original budgeted expenses that are part of the 'Base Budget' and are permanently authorized and budgeted for the account as approved in the University's operating budget.

Email Budget Planning & Development.

Budget Adj/Tfs

Budget transfers and adjustment entries.

Orig Bud Income & Tfs

Original budgeted income and transfers that are part of the 'Base Budget' and are permanently authorized and budgeted for the account as approved in the University's operating budget.

Posted Income

Year-to-date income.

 

Adj Budget

The budget after all adjustments and transfers are applied. The net of BalFwd, Orig Bud Expenses, Budget Adj/Trans, Orig Bud Income & Trnfrs, and Posted Income.

 

Expense

Year-to-date expenses.

 

 

Encumb

 

Year-to-date encumbrances.

 

Inv, Asset & Liab

Year-to-date investment, asset and liability activities.

 

Bal Available (Current YTD)

Available budget balance (year to date) by subaccount and budget group for current month.

Each subaccount is assigned to a budget pool, and the system combines the available balance of all subaccounts in the budget pool into one budget pool balance. When the system audits an account for available funds, it reads the budget pool balance (not the individual subaccount balance).

Bal Available (Prior Month)

Available budget balance by subaccount and budget group for prior month.

 

Current Month Activity

See the Transactional Detail Report section.

This will match the current month activity reported in the Transactional Detail Report.


3. Balances by Budget Group Report

The Balances by Budget Group Report can be used to ensure balances are appropriate. Additionally, this report is useful for financial assessment and planning purposes.

This report is a summary at the budget group level of the Balances by Budget Group and Subaccount Report. It includes all of the fields found in the Balances by Budget Group and Subaccount Report except the Sub Account Title field, see the Balances by Budget Group and Subaccount Report section for a list of fields. This report provides year-to-date balances within a unit for budget groups that had activity during the year, with fund group and unit totals.

NOTE: You may view a sample of the Balances by Budget Group Report.

4. Monthly Income and Expenditures Workbook

The Monthly Income and Expenditures Workbook can be used to review variances and identify trends or discrepancies and includes two reports:

    a. Monthly Income Report: Provides month-by-month and year-to-date income activity for the budget groups and subaccounts within a unit. b.

    b. Monthly Expenditures Report: Provides month-by-month and year-to-date expenditure activity for the budget group and subaccount within a unit (encumbrances are not included).

    NOTE: You may view a sample of the Monthly Income and Expenditures Workbook.

5. Reconciliation Workbook

The Reconciliation Workbook includes the Certification Worksheet and Supplemental Information Report.

Certification Worksheet: Provides year-to-date balances of all active budget groups within a unit. It also includes the official certification statement to be signed by the Account Administrator and Reconciler.

NOTE: This worksheet is provided as an optional tool that the Reconciler can use to show total reconciling items and compute the balance available per department. Departments may use other tools (such as Quicken®) for this purpose, but they must have a formal reconciliation process in place.

If the Certification Worksheet is used, the Reconciler must:

    a. Enter total reconciling items (differences between departmental records and the Transactional Detail Report that were noted during the SOA/departmental record comparison) for each Budget Group in the Total Reconciling Items column.

    b. Enter formulas to calculate the Balance Available per Department for each budget group.

    c. Enter formulas to calculate the totals for these columns (see contents of report for further instruction) in the last line of the Total Reconciling Items and Balance Available per Department columns.

    NOTE: If there are not reconciling items (departmental records match the SOA reports), the Total Reconciling Items column is left blank.

Reconciling items that increase income (such as revenue received) are entered as positive amounts, and items that reduce income (such as fee refunds) are negative amounts. Items that increase expense are entered as negative amounts, and items that reduce expenses or encumbrances are entered as positive amounts.

IMPORTANT:

  • The certification statement and Account Administrator and Reconciler signatures are required even if there are no reconciling items or the department uses another reconciliation method.

  • If the Certification Worksheet is not used, the certification statement must be copied verbatim from the Certification Worksheet onto the last page of the departmental reconciliation document and signed by the Account Administrator and Reconciler.

The Certification Worksheet includes the following fields:

Column

Description

Additional Information

Budget Group

Title and number of budget group (see the Transactional Detail Report section).

 

BalFwd

See the Balances by Budget Group and Subaccount Report section.

Email Accounting Services.

Orig Bud Expenses

Budget Adj/Tfs

Orig Bud Income & Tfs

Posted Income

Adj Budget

Expense

Encumb

Inv,Asset & Liab

SOA Bal Available

Available budget balance by budget group for current month.

This is the available balance before any reconciling items.

Total Reconciling Items

Entered by the Reconciler and represent differences between departmental records and the Transactional Detail Report.

With very few exceptions (such as deposits in transit), reconciling items will need to be corrected in departmental records or in the DEFINE system, even if reconciling items offset each other and the Balance Available per Department matches the SOA Balance Available

Bal Available per Department

Available budget balance by budget group for current month after any reconciling items.

Reconciler adds formulas to calculate this amount (see contents of report for further instruction).

Supplemental Information Report: May be used to review variances and identify trends or discrepancies. It only includes budget groups that had balances for the periods being reviewed, and it shows current year and prior year monthly and year-to-date income and expenditures, with dollar amount and percentage variances between current and prior year activity.

The report includes the following fields:

NOTE: You may view a sample of the Reconciliation Workbook.

Field Name

Description

Income Section

Budget Group

See the Transactional Detail Report section.

Prior Year Monthly Income

Amount of income earned during the same month of the prior year.

Current Year Monthly Income

Amount of income earned during the same month of the current year.

Variance

Dollar amount difference between current and prior year monthly income.

% Variance

Percentage difference between current and prior year monthly income.

Prior YTD Income

Total income earned year-to-date as of the same month of the prior year.

Current YTD Income

Total income earned year-to-date as of the same month of the current year.

Variance

Dollar amount difference between current and prior year YTD income.

% Variance

Percentage difference between current and prior year YTD income.

Expenditures and Encumbrances Section

Budget Group

See the Transactional Detail Report section.

Prior Year Monthly Expenditures & Encumbrances

Expenditures and encumbrances during the same month of the prior year.

Current Year Monthly Expenditures & Encumbrances

Expenditures and encumbrances during the same month of the current year.

Variance

Dollar amount difference between current and prior year monthly expenditures and encumbrances.

% Variance

Percentage difference between current and prior year monthly expenditures and encumbrances.

Prior YTD Expenditures & Encumbrances

Year-to-date expenditures and encumbrances as of the same month of the prior year.

Current YTD Expenditures & Encumbrances

Year-to-date expenditures and encumbrances as of the same month of the current year.

Variance

Dollar amount difference between current and prior year YTD expenditures and encumbrances.

% Variance

Percentage difference between current and prior year YTD expenditures and encumbrances.

D. Additional Resources

Email Management Reporting and Administrative Systems (MRAS) for assistance with any of the following:

  • Appropriate personnel are not receiving the SOA reports (for example, if you are an Account Administrator or Reconciler and you do not receive SOAs that include all of your budget groups)

  • Accessing the SOA reports

  • Other technical issues

Email Accounting Services for assistance with any of the following:

  • Accounting corrections

  • Recording reconciling items

  • Accounting terms and definitions

  • Other matters related to financial information

For information on the Introduction to DEFINE (DE650) or Understanding the Statement of Account and Reconciliation (AM506) training courses, see the Training and Development website.

For other guidance on Statement of Account reconciliation, see the Accounting Services website (select the Statement of Accounts menu item).


DEFINITIONS

Term Description

Account Administrator

 

An individual with fiscal responsibility and decision-making authority for UTSA resources who has approval access to commit funding using the institutional financial accounting system. This is typically the department head for non-grant accounts and the principal investigator for grant accounts.

Budget Pool

 

 

 

 

 

 

 

 

 

 

Budget Pools can reduce the number of routine budget changes necessary during the year. In the example below, although the balance available in subaccount 50 is negative, the pool balance is positive and therefore a transaction for $5,000 or less will process.

Budget Group

Subaccount

Budget Pool

Balance Available

Pool Balance

19-xxxxxx

50

01

-5,000

5,000

19-xxxxxx

69

01

10,000

5,000


It is our general policy to pool all subaccounts together unless there is a specific business reason approved by the Associate Director of Accounting or designee. For details, see UTSA Pooling Rules.

Encumbrance

 

A type of accounting transaction used to reserve (obligate) funds for future expenditures. The amount is deducted from the available budget balance to ensure that the department will have funds to honor its commitments. Encumbrances are reversed (disencumbered) when the expenditure/payment is recorded. Encumbrances are shown as negative amounts, and disencumbrances are shown as positive amounts. These entries will not necessarily occur in the same month.

Encumbrances require authorization before a financial commitment occurs. Approval of the encumbrance certifies that the Account Administrator is acting in the best interest of the university in authorizing the expense.

Salaried appointments are encumbered for the entire fiscal year salary commitment or through the end of the appointment. Purchase and travel requests are encumbered for the amount estimated in the related requisition.

EXAMPLE

(a) A department has a $7,000 budget balance.

(b) The department orders a $1,500 computer. This amount is encumbered against a Purchase Order, and the budget balance is reduced to $5,500.

(c) The computer is received and a payment voucher is prepared, creating a disencumbrance entry for $1,500. This temporarily increases the budget balance to $7,000.

(d) The vendor invoices for $100 in freight charges that were not included in the Purchase Order. A check is issued for $1,600 (the $1,500 Purchase Order amount + $100 freight). This reduces the budget balance to $5,400.

Description

Expense

Encumbrance

Balance Available

(a) Budget balance before Purchase Order

 

 

7,000

(b)Encumbrance created by Purchase Order

 

-1,500

5,500

(c) Disencumbrance related to Payment Voucher

 

1,500

7,000

(d) Expense (approved Payment Voucher)

-1,600

 

5,400


You can view transactions by encumbrance number using DEFINE command GT3, view the remaining balance on a Purchase Order using DEFINE command GE3, or view all outstanding encumbrances on an account using DEFINE command GE1.

Reconciler

 

The individual assigned by the Account Administrator to perform the SOA reconciliation (delegation of the reconciliation is not mandatory, but recommended as it provides separation of duties and internal control).

 

REFERENCES/LINKS

RELATED FORMS/WORKSHEETS

  1. SOA Reconciliation Checklist

REVISION HISTORY

Date Description

04/25/13

Updated broken link for Office of Institutional Complaince and Risk Services and Quality Assurance Review.

05/01/12

Updates published on 05/01/12 are effective immediately, however, Financial Affairs encourages users to submit comments and/or concerns regarding these updates to financialaffairs@utsa.edu within the next 60 days.

07/21/11
  • Revised SOA Reconciliation Checklist. Added link to MRAS Contact web page in step 2. Added SOA-Corrections reference in step 10. Added instructions for Certification Statement in steps 11-13.

  • Added references to the Reconciliation Worksheet section and replaced SOA correction instructions with link to Accounting Services web page in section A. Responsibilities.

  • Added instructions for Mac users to download the SOA Reconciliation Report.

  • Departments are no longer required to print a blank Reconciliation Worksheet if using another reconciliation tool, however, the Certification Statement must be copied verbatim from the Reconciliation Worksheet and pasted to the chosen reconciliation tool to obtain the required signatures.

06/29/11

Revised section title to reflect new title "Internal Control". Added reference FMOG Control Activities to section C. Reconciliation Process.

03/01/11

Published new guideline to be effective 05/04/11.


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