General Policy

Reconciliation is the process of comparing information that exists in two systems or locations, analyzing differences and making corrections so that the information is consistent in both locations. Account reconciliations ensure consistency between the department's records and the University’s general ledger and resulting financial reports.

Accounting and Financial Reporting distributes a Monthly Account Statement (MAS) for each account (WhoKey1). MAS transactions are expected to be reviewed and reconciled monthly for income statement (expense, revenue, and encumbrance) activity. Balance sheet (asset and liability) activity is reviewed and reconciled based on the Quarterly Reconciliation of Balance Sheet Accounts policy. Account Reviewers are responsible for timely reconciliations of MAS transactions at the report level—by account, accounting period, and fiscal year—for each account, to ensure the accuracy of financial reporting. Key roles that are critical to compliance with this policy are the Account Owner2 and Account Reviewer(s)3. The Account Owner and the Account Reviewer(s) may be the same person.

Responsibilities of Account Owner

  1. Designate a Reviewer(s) for each account and provide clear direction that transactions must be reviewed and reconciled monthly.
  2. Clearly document the purpose and specific restrictions of each account and communicate this information to Reviewer(s).
  3. Ensure that training and education are provided to staff that need to validate that transactions are authorized in accordance with University policies, State and Federal laws and regulations, specific sponsor requirements, and donor restrictions.
  4. For externally sponsored research projects, confirm that the personnel charges reasonably reflect the efforts expended.
  5. Review and reconcile activity for reasonableness (transactions that are out of the ordinary) and focus on unusual fluctuations in balances or activity levels for the period.
  6. Review and reconcile deficit balances and take appropriate corrective action, including communications with administrators, as necessary. The Account Owner should be prepared to provide an adequate corrective action plan at the request of Central Administration, Internal Audit, or external auditors.
  7. Periodically examine work done by Reviewer(s) and discuss the process with them that is used to validate that transactions are appropriate.

Responsibilities of Reviewer(s)

  1. Review and research each transaction to ensure that:
    • Transaction is within the guidelines of the purpose of the account.
    • Transaction is within the guidelines of the restrictions of the account.
    • Transaction is appropriately charged to the account.
    • Transaction is properly classified to the correct institutional account (see Accounting Code Manual for more information).
    • Transaction is consistent with available supporting documents.
  2. General considerations for review include but are not limited to the following:
    • Review appropriateness of payroll charges. For externally sponsored research projects, confirm that personnel charges reasonably reflect the effort expended.
    • Review and verify accuracy of non-payroll charges, which includes: closely examining high-profile activities, particularly if there are specific account restrictions. Areas of special consideration could include but are not limited to the following: foreign travel, sub-contractor expense, equipment purchases, consulting fees and significantly large transactions.
    • Review for expected transactions that have not posted to the general ledger yet to ensure that all supporting documentation contains a related transaction.
  3. Verify that prior months’ errors have been corrected.
  4. Take Appropriate Action to Resolve Errors
    • Take appropriate action to resolve errors and discrepancies by collaborating with Account Owner, as necessary. Retain documentation of all discrepancies and resolutions during the review process. See University Cost Transfer Policy for requirements when adjustments involve federal accounts.
  5. Document that the review and reconciliation is complete and communicate all issues to the Account Owner.
    • This can be accomplished by sending an email to the Account Owner stating that accounts have been reviewed, reconciled, and issues have been addressed.
  6. Adequate Documentation
    • Departments are responsible for proof of review and source documentation. Furthermore, they are accountable for providing this information in a timely manner at the request of Central Administration, Internal Audit, or external auditors. Documentation that is not maintained centrally must be maintained by departments. Supporting documentation, either paper or electronic, must be adequate to support the financial transactions and balances. For example, adequate documentation for purchased goods and services answers the following questions:
      • What was purchased?
      • Where was it purchased?
      • When was it purchased?
      • Departments must also be able to explain why it was purchased if requested.

Definitions

1WhoKey – The full MFK (Master File Key) consists of ten elements. A combination of six chartfield elements make up the “WhoKey” (account) and these elements are Fund, Organizational Unit, Department/SubDepartment, Grant/Program and Function. The BRF (Budget Reference Field) is the sixth element that makes up a unique WhoKey, only for externally sponsored grants and contracts (fund 500 and 510 accounts that begin with a grant/program of ‘1’ or ‘2’) and cost sharing (grant/program accounts that begin with a ‘3’). All other WhoKeys that have a funding source other than externally sponsored grants and contracts and cost sharing have no BRF value.

2Account Owner – This is the person who has general decision-making authority over the account and fiscal responsibility and accountability for the account. The Account Owner for non-grant accounts is typically the Departmental Administrator but may be delegated to a Business Manager, Financial Officer, or Program Administrator. The Account Owner for grant accounts is the Principal Investigator. Research Administrators are not permitted to be the Account Owner.

3Reviewer(s) – This is the person(s) reviewing the transactions and comparing them to supporting documents. In addition to the Account Reviewer, up to four Secondary Reviewers may be assigned to an account. Please note that from an application perspective, there is no distinction in the responsibility or hierarchy of reviewers (i.e., Account Reviewer and Secondary Reviewers all have the same level of responsibility).

Updated as of 07/17/2025 for MAS release