Monthly Review of Transactions and Accounts

General Policy

 Accounting and Financial Reporting distributes a monthly Transaction Detail Report (TDR) for each account (WhoKey).  This policy requires that Account Reviewers complete a timely review of TDR transactions for each account (WhoKey1) to ensure that financial information accurately reflects actual activity.  TDR transactions are expected to be reviewed on a monthly basis with the exception of specific expense transactions related to scholarship costs (6300-6399 series).  Scholarship costs must be reconciled on per academic session basis at a minimum.  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 document that transactions are reviewed 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, and specific sponsor requirements and donor restrictions.
  4. For federal research projects, confirm that the personnel charges reasonably reflect the efforts expended.
  5. Review 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 for balances in “clearing” or Agency accounts with expected zero balances.
  7. Review deficit balances and take appropriate corrective action including communications with superiors as necessary. The Account Owner should be prepared to provide an adequate corrective action plan at the request of Central Administration.
  8. Periodically examine work done by Reviewer(s) and discuss with Reviewer(s) the process used to validate that transactions are appropriate.

Responsibilities of Reviewer(s)

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 [2] for more information)
  • Transaction is consistent with available supporting documents

General considerations for review include but are not limited to the following:

  • Review appropriateness of payroll charges. For federal research projects, confirm that personnel charges reasonably reflect the effort expended.
  • Review and verify accuracy of non-payroll charges
    • Closely examine 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.
    • Verify that non-payroll encumbrances are accurate and if necessary, close purchase orders that are no longer needed.
  • Review for expected transactions that may not have posted to the general ledger yet to ensure that all supporting documentation contains a related transaction. For example, verify that retroactive HR “change of status” requests are reflected.

Verify that prior months’ errors have been corrected.

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 [3]for requirements when adjustments involve federal accounts.

Document that the review 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 and issues have been addressed.

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. Adequate documentation answers the following questions:

  • what was purchased
  • where it was purchased
  • when it was 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” 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 two 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 Reviewers and both Secondary Reviewers all have the same level of responsibility).

Updated as of 5/14/2013