Account Reconciliation

February 2008 Business Affairs -Your Partner for Successful Solutions 1

Account ReconciliationAccount Reconciliation


UT System Administration UT System Administration Policy – UTS 142.1Policy – UTS 142.1

• 3.2 Certifications by Account Owners (Subcertifications). Each Account Owner should provide a subcertification annually to the Financial Reporting Officer. Each institution’s Financial Reporting Officer should decide at what level the subcertification is required (e.g. Dean, department head, etc.). The minimum requirements of the subcertification letter are included in Appendix 2.

• http://www.utsystem.edu/policy/policies/uts142_1.pdf


Highlights of Highlights of NewNew Certification Form required Certification Form required

by UT Systemby UT System• Acknowledgement of responsibility• Certification of reconciliation and

that all transactions were appropriate

• Certification that errors were adjusted

• Certification of segregation of duties– Enter & Approve transactions; Receive cash & reconcile


Highlights of New Certification Highlights of New Certification Form required by UT System Form required by UT System

(cont)(cont)

• Certification of sound internal controls• Certification that no misstatements or

omissions are evident on your SOA• Fraud Certification• Certification of compliance with Code

of Ethics related to award of contracts


Need for reconciliations Need for reconciliations and segregation of duties?and segregation of duties?

• Funds availability• Exposes lack of

internal controls• Risk management


Compliance Quality Compliance Quality Assurance Review (QAR)Assurance Review (QAR)

• Report of responses sent to Office of Compliance and Risk Management

• Compliance may use this list to formulate their future QAR visits to departments



Small Budgets (< Small Budgets (< $100,000)$100,000)

• Compare beginning balance• Verify each charge, deposit,

transfer and encumbrance showing on SOA

• http://www.utsa.edu/accounting/Accounting/ReconcilingSmall0309.htm


ACCOUNT REVIEW PROCEDURES

Step # Description Completed (√/ Date)

1. Set-up a Pending File where you will file paper copies of your transaction documentation for the month (PO’s, Petty Cash Receipts, Work Requests, Deposit Slips etc.).

2. Obtain the current month’s Statement of Account (the Accounting Department mails the Statements of Account to departments between the 15th and the 20th of each month- if you are not receiving your Statement of Account call Accounting at X4212).

3. Compare the beginning balance on the current month’s Statement of Account to the ending balance on the previous month’s Statement of Account to ensure that they match.

4. Match each transaction listed in the Statement of Account to a document in your Pending File. If the transaction amount on the Statement of Account is the same as the amount on your Pending File document, put a check mark next to the item on your Statement of Account and on your transaction document to note that it cleared. Once your paper transaction documents are cleared they can be filed in your permanent files.

5. You may not have paper documentation in your Pending File for all of the transactions on the Statement of Account, e.g., Interdepartmental Transfers (IDTs).

Mail Services- review the charges on your Statement of Account and determine whether they are reasonable given the volume of mail your department usually processes.

Facilities Services-match to work order in your Pending File

Telephone Services- match to phone bill in your Pending File

If you believe the IDT charges are accurate you can check them off on the Statement of Account and consider them cleared.

6. After completing this process, you may have identified items in this month’s Statement of Account that are incorrect, e.g., charges that your department did not make, charges for the wrong amount, deposits to the wrong account. Generally, the Office of Accounting can advise you regarding corrections (e-mail [email protected]). Purchase Order corrections are handled by the Purchasing Department. Always verify that errors from previous statements have been corrected. If the correction(s) have not been made, follow-up with an e-mail to the individual who was handling the correction.

7. Place a copy of any correspondence regarding correction(s), in the department’s Pending File as a reminder for next month’s Account Review.

8. The individual who performs the Account Review should sign and date the Statement of Account. The Department Head should review, sign, and date the Statement of Account to indicate that he/she is aware of errors that were identified and that transactions are appropriate.


M & O

Account No. Account No. Account No.

19-7026-0050

2007-2008 Budget 4,000.00

Transfers & 1,500.00

Balance Forward 0.00

Total $5,500.00 $0.00 $0.00

Expenditures (per Accounting)

September 96.63

October

November

December

January

February

March

April

May

June

July

August

Total (per Accounting) $96.63 $0.00 $0.00

Reconciling Items--Expenditures:

Charged to Wrong Account

Credit for Airline Ticket

Data Input error in Accounting

Total $ - $ - $ -

Total Expenditures (per Dept.) $ 96.63 $ - $ -

Encumbrances (per Accounting) ' $ - $ - $ -

Reconciling Items--Encumbrances:

P.O. issued Computers/Server

Travel Reimbursement:

Total $ - $ - $ -

Total Encumbrances (per Dept.) $ - $ - $ -

Total Expenditures/Encumbrances $ 96.63 $ - $ -

Reconciled Available Balance $ 5,403.37 $ - $ -

Prepared by: Date: 9/14/2007

Reviewed by: Date: 9/14/2007



Large Budgets (> Large Budgets (> $100,000)$100,000)

• More extensive review required• Must track pending expenses,

transfers, encumbrances & revenue

• http://www.utsa.edu/accounting/Accounting/reconcilinglargeaccts0309.htm


ACCOUNT RECONCILIATION PROCEDURES

Step # Description Completed (√/ Date)

1.

If you are not using an electronic system, you will need to set-up a Pending File where paper copies of your transaction documentation for the month will be filed temporarily (PO’s, Petty Cash Receipts, Work Requests, Deposit Slips etc.). If you are using an electronic system, e.g., Excel/Quicken/QuickBooks, throughout the month enter the information from your paper transaction documents into the system and mark each paper document with a check mark to note that it has been entered into the system. The paper document can then be filed in your department’s permanent files.

2. Obtain the current month’s Statement of Account (the Accounting Department mails the Statements of Account to departments between the 15th and the 20th of each month- if you are not getting your Statement of Account call Accounting at X4212).

3. Compare the beginning balance on the current month’s Statement of Account to the ending balance on the previous month’s Statement of Account to ensure that they match.

4. Match each transaction listed on the Statement of Account to a document in your Pending File or an entry in your electronic system. If the transaction amount on the Statement of Account is the same as the amount on your Pending File document or electronic entry, put a check mark next to the item on your Statement of Account and on your transaction document/electronic entry to note that it reconciled. Once your paper transaction documents are reconciled they can be filed in your permanent files.

5. You may not have paper documentation in your Pending File for all of the transactions on the Statement of Account, e.g. Interdepartmental Transfers (IDTs).

Mail Services- review the charges on your Statement of Account and determine whether they are reasonable given the volume of mail your department usually processes.

Facilities Services-match to work order in your Pending File

Telephone Services- match to phone bill in your Pending File

If you believe the IDT charges are accurate you can check them off on the Statement of Account and consider them reconciled. If you have an electronic system, you will need to enter these charges into the system (another option would be to enter estimates of the charges into the system at the time you incur the charges- you can amend the entry at a later date once you know the accurate charge) and then reconcile them.

6. Make a list of encumbrances or expenses, e.g., purchase orders, receipts that are in your records (pending file or electronic system), but are not included in this month’s Statement of Account (step 2 on worksheet)

7. Make a list of transfers and deposits, e.g., deposit slips that are in your records (pending file or electronic system), but are not included in this month’s Statement of Account (steps 3 and 4 on worksheet).

8. After completing this process, you may have identified items in this month’s Statement of Account that are incorrect, e.g., charges that your department did not make, charges for the wrong amount, deposits to the wrong account. Generally, the Office of Accounting can advise you regarding corrections (e-mail [email protected]). Purchase Order corrections are handled by the Purchasing Department. Always verify that errors from previous statements have been corrected. If the correction(s) have not been made, follow-up with an e-mail to the individual who was handling the correction. (step 5 on worksheet).

9. Place a copy of any correspondence regarding correction(s) in the department’s Pending File as a reminder for next month’s Account Reconciliation. If using an electronic system enter the correction into your system.

10. The individual who performs the Account Reconciliation should sign and date the Statement of Account. The Department Head should review, sign, and date the Statement of Account to indicate that he/she is aware of errors that were identified and that transactions are appropriate.

11. Optional- prepare a summary document with information regarding all of the accounts under a Department Head. The summary document may include monthly transaction totals, balances given that transactions are outstanding or whatever information the department head needs.


Recon MethodsRecon Methods

• Excel spreadsheet

• Quicken

• Success stories from FAR members?

Documents

Account Reconciliation