University of VirginiaUniversity of Virginia

Fund Accounting and Fund Accounting and Reconciliation ProcessReconciliation Process

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Welcome!

Fund accounting and how we use it

Expenditure reconciliations

Revenue reconciliations

Cash reconciliations

Appendix of Sponsored Programs reference material

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What is Fund Accounting?

A method of segregating resources (i.e., funds) into categories to identify both the

source of funds and the use of funds.

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Sources of Funds

Sales and Services

Patient Services

Gifts

Tuition and Fees

Commonwealth of Virginia

Investment Income

Grants

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Awards

Installment

SG, LG

G_

DR, DU

FA

SS, LS

YY

Installments should not exceed the amount of revenue collected

(except for Sponsored Programs and Sales and Service)

Award

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Uses of Funds

Also… Academic support

Institutional support

Student Services

InstructionResearchPublic servicePatient Services

University’s mission

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Projects

Award

Budgets are established when projects have been funded

Project #1

Project #2

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GA Charging InstructionPTAEO

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Transaction FlowTransaction Flow

PTAEO – COA

Detail Summary INST

ITUTI

ONAL

REPORTS

Revenue

Budget

Accounts Receivable

Internal ServiceProviders (isp)

Exp

endi

ture

Bud

get

GrantsAccounting

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Expenditure

Expenditure projects can be identified as projects linked to, and funded by an award

Revenue

Revenue projects provide and identify the funds that back up award installments

2 Basic Types of Projects

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P11797

SA – UCS Resume Marathon

ADR01340

P102003GL

GA

Revenue

Expenditures

P102003 P107165 P117976P107168 P107173

SA – UCS Gifts

SA – UCS Gifts

SA – UCS Employer Svc

SA – UCS CLAS Svs

SA – UCS Library

SA – UCS NYRA

SA – UCS Gifts

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Sponsored Program Awards (Awards that start with a “G”)

Sponsored Programs DO NOT have an associated revenue project

Sponsors’ awards provide spending authority via letter of credit (LOC) cash, or other means

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Your role…

YOU ARE HERE

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Identify Projects to ReconcileIS.GL_Revenue Project Relationships

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Reconciliation

Compare transactions in the Integrated System to the department's documents

Determine if transactions are accurate and complete

Identify outstanding transactions and those that need correction

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Supporting Documentation

All original supporting documentation related to financial transactions must be retained by the department

Exception for petty cash and travel reimbursements

•Original documents to Accounts Payable •Copy for the department

Provide source documentation in a timely manner, if requested by a central financial office or an internal or external auditor

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Timeliness

Financial Procedure 1.4.http://www.virginia.edu/finance/polproc/proc/1- 4.html

Complete reconciliation by the 10th working day of the month

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Review

Are all transactions charged or credited to the correct account codes (PTAEO or COA)?

Were any transactions from other departments charged/credited incorrectly to your PTA?

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Review

Do all transactions have supporting documentation (as required)?

Do all transactions comply with University policies and procedures, and applicable state and federal laws and regulations?

Note discrepancies, and have both the reconciler and approver sign and date the monthly transaction detail report or optional standard reconciliation form

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Additional Review for Grants/Contracts

Review Notices of Award (NOA) and verify accuracy of data

Sponsor NOA

OSP NOA

Understand the difference between direct and indirect costs

Direct: Expenditures for payroll, supplies, etc.

Indirect: F&A rate negotiated between UVA and the Federal Government applied to direct expenditures

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Resolution

Locate missing documentation

Remove transactions that don’t belong on your PTA/COA

Note outstanding expenses/revenues

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Resolution

Move expenditures in your suspense projects (Labor/OTPS) to your PTA

Additional policies and procedures may apply for Sponsored Program projects and awards

Optional: complete Standard Expenditure Project Review and Reconciliation Form

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Record Retention Policy and Procedure

University record retention website:http://www.lib.virginia.edu/speccol/about/records_mgt.html

Supporting documentation must be retained in such a manner as to satisfy state and federal records retention requirements (or until the Institution has been audited)

State Retention PeriodsPayroll Records = 5 years + current fiscal yearOTPS Records = 3 years + current fiscal year

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Record Retention Policy and Procedure

For the Health Sciences Center record retention policy contact:

John Redmond, Administrative Services: 982-3452 Abraham Segres, Risk Management: 924-5595

Sponsored Program Retention Periods7 years for Grants (or until audited by the Sponsor)

Life for Contracts

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Reconciliation Links website http://www.virginia.edu/finance/reconlinks.html

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Time for a break?

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Expenditure FocusExpenditure Focus

Monthly AccountMonthly AccountReconciliationReconciliation

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What to gather

Prior month reconciliations and notes

Department records/documents related to expenditures for PTA or PA combinations

Optional: Standard Expenditure Project Review and Reconciliation Form

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Reports Needed

Required:FM_Project BBA by Expenditure TypeFM_Expenditure Detail by Project

Recommended:GL_Only Project Activity Detail

Optional:FM_Payroll Expenditures by Project

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“O” in the PTAEO

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Parents Weekend Open House

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Reconciliation Lab

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Troubleshooting Expenditures

Actions:

Seek missing documents

Gather information about transaction discrepancies

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Troubleshooting Expenditures

Actions (cont’d):

Finalize transactions on projects/awards to be closed

Close completed POs if there are no pending invoices

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DiscovererIS.LD_Labor Suspense Project Balance Report

IS.FM_OTPS Suspense Project Balance Report

DiscovererPDW4X.PS.AP 110 Held Payment Vouchers

PDW4X.PS.AP 120 Held Invoices on Receiving Hold

PDW4X.PS.AP 130 Held Invoices With No Valid PO

Oracle Standard ReportUVA PA Installment vs. Funding vs. Expenditures

Additional Reports

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Award Management

IS.FM_Award BBA by Award Manager

Review budget and actual totals and take corrective action as necessary

Note: This is not a mandated activity, but Award Managers are expected to monitor their awards and to manage to established budgets

UVA Installment vs. Funding vs. Budget vs. Actual (Oracle Standard Report-optional)

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Revenue FocusRevenue Focus

Monthly AccountMonthly AccountReconciliationReconciliation

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GA to GL mapping

GL Chart of Accounts (COA)

GA PTAEO

one toone

one toone

Many awards to onefundsource

Many expend types toone object code

Many awards to one entityMany awards to one entity

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Transaction FlowTransaction Flow

Bank Deposits

RevenueBudget (sales and services

Accounts Receivable

Cashier’s Office

Credit Card Receipts

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What to Gather

Prior month reconciliations and notes

Department records/documents related to deposits or transfers for this GL project combination

Optional: Standard Revenue Reconciliation Form

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Needed Report

IS.GL_Only Project Activity Detail

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This deposit slip contains items for two projects. Item #3 relates to project 114977

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Troubleshooting

Take needed actions:Seek missing documents

Track down transaction discrepancies

Make correcting entries, or get the appropriate central office to make them for you

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Cash Reconciliation

Not applicable to all revenue projects

Schools and departments that reconcile to cash (vs. budget) should review and reconcile net cash

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Needed Reports

Required:UVA Cash Balance By Project (Oracle standard report)

orGL_Cash Balance by Project (Discoverer report)

Recommended:

BU_Budget to Actual by Revenue Project

Optional:UVA PA Revenue vs Installment vs. Funding vs Expenditures (Oracle standard report)

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Questions ??

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Accounting Services Training and OutreachLynn Galasso lgalasso@virginia.eduLynne Hancock lhancock@virginia.eduDevin Herod jdevin@virginia.edu

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Sponsored ProgramsSponsored Programs

Appendix of Appendix of Reference MaterialsReference Materials

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What is a Sponsored Program?

Awards that start with a “G”Funds provided by an external sponsor in the form of a Grant or ContractEach Grant or Contract has a Principal Investigator who has the overall responsibility for award expenditures.Each Grant or Contract has its own Notice of Award that sets out contractual terms and conditions.

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Know your grant!

Review Sponsor’s Notice of Award (NOA) and the OSP NOA.

Verify that all data on both are accurateDirect & Indirect (F&A) dollar amountsBegin, End, and Close dates Verify Grant dollar Amount is the same as the budgetVerify F&A / Indirect Cost rate is correctFamiliarize yourself with the Terms and Conditions Know whether award has cost-sharing or not

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Sponsored ProgramsReference Appendix Content

Award Prefix DefinitionsFederal RegulationsHow is your award funded?Cost SharingDirect CostsCost TransfersRetro Cost TransfersF&A CostsSubcontractsRequired Actions

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Sponsored Program Award Prefixes

GA National Science Foundation - Letter of CreditGB Department of Energy – Letter of Credit

GC Department of Health & Human Services – Letter of CreditGD NASA, Langley – Letter of CreditGE Center for Innovative Technology – Letter of Credit

GF FoundationsGG Other Federal Government (non-Letter of Credit) such as DOD

GH National Endowment for Humanities – Letter of CreditGI IndustryGJ National Endowment for the Humanities (VA Foundation for the Humanities) – Letter of Credit

GK Environmental Protection Agency – Letter of Credit

GL Department of Commerce (National Oceanic Atmospheric Administration) – Letter of Credit

GM Department of Education – Letter of Credit

GN NASA, Headquarter – Letter of CreditGO Other… such as other institutions, or other government bodies

GP NASA, Goddard – Letter of CreditGQ Department of Energy, Chicago – Letter of CreditGR NASA, Glenn – Letter of CreditGS StateGW Department of Education College at Wise – Letter of Credit

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Additional Regulations

Know which Federal and Institutional regulations and policies apply. http://www.virginia.edu/sponsoredprograms/

All Federal Grants are governed by cost accounting standards (CAS) set out in the Federal OMB Circular A-21. http://www.virginia.edu/sponsoredprograms/casguidelines.pdf

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How is your award funded?

Event Based BillingSponsor invoiced based on a particular event (eg, time period, specific event such as a conducting a clinical trial, etc)

Cost Based BillingSponsor invoiced at the end of each period based on actual costs incurred during the preceding period.

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Cost Sharing

When UVA contributes faculty time, money, or other items of value toward the cost of the projectMay be required by the sponsor, may be committed by the PI in the proposal, or may be ‘voluntary’ on the part of the institutionMore than a nominal amountMore commonly found on grants and cooperative agreements than on contracts

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Methods of Cost Sharing

Effort percentage of Salary & Wage for specified individuals fringe benefits

Cash (direct expenditure costs)EquipmentUn-recovered Facilities and Administrative Costs

F&A Costs

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Direct Costs Must Be:

Allowable Under the provisions of OMB Circular A-21

And under the terms of the particular award.

AllocableThe project must directly benefit from the expense.

ReasonableIn that a “prudent person” would have paid the same price.

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Direct Costs: What to look for

Have expenditures been incurred during the grant period?

Are there any unallowable expenditures? Are Payroll charges accurate and appropriate?

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Cost Transfers

Governed by the same costing principles as direct costs:AllowableAllocableReasonable

UVA policy: Section VIII.8-20 of UVA Procedures http://www.virginia.edu/finance/polproc/proc/8-20.html#top

Requires knowledge and approval of PI Subject to OSP review

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Retro Cost Transfers

Applies to transfer of any grant expenditures over 90 days old, including labor distribution or awards where the end/close date is in the past.

Complete OSP Retro Request Form and send to

osp-retro-request@virginia.edu

Requires OSP retro approval number

UVA policy: Section VIII.8-21 of UVA Procedures http://www.virginia.edu/finance/polproc/proc/8-21.html

Requires knowledge and approval of PI

OSP responsible for approving or rejecting

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F&A Costs

Two basic types:Total Direct Costs (TDC) Modified Total Direct Costs (MTDC)

Basic rates:On-Grounds ResearchOn-Grounds Public ServiceOff-Grounds ResearchOff-Grounds Public Service

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Review Indirect Costs (F&A)

F&A accrued each day on which there are applicable direct cost expenditures.

Cumulative, that is, one F&A calculation for all expenditures on a given day.

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Indirect Costs: What to Look For

Were correct Expenditure Types used on subcontract invoices?

Svcs, Subcontracts, SPON PRGM [first $25,000 each subaward]

Svcs, Subcontracts, OSP, No F&A [all payments above the $25,000 thresh hold]

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30 Days prior to end of Grant Period

If appropriate and at the request of the PI, file necessary paperwork with OSP to set up new preliminary (at risk) extension of the account.

At PI request, file necessary paper work with OSP/Sponsor for no cost extensions.

If project is in deficit, take actions to clear deficit.

Notify OSP Accountant (Project Manager) if you anticipate cost overruns.

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Actions at end of Grant Period

If cost sharing on the award – file report with OSP. (Note:NOA terms and conditions may dictate more frequent reporting of Cost Sharing information)

Clear out all commitments

Make sure all POs are finally closed

Make sure all Subcontractor invoices have been received and paid.

Make sure all P-card expenditures are included.

If project is in deficit, take actions to clear deficit.

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Questions ??

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Accounting Services Training and OutreachLynn Galasso lgalasso@virginia.eduLynne Hancock lhancock@virginia.eduDevin Herod jdevin@virginia.edu