university of virginia fund accounting and reconciliation process
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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
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