Section 1: Internal Control
Monthly Financial Report Reconciliation Process
Lenora Chapman, Associate Vice President, Financial Affairs
Last Revised On:
For Assistance Contact:
To assist Department Managers and Reconcilers with reconciliation of the Monthly Financial Report.
UT System Policy UTS142.1 - Policy on the Annual Financial Report
Table of Contents
Monthly Financial Report (MFR) reconciliation is a control activity to compare departmental records to the official accounting record for the Cost Centers/Project IDs shown in the MFR. The reconciliation process includes noting and correcting any reconciling items (discrepancies between the MFR and departmental records). Department Managers are required to certify annually that all MFRs have been reconciled.
Reconciliation helps management:
- Identify errors and inconsistencies
- Determine availability of funds
- Identify internal control deficiencies
For more information on reconciliations see UTSA Financial Management Operational Guideline (FMOG) - Control Activities.
Because of the importance of MFR reconciliation in effective internal control, completion of the monthly reconciliation and timely correction of errors and omissions are factors in Quality Assurance Reviews (QARs) performed by the Office of Institutional Compliance and Risk Services. These reviews are intended to provide management with assurance that internal controls in a department are in place and are operating effectively.
For more information on QARs see FMOG - Monitoring Plan for Segregation of Duties and Reconciliation of Accounts, and the Quality Assurance Review website.
Responsibilities related to MFR reconciliation include, but are not limited to, the following:
- Stewardship of UTSA's assets including preventing overspending of departmental budgets.
- Ensuring that Cost Centers/Project IDs are reviewed each month and accurate accounting records are maintained, and certifying that the reconciliation of all Cost Center/Project ID activity has been completed.
- Reviewing the reconciliation and signing the Certification Statement. The Department Manager’s signature indicates agreement that:
- Correction of all errors has been completed or requested; and
- All financial transactions are accurate, allowable, and appropriate.
- Keeping track of all transactions and related documents for any commitment or receipt of funds for Cost Centers/Project IDs throughout the month. This can be accomplished by keeping a detailed log and documentation for all transactions approved for a Cost Center/Project ID (see the optional Reconciliation Toolbox provides a tool for tracking transactions).
- Completing a monthly reconciliation of departmental records against the MFR for all Cost Centers/Project IDs (see Reconciliation Process).
- Promptly notifying the appropriate department of errors and omissions, coordinating corrections to the university accounting records as appropriate, and following up to confirm that corrections were completed. For more detail on corrections of accounting records (see Additional Resources).
- Signing the Certification Statement and obtaining the signature of the Department Manager.
- Retaining all pages of the MFR including the Certification Statement, supporting documentation and related records for the current fiscal year plus three (a total of four fiscal years). Documentation may be paper or electronic. All documentation must be readily available for inspection for audits, Quality Assurance Reviews, and other examinations.
- Each month, the departmental reconciler:
1. Downloads the MFR (summary and detail sections) in the UTShare/PeopleSoft system (for detailed instructions see Setting Up and Running the Monthly Financial Report);
2. Compares the information in the MFR to departmental records (see the Reconciliation Checklist for an example of an reconciliation tool);
3. Identifies and keeps a record of any reconciling items (discrepancies);
4. Initiates any corrections needed by contacting the appropriate department, and follows up to confirm that all reconciling items have been resolved; and
5. Signs the Certification Statement and obtains the signature of the Department Manager. The optional Reconciliation Toolbox includes the Certification Statement. If the Reconciliation Toolbox is not used, the reconciler downloads and prints the online Certification Statement.
Departments must retain the following documents for the current fiscal year plus three additional years:
- Monthly Financial Report
- Signed Certification Statement
- Supporting documentation and related records, including the list of transactions in departmental records that are not included in the MFR, other reconciling items, and documentation of corrections
- Reconciliation aids
- Recommended training:
- Monthly Financial Report Reconciliation Process Using UTShare/PeopleSoft
- Introduction to the Chart of Accounts
- Managing Departmental Expense and Revenue Budgets
- Contact the PeopleSoft Support and Sustainment Center (PSSC) for assistance with UTShare/PeopleSoft technical issues such as accessing and running reports, and logging into the system:
- Telephone: 210-458-SPOC (7762)
- Click the “SPOC” button on the UTShare website to submit questions in the PeopleSoft Ticketing System
- For assistance with corrections:
- Purchase Orders/Requisitions – contact the Purchasing Department
- Budget transfers, associated revenue, revenue in excess of budget – contact Budget Planning and Development
- Travel Authorizations, Non-PO Voucher Expenses and Expense Reports – contact Disbursements and Travel Services
- Procard transactions – contact Procard/Travel Card Administration
- Sponsored Projects – contact the applicable Research Service Center
- Other expense corrections– contact Accounting Services
- Institutional Compliance and Risk Services
- UT System policy UTS142.1 - Policy on the Annual Financial Report
- Purchasing Department
- Budget Planning and Development
- Disbursements and Travel Services
- Procard/Travel Card Administration
- Research Service Centers
- Accounting Services
|Updated Monthly Financial Report references and added links to Finacial Affairs training site.|
|Updated Monthly Financial Report references and added job aids.|
|Updated Statement of Accounts (SOA) to Monthly Financial Report.|
|Updated FMOG to include Statement of Accounts certification link and added Statement of Accounts certification to Related Forms/Worksheets section.|
|Updated DEFINE information for transition to PeopleSoft.|
|Updated broken link for Office of Institutional Compliance and Risk Services and Quality Assurance Review.|
Updates published on 05/01/12 are effective immediately, however, Financial Affairs encourages users to submit comments and/or concerns regarding these updates to firstname.lastname@example.org within the next 60 days.
Revised section title to reflect new title "Internal Control". Added reference FMOG Control Activities to section C. Reconciliation Process.
Published new guideline to be effective 05/04/11.