300-46: General Ledger Verification

This policy governs verification of general ledger (GL) transactions which is essential for an effective internal control environment to ensure:

• The information transmitted to, contained in, and reported from the University's financial systems is accurate, complete, and recorded in a timely manner
• The information can be relied upon for making financial and administrative decisions
• Fraud, theft, compliance violations and other irregularities are quickly detected and reported to the appropriate authorities

Transactions are to be verified to provide reasonable assurance those financial transactions are valid and allowable per policy and properly classified. The verification encompasses the following three activities:

• Verification: Examining detailed GL transactions to ensure these are the transactions that are expected to appear. Look for any suspicious transactions or abrupt changes from an established trend. Any errors that are identified containing incorrect or inappropriate chartfields must be corrected. Additionally, ensure all transactions are supported by source documentation and that the source document matches the GL transaction.
• Review: Examining monthly GL trend reports for perceived anomalies and errors of substance, based on the reviewer’s experience and knowledge of the department’s operations. This activity should be at a more summarized level compared to the detailed verification discussed above.
• Approval: Confirmation by the Department that they have reviewed the financial information, errors have been corrected, and they can provide reasonable assurance of the validity of the information. Documentation of this acknowledgement is through signing the GL Verification Acknowledgement form and/or the GLV online tool Approval Report.

The entire verification process must be completed in a timely manner within one month of the previous calendar month end. For example, the verification process for transactions recorded during the month of August must be complete by September 30.

Departments are required to ensure supporting documentation exists for all verified transactions. The source document needs to be reproducible upon request.

Detailed procedures have been created to provide guidance on how to obtain GL transaction detail reports, filter this data for verification, and document the procedures performed. Please see the links in the Procedures section below.

Accountability and procedures must be assigned and in place for each department to ensure inaccuracies or incomplete financial information identified during the verification process are investigated and corrected in a timely manner.

GL Verification procedures

Department administrators must comply with the requirements of this policy to ensure that an effective internal control environment is maintained.

Materiality, compliance risk, transaction detail volume, knowledge and experience of personnel performing analyses, and other factors should be considered for verification and substantiation and the subsequent monthly trend review and approval process.

Duties should be separated between verification, review, and approval whenever possible. As a minimum, two individuals are required.

• Verification: Typically, this role is filled by the department’s financial administrator.
• Monthly Trend Review: It is expected that someone familiar with the financial activities of the department, such as the MSO, performs the ledger review.
• Approval: Typically, acknowledgment is completed by the MSO, Department Head, or designee for non-sponsored funds and the Principal Investigator (PI) or designee for sponsored funds.

If separation is not feasible or practical due to staffing levels (e.g., the MSO may also be the financial administrator), it would be advisable to separate the verification and review function, with the reviewer approving that the verification was performed, and monitoring if any errors and corrections are resolved on a timely basis.

If the verification and monthly trend review functions are combined, the approver could sign off that both functions were performed.

If the verification, monthly trend review, and approval functions are combined, an assessment should be performed to ascertain the level of risk and whether or not alternative detective controls are necessary.

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