The University of Texas at San Antonio

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• The University of Texas at San Antonio

Training Class - Understanding the Statement of
Account and Reconciliation (AM506)
Presented by Accounting Services
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Understanding the Statement of Account and
Reconciliation

• The University of Texas operates on a 12 month
  fiscal year which runs from September 1 to
  August 31.
• Budgets, appointments and external reporting are
  all done for this 12 month period.
• A lot of accounting activity takes place as the
  old fiscal year ends and the new fiscal year
  begins.

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Account Structure

• Account number
• The account number is a 10-digit number used for
  recording accounting transactions. The account
  number is broken down into three parts, fund
  group, budget group and budget category.

UTSA Account Structure
Budget Group Budget Category (Sub-Account)
Fund Group Budget Group
14 023300 50
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Account Structure

• Fund Group The first two digits of the account
  number specifies the source of funds. Below is a
  list of fund groups
• 12 / 14 Educational General (E G Funds)
• 18 Service Centers
• 19 Designated Funds
• 26 Grants Contracts
• 29 Auxiliary Enterprise Funds
• 30 Gift Funds
• 32 Loan Funds
• 36 Plant Funds
• 41 Agency Accounts
• Budget Group The first 8 digits of an account
  number represent a Budget Group. Each department
  or academic entity may have several budget
  groups.
• Budget Category The last two digits of the
  account number specifies the purpose of funds. A
  Budget Group could have multiple categories.
• Unit Code The unit code determines the
  department, division or college an account
  belongs to. Typically the unit code is the same
  across fund groups. The unit code was once
  embedded in the 10-digit account number. This
  does not apply to the following fund groups, 26,
  32, 36 and 41.

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Account Structure

• For additional information on the Chart of
  Accounts, refer to Operational Guidelines Chart
  of Accounts at
• http//www.utsa.edu/financialaffairs/opguidelines/
  0114.html

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Electronic Statement of Account

• The Statement of Account is disbursed
  electronically for each unit code.
• Consists of five reports
• Transactional Detail Report
• Balances by Budget Group and Subaccount
• Balances by Budget Group
• Monthly Income and Expenses Workbook
• Reconciliation Workbook
• The reports can be accessed as a PDF or excel
  file

June 2012
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Statement of Account - Detail
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Encumbrance Example

1. A department with a 7,000 budget
2. Orders a 1,500 computer and that amount is
   encumbered on a Purchase Order (PBO document).
   The free balance (DEFINE terminology budget
   balance available) is reduced by 1,500, to a new
   total of 5,500.
3. The computer is received and a payment voucher
   (VP1 document) is prepared. A disencumbrance
   entry is created after the payment voucher is
   created. 1,500 is disencumbered and increases
   the free balance by 1,500. The free balance
   is now 7,000.
4. Although not encumbered on the PO, the vendor has
   invoiced for 100 in freight charges that are
   owed. A check is therefore issued to the vendor
   in the amount of 1,600. The free balance now
   shows as 5,400.

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Encumbrance Example
DESCRIPTION EXP/INC ENC/INV FREE BALANCE
a) Budget balance before Purchase Order 7,000.00
b) Encumbrance created by Purchase Order 1,500.00- 5,500.00
c) Disencumbrance after the Payment Voucher 1,500.00 7,000.00
d) Approved Payment Voucher creates an expenditure 1,600.00- 5,400.00
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Balance Available

1. Each budget category in a budget group is
   assigned to a budget pool.
2. Budget categories within a budget group may be
   assigned to the same budget pool. In these
   instances the system combines (pools) the balance
   available of the different budget categories into
   one balance (pool balance).
3. When the system audits an account for funds it
   reads the pool balance, not the balance
   available.
4. Pooling accounts can reduce the number of routine
   budget transfers that might normally be required.
   

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Balance Available

• In the example below, although the balance
  available in
• budget category is negative, the pool balance is
  positive
• and a transaction for 5,000 or less will process.

Budget Budget Budget Free
Pool Group Category Pool Balance Balance 1
9-XXXX-XX 50 01 -5,000
5,000 19-XXXX-XX 95 01 10,000
5,000
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Sub-Certification Process and Account
Reconciliation
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UT System Administration Policy UTS 142.1

• 3.2 Certifications by Account Owners
  (Sub-Certifications). Each Account Owner should
  provide a sub-certification annually to the
  Financial Reporting Officer-the Associate Vice
  President for Financial Affairs. Each
  institutions Financial Reporting Officer should
  decide at what level the sub-certification is
  required (e.g. Dean, department head, etc.). The
  minimum requirements of the sub-certification
  letter are included in Appendix 2.
• http//www.utsystem.edu/policy/policies/uts142_1.p
  df

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Sub-Certification Process

• Electronic sub-certification conducted through
  the Office of Institutional Compliance Risk
  Services at the beginning of each fiscal year.

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Sub-Certification Process

• The sub-certification certifies that, among
  other items, their accounts are being reconciled
  timely, duties are properly segregated and no
  material weakness exists relative to their
  internal control.

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Highlights of Sub-Certification required by UT
System

• Acknowledgement of responsibility
• Sub-Certification of reconciliation and that all
  transactions were appropriate
• Sub-Certification that errors were adjusted
• Sub-Certification that transactions were reviewed
  and approved.
• Sub-Certification of segregation of duties
• Enter Approve transactions Receive cash
  reconcile

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Highlights of Sub-Certification required by UT
System (cont)

• Sub-Certification of sound internal controls
• Sub-Certification that no misstatements or
  omissions are evident on your SOA
• Fraud Sub-Certification
• Sub-Certification of compliance with Code of
  Ethics related to award of contracts

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Need for reconciliations and segregation of
duties?

• Funds availability
• Exposes lack of internal controls
• Risk management

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Office of Institutional Compliance Risk
Services Quality Assurance Review (QAR)

• Reports of Account administrators failing to
  complete the sub-certification are reported to
  their respective Vice President, Auditing
  Consulting Services, Asst. VP/Controller.
• Compliance utilizes administrator responses (or
  lack thereof) when performing the annual risk
  assessment to determine account administrators
  selected for QAR

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Reconciliation Workbook

• The Reconciliation Workbook includes the
  Certification Worksheet and Supplemental
  Information Report.
• Certification Worksheet Provides year-to-date
  balances of all active budget groups within a
  unit. It also includes the official certification
  statement to be signed by the Account
  Administrator and Reconciler.
• NOTE This worksheet is provided as an optional
  tool that the Reconciler can use to show total
  reconciling items and compute the balance
  available per department. Departments may use
  other tools (such as Quicken) for this purpose,
  but they must have a formal reconciliation
  process in place.

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Reconciliation Workbook

• IMPORTANT
• The certification statement and Account
  Administrator and Reconciler signatures are
  required even if there are no reconciling items
  or the department uses another reconciliation
  method.
• If the Certification Worksheet is not used, the
  certification statement must be copied verbatim
  from the Certification Worksheet onto the last
  page of the departmental reconciliation document
  and signed by the Account Administrator and
  Reconciler.
• Retain reconciliation for FE3

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Who Do You Call ???

• Contact Management Reporting and Administrative
  Systems MRAS_at_utsa.edu for assistance with
• Appropriate personnel are not receiving the SOA
  reports
• Accessing the SOA reports
• Other technical issues
• Contact Accounting Services at accounting.ofc_at_utsa
  .edu for assistance with
• Accounting corrections
• Recording reconciling items
• Accounting terms and definitions
• Other matters related to financial information

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NACUBO Program Codes

• Definition Functional classification of
  expenses
• Classification is assigned to a budget group or
  individual sub-account
• Accounts should be reviewed for appropriate
  NACUBO program codes
• Purpose of a new account is important for
  determining appropriate code

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NACUBO Program Codes
Functional Classification List
Expense categories adopted by Higher Ed for grouping budget expenditures 02 Instruction 06 Research 12 Public Service 14 Academic Support 16 Student Services 20 Institutional Support 22 Operational Maintenance of Plant 48 Scholarships Fellowships 70 Auxiliary Enterprises
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