1 The University of Texas at San Antonio Presented by Accounting Services Training Class -...

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The University of Texas at San

Antonio

Presented by

Accounting Services

Training Class - Understanding the Statement of Account and

Reconciliation (AM506)

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• 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.

Understanding the Statement of Account and Reconciliation

Business Affairs – Your Partner for Successful SolutionsJune 2012

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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.


Account StructureAccount 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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June 2012

Electronic Statement of AccountElectronic 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

6June 2012

Statement of Account - DetailStatement of Account - Detail

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Encumbrance ExampleEncumbrance ExampleA. A department with a $7,000 budget

B. 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.

C. 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.

D. 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.

June 2012Business Affairs – Your Partner for

Successful Solutions

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Encumbrance ExampleEncumbrance 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 AvailableBalance 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 AvailableBalance AvailableIn the example below, although the balance available in budget category is negative, the pool balance is positiveand a transaction for $5,000 or less will process.

Budget Budget Budget Free PoolGroup Category Pool Balance Balance19-XXXX-XX 50 01 -5,000 5,000

19-XXXX-XX 95 01 10,000 5,000


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Sub-Certification Process Sub-Certification Process and and

Account ReconciliationAccount Reconciliation

Business Affairs – Your Partner for Successful Solutions

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UT System Administration UT System Administration Policy – UTS 142.1Policy – 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 institution’s 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.pdfJune 2012Business Affairs – Your Partner for


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Sub-Certification ProcessSub-Certification Process

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

June 2012

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Sub-Certification ProcessSub-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-Highlights of Sub-Certification required by UT Certification required by UT

SystemSystem• 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 & reconcileJune 2012

Business Affairs – Your Partner for Successful Solutions

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Highlights of Sub-Certification Highlights of Sub-Certification required by UT System (cont)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 Need for reconciliations and segregation of duties?and segregation of duties?

• Funds availability• Exposes lack of

internal controls• Risk management



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Office of Institutional Office of Institutional Compliance & Risk Services Compliance & Risk Services Quality Assurance Review Quality Assurance Review

(QAR)(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



Reconciliation WorkbookReconciliation 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 WorkbookReconciliation Workbook

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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 FE+3

June 2012

Who Do You Call ???Who Do You Call ???

• Contact Management Reporting and Administrative Systems [email protected] for assistance with: – Appropriate personnel are not receiving the SOA reports– Accessing the SOA reports– Other technical issues

• Contact Accounting Services at [email protected] for assistance with:– Accounting corrections– Recording reconciling items– Accounting terms and definitions– Other matters related to financial information

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mailto:[email protected]

mailto:[email protected]

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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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