ROWAN UNIVERSITY POLICY 

Title:  Banner Finance Ledger Account Set Up and Reconciliation
(aka: General Ledger Account Reconciliation; aka: University Account FOAP & Reconciliation) 
Subject: Accounting Services                       
Policy No: FIN: 2015:06                                                                   
Applies: University Wide
Issuing Authority:  President
Responsible Officer:  Senior Vice President for Finance and CFO
Adopted:  10/03/16
Last Revision: 11/30/2022
Last Reviewed: 08/13/2024

I.    PURPOSE 

The purpose of this policy is to outline how the University’s Chart of Accounts (COA) is created to define each class of items for which money or the equivalent is spent or received. This policy governs reconciling, verifying, and substantiating financial information used by University personnel for decision-making.

II.   ACCOUNTABILITY 

Under the direction of the President, the Senior Vice President for Finance and CFO shall implement this policy and the Associate Vice President for Finance and Controller shall ensure compliance with the policy under the management of Accounting Services and Budget Departments.

III.  APPLICABILITY 

This policy applies to all University divisions, departments and activities.  It is the responsibility of every faculty, staff member, student organization that is involved in any financial activity on behalf of the University to be fiscally responsible and to exercise appropriate financial controls.

 IV. DEFINITIONS 

1. Analysis – is the process of evaluating and interpreting financial information, which includes breaking the information as a whole down into various parts to determine the makeup of the parts.
2. Balance Sheet Account - an account in the University's general ledger that records and summarizes financial transactions representing assets and liabilities. Assets represent economic resources that benefit future accounting periods such as accounts receivable and investments, while liabilities represent external obligations of the University, such as bonds and leases payable.
3. Comparison – is the process of examining financial information for similarities or differences.
4. Compliance Risk - is in general, the exposure to legal penalties, financial forfeiture and material loss the University would face if it fails to act in accordance with federal and state laws and regulations or internal policies. 
5. General Ledger - the official financial system used to record, summarize and report financial data for Rowan University.
6. Materiality – in general, is the threshold above which missing or incorrect information in financial statements is considered to have an impact on the decision making of users. 
7. Reconciliation - the process of comparing information that exists in two systems or locations, analyzing differences and making corrections so that the information is accurate, complete and consistent in either systems or locations. For financial reporting purposes, the process includes comparing the local unit's record of financial information to the general ledger.
8. Review and Verification - a review is the process of examining financial information at a high level for accuracy and reasonableness. If determined to appear inaccurate or unreasonable, further investigation is needed. Verification is the further investigation at a lower level (chart string, individual employee, voucher information, etc.) to review the transaction that may be inaccurate. 

V. POLICY 

1. The general ledger of accounts aggregates all of the transactions recorded for the University and the reconciliation, verification and substantiation of the accounts are essential for an effective internal control environment to ensure:
   1. Account balances are substantiated by supporting detail records;
   2. The accuracy and completeness of individual transactions that have been posted to the general ledger;
   3. Fraud, theft, compliance violations and other irregularities are quickly detected and reported to the appropriate authorities.
   4. The information transmitted to, contained in, and reported from the University's financial systems is accurate, complete and recorded in a timely manner;
   5. The information can be relied upon for making financial and administrative decisions;
   6. An efficient and effective audit process.
2. The Associate Vice President for Finance and Controller will maintain a master list of balance sheet account assignments.  This list shows the unit and person responsible for completing individual account analysis on a periodic basis, where the supporting files are located and the period through which the accounts have been reviewed.  As new accounts (FOAP) are set up there is a form to encompass all approver review levels for Fund, Org, and Program. This includes Budget transfer initiator, Travel/Concur, P-card, DCA, Non-PO Payment/Requisition, and Catering.
3. Accounting Services will perform regular and timely reconciliations of balance sheet accounts and monitor the reconciliation processes performed by other University departments (if assigned) that have primary responsibility for reconciling accounts to ensure they are completed regularly, timely, consistently and all reconciling items are corrected timely.
4. Departments will review financial data and information relevant to their operating activities for accuracy and completeness, perform regular and timely reconciliations of balance sheet accounts as assigned by Accounting Services, and investigate and correct inaccuracies, discrepancies, or errors timely.
5. Departments must:
   1. Review financial information on a regular and timely basis;
   2. Use reports to verify revenue and expenditure transactions, payroll transactions, and other financial transactions for accuracy and completeness; and,
   3. Reconcile balance sheet accounts periodically by having a preparer complete the reconciliation and approver review it to ensure the transactions have been reconciled and are appropriate for the account.
6. Departments must assign accountability to departmental employees and procedures must be in place in each department.
   1. Departments are responsible for investigating and correcting any inaccuracies or incomplete financial information identified during the reconciliation or verification process in a timely manner.
   2. Departments must consider, compliance risk, transaction detail volume, knowledge and experience of personnel performing analyses, in the design and implementation of account reconciliations and the subsequent review process.
7. The COA is created by the University to define each class of items for which money or the equivalent is spent or received. It is used to organize the finances of divisions, departments and activities and to segregate expenditures, revenue, assets and liabilities in order to give interested parties a better understanding of the financial health of the University.

8.  The COA identifies the general ledger numbers and the subsidiary ledger accounts used by the University. All general ledgers and subsidiary ledgers are grouped by major functions.

9. All divisions and departments are responsible for ensuring the proper recording and classification of all revenues, expenses, assets, liabilities and fund balances
10. Fund and Organization Code
    1. Fund and Organization codes define the departmental entities or budgetary units within the institution.
    2. Fund and Organization codes are established in Banner to meet the reporting needs of the University. The creation of new Fund and Organization is driven by new operations or requirements.
    3. All requests for new Fund and Organization codes should be submitted via to the University Budget Office. The University Budget Office and Accounting Service department will then determine if the request for a new fund and/or organization is needed and will authorize its creation in the Banner system.

11. Account Number

    1. All requests by departments to change attributes on accounts or to set up new accounts must be in writing and will be reviewed and approved by the Associate Vice President for Finance and Controller.

    2. The Associate Vice President of Finance and Controller or designee will ensure the proper recording and classification by properly maintaining the banner chart of accounts and overseeing account setup and the assignment of attributes to accounts.  

12. Program Codes

    1. The use of a Program code in fund accounting is used to designate a purpose for transactions in an account. This is useful when dealing with system-wide, campus-wide, or interdepartmental purposes. Program codes are essential for tracking sources of funds.

    2. Specific Programs have been set up to identify a type of activity taking place within the University. These programs have been set up by Accounting Services and follow GASB.  
    3. When creating journal entries or conducting transactions, it is imperative to assure proper usage of program code. This is necessary to assure all transactions are properly posted and reports generated will reflect accuracy. Usage of the correct program number is essential in proper recording for IPEDS.It is the responsibility of departments requesting entries via Departmental Charge Authorization to assure the program code is used correctly, utilizing resources to assure accuracy.
    4. It is also the responsibility of the Budget Office, Bursar’s Office, Office of Sponsored Programs, and Accounting Services to assure correct usage of program number upon posting entries.