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SOA Reconciliation

SOA Reconciliation. Financial Operations Internal Controls University Audits Information Technology Systems. December 16, 2009. SOA Reconciliation Defined. Verify transactions in the system of record (M-Pathways) Ensure transactions are accurate and appropriate

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SOA Reconciliation

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  1. SOA Reconciliation Financial Operations Internal Controls University Audits Information Technology Systems December 16, 2009

  2. SOA Reconciliation Defined • Verify transactions in the system of record (M-Pathways) • Ensure transactions are accurate and appropriate • Compare to original source documents • Identify errors • Ensure policies and procedures are being followed • Confirm approvals • Ensure transactions are properly reflected in the financials (account, class, etc) • Analyze differences • Correct errors • Check and balance

  3. Why Perform SOA Reconciliation • Be good financial stewards of University resources and help maintain compliance • University financial data is accurate • Information can be relied upon for decision making • Important detective control • Fraud, theft, compliance violations, vendor issues, irregularities, incorrect charges – can be detected earlier • A little work now can prevent big problems later!

  4. Why Perform SOA Reconciliation Great way to support key control objectives/assertions: • All transactions are processed (once and only once) Completeness Accuracy • All transactions are processed correctly Validity • All transactions are authorized or approved by appropriate person Restrictiveness • Access to certain functions is restricted to appropriate persons

  5. Who Can/Should Perform SOA Reconciliation • “Detective work” – not just “tick/tie” • Right people doing the job – right skill set • Somebody familiar with the activity/related expenses • Ensure proper separation of duties • No one individual can control a transaction from beginning to end • Ensure errors do not go undetected • Compensating controls • Management oversight • Making sure reconciliation is being performed

  6. When to Perform SOA Reconciliation • Monthly • Timeliness • Sponsor time limits • 120 days from the time the transaction hits the statement to correct any errors

  7. How to Perform SOA Reconciliation • No single required method • Key elements • Defined, documented process that makes sense for your unit • Evidence of the review • Who, when, issues noted and resolution • Charges are valid and accurate • All appropriate charges are present • Corrective action is taken for issues identified

  8. How to Perform SOA Reconciliation • Example: Reconcile supplemental pay to approved PeoplePay form • Don’t reconcile GPR to SOA • Example: Reconcile a vendor charge to the vendor invoice • Quantity, rate, receipt appropriate • Don’t reconcile a vendor charge to the voucher line report • eReconciliation provides electronic means to maintain evidence of reconciliation, comments, etc.

  9. Other Key Points • Automation, process improvement initiatives, and up front preventative controls will help • e.g., self-entry time reporting eliminates the risk of re-keying errors • If supporting documentation lives in imaging systems, then reprinting is unnecessary; but keep any supporting documentation that is not in imaging systems – doesn’t need to be duplicative • Keep supporting documents current year + 2, for Sponsored documents, 3 years from final report submission • FinOps, ITS, Office of Internal Controls, and University Audits are all willing to assist unit

  10. Common Audit Issues • Reconciliations not done • Done by “glance-over” instead of compare to source documents • No tickmarks, corrections, or evidence of review • Reconciliations not signed/initialed or dated • User ID/Updt field and Date/Last Updtd field in eReconciliation acceptable

  11. Common Audit Issues • Concluding that expenses are in line with budget is NOT good enough • Lack of segregation of duties • Use of shadow system to reconcile and shadow system not reconciled to M-Pathways • Discrepancies not investigated/corrected (JEs)

  12. Reconciliation Can Find Error & Fraud • Item keyed to your account mistakenly • Deposits not being made • Expenses not properly approved • Ordering excessive supplies/inventory • Unauthorized temp employees • Mistakes/miss-keys • e.g., temp paid $78.50 instead of $7.85 per hour

  13. New Reports Available • Activity Summary Report by Dept – Indicates chartfields within your department that have had activity and should be reconciled • New run controls for SOA reports in FINODS • Reports can be run by Dept ID, Dept Manager or SAPOC • Improved Reporting • Adding checkbox and notes to current SOA reports • Adding the ability to print reports with or without notes • Month-end close email to all reconcilers and department managers (pushed to users, not self-subscribing email)

  14. Future Functionality • eReconciliation Enhancements • Additional detail pages • Voucher detail • Payroll detail (also adding percent distribution and percent effort) • Student Financial detail • Accounts Receivable/Billing detail

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