T HE U NIVERSITY OF I OWA F INANCIAL S UB - C ERTIFICATION W ORKSHOP S ESSION #2 Finance, Accounting & Audit

1. THE UNIVERSITYOF IOWAFINANCIALSUB-CERTIFICATIONWORKSHOP SESSION #2Finance, Accounting & Audit

2. Today’s Presenters • Selina Martin • Angie McMullin

3. Today’s Agenda • Financial Sub-certification Website http://www.uiowa.edu/budgetofficers/subcertification • Objective of today’s training • Review questions #3 through #8 • Review the underlying policies & processes • Identify related control document which indicate compliance with policies • Identify the resources available to learn more • Understand risks & consequences of non-compliance Relevance to Sub-certification • What should you do after this workshop?

4. Sub-certification Question…. Does the college/unit set expectations that employees with fiscal responsibilities should attend relevant financial systems and processes training offered by Finance & Operations?

5. Related Policies • Educational Opportunities (Operations Manual) http://www.uiowa.edu/~our/opmanual/iii/26.htm#261

6. Chapter 26: Educational Opportunities “It is strongly recommended that individual colleges, departments, and/or units develop an educational plan for the benefit of their employees' continuous learning and to meet the needs of a changing work environment.”

7. Business Processes Series http://www.uiowa.edu/learn/series/businesshr.htm

8. Who should enroll? • For UI managers or supervisors responsible for business and human resources transactions • For others who are interested in gaining this knowledge • Elective courses will be offered as general offerings for open enrollment

9. Certification Requirements • Complete all six core courses • Complete four elective courses • Complete within a 2 year period

10. Required Core Courses • Finance & Operations Roadmap to Success • Ethics & Responsibilities (ICON Course) • Business & Human Resources Processes Overview • Internal Controls & Security • Contracts and Risk Management Basics Overview • Lean Overview

11. Elective Courses – • Data Access Courses (3 courses) • Application Courses (10 courses) • Other Courses (5 courses) • ICON Courses (6 courses)

12. Control Documents • Key employees need to have training on financial systems and processes. Update the job descriptions of these employees make it clear that specific training is required. • Self-Service "My Training" training records

13. Resources to Learn More

14. Resources to Learn More

15. Resources to Learn More

16. Sub-certification Question…. Does the college/unit have processes and monitoring activities in place to ensure compliance with the University's Cash Handling Policy?

17. Related Policies • Cash & Credit Card Receipts (Operations Manual) http://www.uiowa.edu/~our/opmanual/v/04.htm • Cash Handling Policy (website) http://www.bo.uiowa.edu/cashhandling/cash_handle_policy.pdf • Credit Card Handling Policy (website) http://www.uiowa.edu/~fustreas/Credit%20Card%20Handling%20Policies%20and%20Procedures.pdf

18. Cash Handling Cash & Equivalents – Coins, currency, checks, money orders, credit card transactions, tokens, tickets, stamps, gift cards, parking vouchers, etc.

19. Chapter 4.1 Ops Manual - Receipt of Funds • If you handle cash, you must have approved local cash handling procedures! • Every unit administrator and employee responsible for overseeing, receiving, depositing, or reconciling cash and equivalents must complete the certification process.

20. Basic Principles of Effective Cash Handling • Proper Segregation of Duties – maintain clear separation of the following roles: Beatrice – Bills for Services Kyle – Collects Cash Debra – Deposits Cash Rick – Reconciles Cash

21. Basic Principles of Effective Cash Handling • Adequate safeguards for handling, transporting and storing cash • Safe or other secure place • Prompt deposit of cash at the bank or designated deposit drop location on campus • Cash on hand reaches $500 or at least weekly • Submit to eDeposit system within 3 working days • Designated drop off locations

22. Basic Principles of Effective Cash Handling • Independent reconciliation of deposit documents to the statement of accounts • Performed by someone who has no actual cash handling responsibilities • Must validate bank deposit ticket to departmental copy after deposit has been made • Reconcile monthly • Management oversight and review

23. Who needs to know & follow? • Unit management • Edeposit users • Billers/invoicers • Cash collection point cashiers • Cash collection point supervisors • Deposit preparers • Reconcilers

24. Departmental/Mgt Responsibility • Maintain approved & updated local procedures • Establish an effective internal control system • Maintain proper segregation of duties • Require that staff is properly trained & certified • Review receipts and reconciliations on a regular basis, then sign & date documentation • No matter who is collecting, depositing and reconciling, management is ultimately accountable.

25. Individual Staff Responsibility • Understand his/her role in the cash handling process • Complete the University of Iowa Cash Handling ICON course annually • Review updated departmental procedures as provided by unit management in a timely manner.

26. Credit Cards Handling Policy http://www.uiowa.edu/~our/opmanual/v/04.htm#44 • We must have controls for credit card transactions in order to maintain proper security over credit cardholder information. • Contact Controller’s Office & Treasury Operations to get approval to be a credit card merchant (not credit card processor) • New credit card merchants will be required to complete training

27. Credit Card Merchant Responsibility • Obtain approval before… • entering into any contracts • purchasing software and/or equipment • Implementing any technology • Establish departmental procedures for safeguarding & storing data. • Perform an annual security self-assessment • Comply with Payment Card Industry (PCI) Data Security Standards

28. Control Documents • Approved local cash handling procedures • Documented completion of Cash Handling training course for appropriate employees • Documented completion of Credit Card Policy Merchant Training • Payment Card Merchant Agreement form • Annual Security Self Assessment • Job descriptions which support duties as described in local procedures

29. Resources to Learn More • Cash Handling ICON Course https://icon.uiowa.edu/ • E-Deposit ICON Course https://icon.uiowa.edu/ • E-Deposit Training http://www.uiowa.edu/~fusstfdv/catalog/workplace/226.html • Cash Handling website http://www.bo.uiowa.edu/cashhandling/ • Credit Card Policy Merchant Training http://www.uiowa.edu/~fustreas/Training_for_Credit_Card_Merchants.pdf • Payment Card Industry (PCI) Data Security Standardshttps://www.pcisecuritystandards.org/pdfs/pci_dss_v1-1.pdf (sign up for all training through Self Service)

30. Sub-certification Question…. Does the college/unit submit the required information to Financial Management to ensure compliance with the Service Center Policy?

31. Related Policy • Service Centers (Operations Manual) http://www.uiowa.edu/~our/opmanual/vi/12.htm • Service Centers Policy Website http://www.uiowa.edu/~fusfm/rechargecenterpolicy.pdf

32. Service Center Policy Highlights • Internal Sales (both sides of entry in GL) • University Wide Recharge Centers • Departmental Recharge Centers • Specialized Service Facilities • “highly complex or specialized facilities” and usually have federal revenue • or, may not be complex but federal revenue is consistently greater than $25,000

33. Accounting Issues • Easily identifiable in GLDSS • Unique at the Dept-SubDept level (no lower) • Federal revenue identification • Subsidies • Transfer in • Center expenses paid elsewhere – unique Dept-SubDept identifies

34. Break-Even • 10% threshold of annual expenditures • Monitor Fund Balance • Account for subsidy • Analyze what happened, create a plan • Avoid ups and downs in rates

35. Rate Calculations • Required to perform rate calculations • Must tie to rate list • Budgeted expense/budgeted units • Mark up % for stores • Include only allowable costs • What are unallowable costs?

36. Rate Calculations • No capital expenditures in rates or operations • Depreciation transfers • Plant Fund Reserve account • Monitor for non-capital expenditures • Monitor for negative balances

37. Rate Calculations • Discounts • Cannot discriminate against Federal Grants • Free is a discount • Can impute revenue & count against subsidy • Off Peak Rates • What are they? • Rates must be available to federal grants

38. Rate Calculations • External Rates • Market Rate for External Customers • Account for profit • UBIT issue (http://www.uiowa.edu/~fusas/ubit.html)

39. Service Center Reviews • Specialized Service Facilities • Tier I – annual • Tier II – every other year • Tier III – compliance questionnaire • Recharge Centers • >$20,000 revenue - compliance questionnaire • <$20,000 revenue - no review

40. Control Documents • Written request for the establishment of recharge center • Annual rate analysis

41. Resources to Learn More • Recharge Centers Responsibilities & Procedures http://www.uiowa.edu/~fusfm/rechargecenterpolicy.pdf • Unrelated Business Income Taxes http://www.uiowa.edu/~fusas/ubit.html (UI website) http://www.irs.gov/pub/irs-pdf/p598.pdf (IRS website)

42. Sub-certification Question…. Does the college/unit communicate guidelines for reporting material financial risks, issues, errors, etc. to senior administrators within the college and to the Controller?

43. Communicating Within Your Unit • Process may be unique to your organization • Develop recurring meetings with clear expectations of outcome communicated to participants • How often will you meet? • Who will be involved and what are their roles? • What types of issues will be addressed? • What are acceptable threshold/materiality level? • What issues will rise to the level of communicating to Controller’s Office?

44. Communicating to Controller Future recurring meetings with clear expectations of outcome – topics may include: • Budget v actual • Recurring deficits and corrective action plan • Suspected or actual fraud • Patterns of errors in charging • Operational issues • Status of audit Issues • Financial sub-certification status/issues • Regulatory issues • Building plans (if applicable) • Contractual violations

45. Control Documents • Regular recurring meetings with appropriate staff for the purpose of financial review (control document may be schedule, agenda, minutes, etc.) • Communication to staff (i.e., memo) indicating what process to follow for reporting financial errors, problems, etc. • Other documents (audit issues log)

46. Resources To Learn More • Unit Senior Fiscal Officer • Controller’s Office • Other - SkillSoft courses

47. Sub-certification Question…. Has the college/unit addressed and resolved outstanding internal and external audit issues?

48. Related Policies • Internal Audits Policy http://www.uiowa.edu/~our/opmanual/v/13.htm • External Audits Policy (none)

49. Internal Audit • Authorized by Board of Regents to provide independent appraisal services. • Serve a managerial control by measuring & evaluating the effectiveness of financial and managerial controls. • Authorized to have unrestricted access to University functions, records, properties, and personnel.

50. What is reported to the Board? • Any activity which is illegal or the legality of which is questioned by the audit staff immediately upon discovery by audit staff. • Review of all audits (current & follow-up of prior years)