FD 601 Reconciliation Best Practices May 12, 2017 Cassandra Balent Accounting Operations Manager CLS Fiscal Services Adapted from Tricia Cook’s FD601 Training 5/17/2016

Introductions Name and where you work on campus? What would you like to learn about reconciling and/or what do you find frustrating or struggle with? Are you a CatBooks user?

Objectives for FD 601 Understand what reconciling is and why it’s important. Become familiar with reconciliation processes and tools. Develop problem solving strategies and learn about campus resources.

What Does “Reconcile” mean? Compare two sets of records to ensure they are in agreement. e.g. balancing your checkbook to your bank statement is a form of reconciling. At MSU, we will reconcile our departmental financial records (checkbook) to Banner (bank).

Why Do We Reconcile? Verify the accuracy of transactions. Identify and resolve errors in a timely manner. Confirm the accuracy of fund balances. Accurately inform decision making. Ensure compliance with university, state and federal regulations, circulars and cost accounting standards.

How Often Should You Reconcile? Normally, department funds should be reconciled monthly. Special circumstances for more frequent reconciliation: High volume High risk Time of year Balance effectiveness with efficiency

Who Should Reconcile? Reconciling should be performed by someone in the unit with sufficient knowledge to: Compare transactions on financial reports to departmental records. Match all transactions to appropriate backup documentation.

Who Should Reconcile? (cont.) Identify, investigate, and resolve: Unknown or unexpected transactions. Coding errors. Transactions that should but have not yet occurred. Unallowable expenditures. Report irregularities to appropriate authorities and fund balances to stakeholders.

Segregation of Duties “Significant transactions” should not be controlled from start to finish by the same person. High dollar transactions, e.g. procurement Risky transactions, e.g. cash handling, pcards Separate AP/AR and reconciling as possible.

Department Records Accounts Receivable Accounts Payable Cash receipts Invoices for services performed Accounts Payable BPAs/invoices (itemized invoices, not statements, reservations or confirmations) Pcard reports (itemized invoices, not statements, reservations or confirmations; payment method shown) Campus autobills Finance and payroll correction forms

Department Records (cont.) Procurement paperwork Purchase order and sole source or tab of bids Contracted services agreements Travel and Hospitality forms Student OSP Fee Authorization Third Party Billing form Fellowship form Secondary Ledger/Shadow System CatBooks, Quicken, QuickBooks, Excel

Documenting Reconciliation Maintain a record of: When reconciliation was done and by whom. Identification and resolution of errors. Complete record of AP/AR. Proof of review by fund end user principal investigator, department head, director, etc.

Who Should Review Reconciliations? Someone with sufficient responsibility and authority to: Ensure reconciliations are completed in a timely manner and errors are satisfactorily resolved. Review and evaluate fund activity and balances. Principal investigators should review grant reports directly. Department Head/Director is ultimately responsible for all unit funds.

Banner Finance Reports (BANK) SAIS, MSU Switchboard https://login.montana.edu/idp/profile/cas/login?execution=e1s1 OR Navigate to sais.montana.edu, click on “Banner Application Switchboard” You will be prompted for your NetID credentials

Banner Reports and Fund Types General Operating (State) Grants Restricted Gift & Designated Index Types 41xxxx, 01XXXX, 91xxxx, 4Sxxxx 4Wxxxx 42xxxx, 43xxxx SAIS Reports Run by Index (or group type), FY, and Month Operating Ledger Summary Operating Ledger Transactions Payroll Report Inception to Date General Ledger My Groups Type Index Fund Run the “Index Listing (by Org)” (SAIS – Finance Reports) to see all indices currently active in your ORG.

Step 1: Reconcile Transactions For all indices use: Operating Ledger Transactions Payroll Report Compare departmental records (source documents and secondary ledger if one is used). Reconcile to budget or cash, YTD expenditures, and encumbrances.

Clearing Transactions in CatBooks CatBooks Menu >Tools > Reconcile Select index from drop down menu Click “Begin Reconcile” or hit “enter” key Toggle transactions that appear on the SAIS Operating Ledger Transactions and Payroll Reports. “Checked Total” field will show balance of all checked transactions

Clearing Transactions in CatBooks (cont.) Click “Clear Checked” This will enter the “month cleared” on the selected transactions. Be sure to manage this feature.

Clearing Transactions in CatBooks (cont.) Run “detail by month report” in CatBooks to double check

Step 2: Balance the Index (Based on Fund Type) General Operating/State Grants Restricted Gift and Designated SAIS report Operating Ledger Summary Inception to Date General Ledger How to Balance SAIS: Sum of the “encumbered” and “available” columns **should match** Departmental encumbrances and available balance (CatBooks: sum of “outstanding” and “remaining” columns – Summary Report) SAIS: Sum of the “encumbrance” column and “free balance” SAIS: “1104 Cash in Treasury” or “Total Fund Balance”

CatBooks Dropdown Menu > Reports > Summary

Balancing Fund Type Review General Operating Grants Designated and Restricted Gift SAIS Reports (use for reconciling) Operating Ledger Summary • Balance sum of “encumbrance” and “available” columns to dept. records. Inception to Date • Balance sum of “encumbrance” column and “free balance” to dept. records. General Ledger • Balance either “cash” or “fund” to dept. records. Banner MSTR screens (shows ongoing activity – helpful for researching transactions) FGIBDST FRIGITD FGITBAL or FGITBSR

Troubleshooting! Research and Resolve Check index expenditures Don’t just make entries so that the index balances. Track down mystery charges Follow up on unpaid invoices Check index expenditures SAIS Operating Ledger Transaction by FY or by month FGIBDST/FGITRND (MSTR will show activity to date) Operating Ledger Summary (use for checking account code balances)

Troubleshooting! (cont.) Check budget and cash entries. SAIS Operating Ledger Summary, Inception to Date Report, General Ledger FGIBDST, FRIGITD, FGITBAL Budget transfers will appear on SAIS Operating Ledger Transaction report. Remember, SAIS rounds budget entries! Check MSTR (FGIBDST/FGITRND) for exact amount. Position Budget Adjustments appear on Budget by Position report in SAIS.

CatBooks Troubleshooting Check imports by index and account code CatBooks dropdown menu > data entry > index CatBooks dropdown menu > data entry > account

CatBooks Troubleshooting (cont.) Reconciling Sub-Accounts Balance “main” index to Banner Sub-account all transactions (recommended, based on need) Balance “subs” to “main” index in CatBooks

Helpful SAIS Reports

Helpful Banner MSTR Screens

Campus Resources Salary, benefits, payroll encumbrances HR Payroll Tech AP/AR (pcard tx, BPAs), account codes, finance corrections UBS, UBShelp@montana.edu; OSP JD1 issues fast@montana.edu Autobills Campus office/department making the charge, UBS can help you look this up (by doc code)

Campus Resources (cont.) General operating budget, budget transfers, position budget adjustments Budget Office Grant budgets, sub-awards, no-cost extensions, allowable costs OSP Fiscal Manager Transfers in 436/7/8xxx indices VP RED CatBooks questions catbooks@montana.edu Me! Cassandra.Balent@montana.edu, x5022

Questions?

Thanks!