University of Virginia Fund Accounting and Reconciliation Process

2 Welcome! Fund accounting and how we use it Expenditure reconciliations Revenue reconciliations Cash reconciliations Appendix of Sponsored Programs reference material

3 What is Fund Accounting? A method of segregating resources (i.e., funds) into categories to identify both the source of funds and the use of funds.

4 Sources of Funds Sales and Services Patient Services Gifts Tuition and Fees Commonwealth of Virginia Investment Income Grants

5 Awards Installment SG, LG G_ DR, DU FA SS, LS YY Installments should not exceed the amount of revenue collected (except for Sponsored Programs and Sales and Service) Award

6 Uses of Funds Also… Academic support Institutional support Student Services Instruction Research Public service Patient Services University’s mission

7 Projects Award Budgets are established when projects have been funded Project #1 Project #2

8 GA Charging Instruction PTAEO

9 Transaction Flow PTAEO – COADetail Summary INSTITUTIONAL REPORTS Revenue Budget Accounts Receivable Expenditure Budget Grants Accounting

10 Expenditure Expenditure projects can be identified as projects linked to, and funded by an award Revenue Revenue projects provide and identify the funds that back up award installments 2 Basic Types of Projects

11 P SA – UCS Resume Marathon A DR01340 P GL GA Revenue Expenditures P P P P P SA – UCS Gifts SA – UCS Employer Svc SA – UCS CLAS Svs SA – UCS Library SA – UCS NYRA SA – UCS Gifts

12 Sponsored Program Awards (Awards that start with a “G”) Sponsored Programs DO NOT have an associated revenue project Sponsors’ awards provide spending authority via letter of credit (LOC) cash, or other means

13 Your role… YOU ARE HERE

14 Identify Projects to Reconcile IS.GL_Revenue Project Relationships

15 Reconciliation Compare transactions in the Integrated System to the department's documents Determine if transactions are accurate and complete Identify outstanding transactions and those that need correction

16 Supporting Documentation All original supporting documentation related to financial transactions must be retained by the department Exception for petty cash and travel reimbursements Original documents to Accounts Payable Copy for the department Provide source documentation in a timely manner, if requested by a central financial office or an internal or external auditor

17 Timeliness Financial Procedure html Complete reconciliation by the 10th working day of the month

18 Review Are all transactions charged or credited to the correct account codes (PTAEO or COA)? Were any transactions from other departments charged/credited incorrectly to your PTA?

19 Review Do all transactions have supporting documentation (as required)? Do all transactions comply with University policies and procedures, and applicable state and federal laws and regulations? Note discrepancies, and have both the reconciler and approver sign and date the monthly transaction detail report or optional standard reconciliation form

20 Additional Review for Grants/Contracts Review Notices of Award (NOA) and verify accuracy of data Sponsor NOA OSP NOA Understand the difference between direct and indirect costs Direct: Expenditures for payroll, supplies, etc. Indirect: F&A rate negotiated between UVA and the Federal Government applied to direct expenditures

21 Resolution Locate missing documentation Remove transactions that don’t belong on your PTA/COA Note outstanding expenses/revenues

22 Resolution Move expenditures in your suspense projects (Labor/OTPS) to your PTA Additional policies and procedures may apply for Sponsored Program projects and awards Optional: complete Standard Expenditure Project Review and Reconciliation Form

23 Record Retention Policy and Procedure University record retention website: Supporting documentation must be retained in such a manner as to satisfy state and federal records retention requirements (or until the Institution has been audited) State Retention Periods Payroll Records = 5 years + current fiscal year OTPS Records = 3 years + current fiscal year

24 Record Retention Policy and Procedure For the Health Sciences Center record retention policy contact: John Redmond, Administrative Services: Abraham Segres, Risk Management: Sponsored Program Retention Periods 7 years for Grants (or until audited by the Sponsor) Life for Contracts

25 Reconciliation Links website

26 Time for a break?

27 Expenditure Focus Monthly Account Reconciliation

28 What to gather Prior month reconciliations and notes Department records/documents related to expenditures for PTA or PA combinations Optional: Standard Expenditure Project Review and Reconciliation Form

29 Reports Needed Required: FM_Project BBA by Expenditure Type FM_Expenditure Detail by Project Recommended: GL_Only Project Activity Detail Optional: FM_Payroll Expenditures by Project

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32 “O” in the PTAEO

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40 Parents Weekend Open House

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43 Reconciliation Lab

44 Troubleshooting Expenditures Actions: Seek missing documents Gather information about transaction discrepancies

45 Troubleshooting Expenditures Actions (cont’d): Finalize transactions on projects/awards to be closed Close completed POs if there are no pending invoices

46 Discoverer IS.LD_Labor Suspense Project Balance Report IS.FM_OTPS Suspense Project Balance Report Discoverer PDW4X.PS.AP 110 Held Payment Vouchers PDW4X.PS.AP 120 Held Invoices on Receiving Hold PDW4X.PS.AP 130 Held Invoices With No Valid PO Oracle Standard Report UVA PA Installment vs. Funding vs. Expenditures Additional Reports

47 Award Management IS.FM_Award BBA by Award Manager Review budget and actual totals and take corrective action as necessary Note: This is not a mandated activity, but Award Managers are expected to monitor their awards and to manage to established budgets UVA Installment vs. Funding vs. Budget vs. Actual (Oracle Standard Report-optional)

48 Revenue Focus Monthly Account Reconciliation

49 GA to GL mapping GL Chart of Accounts (COA) GA PTAEO one to one to one Many awards to one fund source Many expend types to one object code Many awards to one entity

50 Transaction Flow Bank Deposits Revenue Budget (sales and services Accounts Receivable Cashier’s Office Credit Card Receipts

51 What to Gather Prior month reconciliations and notes Department records/documents related to deposits or transfers for this GL project combination Optional: Standard Revenue Reconciliation Form

52 Needed Report IS.GL_Only Project Activity Detail

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54 This deposit slip contains items for two projects. Item #3 relates to project

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56 Troubleshooting Take needed actions: Seek missing documents Track down transaction discrepancies Make correcting entries, or get the appropriate central office to make them for you

57 Cash Reconciliation Not applicable to all revenue projects Schools and departments that reconcile to cash (vs. budget) should review and reconcile net cash

58 Needed Reports Required: UVA Cash Balance By Project (Oracle standard report) or GL_Cash Balance by Project (Discoverer report) Recommended: BU_Budget to Actual by Revenue Project Optional: UVA PA Revenue vs Installment vs. Funding vs Expenditures (Oracle standard report)

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60 Questions ??

61 Accounting Services Training and Outreach Lynn Lynne Devin

62 Sponsored Programs Appendix of Reference Materials

63 What is a Sponsored Program? Awards that start with a “G” Funds provided by an external sponsor in the form of a Grant or Contract Each Grant or Contract has a Principal Investigator who has the overall responsibility for award expenditures. Each Grant or Contract has its own Notice of Award that sets out contractual terms and conditions.

64 Know your grant! Review Sponsor’s Notice of Award (NOA) and the OSP NOA. Verify that all data on both are accurate Direct & Indirect (F&A) dollar amounts Begin, End, and Close dates Verify Grant dollar Amount is the same as the budget Verify F&A / Indirect Cost rate is correct Familiarize yourself with the Terms and Conditions Know whether award has cost-sharing or not

65 Sponsored Programs Reference Appendix Content Award Prefix Definitions Federal Regulations How is your award funded? Cost Sharing Direct Costs Cost Transfers Retro Cost Transfers F&A Costs Subcontracts Required Actions

66 Sponsored Program Award Prefixes GANational Science Foundation - Letter of Credit GBDepartment of Energy – Letter of Credit GCDepartment of Health & Human Services – Letter of Credit GDNASA, Langley – Letter of Credit GECenter for Innovative Technology – Letter of Credit GFFoundations GGOther Federal Government (non-Letter of Credit) such as DOD GHNational Endowment for Humanities – Letter of Credit GIIndustry GJNational Endowment for the Humanities (VA Foundation for the Humanities) – Letter of Credit GKEnvironmental Protection Agency – Letter of Credit GLDepartment of Commerce (National Oceanic Atmospheric Administration) – Letter of Credit GMDepartment of Education – Letter of Credit GNNASA, Headquarter – Letter of Credit GOOther… such as other institutions, or other government bodies GPNASA, Goddard – Letter of Credit GQDepartment of Energy, Chicago – Letter of Credit GRNASA, Glenn – Letter of Credit GSState GWDepartment of Education College at Wise – Letter of Credit

67 Additional Regulations Know which Federal and Institutional regulations and policies apply. All Federal Grants are governed by cost accounting standards (CAS) set out in the Federal OMB Circular A

68 How is your award funded? Event Based Billing Sponsor invoiced based on a particular event (eg, time period, specific event such as a conducting a clinical trial, etc) Cost Based Billing Sponsor invoiced at the end of each period based on actual costs incurred during the preceding period.

69 Cost Sharing When UVA contributes faculty time, money, or other items of value toward the cost of the project May be required by the sponsor, may be committed by the PI in the proposal, or may be ‘voluntary’ on the part of the institution More than a nominal amount More commonly found on grants and cooperative agreements than on contracts

70 Methods of Cost Sharing Effort percentage of Salary & Wage for specified individuals fringe benefits Cash (direct expenditure costs) Equipment Un-recovered Facilities and Administrative Costs F&A Costs

71 Direct Costs Must Be: Allowable Under the provisions of OMB Circular A-21 And under the terms of the particular award. Allocable The project must directly benefit from the expense. Reasonable In that a “prudent person” would have paid the same price.

72 Direct Costs: What to look for Have expenditures been incurred during the grant period? Are there any unallowable expenditures? Are Payroll charges accurate and appropriate?

73 Cost Transfers Governed by the same costing principles as direct costs: Allowable Allocable Reasonable UVA policy: Section VIII.8-20 of UVA Procedures Requires knowledge and approval of PI Subject to OSP review

74 Retro Cost Transfers Applies to transfer of any grant expenditures over 90 days old, including labor distribution or awards where the end/close date is in the past. Complete OSP Retro Request Form and send to Requires OSP retro approval number UVA policy: Section VIII.8-21 of UVA Procedures Requires knowledge and approval of PI OSP responsible for approving or rejecting

75 F&A Costs Two basic types: Total Direct Costs (TDC) Modified Total Direct Costs (MTDC) Basic rates: On-Grounds Research On-Grounds Public Service Off-Grounds Research Off-Grounds Public Service

76 Review Indirect Costs (F&A) F&A accrued each day on which there are applicable direct cost expenditures. Cumulative, that is, one F&A calculation for all expenditures on a given day.

77 Indirect Costs: What to Look For Were correct Expenditure Types used on subcontract invoices? Svcs, Subcontracts, SPON PRGM [first $25,000 each subaward] Svcs, Subcontracts, OSP, No F&A [all payments above the $25,000 thresh hold]

78 30 Days prior to end of Grant Period If appropriate and at the request of the PI, file necessary paperwork with OSP to set up new preliminary (at risk) extension of the account. At PI request, file necessary paper work with OSP/Sponsor for no cost extensions. If project is in deficit, take actions to clear deficit. Notify OSP Accountant (Project Manager) if you anticipate cost overruns.

79 Actions at end of Grant Period If cost sharing on the award – file report with OSP. ( Note:NOA terms and conditions may dictate more frequent reporting of Cost Sharing information) Clear out all commitments Make sure all POs are finally closed Make sure all Subcontractor invoices have been received and paid. Make sure all P-card expenditures are included. If project is in deficit, take actions to clear deficit.

80 Questions ??

81 Accounting Services Training and Outreach Lynn Lynne Devin