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 2

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! 3

4. Why Perform SOA Reconciliation 4 Great way to support key control objectives/assertions: Completeness  All transactions are processed (once and only once) 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 5

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 6

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 7

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. 8

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 9

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 10

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) 11

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 12

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) 13

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 14