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

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T HE U NIVERSITY OF I OWA F INANCIAL S UB - C ERTIFICATION W ORKSHOP S ESSION #2 Finance, Accounting & Audit Today’s Presenters Selina Martin Angie McMullin Today’s Agenda Financial Sub-certification Website

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today s presenters
Today’s Presenters
  • Selina Martin
  • Angie McMullin
today s agenda
Today’s Agenda
  • Financial Sub-certification Website

  • 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?
sub certification question
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?

related policies
Related Policies
  • Educational Opportunities

(Operations Manual)

chapter 26 educational opportunities
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.”

business processes series
Business Processes Series

who should enroll
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
certification requirements
Certification Requirements
  • Complete all six core courses
  • Complete four elective courses
  • Complete within a 2 year period
required core courses
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
elective courses
Elective Courses –
  • Data Access Courses (3 courses)
  • Application Courses (10 courses)
  • Other Courses (5 courses)
  • ICON Courses (6 courses)
control documents
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
sub certification question16
Sub-certification Question….

Does the college/unit have processes and monitoring activities in place to ensure compliance with the University's Cash Handling Policy?

related policies17
Related Policies
  • Cash & Credit Card Receipts (Operations Manual)

  • Cash Handling Policy (website)

  • Credit Card Handling Policy (website)

cash handling
Cash Handling

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

chapter 4 1 ops manual receipt of funds
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.
basic principles of effective cash handling
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

basic principles of effective cash handling21
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
basic principles of effective cash handling22
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
who needs to know follow
Who needs to know & follow?
  • Unit management
  • Edeposit users
  • Billers/invoicers
  • Cash collection point cashiers
  • Cash collection point supervisors
  • Deposit preparers
  • Reconcilers
departmental mgt responsibility
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.
individual staff responsibility
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.
credit cards handling policy
Credit Cards Handling Policy

  • 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
credit card merchant responsibility
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
control documents28
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
resources to learn more29
Resources to Learn More
  • Cash Handling ICON Course

  • E-Deposit ICON Course

  • E-Deposit Training
  • Cash Handling website

  • Credit Card Policy Merchant Training
  • Payment Card Industry (PCI) Data Security Standards

(sign up for all training through Self Service)

sub certification question30
Sub-certification Question….

Does the college/unit submit the required information to Financial Management to ensure compliance with the Service Center Policy?

related policy
Related Policy
  • Service Centers (Operations Manual)

  • Service Centers Policy Website

service center policy highlights
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
accounting issues
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
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
rate calculations
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?
rate calculations36
Rate Calculations
  • No capital expenditures in rates or operations
    • Depreciation transfers
    • Plant Fund Reserve account
      • Monitor for non-capital expenditures
      • Monitor for negative balances
rate calculations37
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
rate calculations38
Rate Calculations
  • External Rates
    • Market Rate for External Customers
    • Account for profit
    • UBIT issue (
service center reviews
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
control documents40
Control Documents
  • Written request for the establishment of recharge center
  • Annual rate analysis
resources to learn more41
Resources to Learn More
  • Recharge Centers Responsibilities & Procedures
  • Unrelated Business Income Taxes (UI website) (IRS website)

sub certification question42
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?

communicating within your unit
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?
communicating to controller
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
control documents45
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)
resources to learn more46
Resources To Learn More
  • Unit Senior Fiscal Officer
  • Controller’s Office
  • Other - SkillSoft courses
sub certification question47
Sub-certification Question….

Has the college/unit addressed and resolved outstanding internal and external audit issues?

related policies48
Related Policies
  • Internal Audits Policy

  • External Audits Policy (none)
internal audit
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.
what is reported to the board
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)
internal audit expectations of units
Internal Audit – Expectations of Units
  • Cooperate with staff
  • Understand audit issues/findings
  • Discuss recommendations for resolution of audit findings
  • Implement changes as appropriate
  • Follow up with internal audit with status
  • Communicate as appropriate with unit leaders and Central Administration
common issues found by internal audit
Common Issues Found by Internal Audit
  • Rate methodology – no documentation of supporting detail
  • Charge capture cycle time
  • Expenditures using incorrect institutional account
  • Lack of segregation of duties
  • Financial management – untimely review
  • Inappropriate use of blanket orders
external audit expectations of units
External Audit – Expectations of Units
  • Make sure that the Controllers Office is aware of your interaction with external auditor
  • Cooperate with audit staff
  • Understand audit issues/findings
  • Discuss recommendations for resolution of audit findings with Controllers Office
  • Implement improvements in a timely manner
control documents54
Control Documents
  • Documentation of response to auditors & central administration describing the resolution of audit issue
  • Documentation of process changes
resources to learn more55
Resources to Learn More
  • Controllers Office
  • Internal Audit
  • Auditor of State
  • Other - SkillSoft courses
sub certification question56
Sub-certification Question….

Does the college/unit perform review of transactions appearing in its general ledger reports to internal source documents on a monthly basis?

related policy57
Related Policy
  • Monthly Review of Transactions Policy

monthly review of transactions policy
Monthly Review of Transactions Policy

Requires the monthly review of transaction detail in each account to ensure that financial information accurately reflects actual activity.

  • Non-grant Reports  SA3 (Statement of Accounts)
  • Grant Reports  TDS (Transaction Detail Statement)
who is involved
Who is involved?

Account Owner: The person who has general decision making authority over the account and fiscal responsibility & accountability for the account.

Reviewer: The person reviewing transactions and comparing to supporting documents.

  • Departmental Administrator
  • Business Manager
  • Financial Officer
  • Program Administrator.
  • Principal Investigator
  • May not be the Research Administrators
responsibilities of account owner
Responsibilities of Account Owner
  • Document the purpose & restrictions of each account
  • Designate a Reviewer & ensure that training & tools are provided to effectively validate transactions.
  • Confirm that the personnel charges reasonably reflect the efforts expended (federal research).
  • Review deficit balances & take corrective action
  • Examine work done by Reviewer and discuss process used to validate that transactions are appropriate.
responsibilities of reviewer
Responsibilities of Reviewer
  • Review each transaction
  • General considerations:
    • Appropriateness of payroll charges
    • Accuracy of non-payroll charges
    • Transactions not yet posted
  • Verify that prior months’ errors are corrected
  • Document discrepancies and take appropriate action to resolve (in collaboration with Account Owner).
  • Document that the review is complete and communicate all issues to the Account Owner.
adequate documentation
Adequate Documentation
  • Departments are responsible for ensuring the existence of source documentation and retaining documents which are not maintained centrally.
  • Adequate documentation answers the following questions:
      • What was purchased?
      • Where it was purchased?
      • When it was purchased?
      • Be ready to explain why it was purchased.
control documents63
Control Documents
  • Transaction reports (SA3 & TDS)
  • Supporting documentation (sub-system reports, analysis, correspondence, etc.)
  • Documentation of review of detail transaction reports (notes, annotations, worksheets, etc.)
  • Documented communication with Account Owner (email)
financial sub certification focus
Financial Sub-certification Focus

Our internal controls should reasonably assure….

  • Compliance with laws, regulations & contracts
  • Prevention & detection of fraud
  • Proper recording, classification & valuation
  • Adequate documentation & disclosure
risks consequences
Risks & Consequences
  • Loss of privilege to handle cash
  • Loss of privileges to process credit card payments and the revocation of credit card merchant status
  • Additional oversight & scrutiny
  • Management may make decisions which are made based on faulty, inaccurate, financial data
  • Fraud or misuse of university resources
  • Audit findings & resulting audit opinion
  • Fines & penalties
  • Reputation & public disclosure

Financial sub-certifications will be completed in fall 2009 for the fiscal year 2009.

Accurate responses will help us to help you to strengthen internal controls.

Progress will be made over time as we identify areas of opportunities to improve controls.


what are your next steps
What are your next steps?

Understand your role in the sub-certification process

Understand the general & specific policies relevant to your roles & responsibilities

Share information with your staff & colleagues

Attend targeted training

Review control documents checklist

Provide feedback to central administration