Kentucky State University Business Policies and Procedures Manual

Reconciliation Approvals

Accountants should reconcile each major grouping of balance sheet accounts monthly.

Accountants should reconcile each major grouping of balance sheet accounts' monthly. Reconciliations should include sufficient documentation that can be independently reviewed and fully supported by the attached documents without additional explanations. Documentary evidence of the review and approval of reconciliations is a critical internal control that is assessed in the annual financial statement audit process.

Responsible position(s):

• Controller

Required documents and access:

• Banner
• Supporting account statements and/or subsidiary ledger reports

Frequency and timing:

• Monthly, as reconciliations are completed, before 20^{th} of the month following month-end, before month-end system close

Steps:

• Run a trial balance after all month-end entries have been posted.
• Ensure the preparer has appropriately signed and dated the reconciliation before reviewing.
• Verify the balances in the reconciliation to the trial balance and supporting statements.
• Review all the attached documents to ensure there is sufficient evidence to support each reconciling item, including:
• Return the reconciliation to the responsible position if the documentation is insufficient to answer all the reviewer's questions.
• Sign and date the reconciliation if the documentation is complete and the system balance has been appropriately supported.
• oTransaction date, document number, description, and amount of each item.
• oNotation of the specific actions taken or to be taken to correct the items, including the transaction date, document number, description, amount, and responsible position.

Year-end Balance Roll Forward and Accrual Period

Once the final fiscal period of the year has been closed, the system rolls balance sheet balances forward to the new fiscal year and opens the accrual period 14. Activity posted to period 14 is processed concurrently in both the prior and new fiscal year to keep the rolled forward balances in sync.

Items that are typically entered into the accrual period include year-end adjustments such as accrued payroll and leave, pension and OPEB liabilities, discounts on receivables and other year-end adjustments. Typically, period 14 will be kept open until the audit has been completed so audit adjustments can be posted to the correct fiscal year and audited financial statements will be tied to the ledger balances.