MONTHLY RECONCILATIONS NON PAYROLL

MONTHLY RECONCILATIONS NON PAYROLL Background: This document outlines the requirements for reconciliations of all accounts. All of UMCES - IMET accounts are used for day to day operations and are subject to monthly reconciliations. Reconciliations will be required to contain specific details, supporting documentation, analysis, and corrective actions to be taken. The assistant director will review reconciliations to ensure procedures are being applied consistently, and errors are being corrected in a timely manner. Objective: Analyze the two reports (KFS & IT works), identify, investigate and difference and take the corrective action to bring the two records into agreement. Person Responsible: Accountant and Assistant Director List of steps to reconciling: Step 1. Print reports from KFS See Month- End Reports Step 2. Step 3. Step 4. Step 5. Step 6. Step 7. Step 8. Step 9. Step 10. Print reports from KFS See Printing the statement of Payroll Charges Reconcile expenditures in ITW and move backups See How to Reconcile Review the encumbrance report See Encumbrance Report (by SH and CP) Run the major code report See Major Code Report Compare the two reports Close BAS Lab See Closing BAS Lab invoices Complete budget sheets for FY15 budget and BAS Lab accounts Review and Print all accounts Schedule meeting with Assistant Director Step 11. Send 30, 60, 90 Reports Step 12. Stamp and File 1

Step 1: Run the month-end reports: Running this report will allow the accountant to see what transactions hit the accounts for the month selected. This report will include the income statement summary, which is an overview of the account at a glance and the income statement detail which will show the details of each transaction. 1. There are two ways to do run the month-end reports. You can run the reports by department, which prints all accounts for the department, or run by a single account. First log into the KFS system. www.ares.umd.edu Kuali Financial System (KFS) Go to KFS WEB Log in. a. To run by department: i. Sub-Department Reports for all accounts ii. FBM092: Sub-Department Month-End Report: 1. Chart Code 07 2. Division D500000 UMCES 3. Department P770090 Institute of Marine & Environmental Technology 4. Sub-Department 7700901 - Institute of Marine & Environmental Technology 5. Month End month ending 6. Income Statement 7. Apply 2

8. Print single sided. Printing to the multifunction copier in the hallway due to the length of the document. b. To run for a single account: i. Account Reports ii. FBM:092 Month-End Report: 1. Chart Code 07 2. KFS Account Number 6 digits adding a -0- at the end 3. Month Ending 4. Income Statement 3

Step 2: Print the Statement of Payroll Charges: These reports will be used to verify salary and fringe expenses charged to the accounts. The title of the report printed will be the Statement of Payroll Charges-Details which will include all the details for charges that hit the selected pay period. 2. Statement of Payroll Charges Statement of Payroll Charges Reports: a. LDT180: Sub-Department Statement of Payroll Charges i. Chart Code: 07- Center for Environmental Science (UMCES) ii. Division : D500000 U of MD Center for Environmental Science iii. Department: P770090 Inst, of Marine & Environmental Tech. iv. Sub-Department: 7700901 Inst, of Marine & Environmental Tech. v. SOPC Fiscal Year : 2015 vi. Pay Period: Choose the correct pay period. Checks issued in the month being reconciled are the pay periods needed vii. Payroll Charge View: Payroll Details viii. Report Format: Report ix. Apply x. Print, single sided these will be collated with the major code and month end reports. 4

Note that Salary and Fringe should have been entered in ITW earlier in the month, please see the Importing Payroll SOP. Step 3: Review the month-end reports, reconcile all transactions in ITW and verify there is sufficient backup documentation. Every transaction found on the month end report will need to be reflected in our show systems, ITWs. It will either need to be reconciled or created. 3. The Month-End reports include the Income Statement Summary and the Income Statement Detail. a. To reconcile, skip to the income statement details sheet, locate the charges to be reconciled on the KFS report in the actuals column. Below you will find a brief description of each column found on the income statement detail report: i. Obj Code subcode charged ii. Description a description of the charge should in include, UID, Ref #, Last, something useful to locate the charge iii. Trans Date The date the transaction hit the ledger iv. Document Number A reference to help determine how the charge was processed v. Org Document Number Number to Search the document, such as AVs, PTs, JVs, etc. vi. Budget Entries Adjustment to the budgets vii. Actuals Actual expenditures that hit the account during the month viii. Encumbrance Pending encumbrances in KFS 5

In ITWs, go to the transaction data entry screen: b. File Transactions select Recon c. Enter the Account number, month end date and select Standard d. Use the unreconciled transactions arrows to navigate through transactions. **Note: ITWs will show you the number of unreconciled transactions in blue. 6

e. Once you find the transaction to reconcile, verify the account number, object code, and amounts reflect what is on the KFS report. If the transaction is not found or does not exist, it will still need to be reconciled. A corrective action will need to be taken, verify the account number and/or reference number then create the transaction. f. Backup documentation verification: i. Verify the charge has sufficient backup documentation. All backup documentation can be found in the Grants drive Grant-backups pending reconciliation Folders by processing type (see below) Based on the transaction; you would find the appropriate documentation in that folder. ***NOTE: Each month these folders will need to be created for the new month*** ii. The ITWs transaction purchase type will help determine which folder each backup should be filed in: 7

iii. Once you have found the appropriate backup documentation for the transaction, verify all the information is included by opening the document: 1. Invoice, receipt, approvals, and any other documentation, etc. 2. Move the charge from the pending reconciliation folder to the reconciled folder (Grants drive Grant-backups reconciled Account number FY year Month Type of transaction) g. After the charge and backup documentation have been verified, reconcile the transaction in ITW. Move the amount from the encumbered column to the Income/Expense column and add the campus date, which is the last day of the month being reconciled. (i.e. when reconciling for September, enter 9/30/14.) 8

***Repeat this process for each transaction on the month-end Report of Transactions for each account.*** Step 4: After all accounts have been reconciled the encumbrance report needs to be reviewed before the final phases are complete. This determine if any there is any invalid transactions, or if any adjustments are needed. 4. After reconciling the accounts, the Accountant will notify the Administrative Coordinator that they can run the Encumbrance Report. This process is done after the accounts are reconciled in ITW, generally by the 6 th of the month. a. The administrative coordinator will run the account encumbrance report in ITWs. i. Reports from the Detailed/Specialized Reports select Account Encumbrance. ii. Enter the transaction date from 1/1/00 to the last day of the previous month (i.e.11/30/14 when for reconciling December). 9

iii. Do not enter an account number because the report should be run for all accounts. iv. Select the box to run the report. v. The account encumbrance report should open in a separate window. vi. Export the report to.pdf by clicking the envelope button at the top of the screen. b. Save it to the BO drive. BO drive Encumbrance reports Encumbrance report today s date and initials (i.e. Encumbrance report 12.05.14 SH). c. The administrative coordinator will review the encumbrance report and add notes. If there are any pending adjustments a note will be added (I.e. tax to be refunded, duplicate charge pending reversal, etc.). d. After the Administrative Coordinator completes the first review, the accountant will review the encumbrance report using the same criteria. She will request additional information from the Administrative Coordinator if needed. e. Once the Accountant has received and reviewed the entire report and notes, findings are reported to the Assistant Director. i. All encumbrances older than 2 months ii. For accounts expiring within 30 days report all encumbrances older than 1 month Step 5: Run the major code report needed to compare ITWs, our shadow system, to the KFS month-end reports, the official financial system. 5. In the ITW Accounting Module, pull up the reporting category to select the desired criteria: Accounting Module Reports Account 10

a. Run the major code report for all accounts, select the following criteria: i. Object Set UMCES ii. Grouping Major iii. Encumber Indirect Cost - Yes iv. Balance Views/Budget Summaries Group by Major Code v. ( ) - Click ***This report will take a minute or two to load because it pulls the major code reports for all active accounts. *** b. Once the report has successfully loaded, print all reports: i. Select: Budget Rpt. 11

c. This selection will pull up each accounts major code report broken down by account by category. d. Print all of the accounts 12

Step 6: Compare the month end report balance to the major code report balance. 6. The totals for each report should match, give or take a few cents due to the month end report rounding totals. a. On the month end report: i. Review the total direct and indirect costs line under the Balance Available column on the first couple pages on the Month End Report called the Income Statement Summary and notate the balance. ii. For the example shown below, the balance is $88,482.00, if there are figures in the encumbrance s column, add the two fields. b. On the Major Code Report: i. Add the encumbrances + the balance ii. For the example below: $63,123.36 + $25,358.66 = 88,482.02 13

c. When the totals match, move forward. i. Collate the major code report, the month end report, and the statement of payroll charges for each account with a paper clip. d. In the event the totals do not match review the following areas to determine the difference: i. You can rerun the major code report for that month only using the campus dates field and compare the balance to the month end report current month column. 14

ii. Compare the expense column of the major code to the current month expenditures on the month end report. e. Review each category total to determine where there may be a difference. If the difference is found in the salary and fringe category, review the statement of payroll charges to determine the error. f. While comparing the accounts make notes in a notepad or spreadsheet for the following but not limited to: i. Accounts that did not balance. ii. Unexpected charges with little to no backup documents. iii. Charges posted in error from a different campus. iv. Any questionable transactions. v. AVs needed for corrections. vi. Anything that should be brought to the Assistant Director's attention. Step 7: Closing BAS Lab Invoices 7. Once all accounts have been reconciled, the BAS Lab invoices must be closed in the facilities module. a. IT Works Facility Management Invoice Process payments i. Edit Enter month end date 15

ii. Locate the Invoice Number Highlight the row Click complete payment ***This will have the payment amount and date auto populate*** 16

iii. Then: Update grid Close Note: Paid invoices should disappear. b. To verify the invoices have been closed: i. Invoice Invoices 1. Invoice No. Ctrl Z Invoice number: B0333 2. Verify the status is CLOSED ii. Once you have verified the status is closed this process is complete 17

Step 8: Update the UMCES-IMET FY15 & BAS Lab Budget Summary Sheets 8. You will update the UMCS-IMET FY15 spreadsheet using the KFS and ITWs reports used for reconciling. a. Open the spreadsheet: BO Drive FY Budget Sheets to R. Hill FY15 Budgets & Other Documents FY15 Monthly Budget Sheets FY15 Budget Summary [Previous Month End] CP i. Save a new copy of the current month with the same title. b. Under the Revenues section, in the Overhead Revenue (Budget is Projection) row 9: i. Run the major code report for the OH, salary and fringe accounts ii. Run the account breakdown report for expenses (07133906) iii. From the KFS month end report enters the current month totals for accounts: 07294901, 07294905, 07294922, & 07294931. Then change the color from blue to black to show they are actual figures not estimates. c. Under the Expenses section: i. For salary and fringe, use ITWs month end report for accounts 07133901, 07133902, & 07133999. (There should only be salary and fringe on these three accounts) ii. For all other expenses, enter the amounts and a brief description of what the transaction is. 18

1. Use the ITWs major code report for account 07133906, this will provide the total for each category. The report is run for the current month only. 2. Use the account breakdown to get more detailed information needed to fill out the description section below. Step 9: Print and Review all accounts 9. Once the accounts have been reconciled and the spreadsheets have been updated: a. Run the major code report for all accounts and print for reviewing. b. Run the cost center totals report for accounts: 07293901, 07293907, & 07293909 i. Accounting Module Reports Detailed/Specialized Reports Cost center totals ii. Review each line item to make sure all balances are accurate. c. When reviewing the accounts verify the following: i. Project dates to determine if the project will end within the next 30, 60, or 90 days. ii. No overspent category balances, if so, review for AVs to correct. iii. Review that overhead has been encumbered and balance is 0. 19

iv. All encumbrances make sense, just a double check of step 4. v. Review subawards for payments due and encumbrances are accurate vi. Run reports for any expense that will need to be invoiced for reimbursement: 1. Account reporting for account 07133907 & 07293907. 2. Because there may be other accounts that need invoices run the cost center- breakdown report (I.E. INV CA, INV UMBC, INV USMF, etc.). Step 10: Schedule a meeting with the Assistant Director 10. Once all the above steps have been processed. Review the Assistant Director s calendar and schedule a 1-hour meeting to review the encumbrance reports, accounts and all the findings. a. During this meeting you will discuss: i. any adjustments needed ii. budget reallocations iii. accounts to archive b. The Accountant will go back and make all adjustments Step 11: Send 30, 60, and 90- day reports 11. Send an e-mail notification to the PIs and copy the admin office (imetadmin@umces.edu) notifying them of the remaining balance on the account, and attached the most recent major code report. a. 30 days Attached you will find a copy of the major code report for the type of grant account 07111111. It shows the remaining balance of $1,060.97 available in category to spend on the project. This project is ending 12/31/14. Any pending charges (IPS, Bioresco, etc.) will need to be submitted no later than Monday, December 15, 2014. Please let me know if you have any questions. b. 60 days - Attached you will find a copy of the major code report for your type of grant account 0711111. It shows the remaining balance of $2,554.04 available, $269.73 in category and $2,272.40 in category. This project is ending 5/31/15. Please let me know if you need any funds reallocated or have any questions. c. 90 days - Attached you will find a copy of the major code report for your IMET- Seed account 07430487. It shows the remaining balance of $3,356.89 available, this includes funds available in domestic travel and supplies and materials. Please review the major code report and let me know if any reallocations are needed. This project is ending 6/30/15. Please let me know if you have any questions. Step 12: Stamp and File accounts 12. If there are no additional adjustments needed and the accounts are finalized the accountant will: a. Staple and Stamp the accounts i. If any adjustments are still pending at them into Asana with a reasonable due date b. File each account in the cabinet outside of the administrative offices c. File any invoices for subawards 20

Account Reconciliation Checklist Monthly Account reconciliation tasks are broken down into 4 categories: State Accounts, Revolving Accounts, Grant Accounts and BAS Lab For All Accounts: Reconcile in IT Works by comparing the month-end report and IT Works; review and move all backup documents to IMET- grant drive o Once these two steps are complete, check box that Encumbrance Report should be run and analyzed. This should automate a task for Samantha Horn with an automatic due date of 2 business days. Compare IT Works budget to KFS budget Review salaries State Accounts tasks: Update Budget spreadsheet with monthly state expenditures and revenue. Check the suspense account for transactions that need to be reallocated to the correct account. Review/Analyze Accounts o Check employees on ITW Major Code Report o Check for over expenditures o Check for invoices to be created o Check department account to make sure all the expenditures are related and taxes have been recovered. o Check IMET director s accounts to make sure everything has been invoiced. Revolving Account Tasks: -0- indirect cost balance Update fund balance with any salary savings Review/Analyze Accounts o Check Cost Centers (ie INV UMBC) o Check Cost Center totals (293901, 293907 and 293909 only) o Check for invoices to be created Grant Account Tasks -0- indirect cost balance Check Project End dates o If project is ending, request 60 day KFS extension to allow pending expenses to hit the account. 30/60/90 day report to PI Budge reallocations- revision and processing Review for archiving accounts Review/Analyze accounts o o o Check Employees on major code report Check for over expenditures by budget category Determine if a budget reallocation is needed 21

o o Compare project end date to spending patterns Review/analyze subawards with monitoring spreadsheet. Review end dates, encumbrances, request invoices and process payments. BAS Lab Account tasks: Reconcile in IT Works by comparing the month-end report and IT Works; review and move all backup documents to IMET- grant drive o Once these two steps are complete, check box that Encumbrance Report should be run and analyzed. This should automate a task for Samantha Horn with an automatic due date of 2 business days. Close out invoices Collection emails Check budgets Review salaries Update BAS Lab budget spreadsheet Review/Analyze account o Compare ITW Major Code report to Facilities Module report invoice and outstanding invoices report. 22