Overview

In order to accomplish UC’s mission and vision to promote teaching, research and public service, administrative officials must manage resources in an efficient and cost-effective manner.

The administrative official of each unit shall adopt the following principles and responsibilities to ensure sound financial management.

Principles

1. Actual financial activity must be compared to the budget on a regular basis to ensure that unnecessary costs are being avoided and that transactions are adequately supported.
2. When actual financial activity varies significantly from the budget, administrative officials, or their designees, must determine the cause, evaluate the activity, and take corrective action.
3. Each unit must evaluate the financial consequences before a new activity is started, or a current activity is changed or eliminated, and must ensure that the anticipated benefits are greater than the costs.
4. Administrative officials must provide adequate safeguards to protect against the loss or unauthorized use of UC assets.

Responsibilities: Planning and Budgeting

All financial activity must include:

1. A method of identifying and assessing financial, service, and organizational risks.
2. A plan for unit operations, and a realistic plan for resource management adequate to cover the needs of the unit, as well as subsequent adaption as may be needed to respond to changing resource allocations.
3. A cash management plan to maximize the cash resources available to UC.

Responsibilities: Monitoring and Evaluating Financial Data

All systems for monitoring and evaluating financial data must include:

1. Monthly financial reports that accurately represent the unit’s financial status; these reports must:

• Identify revenue sources and categorized expenditure data
• Provide budget to actual fiscal activity
• Identify trend activity and problem areas
• Highlight exception items

2. A method for reviewing revenue and expenses at the end of each ledger cycle
3. A system that documents the monitoring and reconciliation of financial and payroll data
4. A method of sampling financial transactions to ensure that expenditures are appropriate and that adequate supporting documentation is provided
5. A method to determine and document the cause of significant deviations
6. A method for taking corrective actions that include:

• Correcting transaction errors
• Implementing new control procedures

Responsibilities: Safeguarding University Assets

UC assets must be safeguarded from loss or unauthorized use.  Adequate safeguards include:

1. A physical inventory of all inventorial equipment conducted at least once per year; with all discrepancies promptly reported and investigated.
2. Documentation and approval of any adjustments to the asset records.
3. Regular and periodic examinations of delinquent account balances and follow-up collections or write-off actions and procedures.
4. The assurance that all cash or cash equivalent collections are handled in a timely manner. All cash shortages and excesses must be promptly reported to a supervisor, who must investigate them immediately.
5. All UC accounting and financial records, tax reports, expense reports, timesheets and effort reports, and other documents including those submitted to government agencies must be accurate, clear, and complete.  All published financial reports will make full, fair, accurate, timely, and understandable disclosures as required under generally accepted accounting principles (GAAP).  Certain individuals with responsibility for the preparation of financial statements and disclosures, or elements thereof, may be required to make attestations in support of the GAAP standards.

Responsibilities: Preparing and Reviewing Budgetary and Financial Transactions

Both a preparer and reviewer must be involved in budgetary and financial transactions.  Specifically:

1. A preparer must:

• Understand all relevant regulatory requirements, systems and policies, as well as the purpose of the transaction
• Enter accurate data into all fields on a transaction document or system screen
• Record an accurate and thorough explanation of each transaction
• Ensure that any new account and fund linkages requested are appropriate
• Resolve any questions raised during the completion of the transaction or via online edits and related messages
• Forward the completed transaction, with any supporting documents, to a reviewer when appropriate

2. A reviewer must:

• Inspect transactions to ensure that the preparer properly fulfilled their responsibilities
• Ensure that transactions being reviewed comply with policy, regulatory, and other requirements
• Resolve all questions that arise with a transaction, or ensure that the transaction is reversed until the questions are resolved

3. Each unit must ensure that all financial and personnel transactions are recorded accurately and in a timely manner. Accurate transactions should reflect the actual value/information involved; contain sufficient detail; and be posted in a timely manner, stored securely, readily retrievable, and safeguarded against improper alteration, disclosure, or use.
4. All significant online transactions appearing on the general/operating ledger and payroll/personnel system should be validated in a timely manner either at the end of each accounting period, or as specified for online systems. In addition, a representative sample of smaller transactions should also be validated, to ensure that the controls in place are effective.
5. Employees must be adequately trained in the use of online systems and transactions.
6. A second person shall be assigned to review financial transactions to ensure that the preparer has properly fulfilled their function.

For further information contact the Financial Services Director.