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In accordance with , which calls for the establishment of efficient and effective internal controls over the preparation of the financial report, all cost center/project administrators are required to ensure the respective cost centers and/or projects for which they have signature authority are reconciled and approved on a monthly basis..

Cost center/project review and approval demonstrates accountability for financial resources and assures Ãå±±ÂÖ¼é administration and external parties that fiscal resources are monitored and maintained in accordance with Ãå±±ÂÖ¼é Policies and Procedures.  This process is essential for an effective internal control environment to ensure:

• The accuracy and validity of the entries and balances.
• Transactions are accurately recorded.
• Unauthorized charges/changes did not occur.
• Resolution of discrepancies occurs in a timely manner.

5.1 Responsible Parties

• Cost Center Owners/Principal Investigators (PI)
• Cost Center/Project Administrators
• Business Centers and Center Managerial Staff
• Chief Financial Officer
• General Accounting
• Contracts and Grants Accounting

5.2 General Guidelines for Cost Centers and Capital Projects

The cost center/capital project administrator of record should assign the monthly reconciliation process to someone in the department who is familiar with the financial activity to ensure that an effective review occurs.  In addition, cost center/project administrators should either perform the monthly review and approval of the reconciliation or delegate that process to another full-time managerial staff position who is familiar with the financial activity and is not the reconciler.   Cost center/project administrators may not delegate the fiduciary responsibility for Ãå±±ÂÖ¼é assets to another individual. Following these guidelines ensures proper segregation of duties.

The reconciliation, review and approval process should occur monthly and within 30 days after the month-end close.  Departments are notified by email of each month-end close. Cost center and project review and approval will occur in the SAHARA application available in PeopleSoft. 

5.3 Cost Center/Project Reconciliation

A formal reconciliation of the accounting records from the Ãå±±ÂÖ¼é’s official accounting system is required monthly.  The reconciliation function consists of:

• Comparing departmental supporting documentation to the actual charges recorded in the cost center/project listed in the PeopleSoft SAHARA application (cost centers/capital projects) or the PIC application (sponsored projects).
• Ensuring all transactions have supporting documentation and are accurate, authorized and appropriate to the mission of the department and Ãå±±ÂÖ¼é.
• Ensuring all transactions meet applicable Federal, State, Sponsor, U.T. System, or Ãå±±ÂÖ¼é policies, regulations, guidelines and laws; and transactions from gift funds are allowable or consistent with the donor agreement.  
• Identifying discrepancies and ensuring they are resolved within 60 days after their identification. The administrator or designee should follow up to ensure all the corrections have been made and recorded.
• Completing the system reconciliation by clicking the appropriate check box in the SAHARA application for cost centers and capital projects.
• Sponsored projects administrators are responsible for notifying the PI that reconciliation and verification is complete and ready for certification.

5.4 Cost Center/Project Review and Approval Process

The cost center/project review and approval process is broader and less detailed than those steps required for the reconciliation.  Specifically the approver should consider the following:

• Do the transactions appear appropriate for department/grant/Ãå±±ÂÖ¼é business?
• Are there any suspicious looking transactions?
• If the review process has been delegated, is there an indication of a review?
• Is there an explanation for any unrecognized transactions?

When the approver is assured all transactions are logged, accurate, appropriate, and authorized, he/she will check the “approved” check box in SAHARA and certification boxes in PIC indicating approval of the reconciliation and notes regarding any reconciling items for the month’s activity.

5.5 Retaining Documentation

Supporting documentation for recorded transactions used for the review process must be retained.  Documents may be retained in any manner deemed most efficient by each department so long as the documentation may be easily accessed and produced upon request (to include but not limited to electronic file copies).  The reconciliations and supporting documentation should be retained in accordance with the most current state record retention schedule.

5.6 Annual Certification

On an annual basis, all cost center and capital project administrators and sponsored project PIs must certify that reconciliations have been completed in accordance with this policy.  The certification will be completed within the PeopleSoft application.

5.7 Definitions

Internal Controls - A process, effected by an entity's board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

• effectiveness and efficiency of operations,
• reliability of financial reporting, and
• compliance with applicable laws and regulations.

Reconciliation - The process of comparing information from two separate sources and, providing explanations for any differences.  For departmental purposes, the process consists of comparing the supporting documentation retained by the department to the information recorded in the PeopleSoft SAHARA application. 

Review - The process of examining the reconciliation for accuracy and reasonableness. 

Segregation of Duties - The concept of having more than one person required to complete a task. The separation by sharing one single task by more than one individual is an internal control intended to prevent fraud and error.

Verification - The process of examining information contained in an account, report or system to ensure it is accurate and complete.

5.8 Applications Used for Reconciliations 

The Ãå±±ÂÖ¼é will utilize the SAHARA application within PeopleSoft as the official reconciliation tool for cost centers and capital projects.  The official reconciliation tool for sponsored projects is the PIC application. 

Additional information concerning the SAHARA application and help with account reconciliation may be found on the PeopleSoft website.  For training or assistance using the PIC tool, email cgsc@utep.edu.