(1) This Policy and Procedure provides rules and guidance that applies to staff as to when a balance sheet account reconciliation must be prepared, who should prepare it, and who should approve it. (2) Applies to: (3) Balance sheet account reconciliations are a critical control measure to minimise exposure to financial risk and for accurate financial reporting. Regular preparation of balance sheet account reconciliations ensures identification and treatment of unusual, erroneous or unallocated transactions posted to the balance sheet. A well implemented reconciliation process will foster proactive identification of issues that if left un-checked could result in misstatements in financial reports and/or impacts to reported results to Council. (4) The requirement of ‘when’ to prepare balance sheet reconciliations is determined by Corporate Finance in consultation with the Chief Financial Officer according to an assessment of risk. Reconciliations for the month of January are not required to be prepared as January is a non-reporting period. (5) Risk factors to be considered include, but are not limited to, the adequacy of internal controls, the magnitude of the dollar value of the class of transactions, and the probability that misreporting could lead to a significant misstatement of the results of the university, or fraud. The following table sets out assessed risk levels and timeframes for completion of balance sheet account reconciliations: (6) For Critical accounts, it is expected that a reconciliation will be completed in sufficient time to allow processing of journal entries to transfer/reallocate charges to other ledger accounts, capital project ledger accounts etc. prior to the closing of the ledger for the accounting period. (7) The risk level of the following balance sheet accounts is assessed as “Critical”. Even though reconciliation of these accounts is required by the 5th working day after month-end close, the reality is reconciliations for these accounts will need to be ongoing throughout the month to enable normal finance operations, and to receive early-warning of issues requiring follow-up action during the month, e.g. tracing the source of unidentified revenue or chasing down missing grant money. (8) Corporate Finance will maintain a master listing of all balance sheet account reconciliations to be performed, their frequency and required timeframe for completion, based on the assessed level of risk at that time. This master listing will be reviewed and updated monthly (attached). (9) Completed reconciliations are subject to Chief Financial Officer review, which is to occur close of business on the 10th day after month-end. The approval timeline for completed reconciliations is as follows: (10) There must be adequate segregation of duties applied in determining who is responsible for preparing balance sheet account reconciliations. For example, it is not appropriate for an accountant who is a signatory to a bank account to also reconcile the balance sheet bank ledger account. In addition, the “Preparer” and the “Authoriser” cannot be the same person. The master listing of all balance sheet account reconciliations to be performed will note who is the “Preparer”, and who the “Authoriser” is for each reconciliation. (11) This role is to be performed by an accountant and responsibility includes: (12) The role of the “Authoriser” is to perform a timely review and approval of the balance sheet account reconciliations. The role is to be generally performed by supervisor/manager of the “Preparer” and is generally the senior finance officer/manager of the area. Responsibility includes: (13) The role of Corporate Finance includes: (14) The Chief Financial Officer will maintain oversight of the implementation and operation of this Procedure, including undertaking periodic review of individual balance sheet account reconciliations. (15) All reconciliations must be prepared using a template approved by Corporate Finance. (16) All reconciliations must have adequate supporting documentation attached (SAP downloads are not considered adequate back-up). (17) A schedule of prepaid invoices must be maintained at all times, providing adequate detail to confirm the balance of prepayment in the Balance Sheet prepayments ledger account. (18) A printout of open purchase orders and other information (if a purchase order has not been raised) must be provided to confirm the accruals for unprocessed invoices. (19) All reconciliations must as a minimum standard provide the following information: (20) As best practice, where deemed appropriate, it is recommended that: (21) Corporate Finance will undertake random audits of balance sheet reconciliations to check for compliance with this Procedure. (22) For the purpose of this Policy and Procedure:Balance Sheet Reconciliation Policy
Section 1 - Background and Purpose
Section 2 - Scope
Top of PageSection 3 - Policy Statement
Section 4 - Procedures
Part A - ”When” to Prepare Reconciliation
Assessed
Risk LevelReconciliation Required Timeframe
Critical: Monthly
Reconciliation completed monthly before 5th work day after month-end close. “WD+5”
Important: Quarterly
Reconciliation completed quarterly before 5th work day after month-end close. “WD+5”
Static:
6 MonthlyReconciliation completed 6-monthly before 5th work day after month-end close. “WD+5”
Annual Accounts: Yearly
Reconciliation completed yearly before 5th work day after year-end close. “WD+5”
Work Day after Ledger Close
Responsible
WD+5
Preparers to Complete Reconciliations
WD+8
Authorisers to Approve Reconciliations
WD+10 AM
Corporate Finance Completes Review of Reconciliations
WD+10 PM
Management Sign-Off
WD+10
Close of BusinessReconciliation available for CFOO review
Part B - “Who”– Roles and Responsibilities
Role of Preparer
Role of Authoriser
Role of Corporate Finance
Role of Chief Financial Officer
Part C - Templates and Supporting Documentation
Compliance
Section 5 - Definitions
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This is not a current document. It has been repealed and is no longer in force.