Expenditure Statement Reconciliation and Review

Cardinal Curriculum Financial Training Expenditure Statement Reconciliation and Review FIN 160 Cardinal Curriculum Financial Training Course Modules 1. 2. 3. 4. 5. 6. Overview Reconciliation Review Certification Reconciling Items Salaries Cardinal Curriculum Financial Training Module 1: Overview Module 1 Objectives: At the end of this module you will be able to:  Explain the role of reconciliation, review, and certification and why we have internal controls Contrast two types of internal controls and explain the role of reconciliation  Cardinal Curriculum Financial Training Stanford’s Sources of Revenue  Stanford University is a $3.2 billion non-profit organization. The University's revenue includes: • • • • Sponsored Research Student Income Gifts Investment Income Sources of Revenue Cardinal Curriculum Financial Training Reconciling, Review, Certification Cardinal Curriculum Financial Training Reconciling Is an Internal Control  Internal controls are practices that help prevent errors and irregularities from occurring If errors or irregularities do occur, they are detected in a timely manner   Consequences arising from reporting errors are kept to a minimum and are quickly resolved Cardinal Curriculum Financial Training Internal Controls Types  Preventive controls attempt to deter or prevent undesirable events from occurring. They are proactive controls that help to prevent a loss. Examples: • • • • Proper approval and authorization Segregation of duties Adequate documentation Physical control over assets   Detective controls attempt to detect undesirable acts after they have occurred. They provide evidence that a loss has occurred but do not prevent a loss from occurring.  Examples: • • • Reconciliation, Review, Certification Analysis of variance Physical inventory audit Cardinal Curriculum Financial Training Reconciliation  Reconciliation is the process of comparing the entries on reports to those on supporting documents and, if differences exist between them, finding the cause and bringing the two records into agreement. Cardinal Curriculum Financial Training Review  Review is inspection: a formal examination that analyzes reasonability of charges and confirms that they are allowable, beneficial, and represent current level of effort expended on the project. Cardinal Curriculum Financial Training Certification  Certification is an official examination of reconciled statements between the reviewer and the Principal Investigator (PI). The PI's certification assures that all expenses charged to the account are allowable, allocable to the project, and reasonable. The certification also assures that expenditures are for items or services purchased and used during the project period as specified by the award. Cardinal Curriculum Financial Training Reconciling, Review, Certification Cardinal Curriculum Financial Training Why We Must Reconcile  Stanford’s Code of Conduct (AGM 1) states: ―All accounts, financial reports … must be accurate, clear and complete‖  Transaction coding errors affect financial reports and subsequent decisions  University imposes stewardship responsibilities for expenditures Cardinal Curriculum Financial Training Review 1. Why do we have internal controls? 2. Contrast the two types of internal controls. Cardinal Curriculum Financial Training Module 2: Reconciliation Module 2 Objectives: At the end of this module you will be able to:  Read and understand an expenditure report  Reconcile non-salary transactions shown on your expenditure statements Cardinal Curriculum Financial Training Reconciling, Review, Certification Cardinal Curriculum Financial Training Expenditure Detail Report  The Expenditure Detail Report is a financial report which summarizes budgets, expenditures, and balances for an account. The report is available via ReportMart3 on or after the 6th workday of the following month.  Cardinal Curriculum Financial Training Obtaining Your Expenditure Report Administrators can choose to have their Monthly Expenditure Statement (285) printed centrally and mailed to the Task Manager or to print them on their local printer. • When printed centrally, the report will be in either PTD (project-to-date) or FTD (fiscal-to-date) format depending on the type of PTA requested.  • When printed locally, use of the PTD prompt will ensure appropriate results when conducting a search that will return both FTD and PTD types of Awards. Cardinal Curriculum Financial Training Opting Out of Hard Copies  Task Managers or Department Administrators can opt-in or opt-out of receiving hard copies of Expenditure Statements. • Download the template from http://fingate.stanford.edu/staff/finreporting/quicksteps/o pt_hardcopy_mo_exp_statement.html • Follow instructions to complete template and e-mail to: Sponsored: lerwin@stanford.edu Non-sponsored: jeand@stanford.edu Cardinal Curriculum Financial Training Case Study #1  The Expenditure Report • Now let’s take a look at an actual report Cardinal Curriculum Financial Training Detailed Expenditure Report Cardinal Curriculum Financial Training Reconciling, Review, Certification Cardinal Curriculum Financial Training Reconciling Reports  Reconciliation is the process of comparing the entries on reports to those on supporting documents and resolving any discrepancies. Reconciliation should occur regularly, after month end close.  Cardinal Curriculum Financial Training Why Reconciling Is Important  Ensures transactions are valid and accurately recorded Ensures all transactions are recorded Ensures transactions are properly authorized    Ensures transactions are recorded in a timely manner Reconciliation should occur regularly, after month end close  Cardinal Curriculum Financial Training Reconcile vs. Review Where the inspection occurs Cardinal Curriculum Financial Training Basic Reconciling Steps 1. Gather appropriate backup (source) documents and information Verify recorded transactions 2. 3. Verify commitments Correct errors Initial and date reports 4. 5. Cardinal Curriculum Financial Training Step 1 Gather Documents  Expenditure reports  Source Documents, such as • • • • • Purchase orders Invoices Receiving documents Purchase cards receipts Prior month report(s) with corrections / notations  Fund restrictions  Tools & Resources Cardinal Curriculum Financial Training Fund Restrictions  Sponsored Projects • Grant or Contract • REF 216 Award Config Report (quick reference)  Other awards • REF 225 Fund Authorization • Your department’s mechanism for summarizing restrictions Award Type List Values Cardinal Curriculum Financial Training Where to Find Help  Check the Expenditure web site for Report Job Aid • Sample reports have live links for additional information about many fields Expenditure Report Job Aid Cardinal Curriculum Financial Training Resources & Tools  Reference Code Table  Coding tools • Unallowable Costs • List of Unallowable Expenditure Types • Expenditure Type Lookup (Expenditure Codes and Descriptions)  Coding a Transaction Flowchart  Monthly Reconciliation Guidance Monthly Reconciliation Guidance Coding Transaction Flowchart Reference Code Table Cardinal Curriculum Financial Training Step 2 Verify Recorded Transactions  Verify transactions & compare each transaction on the Expenditure Detail Report to source documents as required  Confirm overhead rates (burdening) Investigate questionable transactions   Check to see if all expected transactions are on the report • Review ―pending / commitment file‖ if applicable • Check prior expenditure statements for corrections that should appear on current statement Cardinal Curriculum Financial Training Investigate Questionable Transactions  Review recorded transactions and investigate those that you don't recognize or appear unusual. • Compare transactions to source documents as needed. • Review infrequent transactions. Cardinal Curriculum Financial Training Investigation Questions  Why might an invoice payment not appear on the expenditure report? What does Accounts Payable require in order to pay a vendor?   Why might an iJournal not go through in the same month it was submitted? Cardinal Curriculum Financial Training Investigation Suggestions Problem Incorrect Coding Transaction doesn’t appear Cause Typo or wrong choice Transaction not fully approved Processing time Incorrect PTA Tools / Solutions Create iJournal or Labor Distribution Adjustment Remind approver Check Web Inquiry or IOU EXP_279 Transaction Detail for org or check original transaction, create iJournal Check ReportMart3 status; run reports again ReportSU email distribution list Data timing or report prompts System problem Cardinal Curriculum Financial Training Investigation Suggestions (continued) Problem Travel expense does not show Cause Travel has not been completed or reimbursement request is still in process Tools / Solutions Check using Inquiry or IOU Number appears unreasonable or incorrect Typo or no one told you Check using the relevant applications and Inquiry tool. Create iJournal as needed Report problem to appropriate people Take FIN-0210 Intro to iJournals for further training Cardinal Curriculum Financial Training What Is Burdening?  Certain University infrastructure, administrative, and benefit costs cannot easily be attributed to specific programs or activities.  The University assesses a charge, or burden rate, on certain activities to recover a portion of these costs, which include: • Facilities and Administrative Costs (indirect costs) • Infrastructure • Staff Benefits  Additional information about these burdens and specific rates is available on the Stanford Rates page. Stanford Rates Page Cardinal Curriculum Financial Training Find the Correct Rate  Facilities & Administrative Cost (F&A) for most sponsored projects  Infrastructure Charge (ISC) for most nonsponsored projects Implementing Infrastructure Cardinal Curriculum Financial Training Step 3 Verify Commitments  What are commitments? • They are firm obligations generated in our financial systems • Amount shown is based on certain salary obligations and expenditure transactions in process Cardinal Curriculum Financial Training Hard Commitments (Encumbrances) Are Calculated by the System  Future salary • As entered in PeopleSoft, allocated based upon Labor Distribution Schedule entered in Oracle  Future student-related expenses • As entered in GFS, PeopleSoft Financial Aid or Student Financial modules  Approved Requisitions and Purchase Orders • As entered in Oracle iProcurement  Related burdens • Fringe benefits, indirect costs, etc.  Source code on report for all commitment transactions will start with ―E‖ (for encumbrance) Cardinal Curriculum Financial Training Hard Commitments Will NOT Include: Wage estimates for employees paid hourly (includes bargaining unit)      Additional recurring pay (SUP, HAP, etc.) Credits for future vacations iOU PCard iJournals Feeder journals (inter-departmental charges)   Cardinal Curriculum Financial Training Hard Commitments Section Cardinal Curriculum Financial Training Suppressing Hard Commitments  User has the ability to suppress (remove commitments) by PO line using Web Inquiry Suppressing removes the commitment from expenditure reports only   If an invoice for this PO subsequently comes in, it will be paid Cardinal Curriculum Financial Training Correcting Hard Commitments on Approved Purchase Orders  Launch the Requisition and Purchase Order Query • https://ofweb.stanford.edu  View your purchase order commitments Click the suppress box next to the line(s) of the commitment you want to suppress  IMPORTANT: The suppress action is NOT reversible! Cardinal Curriculum Financial Training Salary Commitment Adjustments  Salary commitments are automatically adjusted when changes are made in Labor Distribution Examples • Terminations • New hires • Percentages of effort  Cardinal Curriculum Financial Training Step 4 Correct Inaccuracies  Once an inaccuracy is discovered, corrective action must be taken as soon as possible. If an expenditure is incorrectly charged, the approver should initiate a correcting journal entry.   The reconciler should verify that the correcting journal entry has posted. Cardinal Curriculum Financial Training How to Correct Inaccuracies (non-salary)  Correct in system where error occurred (e.g., GFS or AP) Use iJournal for corrections of iJournal errors Policy: See AGM 38 Cost Transfers    Checklist for cost transfers Checklist for Cost Transfers Cardinal Curriculum Financial Training Fixing Recurring Transactions  Change coding errors in originating system for recurring transactions For an approved PO http://www.stanford.edu/services/oracle/purchasin g/training.html For capital equipment, contact your Department Property Administrator (DPA)   Cardinal Curriculum Financial Training Transactions Involving Capital Expenditure Codes – Purchase Data  Use PTAE Equipment Change Template • to change expenditure type • to change PTA used for purchase • http://ora.stanford.edu/ora/pmo/dpa_resources/reco nciliation.asp  If caught BEFORE any payments are made, send request to • changemypta@lists.stanford.edu  Procurement Office will change the PO to reflect new PTA data PTAE Equipment Change Template Cardinal Curriculum Financial Training What Do Corrections Look Like? iJournal transactions appear on expenditure reports after approval You don’t have to wait until next month-end to confirm the correction. New data is available throughout the month. Cardinal Curriculum Financial Training Correct Errors as Soon as Identified  Reconcile and review within 2 months of the last day of the month being reviewed Complete expense transfers within 2 months of end of the academic quarter  Although report data is available throughout the month to answer questions, best practice is to wait to reconcile until after month end close. Cardinal Curriculum Financial Training Step 5 Initial, Date, and Retain Reports  Initial and date the reports to document that a reconciliation was performed. Cardinal Curriculum Financial Training An Ounce of Prevention . . .  Don’t hold onto invoices, particularly at year end  Process and approve transactions in a timely manner Cardinal Curriculum Financial Training Case Study #2: Photosynthesis Reconciliation  Turn to case study # 2 in your book. Cardinal Curriculum Financial Training Module 3: Monthly Review of Expenditures Module 3 Objectives: At the end of this module you will be able to:  Explain key elements of the review process Determine what records need to be retained  Cardinal Curriculum Financial Training Terminology Used in Module 3      Accurate Allowable Allocable Reasonable Consistent Cardinal Curriculum Financial Training Reconciling, Review, Certification Cardinal Curriculum Financial Training Reconcile vs. Review Where the inspection occurs Cardinal Curriculum Financial Training What Is Monthly Review?  Review is performed to assure expenditures are • • • • • Accurate Allowable Allocable Reasonable Consistent  Review is a monthly requirement as noted in Administrative Guide Memo 36 Cardinal Curriculum Financial Training Evidence of Review  The review is evidenced by a signature in the review/certification section on the last page of the Expenditure Detail Report • In addition, for sponsored projects the review must be completed within two months of the end of the month of the report • Certification is required for sponsored projects only Cardinal Curriculum Financial Training Why is Monthly Review Important?  Helps ensure transactions are authorized, valid, complete, and properly recorded Provides a second level of internal controls Critically analyzes the reconciliation to prevent any errors from slipping by Conforms with Stanford Administrative Guide Memo 36    Cardinal Curriculum Financial Training Basic Monthly Review Steps 1. Prepare for Monthly Review 2. Consider Cost Principles Review Line Items Sign and Date Reports 3. 4. Cardinal Curriculum Financial Training Step 1 Prepare for Monthly Review  Before you review expenditure reports, gather and review the following information: • Grant or contract award notice or Fund Authorization (non-sponsored) • Prior month(s) expenditure statements • Supplemental reports • The Reference Code Table Cardinal Curriculum Financial Training Where to Find Help  Monthly Review Guidance • Provides steps and reference materials to help guide you through the expenditure review process. These steps can be used for all types of PTAs Choose Show All to see entire list at a glance` Choose Sponsored or Non-Sponsored Monthly Review Guidance Cardinal Curriculum Financial Training Step 2 Consider Cost Principles  Confirm that transactions meet Federal and University standards • Accurate – the amount is correct • Allowable – meets University & Federal definitions, sponsors’ and donors’ restrictions • Allocable – relates to the purpose of the fund • Reasonable – a prudent person would pay this • Consistent – treated like other similar expenses Cardinal Curriculum Financial Training Step 3 Review Line Items  Read the Expenditure Detail Report  Spot check transactions & overhead rates Compare budget-to-actual Compare current-to-prior-period    Follow-up on unexpected results or unusual items Use Monthly Review Guidance checklist to double check your work  Cardinal Curriculum Financial Training Verify All Expected Expenses and Corrections Are on the Report  Review transaction documents to make sure expected transactions appear Check prior expenditure statements for journals or other corrections made that should appear on current statement On prior statement, note when correction went through   Cardinal Curriculum Financial Training Investigate Questionable Transactions  Investigate recorded transactions that you don't recognize or that appear unusual Compare transactions to source documents as needed   Ask questions Cardinal Curriculum Financial Training Investigation Questions  Is expense allowable per the terms of the grant, contract, or gift? Is the amount reasonable under the circumstances?   Are there deviations from budget? If so, why? Cardinal Curriculum Financial Training Resolve Questionable Items  Once questionable items are identified, investigated, and explained, take corrective action as soon as possible If an expenditure is incorrectly charged to a department's accounts, request a correcting journal entry Verify that the correcting journal entry was posted   Cardinal Curriculum Financial Training Step 4 Sign and Date Reports  Sign the Reports Cardinal Curriculum Financial Training Signatures Reconcilers and reviewers are expected to sign and date the last page of the report to show it was reconciled and reviewed. Detailed Expenditure Report Cardinal Curriculum Financial Training Summary  Correct errors as soon as identified  Reconcile and review within 2 months of the last day of the month being reviewed Complete expense transfers within 2 months of end of the academic quarter  Although report data is available throughout the month to answer questions, best practice is to wait to reconcile until after month end close. Cardinal Curriculum Financial Training Case Study #3: Photosynthesis Review  Turn to case study # 3 in your book. Cardinal Curriculum Financial Training Module 4: Certification Module 4 Objectives: At the end of this module you will be able to:  Explain why certification of sponsored projects is critical  Explain the key elements of the certification process Cardinal Curriculum Financial Training Reconciling, Review, Certification Cardinal Curriculum Financial Training Certification  For sponsored projects only  Performed only by the Principle Investigator (PI) – may not be delegated! PI attests (s)he reviewed the expenditure report to ensure charges are reasonably accurate as shown or accounting entries have been initiated to correct any differences   Quarterly certification must be completed within two months of the end of the academic quarter being certified Cardinal Curriculum Financial Training Sign, Date, and Retain Reports  Sign and date the reports to document that a certification was performed. Cardinal Curriculum Financial Training Certification For Sponsored Projects  Quarterly Certification of Charges — The following certification of direct costs is preprinted on expenditure statements for sponsored projects and cost-sharing tasks each month: " TO THE BEST OF MY KNOWLEDGE, SALARY AND WAGES CHARGED TO THIS PROJECT, ARE APPROPRIATE IN RELATION TO WORK PERFORMED ON THIS PROJECT. ALL OTHER COSTS CHARGED TO THIS PROJECT ARE, TO THE BEST OF MY KNOWLEDGE, APPROPRIATE. WHERE REQUIRED, CORRECTIONS HAVE BEEN OR WILL BE MADE THROUGH THE ACCOUNTING SYSTEM. PRINCIPAL INVESTIGATOR’S Signature___________________________Date___" Cardinal Curriculum Financial Training Record Retention Record or PTA When requirements overlap, retain records for the maximum period needed to meet legal and audit requirements. 3 years following the date the Office of Sponsored Research (OSR) has performed closeout (longer if circumstances such as an audit or litigation require it). Direct charges to grants and contracts Accounts included in indirect cost rate 3 years following the final sign-off for that year by the federal government. Contact the Office of Cost and Management Analysis (CMA) to determine “open” indirect cost years. Business Transaction records (not grant or contractrelated) 4 years Employee payroll information Taxable income AGM 34.4 6 years from retirement or termination 4 years following the end of the fiscal year Cardinal Curriculum Financial Training Module 5: Reconciling Items Module 5 Objectives: At the end of this module you will be able to:  Identify transactions that may cause a reconciling item  Explain how to verify transaction details when researching reconciling items Discuss report options for performing reconciling tasks  Cardinal Curriculum Financial Training Module 5 Terms      Reconciling item Advances Expense Expenditure Revenue Cardinal Curriculum Financial Training Reconciling Items  A reconciling item accounts for or explains the difference between transaction back up documentation and the amount shown on the expenditure detail report.  Assure that your reports are always accurate Cardinal Curriculum Financial Training Examples of Reconciling Items        Feeder journal details Praxair issues Adjustments to previous expenses Student aid payments Advances Capital equipment Shipping and sales/use tax Cardinal Curriculum Financial Training Feeder Journal Details  Examples • • • • PSOFT FACOP ITSS BIOST PeopleSoft Student Financials Facility Operation’s FAMIS system ITSS Pinnacle system Biology Stores  Supporting detail for the journal is kept in the feeder system, not in Oracle Financials or ReportMart3 See Reference Code Table for contact information Check FIN_JNL_ 230_Journal_Inquiry report in ReportMart3   Cardinal Curriculum Financial Training Example of Feeder Journals Reference Code Table Cardinal Curriculum Financial Training Praxair Issues  Some Praxair invoices use outdated PTA information To troubleshoot • Use Procurement’s list of invoices by month, beginning May 2004. http://procurement.stanford.edu/delphi/cylinders Open the appropriate spreadsheet. Find your order by selecting Edit > Find. Do NOT print the entire spreadsheet as it is very large.  • • • • Cardinal Curriculum Financial Training Adjustments to a Previous Expense  Appear as a negative amount in a 5xxxx expenditure type Examples • • Correction of an error Refund from a vendor  Cardinal Curriculum Financial Training Student Aid Payments  On non-salary expenditure reports • • • Stipends Fellowships Associated tuition  On salary expenditure reports • • RA / TA / RAF salaries Associated tuition allowance (TAL) Cardinal Curriculum Financial Training Advances  Advances are cash provided for anticipated expenditures to be incurred on behalf of the University Advances do not appear on Expenditure Reports   When an advance is cleared, the amount cleared appears on the Expenditure Report Cardinal Curriculum Financial Training Example of Advances Professor McDonald Cardinal Curriculum Financial Training Capital Equipment  Purchase ≥ $5,000 with a useful life of more than 1 year Fabricated capital equipment with parts costing $5,000 or more assembled into a piece of equipment Appears on expenditure reports in a 53xxx Capital Equipment expenditure type   Cardinal Curriculum Financial Training Shipping and Sales or Use Tax  Shipping charges or sales tax may account for differences between your transaction documentation and the amount on the expenditure report  If expected sales or use tax does not appear on your statement, contact Accounts Payable Cardinal Curriculum Financial Training Proper Coding  iJournals • If reallocating an expenditure to another PTA, use an 5xxxx expenditure code  Deposits using the Cashier’s Office Transmittal Form • • For reductions in expense, use the 5xxxx expenditure series For revenue, use the 46xxx revenue series  Payments from sponsors must go through OSR Gifts from donors must go through Gift Processing (OOD)  Cardinal Curriculum Financial Training Reconciling Items Review What might cause Expenditure Detail report transaction amounts to differ from backup documents for those transactions? How should variances between reports and transactions be documented? 1. 2. Cardinal Curriculum Financial Training Module 6: Reconciling Salaries Module 6 Objectives: At the end of this module you will be able to:    Verify salaries are correctly charged & correct errors Verify correct fringe benefit rates were charged Explain how vacation accruals & vacation taken affect salary reports  Describe how Student Aid, Benefits, and Tuition impact the salary report Identify other compensation types and issues to watch for  Cardinal Curriculum Financial Training Salaries: What to Look For  Employees charged to PTA  Fringe Benefits rates Disability Sick Leave Vacation accrued & taken    Student salaries & related aid Limitations on sponsored projects  Cardinal Curriculum Financial Training Salaries PTAs  Verify salaries are charged to the appropriate PTAs and Expenditure Types Cardinal Curriculum Financial Training Sample Salary Transaction Cardinal Curriculum Financial Training Troubleshooting Salaries Problem Missing salary transaction line Source PeopleSoft payline may have ended or may have been rejected by Labor Distribution PeopleSoft record might not be updated % allocation is wrong Determined by Labor Distribution or Kronos timesheet Information Check with department’s Org Suspense Account custodian To Correct Incorrect salary Contact HRM or dept manager Contact the person in your department who does adjustments Correct in Labor Distribution Incorrect PTA Optional: research with EXP_279_ Transaction_Detail Submit HelpSU ticket Incorrect Expenditure Type Determined by Job Code (JCC) in PeopleSoft Cardinal Curriculum Financial Training Reports for Troubleshooting Salaries LABOR_172_Schedules_Planning does not require salary authority Cardinal Curriculum Financial Training Reports for Troubleshooting Salaries System Report Name FIN Labor 167 Earnings Dist Planning Source Description The Earnings Distribution Planning report provides the same information as the Labor 172 report but includes salary. The Suspense Account Report shows the payroll earnings that posted to an Organization Suspense Account and the reason why the payroll entries hit that account. This report also shows information about Distribution Adjustments performed to clear the Organization Suspense Account for which the report was run. The Labor 247 Report provides summary and detail information regarding Distribution Adjustments including originator, transaction details, comments, and approval lists. This report is also useful to identify the real-time status of a Distribution Adjustment. Salary Authority Required? Yes Oracle Labor Distribution ReportMart3 Oracle Labor Distribution FIN Labor 173 Suspense Account ReportMart3 Yes Oracle Labor Distribution FIN Labor 247 Distrib Adj Detail ReportMart3 Yes Grants Accounting FIN EXP 279 Transaction Detail ReportMart3 The Expenditure Transaction Detail Report shows transaction details by PTA in a given period. Yes Cardinal Curriculum Financial Training Fringe Benefits  Have the correct fringe benefit rates been applied?  Submit HelpSU ticket to correct rate errors: Http://ora.stanford.edu/rates/default.asp Stanford Rates Page Cardinal Curriculum Financial Training Salary Types and Burdening DO NOT calculate the dollar amounts for burdening. Just confirm the correct burden rates using the Stanford Rates web page. Cardinal Curriculum Financial Training Burdening Calculations Salaries / Wages Earned + Vacation Accrual - Vacation Used Net Salaries / Wages Expense Net Salaries / Wages Expense x Fringe Rate Fringe Benefit Charge Net Salaries / Wages Expense x TGP Rate TGP Charge Cardinal Curriculum Financial Training Disability & Sick Leave  Disability payments are not shown on expenditure reports Sick leave paid is included in regular salary charges   Check Kronos to make sure sick and disability leave have been properly account for Ask your Kronos administrator to correct any errors found  Cardinal Curriculum Financial Training Vacation Accruals  Accrual accounting recognizes salaries as they are earned, rather than when they are paid Vacation accrual builds up funds to pay staff on vacation and recognize the cost as the benefit is earned by the employee Web site contains links to policies, forms, examples, etc   http://www.stanford.edu/dept/DoR/Resources/vac.html Cardinal Curriculum Financial Training When Vacation Is Taken Cardinal Curriculum Financial Training Total Compensation Expense Salaries / Wages Earned + Vacation Accrual - Vacation Taken + Fringe Benefit Charges + TGP Charges Total Compensation Cardinal Curriculum Financial Training Vacation Variances  The accrual rate is based on the average length of service for all employees • The actual vacation rate for an employee is usually different  Most people will have a vacation variance due to differences between • the amount earned and amount taken • the average rate used for charging calculations and actual rate for the person Growing variances (accrual > used) could indicate a control problem. Cardinal Curriculum Financial Training Vacation Best Practices  Do you know who is on vacation?  Do you ensure vacation is recorded in Kronos? Do you encourage your employees to take vacation?  Alert responsible people in your unit if you see problems. Cardinal Curriculum Financial Training Key Salary, Stipend Types, and Burdening for Students DO NOT calculate the dollar amounts for burdening. Confirm the correct burden rates using the Stanford Rates web page. Cardinal Curriculum Financial Training Troubleshooting Student Aid and Tuition Problem Cause Tool Check with department’s Org Suspense Account custodian or central Student Financial Services Solution Missing transaction Invalid PTAEO or not within date range Incorrect salary, stipend, or tuition PeopleSoft record might not be updated % allocation is wrong Check with department’s student affairs specialist Varies. See department’s student affairs specialist Incorrect PTAEO Unapplied aid Determined by data in GFS Student registered for fewer units or was charged incorrectly PS8_GFS_Unapplied_Aid report in ReportMart1 Cardinal Curriculum Financial Training Tuition Allowance (TAL) Accrual During the term, accrued as 51960 Beg Term Tuition Allowance Prepaid TAL job aid: https://docushare.stanford.edu/Get/File35626/Tuition_Allowance.doc Cardinal Curriculum Financial Training Tuition Allowance (TAL) Accrual (con’t) At end of term, automatically reclassified as 51975 Tuition Allowance Prepaid Tuition is reversed and balance of 51560 is now $0 TAL job aid: https://docushare.stanford.edu/Get/File35626/Tuition_Allowance.doc Cardinal Curriculum Financial Training Sponsored Project Issues with Salaries  Administrative salaries • Restrictions on charging to Federal sponsored projects and some Non-Federal projects. Must be a major project and explicitly budgeted in the award  NIH salary caps • NIH (National Institute of Health) limits the amount of salary that can be charged for any individual to one of its projects. Amount over salary cap CANNOT be cost shared Cardinal Curriculum Financial Training Other Items Associated with Pay  On Salary reports in Other Compensation section • 51910 Bonus • 51920 Allowable Housing • 51925 Unallowable Housing  On Non-Salary reports in Other section • 52260 Employee Moving Allow • 52265 Employee Moving Unallow For impact on burdening, see http://ora.stanford.edu/rates/infrarev_05.asp Cardinal Curriculum Financial Training Further Your Knowledge With Training  Classes to take • • • • • • • • FIN 210 iJournals FIN 170 Financial Management 1 FIN 180 Financial Management 2 (not yet available) FIN 0510 Labor Schedules FIN 0520 Labor Distribution Adjustments FIN 0110 Paying Students (GFS) FIN 0655 Kronos Time & Leave Policies Cardinal Curriculum Cardinal Curriculum Financial Training Wrap Up  Resources • Webliography • Reference Code Table • Administrative Guide Memos  Course evaluations