U NIVERSITY OF M IAMI
FINANCIAL POLICIES & PROCEDURES
JOURNAL ENTRIES
B016
Revised 2/03
Reviewed 11/06
PURPOSE
A journal entry is used to record accounting transactions in the accounting system. Journal
entries are used to (1) record original transactions in the accounting system, (2) correct
previous entries recorded in the accounting system, (3) move transactions from one account
to another, or one subobject to another, (4) accrue expenses, (5) defer revenue, (6) fund
accounts via transfers, (7) record budget adjustments, and (8) record encumbrances and
their liquidation.
POLICY
All journal entries must contain adequate documentation, and must be approved by the
department supervisor or designee, and are subject to review by the Controller's office.
The Director of the General Accounting Unit of the Controller’s Office may authorize certain
types of journals to be submitted without supporting documentation. In these cases, the
Controller's Office review is limited to completeness of the entry, proper use of the S/L and
G/L accounts with the corresponding subobjects, and proper approval and review of certain
subobjects by a responsible designated individual or department. The Controller’s Office will
review supporting documentation for such journals on a random basis by performing on-site
reviews. Departments must maintain the supporting documentation for a period of seven (7)
years. A department failing to maintain proper supporting documentation will lose the
privilege of submitting entries without documentation.
The Budget office approves journal entries revising budgets.
PROCEDURE
Journal Entry Form
Journal entries are entered in the accounting system through the use of specific forms coded
by type of transaction as follows:
1. Simple Journal Entry – records and/or adjusts actual amounts in the accounting system
and requires a debit entry and a credit entry in a one-to one relationship.
2. Compound Journal Entry – records and/or adjusts actual amounts in the accounting
system. The number of debit entries do not equal the number of credit entries.
However, the total amount of the debits must equal the total amount of the credits, a one
to many relationship.
3. Miscellaneous Accounting Input – is used to record cash receipts, cash disbursements
or encumbrance adjustments. Cash receipts and cash disbursement require only either
a debit or a credit entry. The accounting system automatically records the other side of
the entry by either debiting cash or crediting cash depending on the transaction. In the
University’s accounting system, this is known as an indirect update. Encumbrances and
encumbrance liquidations/adjustments are one-sided entries that do not affect actual
amounts, but record commitments incurred by the University for faculty and employee
salaries, benefits, and goods and services purchased.
4. Budget Input - adjusts the budget amounts.
5. Bank Transfers - generally used by the Treasurer's office or the Controller's office to
record wire transfers.
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Accounting Transaction Coding
Document reference fields differ from one type of journal to another, i.e., check #, BERF #,
check requisition #, Purchase Order #, etc. Please contact the General Accounting unit of
the Controller’s Office for explanations on how these fields are used or attend a Financial
Record System (FRS) training session. Information on available training sessions and
registrations is available at the Professional Development and Training website:
http://www.miami.edu/UMH/CDA/UMH_Main/1,1770,2421-1,00.html.
Supporting Documentation
All journal entries together with adequate supporting documentation must be submitted and
retained in the Controller's office. The only exceptions are those departments authorized by
the Director of General Accounting to retain the supporting documentation, or those journal
entries that enter the accounting system through a subsystem as specified in Appendix A at
the end of this policy. The journal and its supporting documentation constitute the
University's official record of a transaction and must contain sufficient description or
explanation to adequately describe the transaction to an auditor or other outside party.
Format
Journal entries should be submitted in the proper format, as follows:
1. Use a standard form (size 8-1/2X14) provided by Materials Management or a computer
reproduction.
2. Using an adding machine, add the amounts of the entries and produce a hash total.
Staple the adding machine tape to the right hand side of the original journal. If the form
used is a computer form, ensure that the hash total includes all the rows of the journal
entry.
3. Staple back-up documentation for the entries behind the journal form.
4. Each journal submitted to the Controller's Office must balance (debits equal to credits).
5. Journals must be approved by department heads or other authorized personnel before
forwarding to the Controller's office for input or storage.
6. Journals are to be prepared in BLACK or BLUE ink. Whiteout and erasures should not
be used. When an incorrect entry or amount is entered, it should be crossed out,
initialed and entered in the following line.
7. All journals must be accompanied by a Batch Control Form (see below). Blank copies
can be obtained from the Controller’s web page at http://www.miami.edu/controller
and click on Forms.
Batch Control Form
The batch control form requires the insertion of a unique batch identification number and
data totals to assist in the verification of the data entry function. The batch identification
consists of six alphanumeric characters which identify the individual or the subsystem
originating the transaction. The data totals consist of a batch total count representing the
number of accounting transactions in the batch and a hash total on the dollar amounts from
the accounting transactions.
The originator of the batch is responsible for filling in the batch identification, the batch count
total, a short description of the entry, and the hash total. The Controller's Office is
responsible for completing the data entry portions of the form to identify the data entry
person, the date entered in the accounting system, and time completed, and to verify the
system batch total amount and count to the manual information entered by the originator.
The Medical Finance Office performs a similar verification function as it inputs Medical
School entries.
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APPENDIX A
Subsystems that Send Information Via Online Journal Entries to the Accounting
System
Batch id
Description
Department
ALU
APD
APC
APP
APV
ARS
AW
BCF
BDG
BIL
BIO
COP
CRCDWB
CTX
DEG
DPO
DUP
DUR
ENC008
ENC009
GAO
IT
LD
MU
OCR
OHD
PBD
PBR
POS
PPC
PPM
PPR
PR CBA
PR001
PR002, 003
PR005, 006
PR020
PR030
PUB418
PUR
PWO
PWOB
SPM
UT
Xxx
Alumni
Accounts Payable – charges (debits)
Accounts Payable – credits
Accounts Payable EDI- charges (debits)
Accounts Payable-EDI- credits
Accounts Receivable– Students & Other
Away Tuition – Medical School
Overhead (Indirect Cost) Encumbrances
Budget Roll
Computer Billing
Biomedical Engineering Billing
Copy Center Billing
Credit Card Web
Telecommunications Billing
DEGA–Check Req./Reimbursements
Departmental Purchasing
Duplicating Charges
Gift System Processing
Environmental Serv. Encumbrances
Computer Billing Encumbrances
Bank Transfers
IDX TAX – Medical School
Labor Distribution – Payroll
UMHC
Open Commitment Year End Reversals
Overhead (indirect cost)
Purchase Orders (Commitments)
Encumbrance Correction
Postage
Physical Plant- Gables
Physical Plant – Medical
Physical Plant – RSMAS
Sponsored Cash Basis Clearing
(Pharmaceutical Accounts)
Student Activity Fee
Sponsored Programs Receivable
Endowment - splits funds between
unrestricted and permanent
Monthly recurring Journal Entries (rent,
cost share, med malpractice and bonds)
Monthly recurring Journal Entries - ABLEH
Purchase order requisitions
Purchase Orders (Commitments)
Work Order – Buildings
Work Orders – Buildings Medical
Budgets
Medical Dean’s Tax
IDX Patient Receivables
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Alumni Office
Accounts Payable
Accounts Payable
Accounts Payable
Accounts Payable
Student Account Services
Medical Finance
Controller’s Office-Sponsored Programs
Budget Office
Information Technology
Biomedical Engineering
Copy Center
Information Technology – Joe Abreu
Telecommunication
Disbursements
Purchasing
Duplicating
Development
Facilities Administration
Information Technology
Restricted to Controller’s &
Treasurer’s
Medical Finance
Payroll
UMHC
Controller’s
Controller’s (Sponsored Prog.)
Purchasing
Purchasing
Mail Systems
Facilities
Facilities
Facilities
Controller’s (Sponsored Programs)
General Acctng. (Controller’s)
Controller’s
Restricted to Controller’s &
Treasurer’s
Controller’s
Controller’s
Publications
Purchasing
Facilities & Physical Plant
Facilities
Sponsored Programs
Controller’s
UMMG Administration