Internal Control Workshop
Reviews and Documentation
Financial Services Division
April 2011
Reviews and Documentation
We are focusing on three key components of reviews for enhancing the internal controls that exist at
the university. The three key components of the review process on which we are focusing are:
• Transaction Reviews
• Supervisory Financial Reviews and
• Process and Procedure Documentation
Why is this Important
Enhancing financial review and documentation is important to the institution for a number of reasons,
including:
• Ensures compliance with strategic directions, policies, procedures, contractual and regulatory
requirements
• Ensures accurate and timely processing of transactions
• Minimize the risk of unrecorded or incorrectly recorded transactions
• Knowledge, understanding and consistent application of process by all responsible personnel
• Accurate financial reports for the university
• Timely and complete information to support management decisions
Transaction Reviews
At the university, reliance is placed on financial administrators to review transactions posted to funds
for which they are responsible. Regular review of the transactions is important to the integrity of the
university’s financial information.
Opportunities for Improvement
Through the internal control self-assessment two areas have been identified where improvements could
be made to the transaction review processes at the university. The two areas identified are:
• Documented month-end transaction review
• Monthly reconciliation of sub-ledgers to UniFi balances
Impact on the University
Ensuring that university units have effective transaction review processes has a number of direct
impacts on the university, including:
• Ensures good information is available for decision making
• Consistent application of strong clearly-defined financial control processes and procedures
Easy to Implement Changes
Rather than trying to apply a long list of review steps, we want to focus on some easy changes that can
be made to enhance university processes. The following are intended to be some enhancements to
existing processes that can be made with minimal effort but significant institutional impact.
Reviews and Documentation
April 2011
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Month-end Transaction Review
Ensure that unit financial records and reports are not significantly misstated. This can be achieved by
reviewing unit transactions throughout the month to ensure that all goods and services sold and
shipped, purchased, received and consumed during the month are accurately recorded in UniFi. Part of
this process includes tracing and agreeing recorded unit transactions to the original source documents
(e.g. sales invoices, purchases orders, receipts, supplier invoices).
Monthly transaction reviews should be completed by a unit employee who was not responsible for the
initial processing or recording of the reviewed transaction entries.
When preparing these reviews, it is important to also document the review. Below are some examples
of how this can be documented:
• The reviewer should sign and date the review of a hard copy report
• The reviewer should log the name of the reviewer, date of review, issues identified and any
follow-up in electronic spreadsheets
Review and reconciliation documents should be retained on file for future examination.
Monthly Reconciliation of Sub-Ledgers to UniFi
Where your unit maintains accounts receivable, inventory or other sub-ledgers, these must be
reconciled to UniFi on a monthly basis. The reconciliation should document any differences between
the sub-ledger and UniFi. Reconciling items should be adjusted through a UniFi journal voucher or entry
to the sub-ledger as appropriate.
Supervisory Financial Reviews
Beyond the detailed transactional review, it is important for a higher level review of financial activities
and reports that compare actual results versus expectations or budgets.
Opportunities for Improvement
Through the internal control self-assessment two areas have been identified where improvements could
be made in supervisory financial reviews. The two areas identified are:
• Completion of a documented monthly budget versus actual review with explanation of
significant variances
• Monthly supervisory review of summary financial activities and reports
Impact on the University
Ensuring that university units have effective supervisory financial review processes has a number of
direct impacts on the university, including:
• Providing leadership in the development and implementation of a strong financial control
environment
• Good decision making by unit managers
• Ensure safeguarding of university assets
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April 2011
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Easy to Implement Changes
Rather than trying to address all of the processes around supervisory financial reviews, we want to focus
on some easy changes that can be made to enhance university processes. The following are intended to
be some enhancements to existing processes that can be made with minimal effort but significant
institutional impact.
Budget versus Actual Financial Review
For unit operating budget funds, review accounts for accuracy and reasonableness by comparison of
year-to-date actual balances to the corresponding annual account budget amounts, and the
comparative prior year actual year-to-date figures. To document this process, the operating budget
fund can be downloaded to excel from FAST. For any significant variances from budget an explanation
should be noted in your excel worksheet.
The department/unit head should complete a documented review and approval of the monthly Budget
vs. Actual Financial Review.
Supervisory Financial Review
College/Department/Unit head should perform sufficient documented review to be satisfied as to the
reasonableness and accuracy of the college/department/unit financial activities and reports.
If the College/Department/Unit does not have an existing supervisory financial review process, the
following are some suggested reports that can assist in this review:
1. Review by College Dean or Unit Director:
a. Budget vs. Actual review and variance analysis (College or Unit Operating Fund Summary)
b. Publisher Report # 4423 - Salaries and Benefits
c. Publisher Report # 4990S - College/Unit Report of Summary Financial Activity by Fund RollUp by Department, or Publisher Report # 4992S - College/Unit Report of Revenue and
Expense by Fund
2. Review by Department Head:
a. Budget vs. Actual review and variance analysis (Department or Unit Operating Fund
Summary)
b. Publisher Report # 4423-Department Salaries and Benefits
c. Publisher Report # 7328-Department Report of Revenues, Expenditures and Fund Balances
by Fund Roll-Up
Process and Procedure Documentation
In addition to financial review, the documentation of processes and procedures improve the control
environment by providing consistency and reference for activities in your unit.
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April 2011
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Opportunities for Improvement
Through the internal control self-assessment it has been determined that there is an opportunity to
improve the documentation of unit-specific business process and procedures that can be readily
available to staff.
Impact on the University
Ensuring that university units have process and procedure documentation has a number of direct
impacts on the university, including:
• Provides information to assist in good decision making by unit managers
• Promotes teamwork and innovation, effective communication and productivity
• Continuity of processes through staff turnover
Easy to Implement Changes for Documentation
The following are intended to be some enhancements to existing processes that can be made with
minimal effort but significant institutional impact. It is not necessary to focus on process improvement
in the documentation process, but rather to document the current processes and procedures. Even if
you plan on changing a process in the future, focus on capturing how it is accomplished currently. It is
also helpful to focus on incremental improvement and to document one financial control
process/procedure at a time. A work plan to complete the documentation of successive unit processes
and procedures can be helpful in guiding the process.
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April 2011
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