Expenditure Review

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Expenditure

Review

Online Training for Georgia State University

Georgia State University --- Expenditure Review -- Online Training 1

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About this Online Training…

1. You may progress through the presentation by using the mouse to click on the NEXT button.

2. All Definitions , Forms and Spectrum Report

Instructions may be obtained from Web site http://www.gsu.edu/spectrum/ .

3. To EXIT the training at any time, press ESC.

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About this Online Training…

Throughout this online training are links to written documents that may be shown as either:

BACK an icon or a hyperlink

Expenditure

Document

Click here to view Document

NOTE: EXITING the secondary document will return you to this training


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Introduction

And

Overview


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Introduction

What is an Expenditure Review?

Expenditure Review is…… a review conducted after the close of the month to ensure that expenditures were authorized and posted.

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Georgia State University --- Expenditure Review -- Online Training

Introduction

Why do an Expenditure Review?

Routinely performing an Expenditure Review is part of good Internal Controls.

 IMPORTANT NOTE: 

This training provides GUIDELINES that, if followed, result in satisfactory levels of compliance.

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Vice Presidents and Deans determine what the actual practices will be in their areas and may opt to adopt some or all of what is recommended in this training.

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Introduction


Routinely performing an Expenditure Review is part of Good Accounting Practices.

 IMPORTANT NOTE: 

If you see this symbol, the action is

HIGHLY RECOMMENDED

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Introduction


The Expenditure Review Process was initiated in response to a

Presidential Internal Control Memo addressed to the Vice Presidents and

Deans, dated March 3, 2005

The relevant section is: 1. Review of Expenditures.

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Click here to review the document. “Exit” to return to this training.


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Introduction

Learning Objectives

By completing this training, you will understand…

• the Steps to perform an

Expenditure Review

• Who is responsible for each part of the Expenditure Review

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Introduction

OVERVIEW

There are brief quizzes interspersed between and within the sections

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PART I

– Section 1: Process Overview

– Section 2: Roles and Responsibilities

– Section 3: Job Descriptions

PART II

– Section 4: Navigating the Reports

– Section 5: Expenditure Review Concepts

– Section 6: Expenditure Review – Applied (

How-to

)

– Section 7: Other Spectrum Reports

– Section 8: Resources/ References


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Part 1

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Expenditure Review Process – The

BIG Picture

Overview

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The BIG Picture

Overview of the Expenditure Review Process

Close of Month

Expenditure Review

Performed

Certification of Review

End

Discussed in this section


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Expenditure Review Process – The BIG Picture

Process Overview

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Trigger

At the close of each month, a

GroupWise email is sent to all authorized Spectrum users as a signal to begin the Expenditure Review

Process.

Exception: If you are not on GroupWise, you can find the month end date at http://www.gsu.edu/spectrum/

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Review of Expenditures

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An inspection of expenditure

details

that takes place monthly including…

• personal services

(payroll) expenditures

• non-personal services

(supplies, equipment, travel, etc.) expenditures

• all fund types including sponsored research

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Review of Expenditures

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Ideally, each VP/Dean will determine the

intensity of review performed in their areas.

The intensity may range from:

– an overview with attention given to those items appearing out-of-the-ordinary (recommended) to

– a detailed review of a random sampling of expenditures to

– a detailed review of all expenditures.


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Certification of the review simply means that there is a monitoring

system in place that involves

Reviewers attesting to the fact that the expenditure review was

performed.

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It is recommended that the certification be written.

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Certification documentation may be:

• a standardized form,

• an email or

• other notation as prescribed by your

VP/Dean


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This suggested monitoring system involves reviewers attesting, in writing, that the

Expenditure Review was performed.

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Certification documentation should include:

- Name of person completing the review

- Date review was performed

- Speedtype(s) reviewed

(NOTE: Ensure ALL applicable speedtypes are included.)


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Sample Certification Form

Click here to download this Document.

NOTE: Exit secondary application by clicking on top X to return to this training

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Expenditure Review

Summary

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Units should:

– Certify performance of their Expenditure

Review

– Follow the documentation format/process prescribed by their VP/Dean.

– Retain documentation for 24 months.


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Use Mouse to click on answer buttons.

After answering the questions, you must click on NEXT arrow to continue


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1. The Trigger to begin the Expenditure Review is….

B. The 5

th day of the new calendar month month has been closed

2. What item does not need to be included in the Expenditure Review Certification

Documentation?


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3. Documents should be retained for ….

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4. The units are free to use whatever format is approved by their VP/Dean to certify their review.


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Key People in the

Expenditure Review Process

Roles and Responsibilities

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Key People in the Expenditure Review Process

There are three Roles involved in the

Expenditure Review Process:

1. The Initiator

2. The Approver

3. The Reviewer

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Initiator: prepares a transaction for approval either in Spectrum or hardcopy

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Approver: approves financial transactions in Spectrum or hardcopy.

Approval means being able to affirm the business integrity of the transaction.

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Approver

Under the SPECTRUM system restrictions, the

Approver…

– May NOT initiate and approve the same transaction

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– May NOT allow others to sign Approver's name or use

Approver’s Spectrum password to approve transactions


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Reviewer: reviews financial transactions after they have posted to Spectrum to ensure appropriate use of funds.

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Reviewer: To ensure segregation of duties, a

Reviewer may also serve as Initiator OR

Approver but ONLY one or the other.

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Your Speedtype

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• Roles assignments are based upon speedtype, thus your role can vary with speedtype.

For example: For speedtype 0001,you may be assigned as the

Initiator and at the same time, for speedtype 0004 you may be assigned as the Approver.

• Each speedtype has a single reviewer, but a single reviewer may be responsible for multiple speedtypes.


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Search for your Speedtype

To ensure you are reviewing all speedtypes “ owned ” by your area, click here for directions to access the

Speedtype by Owner Query

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The Speedtype By Owner Query will give you a listing of all speedtypes within a

– College,

– Department,

– Center, or

– Unit.


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Search for your Speedtype

NOTE:

Agency Funds and Technology Funds are not included in the Speedtype by Owner Query.

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To obtain a list of your speedtypes within these funds contact:

– Accounting Services for Agency Funds

– Information Systems and Technology for

Technology Fee Funds


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The Reviewer’s Responsibilities

Performing your reviews on a monthly basis allows you to make corrections in a timely manner.

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WHY should I do a review monthly?

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To “Manage” your budget more effectively.

Consistent and timely reviews will help your area to proactively resolve irregularities and errors .

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Management’s Responsibilities

Keeping track of who’s who

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Use of good accounting practices includes maintaining up-to-date, written departmental documentation listing who performs which role for which speedtype.

A Sample Form follows


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SAMPLE FORM

Expenditure/Payroll Transaction Responsibilities Form

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Download this Recommended Form

NOTE: Exit secondary application by clicking top X to return to this training


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1. The Reviewer may also take on what other role?

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2. Assignment of roles is speedtype specific.


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It

IS

in your Job Description

Faculty and Staff members with budgetary responsibilities are to adhere to these internal control policies.

• Compliance Risk

• Job Description Updates

• Requirements for Persons with Budgetary Authority

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It IS in Your Job Description

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Compliance Risk

The guidelines/ monitoring system presented in this online training were developed to minimize the risk of being in non- compliance.

The risks are real.

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Compliance Risk

• Audits

– To ensure compliance, University Auditing and

Advisory Services periodically performs compliance audits; the results of which are forwarded to the

Board of Regents.

– Also performing compliance checks might be auditors from:

• the State

• the Board of Regents

• the Sponsoring Agencies (including the Federal Government)

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As the Person with

AUTHORITY over a Budget

• It is highly recommended that expenditure review responsibilities are a part of the job

descriptions/ job duties and that expenditure review is a part of annual performance

evaluations of ALL persons who have budgetary responsibility.


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Human Resources &

University Auditing and Advisory Services collaborated to create documents that assist with defining Job Expectations/Job

Duties.

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Following are some helpful hints to use when you link to these documents……


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Job Expectations for ….

Persons with Budgetary Responsibility

(including persons engaged in management of sponsored projects.)

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Click here to view Document.

NOTE: Exit secondary application by clicking on top X to return to this training

Please pay close attention to the sections on:

- Payroll / Personnel Practices: Explicit Job Descriptions

- Payroll / Personnel Practices: Employment Screening


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Job Expectations for…

Employees Engaged in

Management of Sponsored Projects please note……

Ultimate responsibility cannot be delegated; as the

Principal Investigator, you are responsible for all expenditures made from your budget. The best way to accomplish this is hands-on involvement in the management of your expenditures.

.


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1. It is recommended that persons with expenditure review responsibilities, have these responsibilities included in job description/job duties.

2. Which of the following entities may assist in ensuring compliance…

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Part 2

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Navigating the Reports

The Data

The Spectrum System has a consolidated report that displays, in a single table, the data necessary to perform an Expenditure Review.

There are four versions of this consolidated report

• Actuals Drilldown Report

• nVision Actuals Drilldown

• nVision Project Drilldown

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The Data

Data in the Drill Down Reports are derived from the

Actuals Ledger (also called General Ledger).

• Transactions listed have been

approved and posted

.

(does NOT include pending transactions)

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• Is the

OFFICIAL

financial record for the University

52 Georgia State University --- Expenditure Review -- Online Training

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The Data

NOTE: The Drill-down reports DO NOT apply to Agency Funds.

For instructions on obtaining detailed expenditures for an Agency

Fund, see http://www2.gsu.edu/~wwwspc/Reports/SpectrumPlusGeneralLedgerActivityReport-

AgencyAcco.pdf

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Working in the Spectrum

Environment

A link to the full, detailed written instructions for both reports is located in the RESOURCES / REFERENCES section at the end of this training.

If you desire more instructions on the Spectrum System, www.gsu.edu/spectrum or for more extensive assistance please call the Spectrum office.

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The Actuals Drill Down Report

Actuals DrillDown Report include summarized and detailed financial transactions. This report can also be run for Sponsored Projects.

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This report applies to all fund types except

Capital Projects and Agency Funds.


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include financial


The nVision Drilldowns

The nVision Actuals Drilldown & the nVision Project Drilldown summarized and detailed transactions.

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The nVision Actuals Drilldown can only be run using Non-

Project Speedtypes and the nVision Project Drilldown can only be run using Sponsored Project Speedtypes.

NOTE: For Agency Funds, refer to information on Accounting Services Web site

( http://www.gsu.edu/~wwwfas/AccountingServices/AgencyPresentation.pdf

)

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Drilldown Training Guides

• Actuals Drilldown Report http://www2.gsu.edu/~wwwspc/Reports/ActualsDrillDownReport.pdf

• nVision Actuals Drilldown http://www.gsu.edu/images/SpectrumImages/nVisionActualsDrilldownReportTrainingGuide.pdf

• nVision Project Drilldown http://www.gsu.edu/images/SpectrumImages/nVisionProjectDrilldownReportTrainingGuide.pdf

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•

• Example: Actuals DrillDown Report – Summary

Navigation: GSU> GSU Reports> Actuals Drilldown Report

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•

• Example: nVision Actuals Drilldown – Summary

Navigation: GSU> GSU Reports> nVision Actuals Drilldown

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• Example: nVision Project Drilldown – Summary

• Navigation: GSU> GSU Reports> nVision Project Drilldown

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The Actuals Drilldown Report

REMEMBER:

Are used to review detailed financial transactions after approval/posting

Based on Actuals Ledger

Include both summarized and detailed financial information

Provide both monthly and cumulative financial transactions

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1. The Drill Down Reports open in the

“SUMMARY” tab view.

2. To Print the prior month’s detail only, simply click the print icon.


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Okay, just what exactly does an

Expenditure Review entail???

What the Reviewer is Looking For

• Part A: Underlying Concepts

• Part B: “How-to”

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What the Reviewer is Looking For

Part A:

• Underlying Concepts

• Definitions

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In General, What Should a Reviewer Look for?

Purpose

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• Do charges pertain to the purpose of the department or of the sponsored project?


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Accuracy

Are the charges familiar?

Do they appear to be accurate as to :

- Payee

- Amount

- Account

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Completeness

• Do all payroll expenses for active employees and non-personal services transactions appear to be charged?

• Do any omissions stand out?

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Summary of the Underlying Concepts of Expenditure Review

Purpose

Accuracy

Completeness


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1. The Reviewer should review for…

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Volume


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Part B:

“How-To”

• Beginning the Review

• Review Categories

• Red Flags

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YOUR FIRST STEPS IN THE PROCESS

1. What you need to have physically in front of you:

• On Screen

– The Drill Down report for the month under review

• On Paper

– Your tickler file of significant or unusual expenditures

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Expenditures

Two (2) main categories

– Personal Services

• Salaries (i.e., payroll)

– Non-Personal Services

• P-Card transactions, Equipment, Phone

Charges, Postage fees, Petty Cash,Travel, and

Consultants’ fees

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When Reviewing Personal Services, verify:

• All active employees are paid

• Only active employees are paid

• Terminated employees are not being paid

• Are the salary amounts reasonable?

• Are funding sources based on effort?

• Any new hires? Any terminations?

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Got QUESTIONS:

Refer to payroll action forms and timesheets. If you do not have the documentation you need, these items are obtainable from the Payroll Office

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When Reviewing verify:

Non-Personal Services

1. P-Card charges

Ensure that entries are consistent with your department’s P -Card Log activities

On-line P-Card Training is available at http://www2.gsu.edu/~wwwpch/fordepartments.htm

or http://www.gsu.edu/finance/44871.html

Any additional questions regarding P-card activities should be addressed to Business Services


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When Reviewing Non-Personal Services verify:

2. Equipment charges

• Ensure that purchases are for authorized business purposes and for your department.

• All questions regarding equipment purchases should be referred to Business Services (Purchasing

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Department).

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3. Phone charges

• Refer to and cross-reference the Phone Bills sent to your department.

• Verify that long distance calls are for business purposes .

All questions regarding phone charges should be referred to

Telecommunications in IS&T

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4. Postage charges

• Ask: Is the amount reasonable?

• All questions regarding postage charges need to be addressed to the reconciler and/or the individual incurring the postage charges.

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(NOTE: All transactions should be documented with receipts and filed in your Tickler Files)


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5. Petty Cash transactions

• Check transactions for reasonableness.

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6. Travel payments

• Verify the person traveling.

• Ask: What is the business purpose?

• Ask: Is the cost reasonable?

For appropriate forms go to: http://www.gsu.edu/spectrum/38158.html

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7. Payments to Consultants

Make sure that:

• Only active consultants are paid

• The consultant amount is reasonable

• The funding source is appropriate

For appropriate forms go to: http://www2.gsu.edu/~wwwfas/FinancialOperation/consultingcontract_new.html

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NOTE: When reviewing Non-Personal

Services charges, verify that documentation exists that can confirm or dispute all charges.

Also consider maintaining a good Tickler file system for your bookkeeping records.


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1. Expenditures fall into which two categories?

2. Non-Personal Services includes…

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Be on the Lookout for……

Watch out for RED Flags to cut through the RED tape

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RED Flags such as:

• High Dollar Transactions

• New or Unknown Vendors

• Inappropriate Vendors

• Unusual Patterns in Spending

• Changes in Repetitive Transactions


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RED Flags

• High Dollar Transactions

– Charges that are EXTREMELY high

– Charges that are costly that are not your bills

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RED Flags

• New or Unknown Vendors

If you’re not sure, make sure!

- Verify whether the vendor is associated with a service rendered to your department

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RED Flags

• Inappropriate Vendors

– Ask “Is this item something that should be purchased from this vendor?”

(i.e., payments to a restaurant may indicate a food purchase, which is generally not allowed)

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RED Flags

• Changes in Repetitive Transactions

(Unusual changes to usual patterns of charges)

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– Look for obvious changes in transactions that normally are consistent

(i.e. Salaries, Telephone charges, Copier rental fees, etc.)

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1. The following item(s) should be a red flag to

Reviewers…

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2. A Reviewer should always question if an item is an appropriate purchase from that particular vendor.


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Departmental OPTIONS

Options to consider when designing YOUR department’s expenditure review procedures are:

–

Expenditure Volume

–

Materiality

–

Tickler File

–

Optional Review Steps

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What the Reviewer is looking for


Expenditure Volume

What if my department has a high volume of monthly expenditures?

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You may decide to:

– Only review those transactions over a certain dollar amount or

– Take a random sample and review those transactions thoroughly or

– a combination of the above

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What the Reviewer is Looking for

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Materiality

A department can determine at what level expenses are MATERIAL enough to warrant review. Some areas may opt to set a lower dollar limit under which the transaction does not have to be reviewed in detail if it appears to be legitimate.

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Tickler Files

Consider maintaining a tickler file of significant or unusual expenditures . This will consist of all hardcopies of expenditure documentation

(Invoices, Purchase Orders, spreadsheets, etc.)

Refer to this file during the next month’s review.

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It IS in your Job Description


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Optional Review Steps

• You may decide in your area, to add additional review

points to ensure that the expenditures are monitored as effectively as possible. If so, include these steps in your departmental procedures manual and in applicable job descriptions.


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1. Areas that routinely experience a high volume of expenditures VPs/Deans may opt to have their areas do one or more of these.

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2.

To effectively monitor your expenditures, it is good practice to maintain a Tickler File with hardcopies of Invoices, Purchase Orders, etc .


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How to Get Questions Answered and Errors Corrected

Making Corrections

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The Reviewer ensures corrections are made in a timely manner.

– Preferably prior to the close of the month following the error occurrence.


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• Transfers/corrections made to

– Expenditures for personal services

• are done by the Human Resource Officer in each college or VP area

– Expenditures for non-personal services

• are done by journal, usually at the department or college level

For more information regarding corrections done by Journal,

Please contact Accounting Services.

For questions on Interdepartmental Charges or Corrections,

see the Interdepartmental Charges Contact List in the Reference section

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If a questionable expenditure appears to be

Fraud, Waste

or

Abuse

, report it promptly to:

1. Your supervisor or other official within your organization, and/or

2. University Auditing and Advisory

Services

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Resources & References

• Fund Codes

• Helpful Web sites and Links

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• Fund – an entity with a self-balancing set of accounts for recording assets, liabilities, fund balance, and changes in fund balance.

• Fund Code or Type – A budgetary distinction of funding by source/use of funds.

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List of all Fund Codes/Types

Click here to download this Document.

NOTE: Exit secondary application by clicking on top X to return to this training

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Some Helpful Links:

– Websites of some helpful links

– Definitions

– Contact List

(Departments to contact with questions)

– Spectrum Financial Reports –

Preparation Instructions

(consolidated in a single Excel

Spreadsheet; prints in legal size)

Exit secondary applications to return to this training


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Expenditure Review Online Training

Congratulations!

You have learned about:

• Roles and Responsibilities of persons involved in the

Expenditure Review process

• The underlying concepts and “how-to” steps of the

Expenditure Review Process

To EXIT please press ESC .

Expenditure Review - Georgia State University

Expenditure

Review

Introduction

And

Overview

What is an Expenditure Review?

Part 1

Expenditure Review Process – The

BIG Picture

Overview

Trigger

Review of Expenditures

details

Review of Expenditures

Certification of Review

Certification of Review

Certification of Review

Sample Certification Form

Key People in the

Expenditure Review Process

1. The Initiator

2. The Approver

3. The Reviewer

Search for your Speedtype

Search for your Speedtype

It

in your Job Description

Compliance Risk

Compliance Risk

Part 2

approved and posted

OFFICIAL

NOTE: The Drill-down reports DO NOT apply to Agency Funds.

Okay, just what exactly does an

Expenditure Review entail???

What the Reviewer is Looking For

Part A:

Purpose

Accuracy

Completeness

Purpose

Accuracy

Completeness

What the Reviewer is Looking For

Part B:

Expenditures

RED Flags

Expenditure Volume

Materiality

Tickler File

Optional Review Steps

Expenditure Volume

Materiality

Tickler Files

Optional Review Steps

Making Corrections

Making Corrections

Making Corrections

Fraud, Waste

Abuse

Resources & References

Congratulations!

You have learned about:

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