Operating activity is current-year revenue and expenses. The fund balance is the beginning period fund balance (object code 3190), plus revenue less expenses. The natural classification for expenses is a debit balance, for revenue it is a credit balance.
Sponsored (fund CG) and Federal Appropriation (fund AP, sub-fund APFEDL) must be monitored at least every other month (but preferably monthly) per the Account Monitoring Requirement section of University Policy 3.20, Cost Transfers on Sponsored Agreements. Other funds (DB, EO, GN, LN, OT, PL, RG, RV) that contain revenue/expense activity should be monitored no less than quarterly. Units may elect to monitor activity more frequently depending on the risk assigned. It is good internal control practice to have evidence that operating accounts have been monitored. It is up to each unit to create guidelines for monitoring operating accounts.
Unlike asset and liability object codes, the operating balance does not require a formal reconciliation (unless subsidiary system data is fed into KFS). Instead, operating activity should be monitored. Adjustments or errors should be corrected as soon as discovered and definitely before the close of the fiscal year.
Monitoring accounts requires a visual or analytic review of the activities on revenue and expense object codes.
To monitor an account, you must understand the purpose of the account, then visually or electronically scan the activity posted for reasonableness. If not reasonable, investigate the transaction to determine the appropriateness of the entry.
At least annually, as a process separate from effort certification, review the charges for your accounts in the labor ledger for reasonableness. For example, are the correct individuals and salary allocations appropriate?
When monitoring an account, ask yourself the following questions:
341 Pine Tree Road, East Hill Plaza
Ithaca, NY 14850
|Accounting:||7:30 a.m. - 4:30 p.m., Monday - Friday|
|Payroll:||7:30 a.m. - 5:00 p.m., Monday - Friday|
|Office of the Bursar:||8:00 a.m. - 4:30 p.m., Monday - Friday|