Angela Calderon, Financial Analyst, A. Gary Anderson Graduate School of Management

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1 University of California Larry L. Sautter Award Submission for Innovation in Information Technology Project Name - UCR Ledger Reconciliation & Storage System (LRSS) LRSS allows campus departments to document departmental ledger reconciliation and review in a user-friendly application [and] provides a succinct mechanism to document key departmental controls necessary to ensure the integrity of our financial statements. LRSS increases the transparency and accessibility to this information [and] can result in savings to the department by avoiding printing and physical storage costs. LRSS allows for electronic storage of departmental annotated general ledgers in a safe, secure and easily retrievable environment. LRSS is wonderful! Bobbi McCracken Asst. Vice Chancellor-Financial Services & Controller Alas! A ledger reconciliation process that saves resources! I love the ease of maneuverability and simplicity of the system! Our Certifier likes the fact that the ledgers are all in one place, and in one file, to review and that we don't have to rummage through hundreds of sheets of paper to find information. In my position, as the reconciler, this application has saved me a lot of time! Thanks C&C! Angela Calderon, Financial Analyst, A. Gary Anderson Graduate School of Management

2 Project Institution University of California, Riverside Project Team Chuck Rowley Associate Vice Chancellor, Computing & Communications David Gracey Director, Enterprise Application Development Marla Reyes Technical Lead Vincent Tran Programmer/Analyst Rebecca Dong Programmer/Analyst Amber Jones Enterprise Applications Support Specialist Submitted by: David Gracey Project Abstract UCR's Ledger Reconciliation & Storage System (LRSS) is a tool that electronically records and demonstrates that campus departments and units have appropriately reconciled financial ledgers. The LRSS also facilitates the reconciliation process by permitting departments and units to store reconciled ledgers electronically on secure campus servers. The Ledger Reconciliation & Storage System was developed in response to SAS 112 auditing requirements. The LRSS requires two electronic certifications: the first is provided by a Reconciler, certifying that the ledger has been reconciled; the second is provided by a Certifier, confirming the reconciliation has been appropriately completed. LRSS utilizes the Oracle 10g DBMS. The software was written in Oracle PL/SQL and JavaScript. The system is hosted by Oracle Internet Application Server (ias). Ledgers are generated, annotated, and stored as PDF files within the database. The database provides an audit trail of ledgers reconciled and certified on a month-bymonth basis. The system allows for optional storage of additional file types, and is flexible enough to meet the highly diverse needs of campus departments ranging from Administration, to Athletics, to Entomology. Completely eliminates the need for paper, photocopies, and departmental shadow systems. For more information, please visit the Ledger Reconciliation and Storage System website at:

3 Authentication To gain access to LRSS, a user must enter a valid UCR NetID and password. The program authenticates against the UCR Enterprise Directory housed in LDAP via UCR Central Authentication Services, CAS. The Enterprise Directory is electronically maintained by some 200 departmental administrators distributed throughout campus. Authorization Authorization occurs in a completely on-line, paperless environment. Systems Access Administrators (SAAs) distributed throughout departments/organizations across campus - grant access to UCR s enterprise systems via the Enterprise Access Control System (EACS). After authentication, the LRSS application checks EACS to determine a user s roles and responsibilities within the application. For more information on the Enterprise Access Control System, please visit the following site: User Roles and Responsibilities Two primary roles are available within the system: Reconciler and Certifier. RECONCILER A UCR Financial System (UCRFS) Reconciler analyzes and reviews the completeness and accuracy of recorded financial activity. The Reconciler also ensures that all financial transactions can be supported with source information. The Reconciler, at a minimum, examines recorded financial activity for: CERTIFIER Accuracy of appropriate FAU distribution Completeness of financial activity for the accounting period Compliance of financial activity for the funding sources Appropriateness of financial activity for the department operations Unusual activity, errors, and omissions A UCRFS Certifier ensures that the reconciliation has been appropriately accomplished within the above guidelines. At a minimum, the Certifier is acknowledging that the ledgers (as represented on the Financial Transaction Detail Report transactions) are complete, accurate, and compliant with applicable policies.

RECONCILIATION MATRIX After granting the Reconciler and Certifier roles, the Systems Access Administrator (SAA) must specify which users are responsible for which FAU values by setting up a Ledger

4 RECONCILIATION MATRIX After granting the Reconciler and Certifier roles, the Systems Access Administrator (SAA) must specify which users are responsible for which FAU values by setting up a Ledger Reconciliation Matrix in EACS. The matrix can be setup with the desired level of granularity by selecting Activity, Account, and Fund tree node levels In the example above, the SAA has indicated that responsibility for reconciliation and certification shall be broken down by Department only. The resulting matrix for this accountability structure is shown on the next page

ESCALATION Additional Roles are available within the LRSS, not for using the software application per se, but for receiving email notifications that are sent as part of the escalation system.

5 ESCALATION Additional Roles are available within the LRSS, not for using the software application per se, but for receiving notifications that are sent as part of the escalation system. These roles include: Department Head, Chief Financial / Administrative Officer, and Dean / Vice Chancellor / Organization Head. These system generated escalation notices are meant to identify departments that are experiencing difficulty meeting the ledger reconciliation and certification schedule. The escalation notice schedule is as follows: A ledger has not been reconciled in the required timeframe A ledger has not been certified in the required timeframe A ledger is 7-days past due for certification A ledger is 15-days past due for certification A ledger is 21-days past due for certification A ledger is 30-days past due for certification A ledger is 45-days past due for certification

Process Flow At the end of each accounting period, the ledgers are closed and must be reconciled and certified based upon the responsibilities defined in the ledger reconciliation matrix.

6 Process Flow At the end of each accounting period, the ledgers are closed and must be reconciled and certified based upon the responsibilities defined in the ledger reconciliation matrix. Reconcilers receive an automated notification indicating that the period being closed must now be reviewed. After logging into the system, the Reconciler can see the FAU combinations that are awaiting reconciliation on a month by month basis

7 In this example, the D01263 (Center for Plant Cell Biology) accountability structure has been selected. The following figure shows the UCRFS Reconciler Menu Option which indicates that there are 4 un-reconciled ledgers. The Reconcile Ledgers / Upload New Annotated Ledgers link will lead to the reconciled page where the Reconcilers can upload the annotated reports and reconcile the ledgers.

8 Clicking the View Outstanding Periods button presents a window which shows the list accounting periods in which one or more actions are outstanding. After choosing a period, a listing of FAU combinations awaiting reconciliation is displayed (see screen image on the next page).

The reconciliation process begins by visiting the UCR Financial System Online Reports Page at http://ucrf

9 The reconciliation process begins by visiting the UCR Financial System Online Reports Page at to view and download the pre-run PDF of the Financial Transaction Detail Report in question. The Reconciler then uses Adobe Acrobat 8 Professional to make electronic notes and annotations to the PDF.

10 The image below shows the typical notes and annotations that are included on a typical PDF. When the reconciliation is complete, the annotated PDF is uploaded and the FAU combination is marked as reconciled within the application.

11 Reconcilers are prompted to certify ledger reconciliation actions per the statement below: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ In accordance with the UCRFS Ledger Review Guidelines (UCR Policy and Procedures # ), I attest that the Financial Transaction Detail (FTD) Reports that I am responsible for reconciling are complete and in reportable condition. The financial activity is reasonable for the accounting period. Unusual activity has been researched and adjustments/corrections initiated as appropriate. Errors and omissions have been annotated on the reconciliation and the appropriate adjustments/corrections initiated. Transactions that have been explicitly validated have accurate FAU distributions, are in compliance with requisite funding source, and are appropriate for the department operations. At a minimum the following transaction have been validated against source documents: All transactions over $5,000 All cash collection transaction (e.g. cash, checks, credit cards, etc.) All salary transactions have been verified through a thorough review of the Distribution of Payroll Expense Contract and grant expenditures

12 For transactions that have not been explicitly validated, a reasonableness analysis (e.g. budget to actual comparison, fluctuation analysis by period and fiscal year, sampling) has been conducted to ensure the FTD Reports are in reportable condition. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ With reconciliation now complete, the Certifier corresponding to the FAU in question is immediately alerted via automated notification that the report must be certified. The Certifier accesses the application and is presented with a menu. In the example below, the D01263 (Center for Plant Cell Biology) accountability structure has been selected and 2 reconciled reports are currently awaiting certification. The Certify Ledgers / Upload New Annotated Ledgers link takes the Certifier to the page where the certification occurs (see screen image on the next page)

13 Clicking the View Outstanding Periods button presents a window which shows the list accounting periods in which one or more certifications are outstanding. After choosing a period, a listing of FAU combinations awaiting certification is displayed (see screen image on the next page).

14 LRSS Certifiers ensure the reconciliation has been appropriately accomplished within prescribed guidelines. At a minimum, the Certifier is acknowledging that ledger transactions are complete, accurate, and compliant with applicable policies. Certification of ledgers can be performed one FAU at a time or all at once. Certifiers are permitted to upload their own copy of the annotated report to supersede the copy originally uploaded by the Reconciler. The figure on the next page shows the Certifier s grid after the certification process has been completed.

15 Certifiers are prompted to certify ledger reconciliation actions per the statement below: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ In accordance with UCRFS Ledger Review Guidelines (UCR Policy and Procedures #200-97), I certify that: These Financial Transaction Detail (FTD) Reports have been reconciled in accordance with the minimum standards of validation (i.e. transactions over $5,000, cash, salaries and contracts & grants) and reasonableness analysis; The FTD are complete, accurate and compliant with applicable policies; Financial activity is reasonable for the accounting period Unusual activity, errors and omissions have been annotated and adjustments/corrections initiated; The Reconciler and Certifier is not the same person; and At least annually, the reconciliation process is reviewed based upon the unit's current environment in concert with a risk assessment. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

16 Notifications Automated messages are generated within the LRSS when: The Accounting Office closes the monthly ledgers The Reconciler certifies a ledger has been reconciled A ledger has not been reconciled in the required timeframe A ledger has not been certified in the required timeframe A ledger is 7-days past due for certification A ledger is 15-days past due for certification A ledger is 21-days past due for certification A ledger is 30-days past due for certification A ledger is 45-days past due for certification More information is available at Reports The following reports have been made available within the LRSS: Ledger Reconciliation Status Report Outstanding Matrix Reconciliation Report Past Due Ledger Reconciliation Report Ledger Reconciliation Schedule Report More information is available at

17 Benchmarks and System Metrics Number of UCRFS Reconciler roles established via EACS: 435 Number of UCRFS Certifier roles established via EACS: 326 Number of ledgers reconciled within the LRSS (currently awaiting certification): 225 Number of ledgers reconciled and certified within the LRSS: 1771 Objective Customer Satisfaction Data LRSS is simple, easy to use, and flexible plus it improves financial reporting and compliance! LRSS allows campus departments to document departmental ledger reconciliation and review in a user-friendly application. LRSS provides a succinct mechanism to document to our external auditors a key departmental internal control necessary to ensure the integrity of our financial statements. Before LRSS, in this decentralized environment, it was difficult for campus administration to determine which units were performing their basic fiduciary responsibilities; LRSS increases the transparency and accessibility to this information. LRSS benefits departmental management as well. LRSS combined with PDF annotations can result in savings to the department by avoiding printing and physical storage costs. LRSS allows for electronic storage of departmental annotated general ledgers in a safe, secure and easily retrievable environment. Another terrific feature of LRSS is the reports; departmental management has ledger reconciliation status information at their fingertips. LRSS is wonderful! Bobbi McCracken, Asst. Vice Chancellor-Financial Services & Controller ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Alas! A ledger reconciliation process that saves resources! I love the ease of maneuverability and simplicity of the system! Our Certifier likes the fact that the ledgers are all in one place, and in one file, to review and that we don't have to rummage through hundreds of sheets of paper to find information. In my position, as the reconciler, this application has saved me a lot of time! Thanks C&C! Angela Calderon, Financial Analyst, A. Gary Anderson Graduate School of Management ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I have been using the LRSS Application for over a year now reconciling the ledgers for Botany & Plant Sciences. It is easy to maneuver within the application. No problems uploading the ledgers to the system. Main menu is easy to understand. All the topics under the main menu are very explanatory. You can search past reports. I do not have any negative comments, all positive for the LRSS Application. Jodie Messin, Accounting Assistant, Botany & Plant Sciences

Campus. Impact. project to

Campus. Impact. project to Whoever put PIWRS together should win something. I found it extremely helpful " Campus Impact Thomass A. Miller, Professor of Entomology, College of Natural & Agricultural Sciences The federal government