COMMON AUDIT ISSUES
Reconciling your cash or checking account to your "Authorized Advance Balance"
In our on-going audits of cash advances, we continue to find custodians with checking accounts who reconcile their checkbook register to their monthly bank statements, but do not carry this through to reconciling to their "authorized advance balance." Cash Management requires all account holders to reconcile monthly to the authorized amount of their advance (in addition to reconciling to their bank statement). This ensures the account is maintained at the authorized level and allows the custodian to note any discrepancies in a timely manner.
This straightforward reconciliation process consists of three easy steps:
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After balancing your checkbook register to your monthly bank statement, identify all unreimbursed expenditures to date.
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Add the total unreimbursed expenditures to your current checkbook register balance. This is your Adjusted Advance Balance.
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Now compare your Adjusted Advance Balance to your authorized amount. (Note, if you have a temporary advance, the authorized amount is the unexpended balance – initial amount less any expenditures submitted to Accounting that have been charged off against the project.) These two totals should agree. If these do not equal, you are out of balance. Possible reasons for not balancing are you might have:
- submitted the same item twice for reimbursement/expensing,
- overlooked an item, and did not get reimbursed/expensed at all,
- submitted a reimbursement for an amount different from the check amount,
- been reimbursed for a check that has been cancelled or replaced,
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been assessed service charges. The only bank service charges allowed to an authorized University (US Bank) account are for check printing fees. If you find any other service charges, you should contact Cash Management to have them reversed.
Account Reconciliation Worksheet (in Excel format)
If you have a replenishable or temporary cash advance that does not utilize a checkbook, the same basic rules apply. You simply add your receipts on hand or log of subject payments to your current cash balance, and this should equal your outstanding authorized amount. If these do not equal, you are out of balance (refer to the first three items in step #3).
Reconciliation is critical to the timely identification of any discrepancies or errors that affect your bank or advance balance. If you can not get your advance to balance, contact your Dean's office, Cash Management or Internal Audit.
Business Services News - June 2006