- Describes the process for recording and approving general ledger accounting transactions, paying intra-university charges, and adjusting certain transactions within the actuals ledger.
- GL journal entries are submitted and approved in a timely fashion to ensure accurate financial reporting for the University of Georgia.
| Why are these best practices? |
- Provides accurate reporting records of financial transactions for the University of Georgia.
- Ensures financial records adhere to Generally Accepted Accounting Principles (GAAP) and
- Governmental Accounting Standards Board (GASB) reporting guidelines.
- Ensures GL transactions are reviewed for accuracy and completeness in order to make appropriate approval decisions.
- Provides commonly reported issues that result in journal entries being denied and includes appropriate fixes to assist in the initiation and the approval processes and reduces the likelihood they will occur.
- Ensures journals are approved correctly and the approver has reviewed the journals and all supporting documentation.
- All initiators and approvers have the responsibility to ensure:
- Transactions occurred and are official University of Georgia business activities.
- Amounts agree to source documentation and documentation is attached.
- Correct chart fields are used and reflect the fund source/use for the transactions.
- Funds are available for transactions.
- Transactions are reflected in the correct fiscal year.
A. Before Creating or Approving a GL Journal Entry
- Review the One Source Training Library Course, Working with GL Journals if needed.
- Determine why the transaction is needed.It may be helpful to view the One Source Training Library resource Creating and Submitting a GL Journal.
- Ensure the transaction complies with applicable policy and procedures. Does this transaction meet the purpose of UGA’s mission? If charged to a grant, is the transaction allowable?
- Consult the appropriate policy. For example, review the Allowable and Unallowable Expenditure by Fund Source document to ensure transactions are allowable by UGA and/or other fund sources.
- If the transaction is moving revenue, verify the chartstring being debited has funds before creating the journal using a general ledger query such as UGA_GL_LEDGER_BALANCES.
- Is the transaction correcting a previous transaction? If so, identify the source of the original transaction by the Source Code column, and always check the date the transaction occurred. The Transaction Correction Method by Journal Source document offers a complete listing of source codes. The source and the date identify how the transaction can be corrected and in which module.
- Only current year transactions may be moved with a few exceptions. For more information on this topic, see Section B, #2, Moving a Charge section below.
- Understand that timing is VERY critical in the creation and submission of a GL journal. If there is not significant time for the journal to arrive at Central Accounting’s level before the month end close process starts, it is best to wait and create the journal in the following month. For more information on this topic, see Section D, #4, Month-End.
B. Creating a GL Journal Entry
1. Intra-University Charges
- It may be helpful to review the One Source Training Library course: Recording Intra-University Charges before creating the journal entry.
- Include relevant supporting documentation (if applicable) along with the invoice for services provided/goods received.All GL journals require supporting documentation for auditing purposes. Ensure the documentation is able to be opened once it is attached, is easy to read, and is supportive of the entry being made.
- Add a description that clearly states what the journal is for, including the dates of service if applicable. GAAP compliance doesn’t allow for annual services to be pre-paid, so invoices must clearly reflect the dates of service.
- Review the Chart of Accounts Code Structure document to verify the correct Chartfield combinations to use in the journal.
- Add the budget reference.Current year bud reference should always be used unless a special exception has been made (e.g. year-end).
- Always use revenue account code 471100 to record the revenue for the department that provided the good or service, and debit the correct expense account code for the department that received the good or service. A helpful document that shows commonly used account codes is the Account Codes Quick Reference Guide. Ensure the account code being used accurately describes the good being sold or service being provided.
- The Reference field should include the invoice number. This ensures your reference will be included on queries.
- The Journal Line Description should describe the services. For example, “UGAPD SECURITY JUL”, for the unit providing the services (abbreviated), services provided, and the month provided.
- Verify the correct signs have been used for the account codes being debited and credited. A helpful guide to aid in this is the Transactions Signs Quick Reference Guide.
2. Moving a Charge
- Identify the source of the original transaction by the Source Code column, and always check the date the transaction occurred. The source and the date identify how the transaction can be corrected and in which module. It may be necessary to review the Correcting Charges Quick Reference Guide.
- Only current year transactions may be moved with a few exceptions. For example, if the transaction to be adjusted posted to a non-lapsable fund such as Restricted (Funds 2XXXX) or Custodial Funds (6XXXX), then an adjustment to a prior year transaction may occur in the General Ledger.Additionally, corrections to transactions that posted to balance sheet accounts are not limited to the current fiscal year.
- The following instructions are based on adjusting current year transactions only. The Transaction Correction Method by Journal Source document offers a complete listing of source codes.The following are examples of source codes and how they should be corrected.
- Source code “AP” includes transactions that are made through the AP module and are corrected with an AP JV, unless the voucher bud ref is prior year.
- Source code “EX” are transactions that were entered in the Expense module and therefore are corrected with the Expense Report Adjustment Template.
- Source code “PAY” includes transactions that were entered in the Payroll module and/or ONEUSG Connect.Unless the transactions occurred on or before 12/31/2018, these transactions will need to be corrected with an Express Direct Retro Payroll Request. If the transactions occurred from July 2018-December 2018, they can be corrected with a GL journal.
- Source code “ONL” or “PRE” includes transactions that were entered as general ledger journals and therefore would be corrected with a GL journal.
- Include relevant supporting documentation.All GL journals require supporting documentation for auditing purposes. Ensure the documentation is able to be opened once it is attached, is easy to read, and is supportive of the entry being made.
- Some examples of what to include:documentation that shows the entire chartstring for the charges being moved, an invoice for services being provided, queries such as UGA_GL_LEDGER_DETAIL or UGA_GL_LEDGER_BALANCES, drilldown details provided in the cubes.
- Add a description that clearly states what the journal is for. For example, “To correct journal #1000648616 for $137.43 posted 06/27/2019 to move charges off of project #SDOEDRE079112CV”.
- Enter the chartstring for the charges being moved. Ensure the correct chartstring is being debited and credited in the journal. The Transactions Signs Quick Reference Guide can be used to help identify the natural state of accounts.
- Enter the chartstring for where the charges are being moved to. Ensure the correct chartstring is being debited and credited in the journal.
- The Journal Line Description should describe what the journal is for. For example, “TO CORR JRNL #648616 06/27/19”, identifying the correction, the journal ID, and the date of the original journal.
- Add the budget reference. Current year bud reference should always be used unless a special exception has been made (e.g. year-end).
3. Moving Revenue
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If necessary, review the FY20 Carry Forward document and the Account Receivable, Deferred Revenue, and Carry Forward presentation.
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Refer to the Budgeting Revenues and Expenditures – Guidelines by Fund document for information on moving revenues and expenses by fund.
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Verify the chartstring being debited has funds using a general ledger query such as UGA_GL_LEDGER_BALANCES.
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In almost all cases, the revenue account code (for example 471100) should be the same for the debit and credit side of the transaction, unless certain exceptions apply. In the case where a deposit needs to be moved because an incorrect deposit detail code was used, the account code could be different and therefore would be an exception to this rule.
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Include relevant supporting documentation. All GL journals require supporting documentation for auditing purposes. Ensure the documentation is able to be opened once it is attached, is easy to read, and is supportive of the entry being made. It is always best to include supporting documentation from the Actuals ledger (GL) and not the KK ledger (Budget) since revenue balances could be different across ledgers.
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Add a description that clearly states what the journal is for. For example, “To move revenue to correct carryforward deficit on 41010001”.
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Enter the journal lines to include both a debit and a credit. The Transactions Signs Quick Reference Guide can be used to help identify the natural state of accounts.
C. Reviewing and Approving a GL Journal Entry
D. GL Journal Entry Common Issues & Troubleshooting
1. Food/Beverage Purchases
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Always be sure to check the Food and Business Related Entertainment policy to be sure the food purchase meets UGA guidelines.
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The Food Purchase Reference Chart is organized by Activity type, and lists allowable participants, fund types, and purchasing methods. This document also lists supporting documentation requirements for each food/beverage purchase.
- It is very important to ensure the journal entry has the supporting documentation required by the Activity type. Failure to include the correct supporting documentation will result in denial of the journal.
- Ensure the Fund source being used to pay for the food/beverage purchase is allowable by the Activity type.
2. Intra-University
- Review the Recording Intra-University Charges to ensure the journal entry follows these guidelines.
- Ensure the correct account codes are being used in the journal. Intra-university charges ALWAYS require a credit to revenue account 471100 and a debit to an expense (7XXXXX).
- Journals that use the incorrect revenue account for sources of revenue outside of UGA (441000) will be sent back for correction.
- Intra-university journals must have an invoice attached that shows the goods purchased and/or services provided between departments.
- Services cannot be pre-paid according to GAAP guidelines.For this reason, services can only be billed after they have been provided.Annual services are NOT allowed to be pre-paid, but can be billed in quarterly installments.
3. Errors
4. Month-End
| Policy and Other Requirements |
Contributed by Cathy Martin
Last updated 05/17/2021