Ledger maintenance program

The University's General Ledger constitutes the complete set of accounts and the framework for recording all the financial transactions of the University.

It is the prime source and repository of data used to produce a wide range of periodic financial reports, for internal decision-making within ANU, and financial statements for external use - notably the Annual Financial Statements.

Consequently, it is vital that the overall reliability and integrity of the ledger (both the general ledger and all subsidiary ledgers) is assured, and the accuracy of all transactions recorded therein is not in question.

The level of integrity and accuracy required can be achieved only by undertaking an on-going, comprehensive program of ledger maintenance. The ledger maintenance program incorporates detailed reconciliation and review procedures covering all segments of the ledger.

The program itself is subject to review; at present it covers procedures such as:

• undertaking an extensive program of periodic reconciliations;
• review of selected ledger accounts to eliminate misscoding and ensure the proper classification of transactions;
• analysis and reconciliation of reporting codes and transactions (used in preparing the Annual Financial Statements) to trial balances;
• review of transfer accounts to ensure they equal zero;
• review of internal transaction accounts to ensure they equal zero;
• reconciliation of movements in capital accounts;
• analysis of 'Financial' entries in particular parts of the ledger for correct accounting treatment;
• review of income accounts for debit balances and expenditure accounts for credit balances.

These procedures are coordinated and monitored by staff of Finance and Business Services.

Reconciliations

An Account Reconciliation is an accounting statement which, by incorporating all items of variance, explains the difference existing at a particular time between the balances of an account shown by two independent records, normally being the balance per the General Ledger and the balance per some supporting document, such as a bank statement or a subsidiary ledger.

The principal areas of reconciliation work undertaken at present as an integral part of the University's ledger maintenance program include:

• Accounts Payable, Creditors;
• Accounts Receivable/Debtors;
• Advances, Staff and Suppliers;
• Bank Accounts;
• Capital;
• Cash at Bank;
• Investment Accounting;
• Loans;
• Assets - Plant and Equipment Register;
• Assets - Land & Buildings - Property Register;
• Reserves, Transfers;
• Special Purpose Funds;
• Salaries Imprest;
• Stores - Inventory Stock;
• Taxation (FBT, GST, Withholding, BAS)

Primarily, reconciliations are required for all Balance Sheet account balances.  The Balance Sheet accounts are those within the following ranges:

Where budget units have balances in account codes in any of these ranges, they may be requested to provide account reconciliations, particularly at the end of Period 3, Period 6, Period 9 and Period 13 - Year End - being 31/12/xx. Some reconciliations, such as Plant & Equipment - Asset Reconciliations, are prepared centrally, but budget units will retain prime responsibility the management of the reconciliations, action in response to variances and the like.

Reconciliations will also be performed centrally for the transfer and internal sales/purchases account codes on a periodic basis.

On occasion various income and expense codes will also be reconciled, particularly at year end. Budget units may be called upon to explain activity in particular account codes, or changes in activity from year to year.

Reconciliation pro-forma

Reconciliations will normally take a format based on the Reconciliation Form.

When preparing reconciliations, the key factors to note are:

1. Reconciliations should clearly demonstrate what is being reconciled.
2. All reconciling items should be listed and dated, to indicate age of each item.
3. Reconciling items should be cleared in a timely fashion.
4. All reconciliations should nominate who has prepared the reconciliation and who has reviewed the reconciliation and these nominations should be signed off.
5. Where necessary, supporting workpapers or other documentation should be attached.