GL Verification Guidelines

General Ledger (GL) verification is a key control of UCSF and is a requirement per Campus Administrative Policies. It is the responsibility of each department to ensure that financial transactions recorded in the general ledger are in accordance with all relevant policies, regulations, and sponsor or donor terms and conditions. This is accomplished through the combination of following campus-wide policies and procedures for financial transactions (preventative controls) and GL verification (a detective control).

For any accounting period, the GL verification process must be completed within 30 days of the month-end close.

Guidelines for Verifiers

The GL Verification Tool systematically identifies transaction lines to be verified. Verifiers should review transactions selected, paying close attention to items that may be may be unusual, erroneous, invalid, inappropriate, high risk or not in accordance with relevant policies, regulations, and/or sponsor or donor terms and conditions.

  • Unusual transactions: transactions that appear to be suspicious, made by an unfamiliar journal preparer, made to unknown or inappropriate vendors, or to vendors with an unusually large volume of transactions, even if the transaction amounts are not individually significant; additionally, look to see if the source of the transaction is familiar.
  • Duplicate or erroneous payments: transactions that involve the same vendor, invoice date, and/or payment amount.
  • Correct Account, Fund, Project, Function and Dept ID: transactions that contain incorrect or inappropriate values in chartfields.
  • Reasonableness. Ensure transactions make sense for the department and are anticipated based on past revenue or expenditure patterns. For example, the purchase of food or beverages on federal contracts is usually prohibited; as a result, finding a transaction involving “Samantha’s Catering Services” recorded against a federal fund should raise suspicions and lead to further investigation to fully determine if that transaction is reasonable and allowable.
  • High-risk transactions. Transactions are deemed to have an inherent higher risk if they fall into one of these categories:
    • Not reviewed / approved before being recorded in the General Ledger
    • Recorded by a department outside of the Dept ID being reconciled
  • Allowable per policy. Greater scrutiny of supporting documentation may be appropriate for some types of transactions with significant policy and/or sponsor or donor sensitivity.

Unallowable Transactions

There are certain expenditures that are not allowable per University policy and are detailed below. Sponsors and donors may have specific external restrictions and different schools within UCSF may have additional internal restrictions.

Expenditures may not be made for the following items from any fund source:

  • Payment of dues for memberships for any non-UC purpose
  • Partisan political purposes or events
  • Consultant agreements with current employees where compensation is through Payroll
  • Repair or maintenance of privately owned automobiles
  • Payment of traffic citations, even if issued to of UC-owned vehicles
  • Use of UC employees, former employees, or near relatives as vendors for goods or services, unless the necessity for use as a sole source can be documented and prior approval has been obtained from Supply Chain Management

Additionally, UCSF policy prohibits expenditures for the following items from any State or Federal funds. (Most such transactions on Federal funds will be tagged for verification in the GLV tool):

  • Meeting, Entertainment and Travel Related Costs
    • Purchase of alcoholic beverages, tobacco products, tickets to athletic, theatrical or entertainment events or amusement activities and any costs associated with such activities
    • Catering of events not directly related to official University business
    • Meeting or conference costs unless the purpose is specifically for dissemination of technical information related to work scope of awards
    • Entertainment costs above allowable rates except when permitted under sponsor policy
    • Valet parking charges over and above normal parking rates
    • Airfare costs in excess of lowest available Coach Class commercial rates
    • Travel expenses in excess of established policies and procedures
    • Travel and subsistence costs of trustees, regardless of the trip's purpose
    • Season tickets to sporting or cultural events
    • Costs associated with personal use of institution-furnished automobiles, including transportation to and from work, regardless of whether the cost is reported as taxable income to the employee
  • Political and Charitable Costs
    • Charitable contributions
    • Value of donated property or services
    • Costs of fund raising campaigns
    • Costs associated with lobbying
  • Gifts to Employees
    • Gifts or flowers including those for bereavement or retirement
    • Gifts of cash, except donations to a charity as an expression of sympathy
    • Gifts to employees or other expenditures not in conformance with UCSF's established policies and procedures or sponsor policy for employee recognition and remuneration
    • Gifts provided to employees in connection with birthdays, weddings, anniversaries, holidays, farewells, graduations and other occasions of a person nature
    • Gift to a University employee who may receive a token gift for volunteer service (e.g. research subject)
    • Negotiable gift certificates and cards
  • Gifts to Non-Employees
    • Gift to a near relative of a University employee
    • Gift to any elected official, candidate for public office, organization, or committee, when the gift is a contribution to a political campaign or referendum
    • Gift to any person with whom a presenter has an outside business relationship (i.e. where any conflict of interest exists)
  • Recruitment and Advertising
    • Advertising expenses except as related to recruitment, procurement of goods and services or as required to meet the work scope of award
    • Personnel recruitment expenses above allowable per diem rates for travel, food and lodging
    • Excessive or other than customary recruitment advertising expenses, salary or benefit offers made during recruitment which do not conform to standard practices and relocation costs for any employee who resigns for reasons in his or her control within twelve months
  • Miscellaneous Activities
    • Public relations costs except as required to meet work scope of the award or as required in keeping the public informed on pertinent matters of concern, e.g., notices of project and or study contract awards, financial matters, etc.
    • Severance pay in excess of standard institutional practices
    • Memberships in recreational, civic, community or social organizations such as country clubs
    • Fund raising activities
    • Fines and penalties
    • Interest expense on deficit balances transferred via a recharge
    • Bad debts and related legal expenses
    • Costs incurred in connection with criminal, civil or administrative proceedings commenced by Federal, State, local or foreign governments
  • Miscellaneous Items
    • Office decorations including plants, ornamental draperies and wall hangings
    • Invitations and greeting cards
    • Goods and services for personal use of employees
    • Housing and personal living expenses

Best Practices for Verifying Transactions

Flagged transactions should be reviewed for the following:

  • Duplicate transactions
  • Unfamiliar or suspicious activity
  • Unusual or incorrect chartstrings

Source Code Specific Guidelines

  • Source code 535 represents financial journals and source code 545 represents cost transfers.
    • Journals initiated outside the reconciling department should be reviewed to ensure they represent appropriate and authorized activity related to the department.
    • Journals initiated by the reconciling department are reviewed and approved at the time they are prepared; therefore, these transaction are lower risk. If activity is unfamiliar, research additional journal entry details by looking up the journal ID in PeopleSoft.
  • Source codes 550 through 556 represent recharge transactions.
    • Recharge expenses: review for reasonableness and if transactions are unfamiliar, verify the goods and services purchased from recharge units have been received against department records.
    • Recharge revenues: review for reasonableness and ensure your department has captured all earned revenue through billing for services performed.
    • If activity is unfamiliar, research additional journal entry details by looking up the journal ID in PeopleSoft.
  • Source code 320 represents cash deposits and source code 323 represents credit card transactions.
    • Journals initiated outside the reconciling department need to be reviewed to ensure they represent appropriate and authorized activity related to the department.
    • If activity is unfamiliar, research additional journal entry details by looking up the journal ID in PeopleSoft and comparing to department deposit records.
    • Deposit records include cash receipt logs, credit card tapes, and other departmental transaction system records.
    • Journals initiated by the reconciling department are reviewed and approved at the time they are prepared; therefore, these transaction are lower risk and it is not necessary to review them again.
    • A10, A30, A40, G70 and G80 are RAS generated journals and should be reviewed for reasonableness, but do not need to be further analyzed.
    • Make note of any errors detected so corrections can be made in a timely manner

GL Verification Guidelines for Sponsored Projects

  • Start with the GL Verification Tool at an appropriate Dept ID level (usually Level 2 or 3) and filter for award, project, and/or Principal Investigator.
  • Perform verification activities for transactions selected for verification by the GL Verification Tool. This includes review of chartstring usage and appropriateness of transactions. You may add comments and upload additional supporting documentation as appropriate.
  • Federal unallowable expense transactions are flagged for verification in the GL Verification Tool.
  • Individuals should evaluate allowable expenses for specific funding sources, and additional verification work may be needed for unique awards such as EU grants. This additional work can be documented in the GL Verification Tool by adding comments to individual transactions, even if they were not flagged for verification.
  • Encourage Verifiers to run either the Project Summary Report or Transaction Detail Report in MyReports and compare with the transactions flagged for verification by GL Verification Tool.
  • If items in error are identified but were not caught by GL Verification tool, share this feedback with the Controller's Office. To the extent that is possible to write an appropriate business rule to capture these errors, we will incorporate them into the GL Verification Tool.
  • Principal Investigators must continue to acknowledge that financial transactions charged to their awards are accurate, timely and reliable, but this does not mean that they have to perform a 100% review of all posted transactions.
    • This process currently varies across UCSF but will be streamlined with the future release of Contract & Grant Accounting's Award Verification Tool.
    • In this interim period, Research Services Analysts should continue to prepare summary signoff packages for their Principal Investigators using the format and process already established within their departments.
  • GL Verification does not replace Award Verification, which is still required.

Correcting Payroll Errors

  • To correct pay rates or one-time payments, submit a ticket using the HR Service Request System.
  • To correct inaccurate chartstrings, use the Payroll Expense Transfer (PET) process, documented here.

Verifying the Monthly Trend Report

The second activity for GL Verification is to review departmental results using the Monthly Report, which is linked to the GL Verification Tool from MyReports. This activity can be performed by a Verifier or Approver who is familiar with departmental transactions. The report displays revenue and expense results for the period, comparing actuals to budget.

Monthly Trend Report Verification Best Practices

Develop a review strategy that includes analyzing the revenues and expense trends for deviations from anticipated results or historical patterns.

  • It is recommended that you further analyze revenue or expense line items when there is a Plan/Forecast Variance of >$10,000 and 10% to ensure the results are accurate and are aligned with expectations.
  • Be mindful of areas where activity significantly fluctuates during the year, such as when a department authorizes more overtime during year-end to process faculty renewals, and note these fluctuations when analyzing the data.
  • Analyze expenditures by category based on a percentage of total expenditures and compare these percentages to historical expenditure percentages.
  • For sponsored awards, review Indirect Cost (Sponsored Project - F&A Recovery) to determine reasonableness.

Guidelines for Approvers

Approvers should indicate their approval for their assigned Dept ID(s) when they are ready to attest that verification activities are complete, identified errors have been corrected, and, to the best of their knowledge, the selected department transactions are accurately recorded.