1. Statutory Authority
The statutory basis and authority for the preaudit procedures in this manual are outlined in Section 16 of the Wisconsin Statutes. The Department of Administration preaudit jurisdiction is provided for under Section 16.51 of the Statutes:
The Department of Administration in the discharge of preauditing functions shall: (6) AUDIT CLAIMS. Examine, determine and audit, according to law, the claims of all persons against the state as provided in s.16.53.
2. UW System Authority
System Administration preaudit jurisdiction is provided for in UW System Administrative Policy 306 – Accounting and Budget Control.
“Preaudit – Each institution is responsible for determining that every expenditure it makes or recommends is in accordance with the Statutes of the State and the policies of the University. Further, an institution approval must provide assurance that funds are available. Thus, a preaudit function must be carried out at each institution.”
Preaudit, which is an integral part of a university’s accounting and fiscal control function, takes place at all levels of administration with a greater or lesser degree of emphasis on the following audit tests at each level:
- Legality and propriety of financial transactions.
- Authenticity of the documents.
- Authorized approvals of financial transactions.
- Review of financial transactions for appropriate accounting code and accuracy.
Under the delegation agreement from the Department of Administration, System Administration is authorized to delegate the preaudit function to any institution which meets criteria as specified by the UW System Office of Financial Administration. Chief Business Officers will ensure that the preaudit function will review the institution’s transactions on a periodic basis to determine compliance with the delegation agreement.
The delegation of the preaudit function to the institution gives the institution the authority to exercise reasonable judgment in processing accounting transactions for situations which are not specifically addressed by State Statutes or UW policies.