Revised: June 1973
This paper will identify the basic accounting activities to be performed within the University of Wisconsin System and establish general policies for each accounting activity. Specific practices and procedures for each accounting activity shall be governed by the policies described below. Accounting policies and practices shall be consistent for all funds regardless of source.
The general objectives and constraints under which these policies will be implemented are:
- Financial control must be sufficient to maintain the integrity of the System’s legal, budget, and reporting requirements.
- Accounting operations should be decentralized to the greatest degree possible while maintaining an economical and effective accounting system.
- Central Administration will be the single interface with the State Department of Administration for accounting purposes.
I. Budgets and Allotments – (Exhibit A)
The budget and the allotment establish the authority to receive and expend a given amount of resources. The budget represents an accepted plan to accomplish a set of goals with specified revenues and expenditures. The allotment process is the statutory action granting authority to the Board of Regents for the specific expenditures.
After the budget has been approved by the Legislature and the allotments have been made by the State Department of Administration, the accounting process is initiated. Budget and allotment adjustments, appropriately authorized, allow for shifting of funds.
II. Revenues – (Exhibit B)
Information concerning actual and unrealized income should be maintained and reported monthly for all funds by budgeted revenue categories as defined by the budget. Comparisons of current and periodic revenue projections with budget estimates of revenue are necessary for possible revision of expenditure budgets.
III. Expenditures – (Exhibit C)
To facilitate budget and allotment control of expenditures, an encumbrance accounting system will be utilized. Encumbrances will cover personnel costs as well as supplies and capital.
Financial Reporting for auxiliary enterprises shall be on an accrual accounting basis.
Disbursement of funds will be made after appropriate authorization and pre-audit, including verification that the specified funds are available at the various levels of control.
IV. Reconciliation – (Exhibit D)
The financial records of the University must be reconciled with those of the Bureau of Financial Operations of the Department of Administration. Such reconciliation will be facilitated by the consistent handling by all units of the UW-System of financial transactions.
V. Reporting – (Exhibit E)
Each operating unit shall be responsible for providing required monthly, interim, and annual financial reports to the office of the Vice President and Controller. An annual UW-System report and reports to the Department of Administration will be coordinated by the Vice President and Controller.
I. Budgets and Allotments
Upon determination of the amount of appropriations by the Legislature and the completion of the annual operating budget, Central Administration will prepare allotment requests to the Department of Administration.
Budget control will be exercised by Central Administration at the budgetary levels of: Unit, Appropriation, Function, Sub-Function and Major Class. Any of the following required adjustments to the printed annual operating budget must be reported to the Board of Regents:
- Shifts between function and sub-function categories
- Shifts between major object lines
- Shifts between appropriations
- Shifts between units
- Shifts out of or into any unit level unassigned account
- Increases or decreases in budget totals.
These budget adjustments shall be reported to the Regents through the Vice President and Controller on a monthly basis.
Each unit will be responsible for collecting, depositing and properly distributing all revenues. Receipts will normally be deposited in local banks on a daily basis. All collections must be deposited in the State Treasury within a week (see Wisconsin Statutes 20.906(1)). In order to maximize interest earnings, revenue should be transmitted as soon as possible to the State Treasurer. The appropriate Central Administration personnel should have signature authority on all local banks for transferring funds to the State Treasury. Distribution of the revenue to the proper classification should be made as soon as possible, but no later than two weeks following deposit in the State Treasury.
Each unit should maintain records for each budget revenue classification and have available for submission to Central Administration revenue information at the budget level in the following format:
|Prior Year||Current Year|
|Collected to Date||Total Collections||Budget||Collected to Date||Uncollected Balance|
Expenditures will originate with the respective units and will flow to Central Administration via one or more processing points (centers), the operation of which will be monitored for policy and procedural performance by the office of the System Vice President and Controller, relying on reports, management by exception techniques and selective audits. These centers shall be responsible for the final accounting processing, including the writing of checks, the entering of all required accounting information and the preparation and reconciliation of all external reports. The processing centers shall also be responsible for accumulating and maintaining the required data bank in accordance with Central Administration specifications. As of July 1, 1974, Processing Center #1 (Peterson Building) will provide service only to Extension, Madison and Milwaukee, assuming that the Center System, Green Bay and Parkside will have developed capability to provide their input to Processing Center #2 (WARF Building).
Each of the processing centers will establish a users committee that will become involved in the establishment and review of operating priorities, and the resource requirements and allocations that are associated with the priorities.
All units will utilize a single system-wide accounting code structure. Each unit will be responsible for accumulation of its accounting data in accordance with the coding structure, and may accomplish it with its own facilities or through use of its respective central processing center.
Each unit 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, unit approval must provide assurance that funds are available. Thus, a pre-audit function must be carried out at each unit.
In addition, Central Administration, working with or under a delegation from the Department of Administration, will perform pre-auditing on a sample basis to provide an additional independent verification that the proposed expenditure is proper. The Central Administration pre-audit department shall be the System’s contact point with the Department of Administration.
An encumbrance accounting system will be maintained for all funds. This may be accomplished at the unit level with its own facilities or at a central processing center.
Except for direct charges, each requisition or purchase order will be encumbered before a commitment to a vendor is made. Each personnel appointment will be recognized as an encumbrance for accounting purposes.
Budget control will be maintained, as a minimum, by the respective units at the following levels: Unit, Appropriation, Function, Sub-Function and Major Class.
D. Vendor Payments
Each invoice from a vendor will be pre- audited and forwarded to the appropriate service center for further processing and check writing. Central will forward the checks and required documentation to the Department of Administration for check signing. The checks will be returned to the service center for distribution.
Payments required immediately will be processed through the unit’s local contingent fund and will not be subject to the above procedures.
Each unit will be responsible for reconciling its revenues and expenditures with Central Administration each month.
The primary responsibility for the statutory requirement for reconciliation between the University and the Department of Administration shall rest with Central. However, each unit will be responsible for currently reconciling its records with Central to facilitate the Central-DOA reconciliation.
Each unit will provide financial data on budgets, revenues and expenditures to Central Administration. Auxiliary operations will report on a full accrual basis in accordance with the uniform reporting system already in existence. All other operations will be reported on a modified accrual basis. Reports from units may be required on a monthly, quarterly, semester, annual, or as-needed basis.
Reports will be in accordance with the uniform accounting code and will include the level of detail as required by Department of Administration and/or Central. Monthly revenue and expenditure reports for Central Administration purposes will contain, as a minimum, the following:
|Prior Year||Current Year|
|To Date||Yearly Total||Budget||Actual to Date||Balance|
By Unit, Appropriation, Function, Sub-Function, Major Class
Financial data supplied by the units for the Annual Report will include detailed expenditures using the complete uniform accounting code. Revenues will be detailed by source. In addition to the revenue and expenditure reporting, each unit will be responsible for developing a year-end balance sheet for its respective unit in accordance with College and University Business Administration, and the Audit Guide for Educational Institutions, as published by the American Institute of Certified Public Accountants.