Berkeley Integrated Budget and Staffing System
Budget Post Audit Guidelines

On July 1, 2000 the campus will implement a new chart of accounts and add financial and budget ledgers to the Berkeley Financial System. As part of this implementation, the budget transfer of funds will change from a paper signature driven process to an online electronic process with a post audit secondary review. In the new online system, the budget journal process is a one step process where the budget processor can both enter and post journals. Because of this, a post audit secondary review is required.

Currently, the University requires multiple signatures on each budget transfer of funds form. Those signatures typically include:

• the person who prepared the form or the departmental person responsible for managing the funds (typically the Chair, Director, Manager/MSO, Analyst, or Principal Investigator)
• the Control Unit (typically the Dean, Chief Administrative Officer, Budget Director or Analyst)
• the Campus Budget Office.

Campus departments, in conjunction with their Control Units/Deans Offices, are accountable for managing and monitoring their budget activity in accordance with university policy and procedures. The new post audit process recognizes this accountability structure while decreasing budget transfer processing time and minimizing campus workload where possible. Post audit simply means that the secondary review in the department and/or Control Unit will be handled after the transfer has been posted to the ledger. We can implement this new post audit process because the online system budget journals will be posted to the ledger each day. With the new BAIRS reporting system, users will be able to run reports throughout the month to check on any new journals posted to their chart of accounts strings. Because of these new tools, any corrections or adjustments can be made within the accounting period (month) the original journal was posted. Campus departments should be aware that their control units or the Chancellor’s Budget Office, in exercising their own levels of accountability in a post audit environment, have the authority to reverse transactions.

The post audit process has not changed the financial and budgetary accountability structure as stated in the UC Accounting Manual, Delegation of Authority-Signature Authorization located at the following website: http://www.ucop.edu/ucophome/policies/acctman/d-224-17.pdf. All managers should review and be familiar with the full policy as stated in the UC Accounting Manual. Sections of the policy are summarized below:

The Chancellor delegates the accountability for the financial management of UC Berkeley resources to organizational heads of functional units on campus. Each campus unit is accountable for managing its own financial resources. The head of each unit will normally delegate the overall financial management responsibility to the Chief Administrative Officer (CAO), Budget Officer, Management Services Officer etc. Each unit head is responsible for developing a financial and budgetary accountability structure that adheres to the following principles and responsibilities:

1. A person cannot delegate greater accountability than he or she has.
2. Tasks shall only be delegated to people who are qualified to perform them.

A qualified person must:

• be actively involved in the tasks being performed,
• have the appropriate knowledge and technical skills to perform those tasks, including knowledge of relevant regulations and policies, and
• have the authority to carry tasks out without being countermanded.

3. A person delegating tasks is responsible for ensuring that those tasks are being properly performed.
4. A second person shall be assigned to review each financial transaction to ensure that the preparer has properly fulfilled their function.
5. The head of each unit, or the CAO, must periodically:

• review the official record of who is accountable for the various financial functions, and
• ensure that each person assigned tasks that involve financial accountability is performing his or her duties with competency and honesty.

6. Each unit head is responsible for monitoring the effectiveness of the accountability structure. A person who delegates tasks must keep a secure, up-to-date record of those delegations as well as modifications to them. (For post audit budget processing, this can be the job card of the person who has been delegated the authority.)

Responsibility for financial management currently operates at the account/fund level. In the BFS system, responsibility will generally reside at the Org Code/Fund level.

Individuals who have the authority to enter and post budget journals through the online budget system must

• independently affirm that each budget transaction is complete, accurate, necessary, and appropriate,
• record an accurate and thorough explanation of each transaction using the journal header and journal line description fields,
• ensure that the proper chart of account strings are entered,
• understand basic policy, regulatory, and other requirements needed to complete the transaction, and
• promptly resolve all questions that arise during transaction processing, and ensure that erroneous transactions are reversed or corrected in a timely fashion.

Individuals who have the responsibility to do a secondary post audit review of budgetary transactions must

• inspect each transaction to ensure the Budget Processor properly fulfilled his or her responsibilities,
• ensure that each transaction complies with University, Control Unit, Agency, or Departmental policy and procedures,
• ensure that the transaction is complete and the correct chart of account values have been used in the transaction, and
• resolve all questions that arise with a transaction and ensure the transaction is reversed or corrected if the original transaction is done in error.

When the following special conditions exist in the journal, the Budget Office will review it before it is posted. This review will take place if

• the unit is moving money out of program code 40 or 43 in fund 19900 to any other program code,
• the unit is using a fund balance, asset or liability account within the journal,
• the unit is using a plant fund within the journal,
• the unit is requesting an exchange of funds, or
• the unit is posting a journal to the permanent budget ledger.

While this Campus Budget Office review will take place before the journal is posted, campus units are still expected to perform a post audit review of these journals.

Several post audit reports will be made available to facilitate the post audit review process. These reports can be viewed on-line as well as printed. Post audit reports will cover only those transactions that are prepared within the reviewer’s organization. Each post audit report contains a place for a signature or initial to record the review and a comment line to instruct budget processors when corrections need to be made to the posted journal entries. (Reconciliation reports will be provided for both financial and budget ledgers to isolate transactions that have been posted against a department’s chart of accounts strings from other organizations.)

Summary Reports

Summary reports will be made available in the new BAIRS reporting system. Reports can be selected by a number of criteria including a range of processing dates, a master organization tree node, the operator i.d. of the budget processor, the individual organization code or range, and the fund or range.

Journal Detail Report

Users will also be able to print a report for a single journal from either the BFS production system or the BAIRS reporting system.

Control Unit Post Audit Reports

Each control unit has different requirements for reviewing budget transactions depending on their area of responsibility. The Campus Budget Office will be working with the control units to define any additional post audit reports they will need to meet their review requirements.

Departments are required to keep the printed post audit reports on file for audit purposes. In general, the time period required to keep the reports will vary depending on the fund source used in the journal, i.e. state, extramural funds. Retention guidelines will be posted on the web in the near future.

For extramural funds, departments are accountable for conformance with the requirements of the funding agencies as well as University policies. Departments are also the office of record for any post audit review reports that are required to substantiate the transactions they process as requested by the funding agency or as part of an audit process.

Preparation of Cross-Department Budget Transactions

The department that is being debited (charged) must initiate the budget journal. If this is not possible, the department generating the budget journal should have some form of authorization (for instance, email) from the department being debited, including verification of the chart of accounts string to be used. The exception to this rule will be journals initiated by the Campus Budget Office, Accounting Services, or by Control Units/Deans Offices for their own departments.

The most challenging part of implementing any new process is integrating it into the flow of work within a department’s day-to-day administrative procedures. Here are some suggestions to help set up this process.

Who should be assigned the role of the online budget processor?

Those individuals who currently have signature authority for the paper transfers of funds should perform the budget processor role in the new system. In many cases, however, this may not be possible. For example, the current signator may be a Principal Investigator or a Director. If it is not practical to have the current signator perform this role, the authority can be delegated to an administrative support person as outlined in the UC Accounting Manual at the website referenced above.

Who should be the budget post audit reviewer?

The budget reviewer should be the person who has the authority to manage the resources of the unit, contract or grant. As outlined above, post audit reports will be provided to facilitate this review process. The post audit reviewer will not need online access to the BFS production and the BAIRS reporting systems.

When should departments use the summary post audit reports?

Each department must evaluate which post audit reports fit their budget processing and administrative structure. The summary reports provide the journal detail for all budget journals processed within the time span requested by the person who runs the report. Units with a large volume of budget transactions each day or week may find this the most useful report.

When should departments use the post audit journal detail report?

Units that process budget journals only a few times per month or per quarter may find this post audit report most closely fits their needs. Each time a journal is entered into the system, the budget processor can print the individual journal and route it immediately for the approval of the budget reviewer. This could eliminate the need for the post audit reviewer to run reports for him or herself.

How often should the post audit review process take place?

The post audit review process should take place within the month that the budget journal has been posted. This ensures that any corrections will be posted within the same month as the journal in error. How frequently per month this review process takes place will depend on how many journals each unit processed each week or month. Remember post audit reviewers must examine each journal for accuracy, completeness, and compliance to university or agency policy. It may be more difficult to give each individual journal the attention it needs if a single report contains a large number of journals.

Last updated: 04/09/01