Financial Reporting Review

Overview and Purpose

Each campus division has financial reporting responsibilities. Monitoring and evaluation, or verification, of financial data is one of several types of financial reporting control activities identified in the Internal Control – Integrated Framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (see Internal Controls). It is an important internal control that provides assurance that financial transactions and results are complete, accurate and valid. The following are definitions of these three objectives:

  • Completeness - Financial transactions that occur are recorded. For instance, vouchers for goods or services received are posted to the general ledger.
  • Accuracy – Transactions are recorded at the correct amount in the right chartstring and on a timely basis (typically in the period in which the transaction occurred).
  • Validity - Recorded transactions represent economic events that actually occurred and were executed according to prescribed policies and procedures.

In addition, monitoring financial data supports the annual campus financial reporting certification process. As part of the fiscal closing process, the University of California (UC) Office of the President requires that each campus’s central Finance Office obtain written confirmations from deans and other campus senior management regarding their responsibilities for the campus financial information which is incorporated into the annual audited UC financial statements. This is accomplished through the Fiscal Close Certification Letter. The periodic review and verification of key financial reports at a division level provides assurance to the Fiscal Close Certification Letter signers that material financial transactions were recorded properly in the campus general ledger to meet the objectives noted above. It may also help detect exceptions to policies or procedures or instances of fraud.

Monitoring of key reports consists of the following activities: