ÎçÒ¹Ó°Ôº

Scope

This policy clarifies the Financial Sub-Certification responsibility of senior officers at each of the ÎçÒ¹Ó°Ôº campuses and System Administration.

Reason for Policy

In connection with the audit of the ÎçÒ¹Ó°Ôº’s financial statements, senior management at the ÎçÒ¹Ó°Ôº System make certain representations as to the accuracy and completeness of the University’s financial statements and the adequacy of its internal control structure.

Due to the University’s decentralized environment, completion of the Campus Financial Sub-Certification of financial statements by senior officers at each of the ÎçÒ¹Ó°Ôº campuses and System Administration provide senior management reasonable assurance that the overall financial data generated by their organizational units is accurate and complete and that internal controls are operating as intended.

Policy Statement

Senior officers at each of the ÎçÒ¹Ó°Ôº campuses and System Administration must complete the Campus Financial Sub-Certification process at the end of the fiscal year to attest to the sixteen statements listed below regarding the financial activity in their units and to acknowledge their responsibility for establishing underlying internal controls.

At the discretion of the senior officers, additional individuals at each of the campuses and System Administration may be required to complete either the Campus Financial Sub-Certification or the College, School, Division Financial Sub-Certification processes.

The Financial Sub-Certification performed at each campus should use the format below for attesting to the accuracy and completeness of the financial information and structure at their campus.

Campus Financial Sub-Certification
In connection with the audit of the ÎçÒ¹Ó°Ôº’s financial statements as of June 30, 20XX and for the purpose of expressing an opinion as to whether the financial statements present fairly, in all material respects, the financial position of the ÎçÒ¹Ó°Ôº, we confirm, to the best of our knowledge and belief, the following representations.

1. Within the areas for which I am responsible, all transactions, agreements, and amounts have been properly reflected in the University’s accounting records.
2. I acknowledge my role in the University’s responsibility for implementation of university financial policies, the establishment and maintenance of an internal control structure and procedures that assist in preventing and detecting fraud.
3. Within the areas for which I am responsible, there has been no undisclosed:
   
   1. Instances of fraudulent financial reporting or misappropriations of assets involving management or employees who have significant roles in internal control.
   2. Instances of fraudulent financial reporting or misappropriation of assets involving other employees that could adversely affect the University’s financial statements.
4. Pledges receivable have been recorded when the pledges are verifiable, measurable, probable of collection, and all eligibility requirements, if any, have been met.
5. I acknowledge responsibility for determining and maintaining the adequacy of the allowance for doubtful notes, loans, pledges receivable, grants receivable, and accounts receivable in accordance with university policies and procedures, as well as estimates used to determine such amounts.  I believe the allowances are adequate to absorb currently estimated bad debts in the account balances.
6. Provisions have been made to reduce excess or obsolete inventories to their estimated net realizable value.
7. Capital assets, including infrastructure assets, are properly capitalized, reported, and if applicable, depreciated in accordance with the University’s capitalization policy.  
8. Net position components (invested in capital assets, net of related debt; restricted; and unrestricted) and fund balance reserves are properly classified.
9. Within the areas for which I am responsible, all plans or intentions that may materially affect the carrying value or classification of assets, liabilities, or fund balances of which I am aware have been communicated to the campus Accounting Office.
10. Expenses have been appropriately classified in or allocated to functions (PCS) in the statement of revenues, expenses, and changes in net position and allocations have been made on a reasonable basis.
11. Accruals for goods received and services performed for which payment had not been made by year-end have been recorded in the accounting records as of year-end.
12. There are no journal entries made in one fiscal year that have been inappropriately reversed in the subsequent fiscal year which affect the accurate reporting of revenues, expenses, assets or liabilities during the period under audit.
13. Within the areas for which I am responsible, all general ledger asset and liability accounts have been reconciled as of year-end and all reconciling items and unreconciled differences have been properly disclosed to the UM Office of the Controller for evaluation and resolution.
14. Within the areas for which I am responsible, all general ledger revenue and expense accounts fairly represent the results of operations and fluctuation analyses have been performed.  Material variances have been properly disclosed to the UM Office of the Controller for evaluation and resolution.
15. Within the areas for which I am responsible, all violations of contractual agreements and laws and regulations of which I am aware have been communicated to those responsible for investigating and managing such matters.
16. Within the areas for which I am responsible and of which I am aware, the following have been disclosed to the UM Office of the Controller;
    
    1. Related-party transactions and related amounts receivable or payable, including revenues, expenditures, loans, transfers, and leasing arrangements.
    2. Guarantees, whether written or oral, under which the University is contingently liable.

Definitions

Financial Sub-Certification  - an annual process whereby senior officers at each of the ÎçÒ¹Ó°Ôº campuses and System Administration attest that their organization’s financial reports are reliable and that the internal controls in their units are working as intended.

Senior Officers - for the purpose of this policy, those University officials who are required to complete the annual Campus Financial Sub-Certification process.  Refer to the Accountabilities section of this policy for additional details.

The following or comparable positions at the campus and System Administration are required to complete the Campus Financial Sub-Certification process:

• Chancellor
• Vice Chancellor for Administration and Finance, Chief Financial Officer
• Assistant Vice Chancellor of Finance (if applicable)
• Accounting Director

Additional Details

Forms

Related Information

History

Formerly Accounting Policy Manual 2.25.15.3 – Campus Financial Sub-Certification (revised 7/5/2011)

Procedure