Journal Entry Preparation, Documentation and Approval
REG07.35.01 Current Version
History: Placed in University Policy Manual after EXPEDITED REVIEW, transitioned without substantive change from prior version, March 25, 2013.
Additional Resources: East Carolina University Spending Guidelines ECU Basic Spending Guidelines
East Carolina University Journal Entry Guidelines and Procedures Journal Entry Guidelines and Procedures
East Carolina University Banner Account Description Account Descriptions
East Carolina University Banner Fund List by Organization Fund List by ORGN
East Carolina University Interdepartmental/Journal Entry Form Interdepartmental/Journal Entry Form
East Carolina University Receipt Adjustment Form Receipt Adjustment Form
East Carolina University Disbursement Adjustment Form Disbursement Adjustment Form
Contact Information: David Price, CPA, Financial Director (737-1140; firstname.lastname@example.org)
The purpose of this regulation is to outline the requirements and responsibilities for the appropriate preparation, documentation, and approval of journal entries. The PRR applies to all campus departments and to all journal entry formats, types, and modes of processing.
2.1 Only current journal entry forms should be used. Older versions will not be accepted.
2.2 Department personnel making journal entries or approving the entries must be knowledgeable of the ECU Basic Spending Guidelines, Journal Entry Guidelines and Procedures, the ECU Banner Account Description and the ECU Banner Fund List by Organization.
2.3 Department personnel should review their financial ledgers and transactions on at least a monthly basis to ensure the reasonableness and accuracy of the posted transactions. Journal entries are expected to be submitted within 30 days of the month in which the related activity or reason prompting the entry occurred. In the month of June, it is necessary to review transaction activity at least weekly to ensure that inaccuracies are corrected before the year-end cutoff.
2.4 The journal entry must contain a thorough explanation within the body of the journal entry document with sufficient detail for another person to understand and review the transaction. It is the responsibility of the initiating department to maintain documentation and provide it upon request for inspection by the East Carolina University Office of the Internal Auditor and Management and Advisory Services, Financial Services, Health Sciences Financial Accounting Office, Office of Grants and Contracts, and the North Carolina Office of the State Auditor.
2.5 Journal entries must be signed by the preparer, approver, and the person posting the entries. Good segregation of duties must be followed. The person preparing the entry may not approve his or her own entry. All journal entries are to be reviewed and approved by the department head or his or her designee, usually an individual responsible for departmental budgets or accounting. Individuals that are designated journal entry approvers must be appointed in writing. A copy of this appointment must be received by Financial Services before the designee approves any journal entries.
2.6 Manual interdepartmental charges must be approved by the department whose funds are being charged (the debit side of the entry). Pre-approval of automated interdepartmental charges for routine services rendered or cost allocations will not be required for the departments being charged. However, the billing department should notify the departments being charged in a timely manner. Departments charged should review for accuracy and agreement with its records. The customer department should initiate corrective action if the postings are incorrect.
2.7 Journal entries affecting a sponsored project fund (21xxx) may have additional requirements, restrictions and timelines. Contact the Office of Grants and Contracts for specific requirements related to a sponsored project fund.
3.1 Transactions to salary line items may not be made through the journal entry process. Salary reclassifications must go through the payroll redistribution process and cannot be processed on a journal entry form.
3.2 Journal entries which charge (debit) state funds and reclassify them into non-state funds are not allowed without approval from Financial Services or the offices listed in section 4 below with delegated review authority. Such transfers subject the University to additional scrutiny from auditors and the general public. Expenditures that are to be paid for with state funds should be debited from state funds when the transaction is initiated, rather than after the fact.
3.3 The miscellaneous income account should not be used without approval from Financial Services. This approval has not been delegated.
4. Delegation of Review Authority
4.1 Financial Services has delegated the review of journal entries for Health Sciences departments, grants and contracts and Foundations to the Health Sciences Financial Accounting Office, the Office of Grants and Contracts, and the appropriate Foundation, respectively.
4.3 Although Financial Services will not routinely perform an additional review of these entries, Financial Services maintains the right to request supporting documentation from these departments and maintains final approval authority.
5. Financial Services Review
5.1 Financial Services will review and approve:
5.1.1 All journal entries sent to Financial Services for data entry.
5.1.2 A sample of entries processed or keyed in campus departments.
5.1.3 All journal entries which charge (debit) state funds and reclassify them into non-state funds except for those offices with delegated review authority.
5.1.4 All journal entries to the miscellaneous income account.
5.2. Financial Services, the offices with delegated review authority, and/or the Office of Internal Audit and Management Advisory Services will contact departments to provide documentation or additional information regarding any questionable journal entries or supporting documentation.