Accounting

Policy Statement 3: Journal Entries

1. Requirements
   
   1. Journal entries are to contain a thorough explanation within the body of the journal entry document. Supporting documentation must be attached to the journal entry when practical. If the documentation is too bulky or does not lend itself to be attached, the documentation must be referred to in the explanation of the journal entry document. The documentation must be available upon request for inspection by the East Carolina University Office of the Internal Auditor and the North Carolina Office of the State Auditor.
      
      
   2. All journal entries are to be reviewed and approved by the department head or their 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 sent to Financial Services before the designee approves any journal entries.
      
      
   3. Manual interdepartmental charges must be approved by the department whose funds are being charged (the debit side of the entry).
      
      
   4. Journal entries which charge (debit) state funds and move these funds into non-state accounts are strongly discouraged. 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. If any such entries are absolutely necessary, the expenditure must meet all requirements of the North Carolina State Budget Manual, as well as all other rules pertaining to the use of state funds.

   Please note that 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.
   
   

2. Financial Services Review
   
   Financial Services will review and approve:

1. All journal entries sent to Financial Services for data entry.
   
   
2. A sample of entries processed or keyed in campus departments.
   
   
3. [If feasible] All journal entries which charge (debit) state funds and move these funds into non-state accounts

Financial Services and/or the Office of Internal Audit will contact departments to provide documentation or additional information regarding any questionable journal entries or supporting documentation.