Ledger Review Process: Analytical Ledger Review
Welcome to your information center for the UC Davis implementation of the new ledger review process, which includes the Analytical Ledger Review (ALR), Management Ledger Review (MLR), and Quarterly Ledger Review (QLR).
In January of 2013 Internal Audit Services (IAS) issued a report on the previous system used at UC Davis, the General Ledger Review System (GLRS). The review found that the GLRS was not working as management intended and the users regarded the GLRS as burdensome and labor intensive. In response to the findings it was agreed that the IAS Director and the Campus Controller would work together to form a Task Force to review internal controls over financial processing and make recommendations for improving and/or changing existing practices.
The Task Force recommended the following changes which were approved by the Chancellor:
- There should be a separate initiator and approver for every department-initiated transaction except for budget and encumbrance documents
- The system should be configured to force separation of duties
- A new system will be developed to incorporate a more analytical review approach
- By moving to an approach based on analytical review, transaction sampling via the GLRS will no longer be necessary
From the above recommendations, KFS changes were made to ensure that each financial document has a separate initiator and approver (appropriate separation of duties). The Task Force also developed the requirements for the new ledger review reports. This ledger review system became the "official" system effective with the July 2015 ledgers.
What are the reports?
1. The Analytical Ledger Review (ALR) (403) report in FIS Decision Support (DS) is a mandatory monthly review for fiscal officers.
WHO CAN COMPLETE: Fiscal officers are the ONLY ones who can complete the monthly ALR.
Fiscal officers perform an analytical review of general ledger transactions rather than a line by line document review. They review payroll/benefit entries to ensure they are valid and in the proper account. They perform budget to actual comparisons by expense category as well as month to month comparisons of expenditures for campus recharges and other high risk areas. Overdrawn accounts also need to be reviewed monthly.
In order to effectively perform the above functions, the fiscal officer must be knowledgeable of the account and its purpose. They must understand all relevant policies and procedures. In order to maintain proper separation of duties the fiscal officer cannot be the PPS/OPTRS primary preparer or mandatory reviewer on any of the accounts to which they are assigned as a fiscal officer.
2. The Management Ledger Review (MLR) (404) report in FIS Decision Support (DS) must be reviewed monthly by MSOs/CAOs/Managers.
WHO CAN COMPLETE: The MLR is completed by the person listed in the MSO/Manager Name field on the Organization document (in the Organization Management section) for the specific organization.
This report provides a summary level view with the ability to search by various attributes, including organization code and fund. The report indicates whether the ALRs have been reviewed or not. The report also lists accounts in overdraft, identifies high value transactions, and provides a summary of revenues and expenditures.
3. The Dean/VC Quarterly Ledger Review (QLR) (405) report in FIS FIS Decision Support (DS) must be reviewed quarterly by dean/vice chancellor offices.
WHO CAN COMPLETE: The QLR is completed by one of the following persons listed on the Organization document in the Organization Management section:
- Assistant Dean/Associate VC
- Dean/VC Budget Analyst
- BIA Analyst
NOTE: Charts H, M, N, and P do NOT use this ledger review system and continue to follow their existing practices.