Process Update: Preparing and Submitting Cash Journal Entries

May 24, 2017

The University Controller’s Office has made significant progress in our efforts to reconcile financial statements in preparation for year-end close and the annual audit. Our analysis has revealed, in some cases, a substantial understatement of University revenues due to little or no revenue being recorded. Cash journal transactions must be prepared and submitted for approval by the next business day of the related bank deposit.

Your assistance is needed to ensure that all cash receipts in areas within your organizational control or influence are posted to the general ledger. For cash journals to be posted for the May close, those journals need to be prepared and submitted for approval on or before June 1.  If you have any transaction backlogs being carried forward into June, please ensure that processing is caught up-to-date as soon as possible.

Background

Implementing the new financial system includes adopting a new business process that decentralizes the preparation and submission of cash journal entries directly into the financial management system. Cash journal approvals are performed by the University Controller’s cashiering operations.

To facilitate the new, decentralized business process, approximately 400 people were trained to prepare and submit cash journals in September 2016. However, the new process was not fully operationalized by all departments. In some cases, revenue has not been recorded since September 2016 and, in other cases, some departments began recording cash journals recently, which has resulted in a backlog of transactions.

Cash journal transactions must be prepared and submitted for approval by the next business day of the related bank deposit. This applies to all cash receipts – cash, check, wire, ACH, or credit card transactions. Failure to post these transactions in a timely manner poses significant financial risks to the University’s financial reporting and internal controls systems.

 

Actions being taken by the Controller’s Office

  • We have updated the cash journal job aid.
  • We will host a Webinar to walk through the cash journal process. We encourage you to join the session with other people on your team who may be responsible for preparing and submitting cash journal entries. You will receive a separate email with details for the Webinar, which will be recorded for re-play.
  • We will continue to monitor the financial statements, especially revenue, and contact units to assist with establishing the practice of routinely processing cash journal entries.
  • We may perform on-site training, if necessary.

Action units should take

  • Review your accounts and identify gaps in revenue that may be the result of not processing cash journals or needing to work down a backlog of cash journals.
  • Ensure that all staff who are responsible for processing cash journals are adequately trained.
  • Prepare and submit all currently unrecorded cash transactions using the cash journal process as soon as possible.
  • Since journals submitted are routed to the cashier for approval, please provide cashiering with adequate time for their review and approval process. The May close is currently scheduled for June 8, 2017. Cash journals need to be submitted on or before June 1 to ensure posting for the May close.

If you have questions, please contact the Controller’s Office at uco@finance.rutgers.edu.