Standards
OVERVIEW OF Roles and Responsibilities
This portion of the book is focused on standards that outline proper roles and responsibilities at Indiana University.
A clear delineation of roles and responsibilities ensures that each unit understands their obligations. This prevents mismanagement or misuse of funds. This comprehension fosters a culture of fiscal responsibility, ultimately contributing to the long-term financial stability of IU. Review these standards in full as they are focused on providing an understanding of and requirements for Constituent Reporting Units, and the roles, responsibilities, and processes used to create and maintain the IU Accounting Standards.
UCO-IRR-2.00: Constituent Reporting Unit
Prerequisites
Prior to reading the Constituent Reporting Unit standard, it is beneficial to review the below items to gain foundational information:
- FIN-ACC-1 Role of Fiscal Officer, Account Manager and Account Supervisor
- FIN-ACC-470 Internal Controls
- FIN-ACC-650 Financial Compliance: Authority and Accountability
Preface
This standard defines a Constituent Reporting Unit (CRU) for Indiana University. Information presented below will provide a general understanding of a CRU, required financial reporting requirements, and best practices for CRU organizations.
Introduction
What is a Constituent Reporting Unit?
A Constituent Reporting Unit (CRU) is a defined segment (organization or grouping of organizations) within Indiana University that have revenues, expenses, or net assets over a predetermined threshold as defined in the Office of the University Controller’s (UCO) closing procedures.
These units are held to a defined set of financial compliance standards and submission requirements by UCO. Thresholds and compliance requirements are reviewed annually and defined within the year-end closing procedures. A list of CRUs can be found here. These standards are meant to comply with external financial reporting requirements as well as ensure transparent and accurate internal reporting.
Required Tasks for Constituent Reporting Units
CRUs are required to meet the following interim and annual reporting requirements and to submit detailed financial documentation to UCO:
- Perform closing activities according to UCO Closing Standards and submit requested documentation for review by the required UCO deadline.
- Record all financial transactions timely and in accordance with the IU accounting standards, including the IU IUCO-CLS-1.00 Accrual Accounting Standard.
- Reconcile all accounts and object codes on a recurring basis as referenced and defined in IU Policy FIN-ACC-1 Role of Fiscal Officer, Account Manager and Account Supervisor and the IU UCO-CLS-4.00 Account Reconciliation Standard.
- Confirm compliance with all items on the IU UCO-IRR-1.02 Financial Sub-Certification Standard and Checklist and ensure signature and submission by the required UCO deadline.
CRUs are also required to meet the following requirements on an ongoing basis:
- Ensure internal controls are documented and reviewed in accordance with IU Policy FIN-ACC-470 Internal Controls.
- Adherence to IU policies and accounting standards as it relates to financial compliance activities including payroll, capital assets, tax, gifts, etc.
- Inform UCO in advance of any activity that would have a potential material financial impact including, but not limited to:
- Material, nonroutine transactions as defined in the UCO closing procedures
- Significant contractual arrangements or agreements
- Significant changes to subsidiary financial systems
- Significant reorganizations
- Substantial chart of account changes
- Major external agreements, engagements, or activities
Requirements and Best Practices
Requirements
- CRUs must meet the requirements of this standard.
- CRUs should review new or updated IU financial policies, accounting standards, and UCO closing procedures as released or updated.
Best Practices
- Ensure that internal controls are designed and operating to enforce this standard throughout the CRU organization.
- Communicate changes in accounting practices and requirements to all fiscal staff and organizational leaders.
UCO-IRR-2.01: Standard on Standards
Prerequisites
Prior to reading the standard on Standards at IU, it is beneficial to review the below items to gain foundational information:
- FIN-ACC-1 Role of Fiscal Officer, Account Manager and Account Supervisor
- FIN-ACC-470 Internal Controls
- FIN-ACC-650 Financial Compliance: Authority and Accountability
- IU Accounting Standards
Preface
This standard defines the roles, responsibilities, and processes used to create and maintain the IU Accounting Standards.
Introduction
As part of the delegation of authority for the university external financial audit in IU Policy FIN-ACC-650 Financial Compliance: Authority and Accountability, the Office of the University Controller (UCO) has created the IU Accounting Standards to serve as the authoritative and comprehensive guide for accounting and financial reporting at Indiana University.
The IU Accounting Standards books are organized by groupings of individual standards and incorporates standard operating procedures. The intent is to expand on policies and procedures that should be followed in order to produce accurate and reliable financial information. Each standard provides an educational overview on a specific topic, summarizes the requirements, importance of the topic, and best practices, including information on how to complete certain fiscal procedures.
Importance and Impact of the IU Accounting Standards
Per IU Policy FIN-ACC-650 Financial Compliance: Authority and Accountability, IU Accounting Standards are the authoritative and comprehensive guidance on accounting and financial reporting at Indiana University. Fiscal officers should follow these standards to:
- Ensure compliance with fiscal regulatory requirements.
- Mitigate accounting and financial risks.
- Provide transparent and accurate information for internal and external financial reporting and management decision making.
- Define expectations.
- Create and maintain accountability and consistency.
- Provide guidance.
- Maintain procedural requirements.
- Identify anomalies, errors, and variances in financial activity.
IU Accounting Standards
Process Overview
In order to ensure that Indiana University’s accounting and financial reporting is accurate and complete, we have created a multi-level review and communication process for the development and on-going maintenance of each standard. Please review the Appendix A: Process Overview for Each Type of Update to the IU Accounting Standards document in addition to the below information. The following information defines roles when developing and maintaining a standard and provides an overview of the standard creation and maintenance process. This process may be subject to variation depending on the complexity of the standard and other conditions.
Roles and Responsibilities
ROLE OF THE UNIVERSITY ACCOUNTING AND REPORTING SERVICES (UARS) GROUP
UARS is responsible for:
- Working with the author of the standard prior to the first draft in order to review the overall process, the document outline, and to identify any necessary resources.
- Answering any questions the author has throughout the draft process.
- Reviewing the standard for consistency and formatting.
- Ensuring the standard is written for the general reader in easily consumable language.
- Presenting/reviewing the outline to/with the UCO review committee.
- Developing and maintaining resources that aid the fiscal officer in the implementation and use of the standards (i.e., templates, instructions, and other resources).
- Ensuring that appropriate stakeholders have been notified of the new or revised standard, including communication to all fiscal officers upon completion through the UCO monthly newsletter.
ROLE OF THE AUTHOR OF THE IU ACCOUNTING STANDARD
The author of a given standard will likely be a subject matter expert (SME) within the Office of the University Controller. For standards related to a specific functional area (e.g., non-student accounts receivable, university collections and loan services, capital assets, internal controls, payroll, tax, etc.), the author will be a SME within that function.
The author is responsible for:
- Providing subject matter expertise and regulatory compliance as it applies to the standard.
- Preparing an outline for any new standard.
- Drafting the standard.
- Serving as the primary contact throughout the process and for subsequent revisions.
- Reviewing the standard with their manager, associate director, or director prior to submitting to UARS.
- Reviewing the document at least annually and updating the document as needed.
ROLE OF THE FUNCTIONAL OWNER
The functional owner can be an individual or group. An example of a functional owner may be non-student accounts receivable within the Office of the University Controller.
The functional owner is responsible for:
- Answering any complex compliance or regulatory questions related to the standard.
- Updating standards on a timely basis as required by regulatory and external requirements or when significant changes in internal business processes or systems occur.
- Reviewing and updating each standard they are responsible for at least every other year.
ROLE OF THE COMPLIANCE REVIEWER
A compliance reviewer is the individual or group that is responsible for interpreting the regulatory requirement at the university. For example, Financial Reporting, within the Office of the University Controller, is responsible for interpreting various GASB pronouncements.
The compliance reviewer is responsible for:
- Providing compliance feedback on the standard.
- Communicating any compliance updates related to the standard to the author, and/or, to UARS.
- Confirming annually with functional owners that there are no required compliance updates.
ROLE OF THE UCO REVIEW COMMITEE
The review committee includes the University Controller, Associate Controller, and various assistant controllers within the Office of the University Controller.
The review committee is responsible for:
- Reviewing the outline for any new standard prior to drafting the initial version of the standard.
- Completing the final review of any new standard or an existing standard that has significant contextual changes.
ROLE OF THE CONTROLLER’S WORKING GROUP (CWG)
Representatives from the CWG include the campus controllers and other campus and UA fiscal representatives.
The CWG is responsible for:
- Reviewing the outline for any new standard prior to the initial draft version.
- Completing the final review of any new standard or an existing standard that has significant contextual changes.
- Collecting campus and unit-level feedback prior to the final draft.
- Communicating changes to campus stakeholders.
- Recommending changes and revisions to new and existing standards.
- Serving as the campus/unit-level expert on IU Accounting Standards (Campus Controller).
Requirements and Best Practices
Requirements
- A member or members of each group identified in the roles and responsibilities portion of this standard must fulfill the specified responsibilities for each standard.
- Functional owners are responsible for updating standards timely as required by regulatory and external requirements or when significant changes in internal business processes or systems occur.
- Functional owners must complete a review of each standard they are responsible for at least every other year.
Best Practices
- The functional owner should complete a review of each standard they are responsible for maintaining on an annual basis to ensure there are no regulatory changes, significant business changes, system changes, and that procedural controls are still adequate.