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Rutgers UniversityFuture state monthly close calendar
May 11, 2015
Agenda
• Rutgers University Finance close objectives
• Key improvement themes identified during the assessment
• Proposed monthly close process
– Governance framework
– High level close cycle
– Stakeholder’s roles and responsibilities
– Materiality thresholds framework
• Next steps
2
Rutgers University Finance close objectives
Business Objectives
Develop a standard monthly close process across Rutgers enabling:
• Consistency in processes and quality of business results
• Ability to leverage technology to improve automation
• Timeliness of month-end close and reporting
• Agility with on-going finance improvement efforts (e.g. HFM, RCM, future ERP rollout)
• Organization structure with right skills and capabilities to support finance and accounting requirements
Key Levers for Improvement
1. Standardize and formalize accounting processes for better integration of Legacy Rutgers and RBHS
2. Define overall governance model to ensure quality and accuracy of financial data
3. Leverage current technology to increase efficiency and data accuracy
4. Establish Finance organization and process model to align with future state reporting structure
3
Rutgers University Financial Statement Close ProcessKey improvement themes identified during the assessment
Standardize and formalize accounting processes for better integration of Legacy Rutgers and RBHS
• Establish process governance & monitoring
• Reinforce control procedure leveraging technology enablers
• Ensure appropriate financial statement quality review
• Set up adjustment reporting materiality threshold and responsibility Financial
Statement Close Process
• Standardize transactional processes across Rutgers organization (accounts payable, payroll, T&E, fixed assets)
• Define a common monthly close calendar with clear cut-off dates
• Standardize month end close activity• Standardize and automate JE’s
• Standardize operating model between both structures to support transactional processes
• Define roles and responsibilities across shared services, Central Accounting and school finance teams
Establish Finance organization and process model to align with future state reporting structure
• Maximize use of current technology capabilities (e.g., close management, account reconciliation, fixed assets modules etc.)
• Automate GL feeding• Automate revenue & cost allocation
model based on RCM defined
Leverage current technology to increase efficiency and data accuracy
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Proposed monthly close processGovernance framework
CONTROLLER’S OFFICE
CENTRAL ACCOUNTING
Decision & Policy
► Establishes and monitors accounting policies and procedures► Review accruals journal entries and compliance with policy ► Consolidates business results and prepare internal and external
reports► Conducts final financial report reviews and variance analysis for
Final RU reports► TBD - Accrual booking process and roles definition in progress
CAMPUSVice Chancellor’s
office, Central and School units
Interpretation & analysis
► Determine and provide accrual information for JE posting► Signs off school level financial results according to policy and
procedures► Perform financial reporting analysis at campus level (variance
Actual vs Budget) ; Monthly budget will be developed across the University
CENTRALIZED DELIVERY
Transaction processing
► Records all transactional entries (Accounts Payable, T&E, Fixed Assets, Accounts Receivable and collection, bank reconciliation, etc.)
► Send query on outstanding items to the business for further investigation and resolution
► Prepare units specific journal entries (e.g. accruals)
Governance model► Define clear common accounting policies across Rutgers
schools/central units (e.g., cut-off procedures, revenue recognition, AP and Payroll accrual calculation, cut-off procedures, escalation path)
► Centralize transactional accounting activities
► Define performance measurement framework
► Embed Central Accounting oversight on close cycle by implementing controls and monitoring process (e.g., Pre-close meetings with accounting team) and centralizing close activities
► Reinforce control and accountability at unit and campus levels regarding monthly financial reports (e.g., Campus Pre-close meetings coordinated by Vice Chancellor’s office, report analysis, sign off)
Decisions & Policy
Interpretation & Analysis
Accounting transactional activities
DRAFT – For discussion purpose only
Work in progress
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Page 6
Gen
era
l accou
nti
ng
Reven
ue
Cost
D-0 & prior D+1 D+2 D+3 D+4 D+5 D+6 D+7 D+8 D+9 D+10 D+11
Unit close activitiesConsolidation,
Units review & Sign off
Reporting
Proposed monthly close process (Cont’d)High level close cycle
AP cut-off
FA capitalization and depreciation
cut-off
Payroll & Fringe accrual
Grants and contracts revenue
Cut-off and accrual process
Student tuition revenue cut-off and accrual process
Financial aid cut-off and accrual process
Loan information
Cut-off
Patient services revenue cut-off and accrual process
Auxiliary revenue cut-off and accrual process
All other revenue cut-off and accrual process
Payroll 1 reallocati
on
Targ
et
Fed. & State Student Aid program
cut-off and accrual process
Bank transfer/investment posting Bank reconciliations
Due to/from accounts reconciliationsIndirect cost
allocation
RBHS consolidated data review
Units reporting final review, variance analysis
at Campus level (Actual vs Budget) & sign-off
Legacy Rutgers consolidated data review
Final Rutgers report
consolidated data review
Final material adjustment postings in HFM
Report published on
RU website
RU report variance analysis
(Actual vs Budget, Act. M vs Act. M-1)
Pub.2
AP accrual
s
Oracle and Banner data uploaded into HFM on daily basis (To Be Confirmed)
(1) Banner Payroll reallocation
(2) RU report will be published a week before Finance Board meeting Timing of activity to be confirmed with Central Accounting
Accrual and provision JE posted into Oracle / Banner GL at Unit levelLegend:
DRAFT – For discussion purpose only
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Close date1
Current State Controller’s Office Campuses
Key activities Central accounting Central and School units
D-0 to
D+5
Determine and provide accrual information (Accrual posting roles between Central Accounting and Units are To Be Determined)
D+6
to
D+8
Review final unit financial report and certification sheet for sign-off, determine necessary top side adjustments (based on materiality thresholds matrix - see page 8),
Review top side adjustments, approve and post top side entries
Review and submit final Campus/Central unit financial statement, variance analysis at campus/central unit level, and Units certification sheet signed off
Validate Campus/Central unit level financial statements
D+9
to
D+11
Review Legacy and RBHS consolidated financial statements
Determine Rutgers consolidated final top side adjustments, approve and post top side entries
Validate and publish Rutgers consolidated financial data
Proposed monthly close process (Cont’d) Stakeholder’s roles and responsibilities
Consolidation & Reporting
Consolidation & Reporting
Consolidation & Reporting
Consolidation & Reporting
Unit Business offices
Consolidation & Reporting
4 Vice Chancellors& 5 Central Units
Reps.
(1) Close dates are Business days; “D-0” corresponds to the last business day of the closed period
Unit Business officesGeneral Accounting
Work in progress
DRAFT – For discussion purpose only
7
Proposed monthly close process (Cont’d)Materiality threshold framework
D+1 D+2 D+3 D+4 D+5 D+6 D+7 D+8 D+9 D+10
Unit Close ActivitiesConsolidation, Units Review &
Sign OffReporting
Key processes / milestones
Units and Central Accounting (General Accounting group)**
Central Accounting (General accounting, Consolidation & Reporting
groups)
Due to/From account No transactions < $5K*JEs into Oracle/Banner systems (GL)
Units/Department revenues No materiality limitsJEs into Oracle/Banner systems (GL)
Materiality > $50K*JEs in HFM
Units/Department costs No materiality limitsJEs into Oracle/Banner syst. (GL)
Materiality > $50K*JEs in HFM
Materiality > $50K*
Consolidated Profit & Loss Requirements To Be Determined Materiality > $50K*JEs in HFM
Materiality > $250K*JEs in HFM
Materiality > $500K*JEs in HFM
Consolidated Balance Sheet
Requirements To Be Determined Materiality > $50K*JEs in HFM
Materiality > $250K*JEs in HFM
Materiality > $500K*JEs in HFM
Work in progress
Note:
(*) $ amount thresholds to be determined
(**) Roles and responsibilities of manual accrual/provision Journal Entries (JE) posting between Central Accounting and Units To Be Determined
Month-end close materiality threshold matrix
DRAFT – For discussion purpose only
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Next Steps
• Include your feedback to inform a finalized design and
determine change requirements
• Continue to socialize the Future state monthly close process
with other Campus Business Offices to get further inputs in
the design
• Continue to have open communication with Vice Chancellors
and Business offices on project progress and outputs
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