A. Definitions

1. General Ledger

   The General Ledger (Report FSO100) provides transaction details and summary data on appropriations, expenditures, encumbrances, and balances. It is produced monthly and sent to appropriate activity managers on the campus for use in making fiscal decisions. Through the online General Ledger Inquiry (GLI), daily updated versions of the General Ledger (FS100) and the Fund Summary Ledger (FS150) are available.

2. Activity Manager

   An activity manager is that person in any activity, whether the individual is located in a school, department, or office, who is directly responsible for the financial affairs of that activity.

3. Budgeted Funds

   Budgeted funds are those monies allocated on either a permanent or temporary basis. Permanent funds are budgeted through the Permanent Budget System whereas temporary funds are those allocated on a basis of one year or less. For a detailed explanation, refer to Section 703-10.

4. Extramural Funds

   Extramural funds are those received from donors, private and governmental contracting and granting agencies, etc. These funds are established when the monies are awarded based on the terms and conditions, and within the intent, of the granting agencies. For a more detailed explanation, refer to the Sponsored Projects Administration policies and procedures.

5. Overdrafts (Overruns, Deficits)

   Overdrafts occur when expenditures plus liens exceed budget amounts in any particular account or subaccount on the General Ledger (Report FSO100).

B. Responsibilities

1. The activity manager is the primary individual responsible for maintaining an activity's fiscal accounts so that they remain financially solvent. Action should be taken promptly to eliminate overdrafts. The principal investigator is accountable for deficits or disallowances that occur under an extramural grant or contract account. (Refer to UC Contract and Grant Manual, 6-440.)
2. The Accounting Office has general oversight responsibility to ensure compliance with University and campus policies, with terms and conditions prescribed by external funding sources, and with provisions of governing laws and regulations. This includes notifying the activity managers and principal investigators of overdrafts.
3. Vice chancellors, deans, and department chairs are required to resolve funding problems for activities under their control.
4. The Budget Office will assist campus activities, at the request of the appropriate vice chancellor, in recommending solutions for overdraft conditions.

C. Procedure for Reconciliation and Corrective Action

Each activity manager maintains procedures that monitor and verify the appropriation, expenditure, and encumbrance transactions (liens) as well as the current unexpended balance for each subaccount, in order to reconcile balances to the monthly General Ledger. Income accounts should also be monitored to verify that deposits have been correctly recorded.

The General Accounting Division of the Accounting Office will give assistance to any department, upon request, in establishing an appropriate procedure.

1. Corrective Action - Budgeted Funds

   Corrective transactions include Transfers of Funds, Transfers of Expense (Financial Journal adjustments), Lien Vouchers, employment forms, and Payroll Cost Transfers (see Section 701-18).

   1. Correcting Payroll Expenditure Discrepancies (Subs 00, 01, 02, 06)

      Salary corrections are made through the Payroll/Personnel Online System.

   2. Correcting Non-Payroll Expenditure Discrepancies (Subs 03, 04, 05, 07)

      Non-payroll expense corrections are made through the on-line Financial System using the Financial Journal Adjustments (TOEB) module. An explanation for each adjustment should contain sufficient information to satisfy an auditor (see Section 701-15).

   3. Correcting Income or Revenue Transactions

      Income incorrectly deposited may be transferred to the correct account using the Financial Journal Adjustments (TOEB) module.

   4. Correcting Encumbrances

      A Purchase Order Change Request (POCR) transaction is processed through the Purchasing/Accounting Link (PAL) when an operating unit wishes to

      1. change the account, fund, and/or subaccount on which a purchase order is encumbered; or
      2. make a change in the commitment to a vendor such as the deletion of an item or the closing of an order for which delivery cannot be made (see Section 707-11).

      A lien voucher may be used to release encumbrance amounts remaining on the General Ledger after an encumbrance has been closed. A concise explanation of the reason for the encumbrance change must be included on the lien voucher.

2. Corrective Action - Extramural Funds
   1. Active Programs
      1. Salary

         The corrective actions described above also apply to extramurally funded activities. However, changes and corrections affecting federal contracts and grants account/funds may require additional action, such as completing a Personnel Activity Report (PAR). See Section 701-18 and Section 701-19.

      2. Non-payroll

         Non-payroll expense corrections are made through the on-line Financial System using the Financial Journal Adjustments (TOEB) module. See Section 701-17.

   2. Terminating Programs

      Refer to Section 701-10, Federal Funds Administrative Procedures.