Administrative Procedures

Journal Entries

1. Purpose

To provide guidance on journal entries.

2. Scope

This procedure applies to all business units.

3. Procedure

3.1 General

1. Management is responsible for establishing processes to ensure the validity, accuracy, and timeliness of journal entries.
   1. Journal entries must accurately represent the activity being recorded.
   2. Journal entries must be correct, complete, and supported by proper documentation.
   3. Journal entries must be approved in a timely manner.
   4. Journal entries must be posted within one month of the occurrence of the need for the journal.
      
      
2. Management designates employees that are responsible for entering, and approving journal entries.
   
   
3. Contact System Office General Accounting with questions on this business procedure.

3.2 Supporting Documentation

1. Supporting documentation must be attached to each journal entry.
   1. The Assistant Vice President (AVP) for Accounting and Treasury Services may approve exceptions to this requirement.
      1. Journal entries, for which an exception has been approved, must specify the location of supporting documentation.
         
         
2. Specific forms must be attached to certain types of journal entries.
   1. The BA6 form is required for inter-unit and inter-fund journals (see Section 3.3).
      1. Journal entries, for which an exception has been approved, must include a copy of the approval.
   2. The BA19-B form is required for cash receipt journals.

3.3 Inter-Unit, Inter-Fund, and Inter-Department Journal Entries 

1. Inter-unit, inter-fund, and inter-department journals are used to record activity between business units, between fund groups, or between departments.
   
   
2. Services or sales between business units (BU) or departments are recorded as follows:
   1. Debit the expense account for the BU/department that receives the service or item.
   2. Credit the recharge account (#54000) BU/department that provides the service or item.
      
      
3. Resources, other than salaries and benefits, (e.g., equipment, paper, etc.) shared between BU’s or departments are recorded as follows:
   1. Debit the expense account for the BU/department that receives the resource.
   2. Credit the expense account for the BU/department that provides the resource.
      
      
4. Salaries shared between BU’s or departments are recorded as follows (if the entry is made before HRBENS is generated for the month):
   1. Debit the salary expense account for the BU/department that receives the resource.
   2. Credit the salary expense account for the BU/department that provides the resource.
   3. Note: HRBENS calculates benefits related to salaries.
      
      
5. Salaries shared between BU’s or departments are recorded as follows (if the entry is made after HRBENS is generated for the month):
   1. Debit the recharge account (#52000 Salaries, #53000 Benefits).
   2. Credit the recharge account (#52000 Salaries, #53000 Benefits).
      
      
6. Revenue transferred between BU’s or departments is recorded in revenue accounts. Revenue accounts may only be used on inter-unit, and inter-department journal entries when transferring revenue.
   1. Debit the BU/department that transfers revenue out (i.e., gives up revenue).
   2. Credit the BU/department that transfers revenue in (i.e., receives revenue).