Reconciling Banner FIS Fund Balances to Financial Statement Net Asset Balances
- Illustration -

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The worksheet (below) illustrates the process for reconciling financial statements back to the Universities' Banner FIS accounting records.

The differences result from financial statement adjustments taking place after the "closing of the books." Such differences are to be expected because the "closing of the books" occurs in late July but the financial statements are not audited and finalized until late October.

For reconciliation purposes, OUS has nine major fund groups within eight charts of accounts (i.e., the seven universities and the Chancellor's Office).

A financial statement adjustment becomes problematic when it:

1. changes the net fund balance of any one of the nine major fund groups within the eight charts of accounts, and
2. is not recorded in the Banner FIS accounting records before the "closing of the books."

The adjustments create year-end differences between the financial statements and the accounting records. To correct this situation, the adjustments must be listed and then recorded in the following year's Banner FIS accounting records, in one of the following ways:

• As part of the current revenues and expenditures of the subsequent year.
• • This method is ideal but only applicable when the financial statement adjustment is an accrual of something already recorded in the subsequent fiscal year.
• As a prior period adjustment to the beginning balance of the subsequent year.
• • This method restates the beginning balance as a "period 0" of the following year. The difficulty with this method is "Period 0" transactions are not always visible in BI-Query data warehouses.
• As an adjustment to the beginning balance sometime during the subsequent year.
• • This method effectively restates the beginning balance during the year and is visible in BI-Query data warehouses.

Once all financial statement adjustments are included in Banner FIS, the original financial statements adjustments are reversed from the reconciliation. If the financial statement and Banner FIS fund balances still disagree, one of a combination of the following has occurred:

• Not all financial statement adjustments were recorded in Banner FIS.
• A Banner FIS beginning fund balance changed that did not pertain to a financial statement adjustment.

The Controller's Division will provide a reconciliation for each university showing the financial statement adjustments made to the nine major fund groups. (See second illustration for the format of the reconciliation.)