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Monthly Cost Center Verifications

PS 05.A.14 sets general guidelines to be followed to ensure financial system verification of cost center activity. In order to minimize the risk of unauthorized uses of funds, entries in the financial system must be monitored monthly by all University of Houston-Downtown (UHD) departments. Cost center verifications are an important internal control for ensuring that authorized transactions post to the correct cost centers.
The following procedure explains the cost center verification process for the Division of Academic Affairs at UHD.

1. Each month, the Department Business Administrator (DBA) or designee runs the 1074 Verification Worksheet for all active cost centers in the department. (Cost centers may be verified at the Cost Center Manager level or the college/division level, if desired.)

2. DBA or designee reviews transaction spreadsheets to verify that all transactions belong to that department.

a. Review transactions that were generated at the department level, such as vouchers (expense only), SC vouchers, GL journals and requisitions. Verify that the document creator belongs to your department.

b. Review P-Card which have the last four digits of the card number in the transaction description. Verify that all cards belong to your department.

c. Review documents like vouchers created by Accounts Payable and verify the vouchers are for goods or services requested by the department. Review budget journals posted for correct encumbrance and / or budget

d. Review postage, telecom, and other centrally billed charges to ensure that the charges belong to the department.

e. Review encumbrance balances to ensure the appropriate amount, release PO encumbrances that will not be used anymore.

e. It is not necessary to review system generated transactions, such as accounts payable liability, and payroll liability.

f. It is not necessary to review payroll-related expense transactions on the Verification Worksheet, which summarize transactions from the HR System. Run the BOB Report in the HR System. Verify that all employees on the report are paid from the correct cost center and research any negative BBA on the BOB report.

3. DBA or designee verifies that budget balances are not exceeded and equity balances are not in deficit.

a. Review the Verification Worksheet to verify that budget balances are not exceeded and to identify deficit equity balances.

b. If negative budget balances or equity deficits exist, DBA or designee should review revenue and expense budgets to determine whether the negative budget or deficit will be corrected by fiscal year end, and reduce budgets or transfer fund equity as needed for anticipated shortfalls.

4. Sign the 1074 Verification worksheet, document corrective actions taken (if any), attach 1074 report, pin necessary documents and upload to SharePoint before the due date. The detailed procedures for completing cost center verifications electronically can be found in the link below:

Procedure_e verification.pdf