Policy and Procedures for General Ledger Interfacing



Policy and Procedures for General Ledger InterfacingBACKGROUND INFORMATIONA general ledger is the master set of accounts that summarizes all transactions associated with programs administered by the PHA. The transactions from various subsidiary ledgers are interfaced with the general ledger and include housing assistance payments, rent charges, payroll for PHA employees, etc. The information in the general ledger is used to prepare the agency’s financial statements and is important for the monitoring of PHA operations and finances.To the extent practical, the PHA should seek to interface the PHA’s different software modules and subsidiary ledgers into the PHA’s general ledger module. This policy focuses on the procedures that the PHA needs to have in place to determine the feasibility of integrating certain modules/subsidiary ledgers with the general ledger, monitor the accuracy of general ledger transactions, and reconcile balances between the subsidiary ledgers and general ledger.This policy applies to all programs administered by the PHA.This document provides a sample of a PHA general ledger interfacing policy and procedures.Sample – PHAs with a Software System. This sample provides a general ledger interfacing policy for a PHA with a software system that includes a general ledger module.PHAs can simply cut and paste the sample into their policy and procedures document and modify as needed. ITEMS FOR CONSIDERATIONThe following provides items that a PHA needs to consider when developing the policy and procedures for interfacing data into the general ledger and the major assumptions that were used to develop the sample policy and procedures.Assumption – The various components of the software system can technically interface with the general ledger.Assumption – Not all accounts will be reconciled monthly, for example, maintenance inventory.SAMPLE – PHAs WITH A SOFTWARE SYSTEMGENERAL LEDGER INTERFACING POLICYThe PHA uses [insert name of PHA software system] software system to maintain its general ledger as well as other system modules needed to oversee and manage the various programs the PHA administers.The goal of the PHA is to maintain a single fully integrated management information system that provides a means for staff and other allowed individuals to access accurate and timely data within the PHA’s software system. The information in the general ledger is used to prepare the agency’s financial statements and is important for the monitoring of PHA operations and finances.To the extent practical, the PHA should seek to interface the PHA’s different software modules and subsidiary ledgers into the PHA’s general ledger module. Modules and subsidiary ledgers that are not currently integrated will be reviewed annually to determine the cost/benefit of integrating the data.This policy focuses on the procedures that the PHA needs to have in place to determine the feasibility of integrating certain modules/subsidiary ledgers with the general ledger, monitor the accuracy of general ledger transactions, and reconcile balances between the subsidiary ledgers and general ledger.This policy applies to all programs administered by the PHA.GENERAL LEDGER INTERFACING PROCEDURESThe following three (3) procedures are associated with the general ledger interface.Identifying the software modules, components and subsidiary ledgers that are used by the PHA but not currently interfaced with the general ledger;Monitoring the general ledger interface; andReconciling the general ledger to the modules and subsidiary ledgers timely.Identifying Software Modules, Components, and Subsidiary LedgersAnnually, the PHA will review the various software modules, components and subsidiary ledgers that are used by the PHA but not currently interfaced with the general ledger to determine the feasibility of integrating these components to the general ledger module. Areas to consider include the following:PayrollTenant accounts receivableAccounts payableFixed asset listing (depreciation schedule)Perpetual inventory systemHAP processingFSS escrowPortability out and portability in activityThe PHA will determine the feasibility from a cost/benefit standpoint to integrate the modules/subsidiary ledger with the general ledger. In some cases, the PHA may determine that it is more beneficial to have separate modules and not interface with the general ledger. This determination would mean that PHA staff will need to manually enter transactions into the general ledger through journal entries.Annually, the PHA’s software system will be reviewed to determine whether additional interfaces or processes can be improved. Key components of the decision should include the risk of asset misappropriation (internal control), the dollar value of the asset in question (if applicable), the cost of integration and projected benefit. The results of the review will be documented in a brief report and discussed in the PHA’s annual planning meeting.The report should:Provide the various software modules, components and subsidiary ledgers that are used by the PHA that are not currently interfaced with the general ledger;A cost/benefit analysis for integrating each of the modules/subsidy ledgers with the general ledger; andManagement’s recommendation on whether to integrate the modules/subsidy ledgers with the general ledger.The report should be signed and dated by the Board indicating concurrence with the report’s recommendations.Monitoring the General Ledger InterfaceThe PHA will monitor the components that have been interfaced with the general ledger on a regular basis to determine whether the accounts are mapped correctly and that the transactions are transferred to the general ledger accounts accurately. In this context, “mapped” means that the transaction has been properly coded to the correct account line items and programs/projects. For example, for an HCV FSS program, an FSS forfeiture transaction needs to: 1) reduce the participant’s FSS escrow account; 2) reduce the associated PHA liability account; 3) increase the cash balance associated with HCV HAP cash account; and 4) generate an FSS escrow forfeiture revenue transaction in the HCV program.The monitoring should be ongoing, with adjustments made to the mapping based on accounting changes, guidance, or the review, analysis, and feedback provided by various offices and individuals such as PHA program staff, accounting, auditors, or HUD financial reviewers.Reconciling to the General LedgerThe PHA must reconcile balances in a timely manner to ensure consistency and accuracy between the software modules and subsidiary ledgers and the general ledger. Reports that should be reconciled include, but are not limited, to the following:PayrollTenant accounts receivableHAP ProcessingPortability out and portability in activityFSS escrow balancesFixed asset listing (depreciation schedule)Depreciation schedulesAccounts payableMaintenance inventoryThe schedule of the reconciliations between the general ledger and the various software modules and subsidiary ledgers will vary but is normally associated with when entries are made to the general ledger. For example, each time payroll is processed and posted to the general ledger, the payroll subsidiary ledger should be reviewed and reconciled to the general ledger. ................
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