Volume I - General Accounting
Chapter 06 – Reconciliations
Questions concerning this policy chapter should be directed to:
- Veterans Health Administration
- Veterans Benefits Administration
- National Cemetery Administration
- Debt Management Center
- Financial Services Center
- Construction and Facilities Management
- All others
0601 Overview
This chapter establishes the Department of Veterans Affairs’ (VA) financial policies regarding reconciliations.
Key points covered in this chapter:
- Reconciliations, whether manual or automated, are an integral component of VA’s internal controls and are a requirement for all federal agencies as outlined in Office of Management and Budget (OMB) Circular A-123, Management’s Responsibility for Enterprise Risk Management and Internal Control;
- VA’s systems, interfaces with other entities, and financial records, whether automated or manual, require the performance of reconciliations to ensure that information is being accurately transmitted, communicated and recorded; and
- VA reconciliations must be performed timely, documented, and verifiable.
0602 Revisions
| Section | Revision | Requesting Office | Reason for Change | Effective Date |
|---|---|---|---|---|
| Various | Reformatted to new policy format and completed full review | OFP | Reorganized chapter layout and revised policy to provide relevant guidance | August 2024 |
| 0603 | Updated definitions | OFP | For consistency with standardized definitions | August 2024 |
| 0604 | Updated roles and responsibilities | OFP | To ensure it aligns to the appropriate role within a VA organization | August 2024 |
| 060501 | Added General Policies | OFP | Provide authoritative guidance to support the requirement for reconciliations | August 2024 |
| 060502 | Revised VA’s Financial Reconciliation Requirements | OFP | For clarity | August 2024 |
| Appendix A | Removed previous Appendix A on Reconciliation Plans Added prior policy revisions as Appendix A and re-numbered Appendices |
OFP | Removed previous Appendix A due to policy changes Required by policy format guidance | August 2024 |
| Appendix B | Added Appendix B | OFP | To provide examples of reports available to assist with monitoring and reconciling data discrepancies | August 2024 |
For a complete listing of previous policy revisions, see Appendix A.
0603 Definitions
Data Validation – A verification process where target data from one system or subledger is compared against original source data to ensure that the data was recorded correctly.
Reconciliation – A systematic and periodic process comparing two or more different sets of related records, explaining variances, and identifying needed adjustments so that the records agree.
0604 Roles and Responsibilities
Under Secretaries, Assistant Secretaries, and Other Key Officials are responsible for ensuring compliance with the policies outlined in this chapter.
Administration or Staff Office CFOs are responsible for: compliance with the Federal Financial Management Improvement Act (FFMIA) of 1996, determining the frequency of reconciliations based on the size and use of data, ensuring that staff is adequately trained and for, monitoring, analyzing, and remediating data discrepancies (e.g., abnormal balances, unprocessed documents, etc.) occurring in VA’s financial systems.
Fiscal Officers, Chiefs of the Local Financial Office, and Chief Accountants are responsible for providing oversight of the reconciliation process, enforcing segregation of duties, ensuring reconciliations and necessary corrections are completed in a timely manner, and for recommending improvements to reconciliation processes.
Accountants, accounting technicians, and other designated staff are responsible for completing assigned reconciliations, maintaining appropriate documentation, escalating problems or variances with reconciliations, providing justifications for material discrepancies, identifying systems and areas requiring adjustment, identifying the root cause for transactions that are not reconciled, and for proposing more efficient ways to achieve the goals of the reconciliation process.
Business Owners are responsible for ensuring that data transmitted to VA’s accounting systems from feeder or subsidiary systems is complete and accurate.
0605 Policies
060501 General Policies
- In order to ensure/improve the quality of financial reporting and validate the completeness and accuracy of financial data, VA will perform timely reconciliations.
- VA will use reconciliations to minimize risks associated with fraud, waste, and abuse of government funds and resources. For additional information on internal controls and risk associated with fraud, waste, and abuse, refer to Volume I, Chapter 5 – Management’s Responsibility for Internal Control.
- Reconciliations will be performed at all levels of the Department to ensure data integrity and accurate financial reporting.
- Reconciliations at the field level shall be designed and completed with the intention of reducing findings at the Administration and Department level.
- VA will comply with FFMIA and ensure that its financial management systems create reliable and useful financial data. For additional information on FFMIA, refer to Volume I, Chapter 4 – Compliance with FFMIA.
- Administrations and Staff Offices will monitor, analyze, and remediate data discrepancies (e.g., abnormal balances, unprocessed documents, etc.) occurring in VA’s financial systems at the lowest level possible (e.g., transaction, GL, Treasury Account Symbol, etc.). These activities will be performed to prevent inaccurate data from flowing to subsequent financial systems (e.g., MINX) and the financial statements. Examples of these types of reconciliations can be found in Appendix B.
- VA will implement OMB Circular A-123, Management’s Responsibility for Enterprise Risk Management and Internal Control, to ensure cost effective internal controls have been established.
- VA will perform reconciliations between budgetary and financial accounting in accordance with Statement of Federal Financial Accounting Standard (SFFAS) 53, Budget and Accrual Reconciliation.
060502 VA’s Reconciliation Requirements
- In accordance with OMB Circular A-123, VA will design and perform reconciliations that strengthen the Department’s control environment. Reconciliations shall be performed in a timely manner, documented, reviewed, approved, and maintained for audit and management review purposes. For example, the CFO at the field level will ensure that the individual performing the reconciliation will not be the same individual reviewing and approving the reconciliation.
- VA will maintain an effective continuous monitoring process to support management monitoring of reconciliations to ensure effective internal controls.
- VA will reconcile both internal and external financial data and ensure subsidiary records, when available, substantiate the amount and support the financial balances. Discrepancies in financial balances will be reconciled and documented (i.e., reviewing the variance at the detailed or transactional level). Examples of financial reconciliations include but are not limited to:
- Fund balance with Treasury;
- Treasury Account Symbol and Business Event Type Codes level;
- General ledger abnormal balances;
- Undelivered orders;
- Accrued services payable;
- Agent Cashier advance;
- Accounts receivable;
- Fixed assets;
- Budgetary to proprietary;
- Intragovernmental reimbursable agreements;
- Intragovernmental transactions and balances;
- Budgetary execution and other financial statement reconciliation;
- GTAS reports support the reclassified Balance Sheet and Statement of Changes in Net Position; and
- Suspense transactions.
- When implementing new systems, VA will design interfaces that use on-line real time data transmission validation methods eliminating the need for subsequent manual reconciliation. Business owners will ensure that these automated system checks function properly prior to systems going into the production environment.
- When manual reconciliations are required, business owners will reconcile interfaced transactions (including subsidiary and feeder system interfaces) to confirm the completeness and accuracy of data transferred between VA’s systems. Reconciliations will review and validate transferred data, identifying discrepancies and taking corrective actions to resolve them when necessary. Examples of existing interfaces include but are not limited to:
- Financial Management System (FMS)/Integrated Financial Acquisition Management System (iFAMS) to Management Information Exchange (MinX);
- MinX to Governmentwide Treasury Account Symbol (GTAS) Adjusted Trial Balance System;
- Veterans Information Systems and Technology Architecture (VistA) Integrated Fund Distribution Control Point Activity Accounting and Procurement (IFCAP) module to FMS;
- Federal Accounting Service Payment and Collection (FASPAC) to FMS;
- Web-based Loan Guaranty System (WebLGY) to FMS;
- VA Loan Electronic Reporting Interface (VALERI) to FMS;
- Benefits Delivery Network (BDN) to FMS;
- Enterprise Management of Payments, Workload, and Reporting (eMPWR-VA) to FMS;
- HR Payroll Application Service (HR-PAS) to FMS/iFAMS;
- Invoice Payment Processing System (IPPS) to FMS/iFAMS;
- G-Invoicing to FMS/iFAMS; and
- Department of Health and Human Services Payment Management System (HHS PMS) to FMS/iFAMS.
- Interface or error reports, or similar automated reports, which alert staff that manual intervention is required to alleviate issues as a result of data transfers between two or more systems will be reviewed and issues resolved within 30 business days. Interface or error reports typically address one or more of the following issues:
- Unprocessed documents;
- Duplicate data or duplicate transmissions of data;
- Verification of the accurate transmission of critical data fields;
- Differences in the record count; and
- Missing data fields.
060503 Reconciling Items
- Reconciliations should be completed no later than the end of the quarter after the posting of the related transactions, monthly reconciliations are preferred.
- Differences noted in the reconciliation process shall be thoroughly investigated, resolved, and documented. Corrective actions shall be designed to eliminate and/or prevent the root cause of differences thus preventing the recurrence of errors.
- VA will make every effort to institute corrections within the current accounting period. If not corrected in the current accounting period, VA will on a monthly basis document the status and actions performed to resolve discrepancies and issues which remain.
060504 Reconciliation Documentation
- VA will maintain documentation related to reconciliations for a period consistent with the General Record Schedule published by the U.S. National Archives and Records Administration and VA or Administration specific guidance.
- Individuals performing reconciliation activities will ensure formal reconciliation schedules and work papers (i.e., supporting documentation) are of sufficient detail to make the reconciliation process, corrective actions, and annotations understandable to an independent third party.
- Schedules and work papers will explicitly identify who performed and approved the reconciliations.
0606 Authorities and References
- Chief Financial Officers (CFO) Act of 1990, P.L. 101-576
- 31 U.S.C. § 3512: Executive agency accounting and other financial management reports and plans (house.gov)
- Federal Information Security Modernization Act (FISMA) of 2014
- Government Accountability Office (GAO)
- OMB Circulars
- A-123, Management’s Responsibility for Enterprise Risk Management and Internal Control
- A-136, Financial Reporting Requirements
- Implementation Guidance for the Federal Financial Management Improvement Act
- Treasury Financial Manual (TFM) Volume I: Federal Agencies
- SFFAS 53, Budget and Accrual Reconciliation
- VA Financial Policy
- Vol I, Chapter 4 – Compliance with FFMIA
- Vol I, Chapter 5 – Management’s Responsibility for Internal Control
- Business Intelligence – BI Report Guides & Videos – Report Gallery (sharepoint.com)
0607 Rescissions
Volume I, Chapter 6 – Reconciliations, October 2018.
Appendix A: Previous Policy Revisions
| Section | Revision | Office | Reason for Change | Effective Date |
|---|---|---|---|---|
| Various | Reformatted to new policy form at and completed five-year update | OFP | Reorganized chapter layout and revised policy to reflect guidance updates | October 2018 |
| 0601 | Updated reference to GAO Green Book | OFP | Revision published September 2014 | October 2018 |
| 0604 | Added requirement for Administration CFO, staff office CFO, and senior executives to develop formal reconciliation plans and define the frequency of reconciliations Added responsibilities for field staff to review, assign and perform defined reconciliations | OFP | NFR VA 16-4 | October 2018 |
| 0605 | Added requirement for Administration CFO, staff office CFO, and senior executives to develop formal reconciliation plans and define the frequency of reconciliations Included requirement for corrective actions and monthly follow up of unresolved items | OFP | NFR VA 16-4 | October 2018 |
| Appendix | Added general guidance on the development of reconciliation plans | OFP | Formal reconciliation plan requirement instituted | October 2018 |
Appendix B: Examples of reports to Remediate Data Discrepancies
- Administrations and Staff Offices will monitor and analyze USSGL abnormal balance(s) for their organization at the TAS level in iFAMS to identify and remediate transactional or system errors. iFAMS BI Report, E-GL 10 Abnormal Balance, will be used to identify and research abnormal balances by fund, TAS, organization, or GL account. The report contains the following information:
- A complete listing of general ledger accounts and debit and credit balances;
- Account net balances which are not in their normal state per the USSGL accounts and definitions; and
- A summary view of GL account balances and their expected sign (e.g., debit or credit per USSGL).
- Administrations and Staff Offices will validate all transactions have correctly posted to the GL and remediate transactions timely when they have not properly posted within the accounting period. iFAMS BI report, E-GL 13 Verification of General Ledger Accounts, should be used to identify transactions that did not post to the GL (when expected) or remain in an unposted status. The report contains the following information at a high-level and provides the details to support the data:
- Administration;
- Fund code;
- Document type;
- Document type name; and
- Transaction amount.
- Administrations and Staff Offices will monitor and resolve unprocessed documents (forms) for their organization to ensure all transactions have been processed timely and any errors have been resolved. iFAMS BI report, E-GS01 Unprocessed Documents and Error Codes Report, is available for Administrations and Staff Offices to assist with identifying and resolving documents that have not been processed. The report contains the following information:
- A listing of unprocessed documents (forms) with aging information and document line amounts;
- A listing of unprocessed documents (forms) with error symbols and error messages;
- Associated document types, document numbers, and document status; and
- Original User ID and last user ID who worked on each form.
- Administrations and Staff Offices will use Department of Veteran Affairs: Office of Financial Audit (OFA) Metrics to assist them with correcting data related to undelivered orders (UDOs). BI report titled “OFA Metrics” provides data, allowing Administrations and Staff Offices to monitor and review transactions at a detail level, which aides in the identification of the responsible office (i.e., the program office or the Acquisitions Office) for making timely updates to the obligation and for closing out stale obligations. The report contains the following information:
- Program Office;
- Number of obligations;
- Total undelivered (i.e., in dollar amount);
- Prior period UDO (i.e., in dollar amount);
- Change in dollar amount; and
- Percentage change.
