Clearing Account Policy & Procedures

Policy Number

405

Purpose

The purpose of this document is to provide guidance on the accounting and reconciliation of clearing accounts.

Responsible UW-Whitewater Office

Division of Finance and Administrative Affairs, Controller

Background

Clearing Account Definition: a temporary place (e.g., fund, department identification (DeptID), account code, etc.) to hold revenues, or expenses until the appropriate place where the revenues or expenses should be distributed is determined, and the clearing account should be reconciled to zero at some point.

Policy & Procedure

Clearing account reconciliations should be prepared or reviewed based on the schedule in Appendix A, or no less than annually. Any balances in clearing accounts must be substantiated with documentation to support the balance.

At least two attempts should be made to determine the correct funding string of any deposit. After two attempts and the item is outstanding greater than 90 days, the unidentified revenue can be transferred to a Financial Administration funding string for use at the discretion of the manager of that funding string.

For expenditures, including interdepartmental, should be processed timely based on the schedule in Appendix A.

Clearing accounts should be periodically reviewed to determine if the account is still needed. If the account is no longer needed, the account should be closed and removed from Appendix A.

The Controller can grant an exception to the above stated procedures on a case-by-case basis.

Related Policies

Wisconsin State Statute Section 20.904(1)

Policy History

First Approved August 1, 2023

Scheduled Review

August 2028

Fund	Department ID	Department Description	Purpose	Staff member responsible for reconciliation	Financial Services Reviewer	Type of Reconciliation	Frequency of Reconciliation
102	261009	Procurement Card Clearing	This is the deptid that the ITS pcard is paid from and then transactions are distributed out to the correct funding string when the transaction is reconciled in the pcard module. Balance should be zero at the end of the fiscal year.	ITS Admin Manager	Assistant Controller	Review WISER Balance	Annual; if balance is not zero at year end file provided to UWW Assistant Controller for review Closed 9/1/23
128	261114	Telecom Clearing	This is the deptid that AT&T phone charges are paid from. Monthly reallocation of charges is received from ITS to distribute charges.	ITS Admin Manager	Financial Specialist II	Review WISER balance	As allocations are distributed process includes review of this account to ensure amount distributed matches amount paid.
102/ 104/ 123/ 128/ 131/ 132/ 136/ 150/ 184/ 189/ 233/ 402	304004	System Chrgs-clrg	Account used for UW System chargebacks; interest; budget transfers; sales tax holding account; p-card holding account; other misc revenue/expenses during the year	Controller	AVC – Financial Services	Review of WISER activity by fund/ balances documented in spreadsheet Minimum of quarterly review; once fully staff should be back to monthly review.
133/ 144	304023	Budget and Fringe Clearing Account	Clearing account that is used to run the fringe benefit cost allocations for grants through. Actual fringes post to this account and then a monthly allocation is run to recoup the funds from each respective grant. Any over/short in this fund is factored into the next year's fringe rate that is established annually.	Grant Accountant	Controller	Review/ calculation of rates	Annual process to reestablish rates and review balances; initiated by UW System. Reviewed by both the grant accountant and Controller
133/ 150	304037	Indirect Clearing	Holding account for accumulated indirect revenues for both federal and non-federal funds	Grant Accountant	Controller	Spreadsheet	Annual reconciliation
990	304012	Dummy Holding Account	This is where the DDD entries are posted and then distributed from. Balance should be zero at the end of each month.	Controller	AVC – Financial Services	WISER Review	Monthly reconciliation done with 304085 to ensure 990 fund balance is zero on a monthly basis.
133/ 144/ 233	304038	Gifts & Grants Holding Account	Deposit gift/contract/federal grant revenue when funding is unknown or not yet established. Also used for grant revenues from UW System schools	Grant Accountant	Assistant Controller	WISER Review	Ensure balance is $0 by close of Fiscal Year.
990	304085	Seg Fee Clearing Account	Account used to hold seg fees collected and then distributed through SIS GL process.	Controller	AVC – Financial Services	WISER Review	Monthly reconciliation done with 304012 to ensure 990 fund balance is zero on a monthly basis.
136	304088	Terminal Leave	Terminal leave assessment is posted here and then terminal leave payouts are made from this deptid instead of the employee’s departmental funding. Balance will carryover from year to year.	Controller	AVC – Financial Services	WISER Review/ Journal entry	Semi-annual review to ensure only FICA fringes applied to account. Entry processed in Jan/period 13.
128	306006	Maintenance Purchasing Clearing Account		FP&M Financial Specialist III / Inventory Mgt	Controller	Spreadsheet	Annual central review by controller to validate year end balances. Closed 9/28/23
128	PRDFLT	Payroll Default	Salary expenses are posted to this department if there is an issue with an employee's funding in HRS (inactive, combination edit, etc.). Direct retros need to be processed to clear this department.	Assistant Controller	Controller	WISER review	Ensure balance is $0 by close of Fiscal Year.
128	PRSUSP	HRS Default Funding	Salary expenses are posted to this department when there is a problem in HRS. Direct retros are needed to clear department.	Assistant Controller	Controller	WISER review	Ensure balance is $0 by close of Fiscal Year.
980	980980	Fringe Clearing	Payroll clearing items	Service Center
102/ 103/ 128/ 131/ 189/ 231/ 402	981600	Budget Clearing	Budget Clearing - no actuals transactions	Assistant Controller	Controller	WISER review	Verify no actual transactions processed for year.