Labor expenditures make up greater than 60% of the University’s total expenses each fiscal year. Therefore the careful review of labor expenses as part of the monthly reconciliation process is critical to sound financial stewardship and is part of our system of internal controls. A manager’s timely review and approval of any compensation action, including timesheets, is a key control on labor expenses; however, that does not negate the importance of monthly reconciliation to ensure that labor expenses are appropriately allocated. In addition, monthly reconciliation is the primary compensating control when submitted hours are massed advanced without a manager’s prior approval and are paid to the employee. Note: This was UVA’s practice prior to and post Workday so that employees are paid promptly and are not negatively impacted by a manager failing to or not being able to review and approve their submitted timesheets.
Timely reconciliation of labor is particularly important on sponsored programs so that generated effort reports are correct and invoices to sponsors or draw down of funds from sponsor accounts are accurate. Note: The Office of Sponsored Programs, Post Award Department, is responsible for institutional effort reporting. For more information on effort reporting, visit their Effort Reporting References webpage; any questions should be addressed to email@example.com.