Start the year off right – new best practices and tools for bank reconciliations!

Nothing is more synonymous with accounting and finance than the monthly reconciliation. Recall even your most basic memory of “finance,” and the importance of balancing your personal checkbook. This essential control activity to government finance not only ensures that banking and accounting records are accurate, but is also a component of identifying unusual transactions that might result from fraud.

Although reconciliations are central to accounting and finance, they are still prone to weaknesses in their execution. And though the Office of the State Auditor cannot prescribe a uniform way to perform your reconciliation, we have developed a list of best practices to consider and compare to your own government's current processes.

Important questions addressed

Every government should make sure there is a reconciliation process that is clear and documented, and that produces enough support to accomplish the reconciliations goals government-wide. Our best practices address some of the following important questions:

• Are all bank accounts reconciled — even those outside of finance?
• Are staff assigned to perform and review reconciliations the most appropriate in relation to their other roles and responsibilities?
• Has your government considered the frequency and timing of reconciliations, making sure to think about reporting requirements, or banking and insurance policies?

These best practices are simply that – activities for your consideration to strengthen controls. Some of these might not be beneficial to your own government's control process or structure. However, all of the best practices are provided to help you engage in thoughtful discussions and perform that careful analysis.

Template included

This resource includes a template for documenting your reconciliations to achieve a “global reconciliation,” that is, one that considers all accounts and allows you to agree the information to your financial statements.

We hope you find these resources helpful, and we'd love to hear from you. Email us with questions, comments, or recommendations for new resources at Center@sao.wa.gov.