OASIS FINANCE

Notes for Auditors

OVERVIEW

Why this document has been written

OASIS Finance has been installed in Catholic schools in many NSW Dioceses to provide a standard computerised accounting system and to raise the quality of accounting practice in schools from the variable level which has existed in the past. The introduction of a standardised accounting system is the precursor to centralised auditing of school accounts where only the adherence to standard procedures will need to be tested rather than the validity of the accounting procedures themselves.

History

OASIS Finance was developed by the NSW Department of School Education to meet their stringent accountability requirements and is installed in virtually all NSW Government schools. This document has been written to provide people who are called upon to audit school financial records which have been maintained using OASIS with a concise overview of the system. In particular it is designed to highlight those aspects of the operation of OASIS which may be unfamiliar to an accountant used to a double entry general ledger system.

What is OASIS Finance?

OASIS uses a single entry cashbook, and is not a double entry general ledger. OASIS was developed to automate the manual cashbook kept by a school. Thus OASIS does not keep a record of assets or liabilities in the cashbook and no attempt is made to apply accrual accounting principles. However, OASIS does have a fixed assets register (which does not calculate depreciation), and outstanding student debt to the school and commitment to creditors by the school are recorded in debtor and creditor 'ledgers'.

CHART OF ACCOUNTS

OASIS uses a chart of accounts with a 3 digit + 3 digit code format. The first three digits is the DISSECTION and the second three digits the SUBDISSECTION. The dissection is generally a project or program breakdown while the subdissection identifies the type of item being purchased or more finely divides income categories. For example:

Budgets are entered as a single figure for the whole year at the subdissection level.

Account types. Dissections are grouped into four types:

Batches

OASIS uses the traditional `batch and post' mode of operation. Batches of transactions are prepared and posted to the ledgers.

A printed audit trail management report is produced for every batch posted. ALL management reports are numbered sequentially and are filed in folders supplied for the purpose. The management reports form a complete paper audit trail of all postings to the ledger.

Transactions are held in two files: FDTRAN (Debtors/Income) and FTRAN (Creditors/Payments).

No intermediate totals are stored. All reports are produced by directly summarising the transaction files.

A disadvantage of this approach is that previously obtained month end balances can be affected if prior period transactions are cancelled and summary reports can be slow to produce if the transaction files are large.

It does, however, have the advantage that the system is less fragile to imbalance if a system error should occur as totals are calculated each time a report is printed.

FEE BILLING

A batch of proposed fees is generated following user specified 'rules'. The generation 'rules can be specified in considerable detail. The proposed fees can be modified before posting. Posting produces a management report and offsets any pending prepayments for a student.

Fee statement can print full detail or balance brought forward up to a selected date. The statement itemises payments made and invoices billed within date range.

Building fund 'donation' can be itemised separately at the bottom of the statement.

In the past there have been problems experienced when printing statements which contain prepayments but these problems all appear to have been fixed.

Credit Journal - Can cancel all or part of a student's debt. Management report printed

Debit Journal - Used to offset a prepayment manually. Management report printed.

Fee billing precheck - checks for missing data items before billing commences.

INCOME

Receipting

All income is entered into OASIS through the Cash Register module.

The Cash Register screen displays any outstanding debtor invoices for a student and allows these to be selected for payment. An itemised receipt is printed which contains:

• date
• time
• operator code
• the name of the payer
• details of invoices being paid
• amounts paid

Note: Receipt transactions always have the current date. This can lead to 'timing errors' if a receipt is cancelled and a corrected receipt re-issued at a later date. The reporting of re-receipted funds will move in time to the date the new receipt was issued.

Payment types:

CASH, CHEQUE, CREDIT CARD, produce entries on the bank deposit report.

NFB (Not for banking) is used to record receipts which are deposited directly into the bank account, e.g. interest, EFT deposits.

Receipts can be:

• Invoiced - paying off a debt which has been entered into the debtors ledger with the fee billing module.
• Sundry - payment which has not (and will not) be invoiced. This enters an invoice and matching receipt transaction into the ledger.
• Prepayment - payment for a debt which WILL be invoiced in the future, e.g. next years school fees. Prepayments are entered into a single Income dissection (030-010) and are identified by family and student. When a fee invoice is subsequently generated for that student, the invoice and prepayment will automatically offset each other. At present, the offsetting of the prepayment does not transfer that amount into the income dissection of the invoice. This may be changed in the future.

The End of Day procedure in the Cash Register posts the batch of transactions to the ledger and prints a management report.

Cancelling a Receipt restores the debt if the payment was made against an invoice.

Posting the cancellation batch produces a management report.

Cancelling a receipt can retrospectively affect dissection totals and reporting of banking figures.

BANKING

The Banking procedure prints two management reports:

• Banking discrepancy report. Allows for variance of banking from receipted total to be accounted for. Any variation is accumulated into subdissection 900-010 - Banking Discrepancies. A variation may occur legitimately because a cash float has been retained. Errors in receipting should be corrected before banking.
• Bank deposit sheet. Lists deposits by type, e.g. Cash, Cheques (itemised) and is accepted by banks in lieu of their forms. Two copies are printed. One is retained as the school's record of the bank deposit, the other is lodged with the deposit at the bank.

EXPENDITURE

OASIS uses commitment budgeting. Funds are deducted from a budget as the order is raised.

Expenditure is permitted from Expenditure and from Income/Expenditure dissections only. (except a refunds of fees paid to a student).

Orders are entered against supplier and debited to a subdissection. The subdissection budget can be checked at any time while the order is being entered. Insufficient funds in a budget does not prevent an order being raised - the budget is just overrun. A management report and official order is are produced.

Delivery/Invoice Entry - A management report is produced. Unless an order is declared as being pre-paid, OASIS will not permit a payment to be made ahead of delivery. A list of outstanding Prepaid orders can be printed.

Note: Many schools do not yet use the ordering/delivery management tools of OASIS but simply enter payments into OASIS as they are made directly from invoices as Claim Vouchers.

Payments

Five categories of payment are available in OASIS:

• Ordered goods (normal situation) against an invoice which has been entered previously. The goods must have been marked as delivered before OASIS will permit payment.
• Prepayment. Goods not yet delivered. Cheque must be sent with order. Prepayment is discouraged since there is a risk of loss if the goods are not received.
• Claim voucher. To pay for non-ordered goods. e.g. telephone, rates, electricity, etc.

All of the above produce a management report, payment voucher and remittance advice.

• Bank. To record bank debits which are taken directly from the bank account, e.g. fees, EFT debits. Does not allocate a cheque number as no cheque will be drawn.
• Refund. Permits payment from an Income subdissection, e.g. refund of school fees (not expenditure)

Cancel Payment. A cheque can be cancelled, unless it has already been reconciled. Cancelled Claim vouchers leave an invoice behind which must also be cancelled. Posting the cancel payment batch produces a management report.

Cancel Invoice (Debit Journal). An Invoice can be cancelled unless it has been paid already.

Cancel Order. An order can be cancelled at any time until it is delivered and/or paid. Posting the Cancel Order batch produces a management report.

Supplementary Funding. OASIS allows the one expenditure to be allocated to multiple subdissections through supplementary funding. A listing can be produced, but it is not a management report as the supplementary funding amounts can be changed after the report is printed.

BANK RECONCILIATION

Reconciles all transactions up to the current date. The OASIS Bank Reconciliation does not artificially exclude transactions after the end of the month. It lists them. One of the dissection summary reports can be used to get the theoretical end of month balances.

Each cheque drawn and Cash register Banking folio produces an entry into the Bank Reconciliation file. Not For Banking income is bundled together into folio 0. The Initiate Reconciliation step summarises the unreconciled transactions in the transaction files into the bank reconciliation files. If a change is subsequently made to the ledgers, this will not automatically update the bank reconciliation file. It is necessary to redo Initiate reconciliation.

The opening balance of one bank reconciliation may not match the closing balance of previous reconciliation if transactions have been cancelled. The difference between the two balances will be the sum of the cancellations.

Last year unreconciled payments and receipts are held in a separate file until reconciled as the amounts will have been amalgamated into the Retained Earnings figure at end of year rollover..

Reconciliation Reports produced:

• Initiate Reconciliation working papers. Expenditure by cheque number and deposits by folio number to allow marking off from bank statement.
• Bank reconciliation statement. Summary of opening and closing balances with unreconciled transactions itemised.

END OF YEAR

All Income and expenditure subdissections are aggregated into the retained earnings subdissection, (except for prepayments which are retained as incomplete transactions).

All Income and Expenditure accounts are set to zero.

Income/Expenditure accounts must have any balance dealt with either by:

• drawing a cheque to pay collected Tuition Fees or Building Fund Levy to the CEO
• notionally receipting back the contents of any investment account. It is then paid out again after the rollover. This is to ensure that the investment funds are incorporated in the Retained Earnings figure.
• Transferring the balance to a suitable income or expenditure account to allow the funds to be incorporated into the Retained Earnings.

Completed transactions are cleared from the ledgers. This includes:

• All Sundry Receipts
• Debtor invoices which have been completely paid
• Orders which have been completely paid
• All Claim Voucher payments
• All transactions in Income/Expenditure accounts

TRANSFER OF FUNDS

OASIS permits funds to be transferred between like dissection types e.g. Income - Income, at a nominated date. Funds transfer for expenditure accounts is in the opposite direction. Funds are transferred, not the debt. A management report is produced. Transfer transactions are listed separately from receipts and payments on most reports.

REPORTING

A wide range of standard financial reports are available which include:

BACKUP AND SYSTEM SECURITY

• All data is backed up daily to floppy disk.
• The backup disks are stored in a secure place away from the computer. Frequently the disks are stored off-site.
• A transaction log of all changes to the data is retained which allows data recovery right up to the point at which a failure occurred.
• Access is by password which allows access to only those functions which are needed.