ERROR CORRECTION

 

 

ERROR DETECTION PROCESS

  1. Introduction

    For ease of understanding, all accounting transaction errors should be classified according to their nature and severity. The basic classification of errors is as follows:

In many cases, what appears to be the first type of error is actually the second. The detection and correction process differs for the two types of accounting transaction errors. The following paragraphs describe the process for each.

  1. Directly Detectable Errors

    This type of accounting transaction error is detected by STARS during the edit stage of system processing. This type of error has the following system characteristics:

System detectable errors can be classified into three major categories: Rejection, Correctable and Warning. Errors within each category have common characteristics and are correctable in the same fashion. Section 12 Error Codes and Messages - Edit/Update Subsystem (STARS System Maintenance Manual) contains a complete list of the individual codes that can occur within each major category.

A further explanation of each category is presented below:

  1. Indirectly Detectable Errors

    Some errors are not directly detected by the system because they result from legitimate accounting codes being used incorrectly or from incorrect amounts. STARS codes such as
    agency code, subfund, mini-code, fiscal month, and major/minor object code are primary control elements. A transaction will be incorrectly posted to the STARS master files if a valid but inappropriate code or an incorrect amount appears on an input document. Similarly, the agency's accounting records could contain errors even if there are no errors in STARS.

    The only way such errors can be detected is for agency accounting personnel to perform regular monthly reconciliations between their agency's accounting records and STARS balances shown on STARS reports. Such reconciliations provide significant assurance that transactions are processed correctly both in the agency's accounting system and in STARS and that balances presented in the State's Comprehensive Annual Financial Report are proper.

To ensure adequate error detection and to satisfy audit requirements, such reconciliations must be:

Monthly reconciliations for revenues, expenditures, and ending cash balances must be performed at the level of detail in the Appropriation Act. In the past, some agencies have reconciled only ending cash balances. Reconciling only the ending cash balance does not provide sufficient assurance that receipts and disbursements were properly processed and that revenues and expenditures (or expenses) were correctly classified. Agencies with federal subfunds are required to perform monthly reconciliations between the CSA 467CM report (Trial Balance By Subfund, Project, and GLA) and the agency's records for each project and phase code.

Errors discovered through the reconciliation process must be promptly corrected in the agency's accounting records and/or in STARS as appropriate. If an error is detected in STARS, the correction will normally require that the agency prepare and submit to the Comptroller General's Office both: (a) a transaction reversal of the incorrect transaction, and (b) a corrected transaction.

Related topics:

Correction Procedures Error Correction Process for Indirectly Detectable Errors
Preparation of Correction Documents-General Types of Corrections

TO: Error Correction Index