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UW Policy Directory

APS 38.1 – Accounting and Financial Reporting

Table of Contents

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(Approved by authority of the President) 

Purpose

This policy establishes that financial statements and financial reports prepared by the University and its affiliated entities must follow U.S. Generally Accepted Accounting Principles (GAAP).

This policy:

  • Demonstrates compliance with finance-related legal and contractual provisions;
  • Provides an accurate and complete presentation of financial results; and
  • Supports sound financial management of the University.

Scope

This policy applies to accounting and financial reporting activities of the University and affiliated entities that are included in the University’s financial reporting entity.

This policy:

  • Governs the preparation of accounting records, financial statements, and reports; and
  • Applies to all University entities unless specifically excluded by the Senior Vice President for Finance, Planning & Budgeting.

Definitions

Component Unit—A legally separate entity for which the University is financially accountable.

  • “Blended” component units are integrated with the University and reported as part of its operations.
  • “Discrete” component units are financially independent and presented separately in the University’s financial statements.

Financial Reporting—Refers to financial statements prepared by Finance, Planning and Budgeting, UW Medicine, and select University business units that are separately audited. It does not include  managerial or internal reports.

Financial Reporting Entity—A Governmental Accounting Standards Board (GASB) term for the collection of entities included in a financial statement or report, generally encompassing the University and other organizations for which the University is financially accountable.

UW Medicine Select Units—Includes UW Medical Center (both campuses), UW Physicians, UW Neighborhood Clinics, Airlift Northwest, and UW Medicine Shared Services.

Responsibilities

University Controller

  • Produce audited University financial reports;
  • Determine policy in consultation with senior financial leadership of the University and UW Medicine;
  • Interpret and explain policy provisions to impacted units;
  • Monitor compliance and enforce policy requirements;
  • Ensure implementation and execution of a well-designed system of internal controls; and
  • Ensure use of University financial resources is appropriate, necessary, and compliant with internal or external restrictions.

Entity or Business Unit Controllers/Finance Leads Responsible for Individually Audited University Business Units or Entities

  • Produce audited University financial reports;
  • Ensure transactions recorded to Workday comply with GAAP, GASB, and State Administrative and Accounting Manual (SAAM) requirements;
  • Maintain effective internal controls; and
  • Ensure appropriate and compliant use of University resources.

University Finance Officers

  • Promote understanding of and compliance with this policy within unit operations;
  • Serve as a resource for unit finance operational areas;
  • Complete the Fiscal Year-End Closing Review Checklist for the unit;
  • Maintain internal control systems; and
  • Ensure appropriate and compliant use of University resources.

Individuals Preparing or Approving Accounting Entries in Workday

  • Ensure all entries comply with GAAP, GASB, and SAAM requirements; and
  • Ensure appropriate and compliant use of University resources.
  • Understand and apply internal control principles in unit operations;
  • Ensure internal controls are in place and functioning; and
  • Ensure appropriate and compliant use of University resources.

Policy Statements

1.  Financial Reporting Entity

The University’s consolidated financial statements will include all departments, schools, and colleges of the University, UW Medicine Select Units, Portage Bay Insurance, and other affiliated operations that are determined to be part of the University’s financial reporting entity.

Affiliated organizations are evaluated for inclusion based on GASB criteria and the significance of the relationship with the University.

2.  Basis of Financial Accounting

Externally published University financial statements must comply with GAAP and GASB standards. All Workday transactions must comply with GAAP, GASB, and the Washington State Office of Financial Management (OFM) SAAM requirements unless a formal waiver is approved. All personnel charged with creating or reviewing/approving accounting entries that will be recorded in Workday must possess knowledge of GAAP and GASB requirements and accrual accounting.

UW Medicine Select Units may differ from American Hospital Association (AHA) compliant accounting treatments to enhance comparability of reporting with peers, provided they still comply with GAAP and GASB. If AHA treatment conflicts with SAAM, an OFM SAAM waiver may be required.

3.  Reporting Periods

The University’s fiscal year begins on July 1 and ends on June 30. Audited financial statements will be prepared annually. The University and UW Medicine will prepare unaudited interim financial statements (income statement and balance sheet) on a monthly or quarterly basis for management purposes.

Workday accounting periods will close at least monthly. FPB and UW Medicine Finance will dictate certain minimum required financial reports that are to be produced on a monthly/quarterly/annual basis. All necessary transactions must be recorded for accurate reporting.

Financial data will be transmitted to OFM as required by SAAM or OFM guidance.

4.  Recording and Posting Transactions

Workday is the University’s official system of record. All transactions impacting entities included within the financial reporting entity must be recorded in Workday using the common chart of accounts and standard data definitions.

5.  Financial Reporting

The University will prepare consolidated financial statements that include all departments, schools, and colleges of the University, UW Medicine Select Units, Portage Bay Insurance, and other affiliated operations determined to be within the financial reporting entity based on criteria established by the GASB.

  • Component units for which the University is financially accountable are included;
  • All inter-unit and inter-company transactions and balances will be eliminated in consolidation; and
  • Financial statements will be prepared as of the same date using uniform accounting policies.

6.  Audits of Financial Statements

Annual financial reports will be audited by an independent auditor selected through a formal process consistent with University procurement policies and Board of Regent expectations. Management will recommend to the Audit Advisory Committee of the Board of Regents, which will in turn recommend to the Finance and Asset Management Committee of the Board of Regents, the selection or continuation of the independent auditor.

The Audit Advisory Committee will review the UW Financial Report, UW Medicine Select Units audit, and other material financial statement audits.

7.  Internal Controls

The University will establish and maintain  internal controls that:

  • Identify and effectively manage risks impacting financial reporting;
  • Safeguard University assets;
  • Ensure integrity of financial information;
  • Ensure compliance with laws, regulations, and policies;
  • Comply with OFM SAAM internal control standards; and
  • Prevent or detect fraud.

General internal control principles include separation of duties, strong authorization and approval procedures, adequate custodial safeguards, and timely reconciliation of financial data. Internal control principles will be applied to all departmental operations, especially those impacting accounting records and reports. All campus systems, processes, operations, functions, and activities will be subject to evaluation of the associated internal control systems. It is a financial management unit’s responsibility to know and understand required compliance procedures as directed by FPB and UW Medicine Finance and to comply with those directives.

Units must reconcile Workday balances to external sources at least quarterly, or monthly when required, and certify compliance to FPB or UW Medicine Finance. Responsibility for reconciliation will be assigned by FPB and UW Medicine Finance.

FPB will maintain a Fiscal Year-End Closing Review Checklist documenting:

  • Financial oversight activities;
  • Accurate reporting ; and
  • A sufficient internal control environment.

Each University Finance Officer must complete the Checklist annually and obtain approval from the  appropriate unit head (e.g., dean, vice provost, vice president).

Responsible Office and Additional Information

For policy questions contact:

History

March 3, 2026.