FOUNDATIONS IN UNIVERSITY FINANCE CHART OF ACCOUNTS

Transcription

1 FOUNDATIONS IN UNIVERSITY FINANCE CHART OF ACCOUNTS

2 Chart of Accounts Bill Overman Manager, External Financial Reporting University Chart Manager Participant Outcomes Label components of the financial system s infrastructure the Chart of Accounts Anticipate how your department s financial activities impact the university s financial reporting Better utilize IUIE reporting tools by leveraging your organization s account and object code structure 2

3 Chart of Accounts COA BASICS 3

4 CoA Basics What is the Chart of Accounts (CoA)? Infrastructure that makes KFS work Internal controls Reporting Routing Includes Chart Responsibility Center (RC) Organization Account Object code 4

5 CoA Basics: Example of a Chart Indiana University (IU) University Administration (UA) 91: VP RSCH 92: VP CFO RSCH VPRO BUDU FMOP

6 CoA Basics Account Specific identifier for a pool of funds assigned to a specific organization for a specific function Can be ongoing General fund account for an academic unit Can be short-term Grant or sponsored project Physical plant project Faculty start-up money 6

7 CoA Basics Attributes of an Account Established during account creation and include: Attributes Fiscal Officer, Manager, Supervisor Organization Sub-Fund Group Higher Ed Function Code Notes (Account Responsibility) Specific roles, as defined in policy FIN-ACC-I-1 regarding oversight, operation, and leadership Leads to RC Leads to Fund Group Function of the account 7

8 CoA Basics Fund Groups and Sub-Fund Groups 12 fund groups and 52 sub-fund groups, including*: Fund Group General Funds Designated Funds Restricted Funds Contracts and Grants Auxiliary Funds Sub-Fund Group General Fund Public Service Continuing Education Faculty Research Scholarships and Fellowships Other Scholarships Fellowships Special State Appropriations Faculty Endowment Match Other Variety, based on funding agency Auxiliary Enterprise Auxiliary Service *See handout for complete listing 8

9 CoA Basics Higher Education Function Code What is the function of the account Definitions in NACUBO s Financial Accounting Reporting Manual (FARM) Examples of Higher Ed Function Code Instruction Departmental Research Individual or Project Research Auxiliary Academic Administration Institutional Support Often used for comparison to peer universities, including IPEDS Must choose the most appropriate code 9

10 Chart of Accounts IMPACT ON FINANCIAL REPORTING 10

11 Impact on Financial Reporting Annual Financial Reports The results of your transactions are reflected in the: Statement of Net Position (aka Balance Sheet) Functional Expense Note 11

12 12

13 Net Position 13

14 Which of the following is NOT restricted? Use your clicker to submit your answer: A. Scholarship created by the board of trustees B. A grant funded by the Department of Health and Human Services C. A fellowship funded by a donor through the IU Foundation D. The proceeds from the issuance of debt for construction of a building 0% 0% 0% 0% 0% A. B. C. D. E. E. All of the above are restricted 14

15 The development officer at the School of Education contacts a donor asking for a contribution. In the course of the conversation, the development officer mentions the scholarships could be provided with the gift. Is the gift restricted? Use your clicker to submit your answer: A. Yes (restricted) B. No (unrestricted) 0% 0% Yes (restricted) 15 No (unrestricted)

16 Functional Expense Note 16

17 Impact on Financial Reporting Object Codes Object Codes are detailed identifiers for Income, Expense, Asset, Liability and Fund Balances. They are: Specific to a chart Major categories are consistent across charts 2000 = academic salaries on all charts More specific codes may vary across charts 1504 = Animal Care Income on BL chart 1504 = Card Services Income on IN chart 17

18 Impact on Financial Reporting Object Codes Consolidation Hierarchy Consolidations Levels Object Codes 18

19 Impact on Financial Reporting Object Codes Beyond Financial Reporting For financial reporting, the object code matters at a high level, but beyond that Specific object codes may have other implications: Can trigger tax reporting, such as miscellaneous income on Tax Form 1099-MISC Can be associated with special policies and procedures related to hospitality, capital assets, travel, moving reimbursements, sales tax, and much more Can drive document routing configurations 20

20 Impact on Financial Reporting Object Codes Levels and Consolidations Object codes that are related are grouped into Levels. Examples of Levels: Academic Salaries Student Academic Salaries Professional Salaries Telephone and Postage Printing and Duplicating Repairs and Maintenance 21

21 Impact on Financial Reporting Object Codes Levels and Consolidations Each object code belongs to an object level Each object level belongs to a consolidation Used in KFS and IUIE for drill-down and sub-totaling Examples of Consolidations: Compensation Financial Aid General Expense Travel Capital 23

22 Impact on Financial Reporting Annual Financial Reports Object Codes impact: Statement of Revenues, Expenses, and Changes in Net Position (aka Income Statement) Functional Expense Note 24

23 Professor Smith registered for a conference and the original expense was charged to object code 4013, Conferences and Workshops. Prof. Smith was unable to attend and a refund was issued in the form of a check. What object code do you use on the cash receipt when depositing the refund? Use your clicker to submit your answer: A Conference and Workshop Fee Income B Other Income C Conference & Workshops D Cash Deposit 0% 0% 0% 0% A. B. C. D. 25

24 Functional Expense Note 26

25 Chart of Accounts REPORTING with IUIE 28

26 29

27 30

28 31

29 32

30 Reporting with IUIE General Ledger Balance For questions that involve totals: How much have we spent year-to-date on travel? What were printing costs last month? Detail Transactions For questions that involve document-level detail: Travel seems high this month, what trips were included? Was that invoice paid in February? 33

31 34

32 Reporting with IUIE Organization and Responsibility Center (RC) Collection of accounts and/or other organizations In a hierarchy with all organizations, eventually mapping to one organization representing the institution (IU-UNIV) Hierarchy can be used for reporting RC is an attribute of Organization 35

33 Reporting with IUIE Organization and RC (with Org Hierarchy) Reports with (with Org Hierarchy) are for questions that involve multiple organizations: What were total expenses on object code 5000 on the South Bend campus? What were total capital expenditures at the School of Business in Bloomington? Organization and RC Without Org Hierarchy Reports without the comment in parentheses are for questions that involve one organization, such as: What was the total travel expense on account ? 36

34 37

35 Reporting with IUIE Financial Object Type Code Classifies an object code as income, expense, asset, liability, or fund balance: Category Object Type Code and Name Asset AS Asset Liability LI Liability Fund Balance FB Fund Balance Income CH Cash Not Income IC IN TI Income Not Cash Income-Cash Transfer of Funds Income Expense EE Expenditure Not Expense ES EX TE Expense Not Expenditure Expense Expenditure Transfer of Funds - Expense 38

36 Reporting with IUIE Financial Balance Type Code Classifies a transaction or balance as budget, actual, or encumbrance: Category Financial Balance Type Code and Name Actual AC Actual Budget BB Base Budget CB Current Budget Encumbrance IE Internal Encumbrance EX PE External Encumbrance Pre-Encumbrance 39

37 Reporting with IUIE What is Fund Balance? Fundamental accounting equation: Assets = Liabilities + Net Worth Assets = Liabilities + Stockholders Equity Fund Balance = Equity or Net Worth An asset is something you ow_ A liability is something you ow_ The difference is fund balance! 40

38 Reporting with IUIE University Fiscal Period Code The period, or month, in which a transaction is posted Will appear as separate columns in the General Ledger Balance datagroup 41

39 Reporting with IUIE University Fiscal Period Code Financial Beginning Balance (period BB) For assets, liabilities, and fund balance, this will have actual balances for the beginning of the fiscal year. July 1 budget (both base and current) 43

40 University Fiscal Period Code University Fiscal Period Code C&G Beginning Balance (period CB) Used to track income and expense over the life of an account rather than on a fiscal year basis Only populated on C&G and construction accounts Contains the total of activity for all prior fiscal years Does not include the current year 44

41 University Fiscal Period Code University Fiscal Period Code Account Line Annual Balance Amount Sum of the Month 01 through Month 13 amounts Account Line Annual Balance Amount = year-to-date amount Financial Beginning Balance + Account Line Annual Balance = Current balance for an asset or liability C&G Beginning Balance + Account Line Annual Balance = Total income/expense over the life of an account 45

42 Getting Support Help is available in several forms! Direct Support 1. Work with you department or organizational business office 2. Contact your account s chart manager Additional Training Training opportunities vary by campus: Bloomington Campus Courses Financial Processing Basics I Financial Processing Basics II IUIE Financial Reports Indianapolis Campus Courses Financial Processing (FP) Basics FP Documents IUIE Report Training Regional campuses: contact your finance administration office. 46

43 Getting Support Chart of Account Managers Chart Chart Manager BA Julie Bauters BL Rozzie Gerstman EA Dan Dooley IA Camy Broeker IN Charlie Miller IU Bill Overman KO Philemon Yebei NW Michelle Dickerson SB Kathleen Pizaña SE Dana Wavle UA Joan Hagen

44 Takeaways What we hope you learned today: 1. Account attributes and organization Defining characteristics like fund and sub-fund groups as well as manager and FO. 2. How object codes effect IU s financial statements Object codes have a structure and your choices have consequences 3. How to leverage your organization s account and object code structure in IUIE reports 48