CHART OF ACCOUNTS (COA) INTRODUCTION. Beth A. Meiser

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1 CHART OF ACCOUNTS (COA) INTRODUCTION Beth A. Meiser 1

2 LEARNING OUTCOMES 1. Understand basic concepts and terminology of Chart of Accounts (COA). 2. Understand the new General Ledger COA structure and how it meets OHIO needs. 3. Understand the functionality of the new Grants module and its COA structure and how Grants activity is summarized to the General Ledger. 2

3 MATERIALS 1. Segment Value Quick Reference List 2. Source Hierarchy Chart 3

4 CURRENT CHART OF ACCOUNTS 4

5 GLOSSARY OF TERMS COA Structure identifies how you will account for transactions. OU will have two structures: one for GL and one for Grants. Segments are the components of an account structure. Each segment has a name and defined length (e.g., Natural Account is 6 digits in our current structure). 5

6 CURRENT COA STRUCTURES Current account string (in BobcatBUY, Concur, PEDS, etc. Fund Type (3) Fund (4) Organization (5) Natural Account (6) Project (9) Task (5) Account string is actually posted as different account strings in GL and Projects GL COA string Fund Type (3) Fund (4) Organization (5) Natural Account (6) Project (9) Projects COA string Project (9) Task (5) Expenditure Type (equivalent to Nat. Account) (30) 6

7 SEGMENT VALUES Values are the range of numbers defined for each segment (e.g., Source = Unrestricted) Child values are used for posting transactions and entering budgets (140200) Parent values summarize child values for reporting purposes(e14020) Can run reports at either child value or parent value level 7

8 VALUE HIERARCHY: Planning Unit (parent value) Russ College of Engineering (C14000) Departments (parent value) Aviation (E14020) ISE: Industrial Systems Engineering (E14070) Other Departments (E14xxx) Organizations (child value) Aviation (140200) ISE: Industrial Systems Engineering (140700) Planes (140210) CASTLE: Center for Advanced Systems & Transportation Logistics Eng. (140710) More examples can be found in handout. 8

9 WHY DO WE NEED A NEW COA STRUCTURE? 1. Fund and Fund Type lead to confusion. 2. The source of funding can be difficult to identify (e.g. federal, state, private allocation funds). 3. The current Project segment reflects sub-organizations, activities, internal awards, and gifts/endowments limiting the ability to clearly track. 4. Similarity of segment values and format restrictions (e.g., natural accounts) do not allow for growth. 5. Enhancements of current reporting capabilities will likely result in less reliance on shadow systems in the future. Information from Campus Interviews, Core Team and COA Partner Group from 2016 identified deficiencies in COA structure and report capabilities 9

10 GENERAL LEDGER CHART OF ACCOUNTS 10

PROPOSED GL COA STRUCTURE How is the transaction summarized? How is the transaction funded? Who administers the funds? Why is the transaction occurring?

11 PROPOSED GL COA STRUCTURE How is the transaction summarized? How is the transaction funded? Who administers the funds? Why is the transaction occurring? Why is the transaction occurring (govt or accounting purpose)? What kind of transaction is taking place? Example: Ohio University, OU Foundation Example: Unrestricted, Sponsored Projects, etc. Example: Organization in a department/ planning unit. Example: Defined by Planning Unit for tracking purposes Example: Instruction, Public Service Fundraising Example: Tuition & Fees, Salaries, etc. 11

12 Definition Examples Represents major components of the university requiring separate balance sheet/external reporting (e.g. legal entities, auxiliary operations, etc.). 10 Ohio University General 14 Century Bond 21 Culinary Services 50 Foundation General 80 University Agency Funds 12

13 Definition Examples: Identifies the source of funds classified by restrictions. Restrictions are imposed by sponsors and donors. Unrestricted: General Fund (Unrestricted) * Designated: VPR Startup Allocations Cost Share Funds Operating Reserves Restricted: State Appropriations 42xxxx 43xxxx 44xxxx Restricted Gifts Endowment Distributions Sponsored Projects * Designated funds are internally restricted, while restricted funds are externally restricted by donors/sponsors. 13

14 SOURCES OF FUNDS HIERARCHY Total University Unrestricted (UNR) (C10000) Temporarily Restricted (TR) (C40000) Permanently Restricted (PR) (C70000) Unrestricted Operations (D1000) Unrestricted Nonoperating (D20000) Restricted Expendable (D40000) Restricted nonexpendable (D50000) PR Nonexpendable (D70000) Unrestricted (E10000) Repair & Replacement Reserves (E20000) State Appropriations (E40000) Endowment Corpus PR Pledges Designated (E11000) Internal Bank Gifts (E42000) Planned Gifts PR Corpus UNR Endowment Distributions (E13000) Century Bond Endowment Distributions (E43000) Pledge Accounting PR Planned Gifts Auxiliaries (E14000) Quasi Endowment Corpus Sponsored Projects (E44000) Represents all university sources. Sponsored Fin Aid (E45000) Unrestricted Ops and Restricted Expendable are most commonly used by Planning Units. 14

15 SOURCE SEGMENT: UNRESTRICTED Unrestricted (UNR) (C10000) Unrestricted Operations (D1000) Unrestricted Nonoperating (D20000) Unrestricted Operations represents various types of unrestricted spending. Unrestricted (E10000) Designated (E11000) Repair & Replacement Reserves (E20000) Internal Bank UNR Endowment Distributions (E13000) Century Bond Auxiliaries (E14000) Quasi Endowment Corpus 15

16 UNRESTRICTED CONTINUED General Unrestricted (100000) will be the most commonly used Source. Unrestricted (F10000) Unrestricted (E10000) Cost Allocations (F10400) Unrestricted (G10000) UNR Foundation Gift (G10050) Student Financial Aid (G10060) Cost Allocations (G10400) General Unrestricted (100000) UNR Foundation Gift (100500) PACE (100600) Institutional Reserves Allocations (G10420) Post-secondary Educ Pgm Student Financial Aid (G10460) Cost Allocation sources are used to track collection and distribution of fees/funding. 16

17 SOURCE SEGMENT: DESIGNATED Unrestricted (UNR) (C10000) Unrestricted Operations (D1000) Unrestricted (E10000) Designated (E11000) Unrestricted Nonoperating (D20000) Repair & Replacement Reserves (E20000) Internal Bank Designated represents unrestricted funds that have been designated or set apart for a specific purpose (aka internally restricted). UNR Endowment Distributions (E13000) Century Bond Auxiliaries (E14000) Quasi Endowment Corpus 17

18 DESIGNATED CONTINUED Designated (E11000) Designated Spending (F11000) Affiliate Programs (F11100) Faculty Commitments (F11200) Cost Share Funds (F11300) Student Financial Aid (F11400) Reserves (F11500) Travel Programs (F11600) Fundraising Events (F11800) UNR Capital Spending (110000) Affiliate Pgms (unique values) (111xxx) Honors Tutorial (112000) Cost Share Funds (113000) Student Financial Aid (unique values) (114xxx) Operating Reserve (11500) Travel (for credit) (1161xx) Fund raising Events (1181xx) Workshops/ Conferrences (110100) Internal Awards (unique values) (1121xx) Federal Workstudy Cost Share (113600) Travel (noncredit) (1165xx) Camps (110150) Startups (1124xx) Designated funds are categorized by purpose or use. Operating Reserve is new Carryforward. 18

19 SOURCE SEGMENT: DONOR FUNDS Total University Unrestricted (UNR) (C10000) Temporarily Restricted (TR) (C40000) Unrestricted Operations (D1000) Unrestricted Nonoperating (D20000) Restricted Expendable (D40000) Restricted nonexpendable (D50000) Unrestricted (E10000) Repair & Replacement Reserves (E20000) State Appropriations (E40000) Endowment Corpus Designated (E11000) Internal Bank Gifts (E42000) Planned Gifts UNR Endowment Distributions (E13000) Century Bond Endowment Distributions (E43000) Pledge Accounting Auxiliaries (E14000) Quasi Endowment Corpus Sponsored Projects (E44000) Gifts are tracked based on restriction and gift purpose. Sponsored Fin Aid (E45000) 19

20 DONOR FUNDS CONTINUED Funds from Donors are tracked by gift purpose If donor doesn t specify an annual gift or broad category (e.g. scholarship), this would be considered an unrestricted gift (Source ). If the donor has specifications, then determine type of fund and purpose. Type of funds (first 2 digits) 13 Unrestricted Endowment 42 Restricted Gifts 43 Endowment Distribution Purpose (last 4 digits) Other Discretionary/ Gen Support Chairs/Professorships/Lectureships Research Scholarships, Fellowships, Awards Capital Improvements/ Renovations 20

21 SOURCE SEGMENT: SPONSORED Total University Unrestricted (UNR) (C10000) Temporarily Restricted (TR) (C40000) Permanently Restricted (PR) (C70000) Unrestricted Operations (D1000) Unrestricted Nonoperating (D20000) Restricted Expendable (D40000) Restricted nonexpendable (D50000) PR Non-expendable (D70000) Unrestricted (E10000) Repair & Replacement Reserves (E20000) State Appropriations (E40000) Endowment Corpus PR Pledges Designated (E11000) Internal Bank Gifts (E42000) Planned Gifts PR Corpus UNR Endowment Distributions (E13000) Century Bond Endowment Distributions (E43000) Pledge Accounting PR Planned Gifts Auxiliaries (E14000) Quasi Endowment Corpus Sponsored Projects (E44000) Sponsored Funds are considered restricted under GASB. Sponsored Fin Aid (E45000) 21

22 SPONSORED FUNDS CONTINUED Sponsored Funds are categorized by source of funds: Sponsored Projects Federal State Other Govt Local Private Sources Sponsored Financial Aid Federal (PELL, SEOG, etc.) State (Gear Up, OCOG, etc.) 22

23 Definition Identifies who administers the funds, such as a planning unit or department. 6 digit number defined as: Planning unit = first 2 digits 10 A&S 14 Engineering 25 - HCOM Location = third digit 0 Athens 1 Dublin 2 Cleveland 9 Regionals Primarily tracks activities of extension campuses Department & orgs = last 3 digits Numbered and summarized by planning units 23

24 WHAT IS AN ORGANIZATION? Organization is the lowest level value of our university structure. A department can consist of multiple organizations Reports can be run at either for an individual org value or for the department parent value. 24

25 CONSIDERATIONS IN DETERMINING ORGANIZATION CODE 1. Are your current organization codes sufficient for your needs? 2. Do you have a department that you d like to track with greater granularity? 3. For a research area, would you like to track sponsored activity by discipline? 25

26 CONSIDERATIONS IN DEFINING ORGANIZATIONS 1. Does a unit appear on your org chart? 2. Is it a program you offer? 3. Does it represent a service provided? 4. Is it an initiative to be tracked? Organizations: Often will have payroll charges Have a need to match revenues and expenses 26

27 Definition Allows departments to identify internal purposes for spending and associated revenues. Some joint purposes are defined at the university level, as well as range of values that are defined at the planning unit level. Activity Segment was added to assist in reducing shadow systems for monitoring and reporting. Examples University defined codes (e.g., Homecoming, Halloween, Graduation, Recruiting-Faculty, Recruiting-Staff, Recruiting- Students, etc.) Arts & Sciences College of Business 27

28 Definition Examples Defines government and accounting purposes for spending. Values generally follow the NACUBO and A-21 Function Codes. Function is only used with expense object codes. 10 Instruction 25 Sponsored Research 30 Public Service 28

29 Definition Examples 1xxxxx 2xxxxx 4xxxxx 6xxxxx 7xxxxx Defines the purpose of a financial transaction and delineates the values for Assets, Liabilities, Fund Balance, Revenue and Expense. Asset codes Liability codes Revenue codes Transfer codes Expense codes 29

30 HOW DO SEGMENTS WORK TOGETHER? Validation rules control and limit how segment values can be combined in forming an account string Examples: Culinary org must be used with Entity 21 (Culinary Svcs) Auxiliary org must use Source (Auxiliaries) Scholarship object codes must use Function 70 (Scholarships/Fellowships) Planning Unit can only use their Activity Code range 30

31 GRANTS ACCOUNTING CHART OF ACCOUNTS 31

32 WHAT IS THE GRANTS COA? Project Accounting tracks activity based on Project - Task Utilizes different tasks to differentiate sources of external and internal funds match Sometimes multiple projects represent awards from different external sources Grants Accounting tracks activity based on Project - Task - Award Task represents work breakdown structure for Project Award represents various sources of funding (both external and internal) 32

33 GRANTS COA STRUCTURE Project (5) Task (up to 5) Award (7) Expenditure Type (30) Same as Object description in GL 33

34 AWARDS 1. Supports multi-funding concept One award can fund multiple projects One project can be funded by multiple awards 2. Tracks all installments, supplements, amendments to the award along with future commitments Tracks funding to various projects and can be directed to specific tasks on a project 3. Indirect cost rates including retroactive changes 4. Compliance terms & conditions 5. Flexible budgetary controls & funds checking 6. Meets reporting requirements Produces SF425, SF270, SF1034/

35 MULTI-FUNDING EXAMPLE Project Task 1 Research Task 2 Design Task 3 Development Task 4 Outreach Award 1 Award 2 Matching Funds for Award 2 Award 1 funds the total project Award 2 only funds task 4 Matching Funds requirement on Award 2 A single project can be funded by multiple awards 35

Access Task 20 Project Mgmt Multiple sources of funds would create multiple

36 CAPITAL PROJECT EXAMPLE Project Task 0 Prebid Task 1 Design Task 2 Development Task 3 Internal Billings Task 4 Task 5 Furnish & Equip Task 6 Access Task 20 Project Mgmt Multiple sources of funds would create multiple tasks to represent each source of funds (e.g. task 3 would have had 4 subtasks in Projects). 36

37 INTERNAL AWARD FUNDING Project Chemistry Task 1 Project English Task 1 Award 1 Incentive Award Project Education Task 1 Task 2 Internal awards can fund multiple projects. 37

38 FACULTY FUNDING Project Faculty Member 1 Task 1 Dept Award Task 2 IBM Gift Task 3 Corporate Gift Task 4 Incentive Funds Award 1 Fac Dev Award 2 Gift Funds Award 3 Rsch Incentive A faculty member can have a single project with unique tasks representing internal and gift funds. 38

39 GRANTS DATA IN GL Grants is a subledger to the GL Project will no longer be a represented segment in GL COA structure All transactions are stored in detail in Grants, but posted in summary to the GL Summarized by source of funds, organization, and function Utilizes auto-accounting to determine GL account strings University rarely used auto-accounting in Projects, which is why account string is required for all segments 39

40 GRANTS AUTO-ACCOUNTING Project Task Award Expenditure Type Organization Service Type Type Purpose Psychology Unspecified NIH Research Lab Supplies

41 WHAT ARE ADVANTAGES OF TRACKING IN GRANTS? 1. Tracks activity both by fiscal year and project period (inception to date) Budgets/funding continues across fiscal years 2. Ability to summarize activity by Project or Award Tasks can belong to different organizations/planning units 3. Can create a grants-centric view of reporting for faculty Track all faculty activity in Grants Common tool to view reporting (OBI dashboard) 41

42 FUNDS YOU MIGHT TRACK IN GRANTS Sponsored Project awards Capital Projects University award programs Planning Unit awards Start-up funds Restricted gifts Endowed fund distributions Honors Tutorial College funding IDC incentive funding 42

43 MAPPING NEXT STEPS: Begin to think about: New Organization values for your Planning Unit New Activity values for your Planning Unit Optional: Participate in a Q&A session if you have questions about today s information April 25: 3:30 5 PM (WUSOC 302) April 27: 12:30 2 PM (WUSOC 302) Attend your scheduled Mapping Kickoff Workshop Participate in scheduled Mapping Action Sessions during May/June For clarification or information, please COA@ohio.edu 43

44 COA RESOURCES COA Website: All COA information posted on website. Mapping information will be posted soon. Utilize site to check on COA project news and updates. Any questions? 44

CHART OF ACCOUNTS (COA) MAPPING KICKOFF. Beth A. Meiser

CHART OF ACCOUNTS (COA) MAPPING KICKOFF Beth A. Meiser 1 LEARNING OUTCOMES 1. Recap the information from the Chart of Accounts (COA) Introduction session about the General Ledger COA and Grants functionality