Controllers Training Series Adjusting the Financial recipe, without cooking the books

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Controllers Training SeriesAdjusting the
Financial recipe, without cooking the books

• John Gardner
• Paul Behrmann
• Doug Belliston
• February 27, 2003

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University Fund Groups

• Permanently Restricted
• Temporarily Restricted
• Unrestricted
• Other Non-university Related Funds

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Permanently Restricted

• Fund 72-True Endowment
• Donor funds which have been specified to be held
  in perpetuity.
• Fund 76-Loan Funds
• Donor funds to be held for short and long-term
  student lending programs.
• Fund 77-Property Management-Restricted
• Donated property that will fund true endowments
  when liquidated.

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Temporarily Restricted

• Fund 51-Donor Restricted
• Donor funds with use restrictions. Other
  university spending does not satisfy the
  restriction.
• Fund 55-Quasi Endowment
• Donor funds with use restrictions that are set
  aside by the university administration to
  function as an endowment.

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Other Non-University Related Funds

• Fund 47-Deposits Held for Others
• Non-university funds held for clubs and
  organizations as a convenience to those
  organizations, sometimes called agency funds.
• Fund 89-LDS Foundation
• Accounting services provided to LDS Foundation as
  a convenience to the Church.

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Unrestricted Funds

• Fund 17-Property Management
• Fund 37-Property Management, Quasi
• Fund 39-Plant Funds
• CXXXXXXX projects
• Fund 43-Annuity Funds

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Unrestricted Funds

• Fund 11-Budgeted and General Funds
• General university income and Academic/
  Administrative budgeted expense units. Primary
  funding is church support (tithing) and student
  tuition.
• Fund 21-Allocated General Endowment
• University allocated general endowment funds to
  support specific projects and activities.

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Unrestricted Funds

• Fund 12-General Fund Auxiliary
• General fund units which are revenue producing
  and self-supporting.
• Continuing Education
• Executive MBA
• BYU Student Association
• Fund 13-Academic Related
• Business-like operations that generate revenue,
  are self-supporting and are closely associated
  with academic units.
• Fund 15-Auxiliary and Service Enterprises
• Self supporting, revenue producing business
  activities.

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Unrestricted Funds

• Fund 23-Donor Restricted, Satisfied
• Donor funds given with a specified purpose.
  Since other university spending has satisfied the
  purpose, these funds are unrestricted for
  accounting purposes.
• Fund 19- Designated
• University funds set aside for specific projects
  and activities.
• Fund 35-Quasi Endowment
• Operate like endowment funds but are set aside by
  the university administration rather than outside
  donors.

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Unrestricted Funds

• Fund 31-Endowment Income
• Spendable funds available from True Endowments
  (Fund 72) and Quasi-endowments (Funds 35 or 55).
  Funding is the annual payout declared by the
  administration
• Fund 32-Endowment Investment
• Accumulated income from True and Quasi-endowments
  in excess of payout rate.

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Unrestricted funds

• Fund 28-Sponsored Programs
• Research grants and contracts funded by sources
  external to the university.
• RXXXXXXX projects

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Budget Adjustments
LPD CPO
Journal Entries
GENERAL LEDGER
Encumbrances
Campus Systems
Systems Allocations
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Pre-Test

• Budget Expense Balance
• 1,000 1,200 lt200gt
• What do you do?

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Use a Budget Adjustment if

• Expenses are properly recorded
• Transfer between two fund 11 speedtypes OR two
  fund 21 speedtypes

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Consider making a PERMANENT adjustment if
situation is expected to be recurring
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Fund 11 OER pools
Wages Benefits 5000 through 5999 Equipment 1
625 Access Devices 1626 Computer
Services 6010 through 6029 Software 6000
through 6009 Supplies and Other 6100 through
6999 Travel 7000 through 7099
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Pop Quiz 1

• Budget Expense Balance
  
• 5100 10,000 10,200 lt200gt
• 5500 1,000 700 300
• 5900 3,000 3,060 lt60gt
• Total 14,000 13,960 40

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Pop Quiz 2

• Budget Expense Balance
  
• 5100 10,000 10,200 lt200gt
• 5500 1,000 900 100
• 5900 3,000 3,060 lt60gt
• Total 14,000 14,160 lt160gt

Not another one!
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Introduction to other fund deficits
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Funds 12, 13 15 may incur losses up to their
available net assets
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Deficits in other funds mean available resources
have been exhausted
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Transaction Processing

• Agency Transactions
• Budget Adjustments (Pauls section)
• Correcting Journal Entries
• Special Cases, Payroll and UCA corrections
• Traditional Funds Transfers
• Support Transfers in Expense Categories
• Authorized University Allocations

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Agency Accounts--47xxxxxx

• Agency Funds are not owned by University the
  ONLY transactions should be
• Cash receipts at cashiers office
• Cash disbursement via agency check
• There should be no transactions from
• POs, Check Requisitions, direct billing systems,
  LPDs, P-cards, etc
• Discuss exceptions with Financial Services

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Correcting Journal Entries

• To correct errors in account or speedtype coding
  from journal entries or campus systems (other
  than Payroll and UCA)
• Example OIT bills telephone to wrong speedtype
• Call and correct billing departments records for
  future billings
• Correct via journal entry

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Payroll UCA (A/R) Corrections

• Corrections to amounts must be resolved through
  Payroll
• (W-2s) and UCA (AR collection)
• Example Incorrect amount of student wages or
  error on employee category
• Contact hiring office for correction or adjust
  hours next pay period
• Coordinate refunds in Payroll Office
• Example Speedtype wrong, amounts correct
• Contact hiring office for future entries
• Make journal entry
• Move 5600 both debit and credit
• If to different accounts, contact Payroll Office
• (e.g. 5600?5602)

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Authorized University Allocations

• ONLY for pre-approved activities by Budget Office
  and Church Headquarters
• 11xxxxxx-xxxx 15,000
• 15yyyyyy-4010 Univ Alloc (15,000)
• Approved support from Fund 11 to specific
  Auxiliaries
• Building usage
• Specific activity support

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Traditional Funds Transfer

• Move support, no change to expense categories
• Typically used with 12,13,15,19,23
• Not used with 21, 31, 51 (by Fin Services only),
  11 (never)

• MUST be sure restrictions are consistent in
  providing
• and receiving speedtypes

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Support Transfers in Expense Categories

• Reduce deficits in account categories or
  speedtypes
• MUST be sure restrictions are consistent in
  providing and receiving speedtypes
• Use when historical tracking of activity not
  critical (e.g. activity costing)
• Continued

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Support Transfers in Expense Categories (cont.)

• Use related xxx9 account for debit/credit OR
• Use same account number for debit/credit
• May move specific dollars or round dollars
• May NOT move more category from fund 11 than
  expenses in receiving fund

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Question for you to think about

• Can we standardize transfers through
• 1) xxx9 account support transfers
• 2) 9250 and 9260 funds transfers
• and NOT do transfer of support via the specific
  accounts?

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Transaction Processing Refresher

• Agency Transactions
• Budget Adjustments (Pauls discussion)
• Correcting Journal Entries
• Special Cases, Payroll and UCA corrections
• Traditional Funds Transfers
• Support Transfers in Expense Categories
• Authorized University Allocations

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• Deficit in a Fund 11 expense category within a
  speedtype
• Incorrect Transfer of wage funds within
  speedtype
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 11xxxxxx 5009 Admin Salaries 38,500
• 11xxxxxx 5599 Student Asst 38,500
• Tool Journal Entry

• Preferred Transfer Budget within speedtype
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 11xxxxxx 5000 Admin Salaries 38,500
• 11xxxxxx 5500 Student Asst 38,500
• Tool Budget Entry, either temporary or permanent

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• Deficit in Fund 11, transfer travel from another
  speedtype to cover
• Incorrect Transfer of supplies funds
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 11xxxxxx 6109 Supplies reclass 8,500
• 11yyyyyy 7009 Travel reclass 8,500
• Tool Journal Entry

• Preferred Request Budget trade
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 11xxxxxx 6100 Supplies 8,500
  to11yyyyyy
• 11yyyyyy 7000 Admin Salaries 8,500
  fr11xxxxxx
• Tool Budget Entry, either temporary or permanent

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• Deficit in non-Fund 11, cover from fund 11
• Incorrect Move supplies money to cover deficit
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 11xxxxxx 9260 Funds Transfer 1,500
• 23yyyyyy 6109 Supplies Reclass 1,500
• transaction will fail, transfers not allowed in
  fund 11 because expense categories are
  specifically budgeted also 9260 must 9250
• Tool Journal Entry

• Preferred Move support
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 11xxxxxx 6109 Supplies Reclass
  1,500 to23yyyyy
• 23yyyyyy 6109 Supplies Reclass
  1,500 fr11xxxxxx
• Tool Journal Entry

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• Transfer equipment maintenance support to cover
  shortfall
• Incorrect Transfer of equipment maintenance
  funds
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 11xxxxxx 6270 Equip Maint 500
• 11yyyyyy 6270 Equip Maint 500
• Tool CPO

• Preferred Since not a sale, use journal entry
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 11xxxxxx 6270 Equip Maint 500 to11yyyyyy
• 11yyyyyy 6270 Equip Maint 500
  fr11xxxxxx
• Tool Journal Entry

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• College support for department secretarial help
• Incorrect Adjust through revenue
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 19xxxxxx 4790 Other Income 3,500
• 23yyyyyy 4790 Other Income 3,500
• Tool Journal Entry

• Preferred 1 Move support through account reclass
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 19xxxxxx 5409 Staff Reclass 3,500
  to23yyyyyy
• 23yyyyyy 5409 Staff Reclass
  3,500 fr19xxxxxx
• Tool Journal Entry
• (continued next slide)

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• College support for department secretarial help
  (continued)
• Incorrect Adjust through revenue
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 19xxxxxx 4790 Other Income 3,500
• 23yyyyyy 4790 Other Income 3,500
• Tool Journal Entry

• Preferred 2 Use to keep account classifications
  pure
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 19xxxxxx 9260 Transfer out 3,500
  to23yyyyyy
• 23yyyyyy 9250 Transfer in 3,500 fr19xxxxxx
• Tool Journal Entry

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• Net asset transfer from College annual fund to
  dept gift accounts
• Preferred Using funds transfer keeps account
  classifications pure
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 23xxxxxx 9260 Funds xfer-out 4,500
  to23yyyyyy
• 23yyyyyy 9250 Funds xfer-in
  4,500 fr23xxxxxx
• Tool Journal Entry

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Question for you

• Can we standardize transfers through
• 1) xxx9 account support transfers
• 2) 9250 and 9260 funds transfers
• and NOT do transfer of support via the specific
  accounts?

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Questions?
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Sponsored Research ProjectsR1234567
Construction ProjectsC1234567
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Research Construction Projects

• Must accumulate specific expenditures
• Cannot use funds transfers 9250/9260
• Adjustments related to deficits are only made by
  Financial Services Accountants
• Research Accounting Office
• Plant Fund Accountant

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Sales of Goods and Services
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• Sale of services from an auxiliary to college
• Sample Record other income and expense
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 11xxxxxx 6100 Supplies 1,500
• 15yyyyyy 4790 Other Income 1,500
• CPO

• Preferred Use proper Sales account
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 11xxxxxx 6100 Supplies 1,500
• 15yyyyyy 4400 Sales-Campus
  1,500
• CPO

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• Non taxable Sale to non-BYU customers
• Sample All sales in single sales account
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 15xxxxxx xxxx AR or Cash 500
• 15xxxxxx 4500 Sales-Campus 500
• Direct Feed

• Preferred Use Taxable Sales Account
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 15xxxxxx xxxx AR or Cash 500
• 15xxxxxx 4510 Sales-Off Campus 500
• Direct Feed

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• Sale to student customers
• Sample All sales in single sales account
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 15xxxxxx xxxx AR or Cash 500
• 15xxxxxx 4500 Sales-Campus 500
• Direct Feed

• Preferred Use Taxable Sales Account
• Speedtype Account Acct Descr Debit Credit
  Line Ref.
• 15xxxxxx xxxx AR or Cash 500
• 15xxxxxx 4520 Sales-Taxable 500
• Direct Feed

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Final Comments Evaluations