Kuali Financial System Overview

1
Kuali Financial SystemOverview

• David Lyons
• NACUBO Liaison to Kuali
• April 2007

2
What is Kuali?
Kuali is a community source initiative with the
goal to develop a comprehensive financial
information system that will serve the needs of
all Carnegie Class college and universities.
3
Current Participants
4
Current Timeline
5
Indiana University FIS

• 12 Years of Operations
• 7 Campuses of Different Sizes
• 2.4 Billion Annual Expenditures
• Modular Design
• Flexible Chart of Accounts
• Need to Port to New Technology Environment

6
FIS Enhancements and Modifications

• Rigorous Review of Each Module
• Webinar-Style Presentations
• Critiqued by Specialists at Each Institution
• Consensus on Enhancements and Modifications
• Priorities Agreed Upon

7
Technology Environment

• Java 2 Enterprise Edition (J2EE)
• XML (Workflow)
• Modular Architecture
• Standard Connections to Other Systems
• Standards Based
• No Proprietary Technology for the Long Term

8
Kuali System Core Modules

• Chart of Accounts
• General Ledger
• Transaction Processing
• Workflow (KEW)
• Kuali Nervous System (KNS)

9
Kuali System Additional Modules

• Accounts Payable/Purchasing
• Budget Construction
• Labor Ledger
• Grants and Contracts
• (Scheduled Release October 2007)

10
Kuali System Additional Modules (contd)

• Scheduled Release June 2008
• Accounts Receivable
• Capital Assets Management System
• Separate Projects
• Endowment (KEM)
• Research Administration (KRA)

11
Kuali Chart of Accounts

• Simple Account Identification Number
• Transaction Object Code
• Sub Accounts/Sub Object Codes as Needed
• Numerous Attributes Linked to the Account
  Identification Number
• Multiple Charts if Needed

12
Conceptual Data Model
13
Transaction Processing

• Electronic Documents
• Built-in edits before routing for approvals
• Only fully approved transactions posted to
  general ledger

14
Business Rules

• Maintained by financial system parameter tables
• Functional users can maintain and create business
  rules
• Institutions can customize based on their
  policies

15
Workflow

• Routing engine for validated transactions
• Could be used for legacy and other systems
• Routes transaction to proper approvers
• Highly customizable

16
Standard Reports Base System

• Account Status
• Consolidated account status
• Consolidated object codes
• Account transactions
• Trial balance
• External reports

17
Balance Inquiry

• Balances by account, sub-account, object code and
  sub-object code
• Balances by consolidation and drill down to
  object code
• Budget balances after actual or encumbrances

18
Balance Inquiry (Contd)

• Drill down to detail transactions and to
  electronic transactions
• Include/Exclude pending entries
• Export functions (e.g. Excel)
• Sort in ascending/descending order

19
Financial Policy Guidance Base System

• Internal Control
• Chart of Accounts
• Cash Receipts
• Cash Disbursements
• Journal Vouchers
• Workflow
• Reports

20
Fiscal Officer Development Series

• Tool Kit for success for Fiscal Officers
• Development not training
• Establish relationships
• Assist Fiscal Officers in identifying their role

21
Not Included in Kauli

• Decision support environment
• Security Structure
• Check Writers

22
Post-Project Sustainability

• Community of users
• User-controlled organization
• Commercial partners

23
More KAULI Information

• WWW.KUALI.ORG
• Downloads and Resources
• Kuali Appliance
• Kuali News
• Sign up on the website for e-mail notices

24
KUALI

• Questions?
• Comments?

25
Chart of Accounts

• Claire Tyson
• San Joaquin Delta College

26
What is the Chart of Accounts?

• Kuali has a flexible Chart of Accounts.
• CoA is made up of sets of tables that define the
  codes and coding structures within Kuali.
• Kuali CoA specifies organization hierarchy and
  provides a framework for reporting financial data.

27
Purpose of the Chart

• What is the primary purpose of a chart of
  accounts?
• To support and validate entries into a general
  ledger
• What other functions does the Kuali chart of
  accounts serve?
• Reporting, both internal and external
• Internal controls
• Document routing and approvals
• Framework for budget construction

28
Key Attributes of the Chart

• Multiple charts of accounts
• Organizations and the organization hierarchy
• Accounts and sub-accounts
• Object code and sub-object codes
• Object level codes and object consolidation codes
• Extended attributes

29
Chart of Accounts at Sample U
30
Benefits of Multiple Charts

• Ability to handle complex reporting structures
• Campus charts are not required to contain object
  codes unrelated to their activities (i.e. Cost of
  Goods Sold, Inventory, etc.)
• Auxiliary Charts are not required to contain
  object codes unrelated to their activities (i.e.
  Tuition, State Appropriations)
• Easy access to campus level or Auxiliary
  reporting
• Increased information and knowledge at the campus
  level

31
Organizations

• Organization
• Example FMOP (Financial Management Operations)
• Collection of accounts and/or other organizations
• Some organization features
• Chart of Accounts, Campus, Department,
  Responsibility Center, Subunit
• Can include all fund groups
• Up to four alphanumeric characters (eg. FMOP)
• Extension HRMS table (customizable)

32
Organization Hierarchy at SU
UNIV
WA
VPBus
FM
FMOP
FMSY
33
Accounts

• Account Number
• Specific identifier for a pool of funds assigned
  to a specific organization for a specific
  function.
• Example 1912610 (Financial Management
  Administration)
• Reports to org FMOP
• All accounts can be self-balancing

34
Org Hierarchy with Accounts
UNIV
WA
VPBus
FM
FMOP
FMSY
1912610
1912631
35
Sub-Accounts

• Sub-accounts achieve further division of an
  account for internal reporting purposes.
• Example custr (FM Admin Customer Service)
• Reports to 1912610
• Characteristics of a sub-account
• Account specific
• Assumes all features of the account it reports to

36
Org Heir with Accounts/Sub Accounts
UNIV
WA
VPBus
FM
FMOP
FMSY
1912610
1912631
aucap
custr
37
Object Codes

• Object Codes are detailed identifiers for Income,
  Expense, Asset, Liability and Fund Balances.
• Chart specific
• Four numeric digits
• Example 1 West-2000 Academic Salaries
• East-2000 Academic Salaries
• Example 2 West-1504 Animal Care Income
• East-1504 Card Services Income

38
Sub-Object Codes

• Sub-object codes achieve further division of an
  object code for internal reporting purposes
• Features of a sub-object include the following
• Specific to an account and object code
• Assumes all features of the object code it
  reports to
• Example In State Travel Object Code 6000
• Faculty Instate Travel, Fac
• Staff Instate Travel, Sta
• Student Instate Travel, Stu

39
Levels and Consolidations

• All object codes report to a higher Level code
  and each Level code reports to a higher
  Consolidation code
• Approximately 80 Levels (although no limit)
• Approximately 20 Consolidations (no limit)
• Example
• Object Code 4100 Office
  Supplies
• Level SE Supplies
  and Expense
• Consolidation GENX General
  Expenses

40
Extended Attributes

• Extended Attributes are extensions of an Account
  that enable
• Search by attribute
• Lookup by attribute
• Balance inquiry retrieval by attribute
• Reporting by attribute
• Extended Attributes can be alpha / numeric.
• They are optional.

41
Enhancements to the Kuali chart

• Flexible Claim on Cash
• Post cash offsets to control accounts rather than
  having each account be self balancing
• Budget Year
• Work in multiple fiscal years at the same time
• Required for reporting uses of state
  appropriations in many states

42
Management Control and COA

• How can I use the chart for organizational
  management?
• Flexibility in Reporting
• Flexibility in making Routing decisions
• Hierarchy for Responsibility Management
• Facilitates internal controls by assigning fiscal
  officers, account managers, supervisors
• Transparency of data to measure performance of
  departments and subunits

43
Management Control and COA

• What tools are provided to achieve reporting
  objectives?
• With the Approval of the Chart Manager
• Organizations
• Accounts
• Object codes
• Sub-accounts (budgeting / spending)
• Sub-object codes (budgeting / spending)
• On line balance inquiries and formal reports
  through use of data warehouse

44
CoA Next Steps

• Kuali Demo Labs
• Kualitestdrive.org

45

• Questions?

46
Financial Transactions, Workflow and General
Ledger

• Bill Overman
• Indiana University

47
TP Global Concepts

• Transaction Processing
• Users create transactions with built-in edits
  before transactions route for approval.
• Fully approved transactions are sent to the
  general ledger.
• Allows read-only access to transactions via
  document search.

48
Electronic Documents

• Document groups
• Accounts Receivable
• Capital Assets
• Contract Grants
• Financial Documents
• Labor Distribution
• Chart of Accounts Maintenance
• Financial documents include
• Budget Adjustment
• Cash Receipt
• Disbursement Voucher
• Distribution of Income/Expense
• General Error Correction
• Internal Billing
• Journal Voucher
• Disbursement Voucher
• Transfer of Funds

49
Edits and Rules

• Validations
• Restrictions
• Account
• Object code
• Balancing rules
• Special features/Specific documents
• Authorizations/Routing

50
eDoc Account Edits
51
eDoc Object Code Edits
52
Kuali Business Rules

• Maintained by Financial System Parameter Tables
• Allows Functional Users to maintain and create
  business rules.
• Allows institutions to customize out of the box
  business rules based on their codes and policies.

53
Moving Expense Business Rule
54
Moving Expense Business Rule
55
General Ledger Pending Entries
56
After Validation

• Once an eDoc is validated it is routed through
  workflow.
• Fiscal Officer Routing
• Organization Routing
• Special Conditions Routing

57
What is Workflow?

• Functionally . . .
• Workflow is the art of moving transactions from
  one place to another, requesting and recording
  actions related to that transaction along the
  way.
• Technically . . .
• Workflow is a routing engine that works with
  Kuali. Workflow functions by matching attributes
  of a transaction to existing rules that indicate
  where a transaction with those attributes should
  go. Most commonly Workflow is used to collect
  approvals.

58
How does Workflow work?

• After a financial transaction is initiated,
  Workflow electronically routes the transaction to
  the proper approvers. - Documents must route to
  fiscal officer(s)
• - Optional organization routing may be in place
  for additional approvals
• The path of approval can be influenced by
• The type of transaction (example a Cash Receipt
  document may route differently than a Transfer of
  Funds)
• and . . .
• The content of the transaction itself (example a
  transaction charging supplies to a grant account
  may need to route for special approval)

59
Delegates

• Fiscal Officers can delegate approval authority
  to other users based on attributes of a specific
  transaction such as document type and dollar
  amount.
• Delegates can approve documents at the Account
  Level of routing as if they were the Fiscal
  Officer.
• Two kinds of delegates exist Primary delegates
  and Secondary delegates.
• Fiscal Officers can choose to establish either
  type of delegate or both.

60
Workgroups

• A workgroup is a collection of approvers who
  share a similar responsibility.
• If a document routes to a workgroup, all members
  of the workgroup will see that document in their
  action lists.
• Once any member of the workgroup takes action on
  that document, the document is removed from the
  action list of all other members of that
  workgroup.

61
General Ledger

• Once an eDoc is approved in workflow it is ready
  to post to the general ledger.

62
Accounting Cycle Components

• Pre-Scrubber and Scrubber Perform the following
  major functions
• Validation of Data
• Application of select missing values
• Reference to chart of accounts for validation
  (non-free form fields)
• Continuation account logic
• Generation of offsets
• Document balancing
• Capitalization of assets and liabilities
• Plant indebtedness
• Cost share transfers
• Cost share encumbrances
• Error handling
• Most common source for error files for input into
  the GLCP e-doc (in conjunction with De-Merge
  process)

63
Accounting Cycle Components Continued

• De-Merge Process Pulls all of the transactions
  for a document that the scrubber found to have
  errors and backs out any scrubber generated
  offsets. This is the main source of transactions
  for the General Ledger Correction Process (GLCP)
  e-doc.
• GL Poster Performs the following major
  functions
• Three instances of the poster
• Primary poster for the scrubbed transactions
• Automated reversal process
• Indirect Cost Recovery (ICR)
• Limited validation of data (amount, account
  number, object type, balance type, fiscal year,
  chart, debit/credit indicator, reversal date)
• Updates and inserts to GL tables
• GL Detail (GLEN)
• GL Balance (GLBL)
• Account Balance (ACBL)
• Sufficient Funds (SFBL)
• Open Encumbrances (GLEC)
• GL Reversals (GLRV)
• Initial determination of expenses eligible for
  ICR
• GL Expense Transactions (GLEX) temporary table

64
Accounting Cycle Components Continued

• Automated Reversal Process - Systematically
  reverses transactions that were created with a
  reversal date. A copy of the original
  transaction remains in the GL Reversal (GLRV)
  table until the reversal date is reached, at
  which time a reversing entry is created and
  posted. The original entry is then removed from
  the GLRV table.
• Indirect Cost Recovery (ICR) Calculates ICR
  based on the expenses found in the GL Expense
  Transactions (GLEX) table. Generally, ICR is
  charged to the account incurring the original
  charge and revenue is recorded in an associated
  income stream account, usually a general fund
  Responsibility Center (RC) account (table
  driven). The ICR process references attributes
  of account and supporting reference tables to
  derive an amount.
• From account - financial series ID, ICR rate, ICR
  types, custom exclusions by object code, and
  revenue chart and account
• From reference tables ICR automated entry, ICR
  type, and account exclusions
• Accounting Cycle Kuali Test Drive accounting
  cycle runs 11pm EDT Sunday Friday with
  refreshes of the test database each Saturday at
  530am. Documents fully approved by the 11pm
  accounting cycle will post to the General Ledger
  tables.

65
Functionality and Chart Set-Up

• Attributes of Account Numbers
• Expiration date, closed indicator, and
  continuation accounting string for continuation
  account processing
• Indirect cost rates, financial series IDs,
  exclusions, and revenue accounts for Indirect
  Cost Recovery (ICR) calculations
• Attributes of Sub-Account Numbers
• Identifies cost share sub accounts and the source
  accounting string for cost share transfers and
  cost share encumbrance processing
• Attributes of Organizations
• Identify the plant fund account numbers for
  capitalization and plant indebtedness
• Offset Definition Reference Table
• Determines the appropriate offset in the event a
  balancing transaction is needed
• Many other examples for other GL fields and
  reference tables

66
GL Enhancements - Turn On/Off

• Flexible Offsets Allows posting of generated
  offsets (cash, accounts payable, salaries
  payable, etc) to a specified offset accounting
  string. Each implementing institution can
  determine if offsets should post to the same
  account as the original transaction or to another
  defined accounting string. An offset accounting
  string can be established by document type within
  an account.
• Bank Specific Claim on Cash At the document
  level, allows the association of receipts and
  disbursements with a specific bank account. When
  activated users can specify a specific bank on
  appropriate e-docs (DV, ND, CR, PREQ, etc). When
  specified an additional set of cash transactions
  will be generated which reclassify the original
  cash entry to a bank specific cash entry, likely
  in an institutional level account. The
  accounting string for the additional bank
  specific entries is maintained via bank reference
  tables.
• Indirect Cost Recovery (ICR) Encumbrances An
  extension of the actual ICR calculation for
  encumbrances. This is an optional feature, that
  when activated will calculate ICR encumbrances
  based on the outstanding encumbrance balances for
  an account. The intent is to provide a more
  complete view of an accounts position.

67
Questions?