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Policy Training Program for the Lifecycle of an Account Account Lifecycle: The Beginning Session 1 Account Establishment January 2010 Mary Bell, Computer Science Stacy Brown, Discovery Park Angie Delworth, Consumer and Family Sciences Christy Haddock, Vice President for Research

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Presentation Transcript
slide1

Policy Training Program for the Lifecycle

of an Account

Account Lifecycle: The Beginning

Session 1

Account Establishment

January 2010

team members
Mary Bell, Computer Science

Stacy Brown, Discovery Park

Angie Delworth, Consumer and Family Sciences

Christy Haddock, Vice President for Research

Samantha Reece, Physical Facilities Business Office

Katie Stair, Budget and Fiscal Planning

Patti Vostry, Electrical and Computer Engineering

Becky White, Sponsored Program Services

Team Members
presenters
Section 1 - Account Set up

Kay Parker

Kathy Vanderwall

Section 2 – Payroll Set up

Mary Bell

Section 3 – Cost Sharing

Stacy Brown

Presenters
slide4

Course Content

Section 1 - Fund Set up

  • Different fund types
  • Unrestricted vs. Restricted
  • Fund Establishment processes
  • Similarities between funds
  • Fund Attributes
  • Key Aspects of Account/ Fund Establishment

Section 2 – Payroll Set up

  • Tracking Effort and Impact on accounts
  • Summer Payroll Processes

Section 3 – Cost Sharing

  • Documentation and Tracking
  • Managing Cost Sharing
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Upon completion of this course, you will be able to:

Identify policies guiding classification of accounts

Identify overall account management issues

Explain commonalities and differences in sources and establishment of funds

Discuss activities associated with new accounts such as payroll set up and sponsored program cost sharing

Know who to call with questions and be able to ask appropriate questions

Course Objectives

fund classifications
Fund Classifications
  • Unrestricted Funds
    • General Funds
    • Income Producing
    • Auxiliary
  • Other
    • Agency
    • Physical Facilities
  • Restricted Funds
    • State Line / Federal Appropriated
    • Sponsored Programs
    • Voluntary Support
    • Student Aid
    • Endowments
    • Construction (Plant)
fund accounting what is it
Fund accounting is the procedure by which resources for various purposes are classified:

As specified by donors

By regulations, restrictions, or limitations set by sources outside the university

By directions issued by the university’s Board of Trustees or upper management

Fund AccountingWhat Is It?
fund accounting why do we do it
Purdue receives funds from a variety of sources.

We need to account for, and report how, funds are used (to the various fund-providing entities)

Allows us to ensure that funds are used as the donor/entity intended

Assists in stewardship of these funds

Fund AccountingWhy Do We Do It?
account set up
Why are there differences in the establishment and management between fund classifications?

http://www.purdue.edu/comptrlr/pdf/AccountManagementGuidelines.pdf

Account Set up
account set up11
What can we learn from the fund listing that will help us understand the fund groupings and better practice account management?

https://www.purdue.edu/account/BPM/OnePurdue/FinalFundListing.xls

Account Set up
account set up12
Why should departments review and maintain documentation?

Ensure funds are appropriately classified

Stewardship of funds

Record Retention

Account Set up
account set up13
Account Set up

Why should you review your accounts once they have been established?

  • SRM Workflow
  • Attributes established correctly
  • GM Account Setup Checklist
  • FM Account Setup Checklist

http://www.purdue.edu/sps/xls/GMAccountSetupChecklist.xls

http://www.purdue.edu/bs-ba/xls/FMAccountSetupChecklist.xls

account set up14
Account Set up

Why is it important to establish funds in a timely manner?

  • Consistent charging of costs
  • Prompt deposit of future gifts
example 1 situation
Example #1 - Situation

A department receives a check and a letter that indicates the donor wants to support a scholarship for undergraduates in your department. The administrative assistant who brings it to the business office states that it should be deposited in the department’s general gift account. What action should you take? What fund do you think should receive the check?

example 1 answer
Example #1 Answer
  • Department should clarify with the administrative assistant that since the letter indicates the funds are specifically designated for a scholarship, the funds should be deposited in either a unique scholarship fund or a general department scholarship account. This will allow for better stewardship of the funds.
example 2 situation
Example #2 - Situation

A recharge activity in your department is overdrafted. The department head would like to subsidize the activity with funds in their general departmental gift account. Is that allowable?

example 2 answer
Example #2 Answer

Yes, this is allowable. Since the funds held in the gift account were given to the department for unrestricted departmental use, the department head can allocate them to subsidize the recharge activity. Notify Costing to revise the recharge rate.

example 3 situation
Example #3 - Situation

A department wants to transfer funds from their general fund account into a sponsored program account that is over drafted. The rationale is that both funds are budgeted and the department wishes to use general funds to cover the overdraft. Is this an allowable transfer?

example 3 answer
Example #3 Answer

No. The correct method to resolve the overdraft is to move the expenses off of the sponsored program account and onto the general fund as voluntary cost sharing.

payroll set up
Why is it important to review payroll information with the appropriate Business Office person responsible for the account?

All staff can ensure that payroll is properly posted and recorded

PAR’s for sponsored research accounts

Payroll Set up
payroll set up22
Payroll Set up

Why is it important to communicate deviations in effort?

  • Effort is planned for individuals
  • Sponsor budget restrictions
  • Potential Fiscal Impacts
    • Bi-weekly finishes project and PI directs that their effort should now be charged to another project
    • Recharge activity is established and the effort of departmental staff changes
    • Sponsored program account expires
payroll set up23
Payroll Set up

Why is it important to review the summer payroll calendar for AY staff (i.e.: faculty, staff and graduate students)?

  • Confirm summer pay schedules
  • Verify funds are available
  • Follow policies that govern summer salary
    • NSF 2/9, NIH salary cap, Career awards, Provost policies
cost sharing
Why must we track cost share commitments?

Purdue’s cost share policy

Cost sharing must be verifiable and auditable

Sponsor reporting requirements

Determine availability of funds within your department

Cost Sharing
cost sharing25
Cost Sharing

Why do we document cost share commitments not captured in the University accounting system such as donated items, volunteer services or from non-federal restricted funds?

  • Documented annually and at closing
  • Memo must provide sufficient documentation and PI certification
  • Cost sharing that is donated or volunteer services will be valued and documented
cost sharing26
Cost Sharing

Why is it necessary to track voluntary cost sharing when no effort for the Principal Investigator is included in the budget to the sponsor?

  • Faculty effort must be appropriately classified for the purpose of the University’s facilities and administrative cost proposal
cost sharing27
Cost Sharing

Why are there separate cost sharing IO’s set up at the beginning of the grant?

  • To verify that the charges are auditable within the University’s accounting system
  • Multiple IO’s may be established for reporting purposes and to expend funds from multiple departments
example 5 situation
Situation: A Form 32 / Letter of Cost Sharing Commitment was submitted and approved with the proposal. It contained AY salary for the PI as a cost sharing commitment from the department. The PI informed the Business Office that he would like to pay for a consultant in place of his salary on the cost sharing dollars. What are the fiscal issues associated with this request?Example #5 – Situation
example 5 fiscal impacts
Department has a fixed dollar commitment to the sponsor.

Commitment included fringes from the university central pool.

Faculty salary budgeted on general funds at budget time.

The Head needs to approve the change as it increases the overall departmental cost sharing commitment.

Is the scope of the project changing in any way by adding this consultant to the project?

Example #5 – Fiscal Impacts
example 5 solution
Fiscal impacts of the request should be addressed with the faculty member and, if necessary, with the department head.

In this situation, the business office raised the concerns to the department head who determined that the original plan as approved on the Form 32 should be followed.

Example #5 – Solution
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Business@Purdue https://www2.itap.purdue.edu/bs/BPP/index.cfm

Accounting http://www.purdue.edu/account/

Sponsored Programs http://www.purdue.edu/sps/

NCURA https://www.ncura.edu/content/

Resources