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UNDERSTANDING FUNDS, ATTRIBUTES AND NEW ACCOUNTS AT UM A discussion of fund accounting, the various fund groups, account structure and logic, account attributes including financial classifications and source of funds, procedures for opening an account and account flags. May 2005 WHY AM I HERE?

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UNDERSTANDING FUNDS, ATTRIBUTES AND NEW ACCOUNTS AT UM

A discussion of fund accounting, the various fund groups, account structure and logic, account attributes including financial classifications and source of funds, procedures for opening an account and account flags.

May 2005

why am i here
WHY AM I HERE?
  • Do you ever wonder what type of account to set up?
  • Do you want to know more about external and internal restrictions on spending placed on certain types of accounts?
  • Do you want to know what budget implications the account types have?
  • If you do, then you are in the right place...
goals objectives
To enable departmental administrators in setting up and managing their accounts.

To help participants understand the budgetary and fiduciary responsibilities of funds.

By completion of this session, participants will be able to:

Understand the basic structure and classification of accounts under Fund Accounting Principles.

Demonstrate an understanding of the source of funds and functionality of accounts.

Perform the necessary steps to successfully open new accounts at the University.

Understand restrictions on using different types of accounts.

GOALS & OBJECTIVES
fund accounting
FUND ACCOUNTING
  • Allows University administrators to manage resources based on the different types of revenues received by the University.
  • Internally University reports on a fund accounting basis (Report 90s are based on fund accounting).
  • External financial statements are based on the accrual basis of accounting.
definition of a fund
DEFINITION OF A FUND
  • A fund is an accounting entity with a self-balancing set of accounts used to record assets, liabilities, a fund balance and changes in fund balance (revenues and expenses).
various fund groups
Current Funds

Unrestricted General

Designated

Medical

Gables, Marine and South Campus

University of Miami Hospitals and Clinics

Anne Bates Leach Eye Hospital

Restricted

Sponsored

Gift

Non-Current Funds

Loan

Endowment

Annuity

Plant

Agency

VARIOUS FUND GROUPS
account numbers
ACCOUNT NUMBERS
  • Account Structure and Logic
  • Link to Funds
    • SL account 1st digit
    • GL account 2nd digit
    • See table in manual
fund group 10 unrestricted general
FUND GROUP 10 UNRESTRICTED - GENERAL
  • Activities recorded in fund group
  • Year end balancing procedures
fund group 2x designated
FUND GROUP 2XDESIGNATED
  • Activities captured in fund groups
  • Year end balancing of funds
distinction between asset types 7r 7u
DISTINCTION BETWEEN ASSET TYPES “7R & 7U”
  • The asset type attribute is coded on “7” accounts as either R or U.
  • 7R - Restricted
  • 7U - Designated
fund group 30 40 restricted sponsored non sponsored
FUND GROUP 30 & 40RESTRICTEDSPONSORED/NON-SPONSORED
  • Sponsored
    • Activities captured in fund
    • Year end balancing
  • Gift
    • Activities captured in fund
    • Year end balancing
fund group 50 loan fund
FUND GROUP 50 LOAN FUND
  • This fund group is used to account for resources available for loans to students.
  • The funding sources for loan funds come primarily from government and donors.
  • Loan funds are revolving funds. Thus as students repay loans, the repayment is placed back in the account. As a result, funds are again available to issue loans to other students.
fund group 60 and 70 endowment annuity
FUND GROUP 60 AND 70ENDOWMENT & ANNUITY
  • Endowment and Similar Funds
    • Permanent
    • Term
    • Quasi
  • Annuity and Life Income Funds
fund group 8x plant funds
FUND GROUP 8XPLANT FUNDS
  • Activities captured
    • Construction and renovation
    • Departmental equipment and surplus reserves
  • Year end balancing procedures for funds 81 & 82
fund group 90 agencies
FUND GROUP 90 AGENCIES
  • Consists of resources held by the University as custodian or fiscal agent for others such as student organizations.
  • Restrictions:
    • Salaries may not be charged
    • Transfers may not be reflected
    • May not use UM’s federal or state sales tax ID #s
  • Year end balancingprocedures
what is an account
WHAT IS AN ACCOUNT?
  • A functional unit established for a specific purpose with one individual having primary responsibility for it.
  • This functional unit is a collection of records which contain dollar data and descriptive data called attributes.
sub object codes
Revenues 0xxx

Conferences 006x

Student Union Fees 0091

Corporate Gifts 0231

Foundation Gifts 0232

Private Gifts 0233

Auxiliary 07xx

Expenditures

Direct Costs 1xxx-7xxx

Personnel Comp 1xxx

Fringe Benefits 2xxx

Operations 3xxx 4xxx 5xxx

Capital 6xxx

Transfers 7xxx

Indirect Costs 8xxx

SUB-OBJECT CODES

Web site to view sub-object code listing is: www.miami.edu/controller

example of code usage
EXAMPLE OF CODE USAGE

Account #Object Code

139759 1521

  • Salary expense transaction (recorded in the subsidiary ledger)

019759 1521

  • Prepaid asset transaction (recorded in the general ledger)
attributes
ATTRIBUTES
  • Account Responsible Person
  • Type of fund (fund #)
  • Purpose of Account
  • Start/End date of account
  • Account title
  • Department Number
  • Asset type-restricted/unrestricted
  • Tax purpose
  • Financial Class
classification structures
CLASSIFICATION STRUCTURES
  • Fund
    • Sub-fund
  • Organizational Class
  • Campus
  • Asset Type
  • Tax Purpose
  • Financial Class
classification exercise
CLASSIFICATION EXERCISE
  • Let’s work through an example…
  • Determine total faculty salaries in the Chemistry Dept. paid by Federal Awards.
  • What account classification structures are selected to roll up the total?
financial class structure
FINANCIAL CLASS STRUCTURE
  • FINANCIAL CLASSIFICATION
    • LEVEL I
      • Educational and General
      • Auxiliary Enterprises
      • Patient Care
source of funds
SOURCE OF FUNDS
  • The source of funds establishes where the resources are being obtained from to fund the account being established. The following are examples of sources.
    • Program Revenues
    • Registration Fees
    • Private, Corporate and Foundation Gifts
    • Special Academic Programs
determining what account to create
DETERMINING WHAT ACCOUNT TO CREATE
  • When creating an account you need to ask yourself the following:
    • What is the funding source?
    • What is the account going to be used for?
    • Is the funding unrestricted, restricted, designated or other?
    • What is the financial classification of the account?
account create forms
ACCOUNT CREATE FORMS
  • You can find the account create forms for unrestricted, designated, restricted, plant and agency accounts on the Controller’s Web Page www.miami.edu/controller
account flags
ACCOUNT FLAGS
  • Frozen Flag
    • Transactions will not post to the account unless there is an outstanding open commitment for the item.
  • Delete Flag
    • Delete 1 Status
    • Delete 2 Status
conclusion
CONCLUSION
  • Is the account unrestricted, restricted, designated or other?
  • What are the budget implications based on the type of account I have set up?
  • What is the funding source and account purpose?
  • Where do I go to find help with the account create process?

Call the Controller’s Office

at 305-284-4244