Accounting Basics for FIS Users

Report
Accounting Basics for FIS Users
Accounting Basics for FIS users
Overview
1.
2.
3.
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5.
6.
Types of Accounts
Basic Account Structure
Budget Transfers
Journal Entries
Inter-fund Transfers
Miscellaneous
Accounting Basics for FIS users
Section 1 – Types of Accounts
There are 3 main types of accounts
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Operating Accounts (Departmental)
Trust Accounts
Grant Accounts
Accounting Basics for FIS users
Operating Accounts
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These are your Business Unit accounts
They are 5 digits long and start with either a “1” or a “2”
eg. Dept A - 19250
They are funded through the University’s central operating
budget, administered by the Budget Process and the
Budget Committee, and approved by the Board of
Governors.
The Budget is allocated to various object accounts such as
general office supplies, travel, equipment, and repairs
Accounting Basics for FIS users
Trust Accounts
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These accounts are set up for specific purposes or
functions such as Scholarships or conferences
They are 5 digits long and start with either a “6” or a “7”
They are funded through various outside sources ie private
donations, government grants, or registration fees
(conferences)
There are 2 main types of Trust accounts:
Endowment Accounts (Interest Earning)
Expendable Accounts (No Interest earned)
Accounting Basics for FIS users
Trust Accounts-Endowment
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Typically funded by an individual or group of individuals
for a very specific purpose ie. Scholarship
These accounts begin with a “6”
The initial investment is deposited and remains unspent
unless the Endowment is to be closed out. These accounts
have specific terms of reference that must be followed and
expenses are not allowed to be posted to them.
Interest earned is calculated at year-end with a maximum
of 6% transferred to an Expendable trust. This account
will start with a “7” and has the same last four digits as the
Endowment. Interest earned over 6% is returned to the
Endowment.
Accounting Basics for FIS users
Trust Accounts-Expendable
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Funded by the interest from their respective Endowment
Accounts, Government funding, or from private donations
that have not been earmarked as an Endowment.
These accounts begin with a “7”
Payments for scholarships, supplies, salaries etc can be
made from these accounts
These accounts do not have budgets. Expenses are limited
to funds available.
Accounting Basics for FIS users
Grant Accounts
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Grant accounts are 5 or 6 digits long and start with an “8”
They are funded from external granting agencies such as
NSERC or SSHRC, or internally funded (start up grants)
Grantee is responsible to ensure that expenditures meet the
funding agency’s guidelines. Any non-compliance with
these guidelines may result in loss of future funding to the
grantee and the University as a whole.
Any over-expenditure of the grant is the sole responsibility
of the grantee
Any grant account may be audited by the funding source at
any time
Additional financial assistance may be available from the
Research Grants Department of Finance
Accounting Basics for FIS users
Section 2 - Basic Account Structure
19250.8560
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Made up of the following components –
Business Unit
19250 Dept A
Object Account
8560 Special Projects
When entering data in the System, you must always have a
Business Unit and an Object Account as well as a
“.” separating the two.
Please see the attached “FIS QUICK FACTS” Sheet for easy
reference
Accounting Basics for FIS users
Basic Account Structure
19250.8560.1
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A Sub-object is another level of detail that is sometimes
added to a particular Object. In the above example, the
Business Unit is Dept A. The Object account is Special
Projects and the Sub-Object could be for “System
Upgrade”.
The use of the Sub-Object further clarifies what the object
is being used for and makes tracking of these expenses
easy to identify.
Accounting Basics for FIS users
Understanding the Budget Comparison
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At the top of the Budget Comparison Screen, you will see
a field called Account – this is where you type in your
Business Unit eg. 19999
Next you will see a field called “Ledger Type 1” – this is
defaulted to read “BA”. This means Budget Ledger
The field under this is “Ledger Type 2” – this is defaulted
to read “AA”. This means Actual Ledger
The LT1 Thru date and LT2 Thru date refer to the point in
time that information is being pulled from the system.
These dates must be the same
The level of detail “9” refers to the amount of information
that is provided in this view. It can be changed to provide
a lower level of detail (more condensed information)
The Ledger Type 1 (BA) Budget ledger is as of the LT1 Thru Date of 2009/07/31
The Ledger Type 2 (AA) Actual ledger is as fo the LT2 Thru Date of 2009/07/31
If these dates were not the same, you would be comparing the Budget as of July 31,
2009 with Actuals from some other time period and the information would be
meaningless
Accounting Basics for FIS users
Budget Transfers
When do I do a budget transfer?
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Budget transfers are used to move budget monies from one
account to another in order to facilitate spending
Budget amounts can be “Base” meaning that these
amounts are given to your Business Units on an annual
basis or “One Time” which means the funds are only given
once and for a specific purpose identified in the budget
process.
Accounting Basics for FIS users
Budget Transfer –General Rules
• The most important thing to remember is to put
the expense where it belongs. Finance relies on
historical information to help us make decisions
regarding Budget Submission approvals and to
forecast future costs to the University. This adds
to the integrity of the data.
• Our auditors use this information as well, to
determine what areas need further focus at yearend
Accounting Basics for FIS users
Section 3: Budget Transfers
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Budget transfers are done via a number of
document types. Each of the codes are designed
to allow the user to easily identify what kind of
budget transfer users are looking at.
The most common are as follows:
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BO – a basic budget transfer used for one time transfers
between accounts – you will use this 99% of the time
BB – a Base Budget transfer used to transfer base
budget funds on a permanent basis. Make sure that
when you use this, you want a PERMANENT change.
Accounting Basics for FIS users
Budget Transfers – General Rules
• You give the money “to” the account that needs it
to cover the spending and take away money
“from” the account you have the funds in.
• You want to move money from Miscellaneous to
the Equipment budget you would:
DEBIT (to)
11130.8860
CREDIT (from)
11130.8550
Accounting Basics for FIS users
Budget transfers explained
• Think of the FIS ledgers as your checking account. Every
time you spend money, by writing a cheque or swiping
your debit card, these are your actual expenses. In the FIS,
this is your AA ledger.
• If your checking account doesn’t have enough money in it,
you do a transfer from your savings account. In the FIS,
Budget transfers do the same thing. If you want to spend
money in an account that doesn’t have any Budget, you
take it from an account that does have money in it through
the budget Transfer process.
Accounting Basics for FIS users
Budget Transfer –Example 1
You are finally getting that new desk and chair you have
always wanted! You don’t have any money in your
Furniture account, but you have lots in the Misc account.
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The actual cost of the Furniture needs to be charged to the
account that best reflects the nature of the purchase.
As you have funds in Misc and have no budget in
Furniture, does not mean that this is where you should
charge the purchase order.
The budget transfer will be as follows:
Accounting Basics for FIS users
Budget transfer –Example 1
Accounting Basics for FIS users
Budget Transfers-Example 2
Your newly installed computer program has an annual
maintenance fee with it and you have no funds in your
8625 object account (Service Contracts)
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The spending must occur in the Service contracts object
line so you will have to transfer funds from another object
account to the service contract account.
The budget transfer will look like this:
Accounting Basics for FIS users
Budget Transfers-Example 2
The positive number is where the budget is being transferred “TO” and the negative is where
the budget is being transferred from. In this case you took the budget FROM your
Miscellaneous account (-) and transferred it TO the Service Contract line (+)
Accounting Basics for FIS users
Budget Transfer –Example 3
As your department has plans to use another dept’s
new machine, you have decided to give them some
money to help pay for it.
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The actual cost of the Machine needs to be charged to the
Business unit that has the ultimate control over the asset.
The purchase order will be made out to the other Business
Unit ONLY. Your accounts will not be charged for part of
the purchase.
The budget transfer will be as follows:
Accounting Basics for FIS users
Budget Transfer –Example 3
Accounting Basics for FIS users
Section 4 - Journal Entries
When do I do a Journal Entry?
You will make a journal ONLY in the following circumstances.
1)
When a charge has been incurred and it is not in the
correct account. ie. You see that a charge has been made
to 8550 Miscellaneous and it should have been charged to
object account 8850 Furniture
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You need to transfer funds to a trust account or grant
account. (Interfund transfers)
Accounting Basics for FIS users
Journal Entries–Example 1
Your new desk and chair have come in and at month-end
you look at the Furniture account for the charges. You
discover they were charged to Miscellaneous in error.
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The actual cost of the Furniture needs to be charged to the
account that best reflects the nature of the purchase.
A journal entry needs to be made that will move the
expense from your Miscellaneous account (credit) to your
Furniture account (debit).
The journal entry will be as follows:
Accounting Basics for FIS users
Journal Entry –Example 1
Accounting Basics for FIS users
Journal Entries–Example 2
An order for office supplies has come in and you
assign object account 8550 to the invoice.
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The actual cost of the Office supplies needs to be charged
to the account that best reflects the nature of the purchase.
A journal entry needs to be made that will move the
expense from your Miscellaneous account (credit) to your
Office Supplies account (debit).
The journal entry will be as follows:
Accounting Basics for FIS users
Journal Entry –Example 2
Accounting Basics for FIS users
Section 5 - Interfund Transfers
These are transfers that occur between Operating,
Trust, and Grant accounts.
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Accounting needs to properly report all
dollars moved from one type of fund to
another
Interfund Transfers
Operating
Grant Acct
Trust Acct
Each of these Areas is like their own separate bank account
We need to make sure that when we transfer money between
these accounts, they balance.
Accounting Basics for FIS users
Interfund Transfers
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To ensure proper accounting and reporting of these
transfers, a series of objects have been setup to transfer
funds.
These objects are found in your accounts:
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8975.1
8975.6
8975.8
Transfer to Operating
Transfer to Trust Fund
Transfer to Research Grants
Accounting Basics for FIS users
Interfund Transfers
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There are offsetting revenue objects to accurately track
these transfers.
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5901
5902
5903
Rev-Internal from Trans-Operating
Rev-Internal from Trans-Grants
Rev-Internal from Trans-Trust Acct
Accounting Basics for FIS users
Interfund Transfers –Operating to Trust
• Interfund transfers are handled in two steps
1) A budget transfer to move funds TO the 8975.6 (transfer
to trust account object). The FROM will be any object in
your account that has money available to transfer –ie.
Misc
2) A journal entry is done to facilitate the movement of these
funds to the trust account – remember that trust accounts
don’t have Budgets so you cannot do a budget transfer to
a trust. The journal entry will be a (+) amount to your
8975.6 object to show the expense in your account, and a
(-) amount to the trust account’s 5901 object account.
Accounting Basics for FIS users
Interfund Transfers –Operating to Trust
HRG has a trust account XXXXX setup for a special
Speaker series and you have promised them $500
to help pay for this.
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This transfer will be from your operating account to a
trust account.
You have funds available in your miscellaneous account to
pay for this.
Our first step is a Budget Transfer as follows:
Accounting Basics for FIS users
Interfund Transfers –Operating to Trust
Accounting Basics for FIS users
Interfund Transfers –Operating to Trust
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We have now moved the budget funds from our
Miscellaneous account to the Transfer to Trust account.
The “Transfer to” accounts must always balance
Now that we have done our Budget transfer, we need to
complete step 2 – The journal entry.
Accounting Basics for FIS users
Internal Transfers –Operating to Trust
Accounting Basics for FIS users
Internal Transfers –Operating to Trust
• Our journal entry shows the (+) to our 8975.6 account.
When you look at your expenses for the year, you will
clearly be able to identify this transfer as a cost to your
department in the year.
• The (-) amount in the trust shows up in their revenue
account. Revenues always appear as negatives. When the
recipient of the funds sees a negative in their object
account, they know someone has given them some money.
Accounting Basics for FIS users
Internal Transfers-Operating to Grant
Prof Doe has a grant account that he is using to help
fund a research project. Your department has decided
to pay for some equipment he will need to purchase.
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The transfer will be from your operating account to the
grant account.
You have funds available in your miscellaneous budget to
pay for this.
Step 1 is the budget transfer -
Accounting Basics for FIS users
Internal Transfers-Operating to Grant
Accounting Basics for FIS users
Interfund Transfers –Operating to Grant
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We have now moved the budget funds from our
Miscellaneous account to the Transfer to Grant account.
The “Transfer to” accounts must always balance
Now that we have done our Budget transfer, we have to
have a balancing Journal entry to physically move the
funds from our Operating to the Grant account. The grant
account records this as revenue, and the operating account
records this as an expense.
Step 2 is the journal entry as follows:
Accounting Basics for FIS users
Internal Transfers-Operating to Grant
Accounting Basics for FIS users
Section 6 -Miscellaneous
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The Budget Department is staffed as follows:
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David Butcher – Manager, Budgets
x2130
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Bonnie Bashura – Budget Secretary
x2130
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David Smith – Budget Analyst
x2082
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Sue Holiga – Budget Analyst
x2022
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Shelley Daigneault – Budget Analyst
x2021
For further information, please visit our Budget website at :
www.uwindsor.ca/budgets
Accounting Basics for FIS users
Miscellaneous – Other Financial Issues
If you have questions relating to FIS such as getting
Security on accounts or training for staff members, please
contact :
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Sandy Mehenka, Systems
x2143
Accounting Basics for FIS users
Miscellaneous – Other Financial Issues
Any Grant related questions should be forwarded to :
-Heather Pratt-Supervisor, Grant Accounting
X2127
-Donna Bergamin-Grant Accountant
X2132
(CFI,OIT,Sharc-Net,HRDC)
-Kathy McGorman-Grant Accountant
X2129
(SSHRC/NSERC/CIHR Grants, Start up Grants)
Visit the Grants website at: ‘www.uwindsor.ca/finance”
and then click on the Research Grants “flyout” on the left.
Accounting Basics for FIS users
Other Questions?

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