1 Kuali Financial System Overview 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 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 Indiana University FIS

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 Scheduled Release June 2008 –Accounts Receivable –Capital Assets Management System Separate Projects –Endowment (KEM) –Research Administration (KRA) Kuali System Additional Modules (cont’d)

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 (Cont’d) 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 Downloads and Resources Kuali Appliance Kuali News Sign up on the website for 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 SU COA UA COAWest COA WA COA East COA EA COA Regional COAs

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 VPBus WA UNIV FM FMOPFMSY

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

34 Org Hierarchy with Accounts VPBus WA UNIV FM FMOPFMSY

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

36 Org Heir with Accounts/Sub Accounts VPBus WA UNIV FM FMOPFMSY aucapcustr

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 S&E “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 5:30am. 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 ID’s, 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 account’s position.

67 Questions?