2. Indiana University Financial Management Services Chart of Accounts

3. Today’s Focus I. Chart of Accounts * Attributes * Attributes * Objectives * Objectives * Use for Internal Reporting * Use for Internal Reporting II. Year-end Carry forward and Reversion Process

4. What is the Chart of Accounts? m COA is the set of tables that define the codes and coding structures within the Financial Information System (FIS) Multiple Chart of Accounts Multiple Chart of Accounts –Organizations –Accounts –Sub-accounts –Object Codes –Sub-object codes –Levels –Consolidations

5. Chart of Accounts at IU IU COA UA COABL COA BA COA IN COA IA COA Regional COAs

6. Chart of Account Attributes OrganizationAccountSub-account Consolidation Least Detail Level Object Code Sub-object Code Most Detail Most Detail

7. Why do we need the Chart of Accounts? m External Financial Reporting IU Chart – Consolidated LevelIU Chart – Consolidated Level m Internal Financial Reporting Responsibility Center ManagementResponsibility Center Management Departmental ManagementDepartmental Management Detail by AccountDetail by Account m Internal Control Reporting HierarchyReporting Hierarchy RoutingRouting m Budget Construction

8. Benefits of Multiple Charts m Complex Reporting m Auxiliary Charts are not required to contain object codes unrelated to their activities (i.e. Tuition, State Appropriations) m Campus charts are not required to contain object codes unrelated to their activities (i.e. Cost of Goods Sold, Inventory, etc.) m Increase Campus Knowledge and Information m Easy Access to Campus Level or Auxiliary Reporting.

9. Chart of Account Managers ChartChart Managere-mail address IUBill Overman woverman@indiana.edu UASteve Keucher skeucher@indiana.edu BLRozzie Gerstman gerstma@indiana.edu BAJulie Bauters jbauters@indiana.edu IACamy Harrison charriso@iupui.edu INCharlie Miller chmiller@iupui.edu EADan Dooley dadooley@indiana.edu KOBill Yost wyost@iuk.edu SBKaren Vargo kvargo@iusb.edu NWMarilyn Vasquez mvasquez@indiana.edu SEMike Kerstiens mjkersti@indiana.edu

10. Chart of Account Attributes Orgs Accounts Sub-accounts

11. Organizations m Organization Example: FMOP (FMS Administration)Example: FMOP (FMS Administration) Collection of accounts or a collection of other organizations.Collection of accounts or a collection of other organizations. An organization may have any of the following attributesAn organization may have any of the following attributes –Chart of Accounts, Responsibility Center, Campus, Department, Subunit –HRMS –Can include all fund groups –Up to four alphanumeric characters (eg. FMOP)

12. Accounts m Account Number Specific identifier for a pool of funds assigned to a specific organization for a specific function.Specific identifier for a pool of funds assigned to a specific organization for a specific function. Example: 19-126-10 (FMS Administration)Example: 19-126-10 (FMS Administration) Reports to org FMOP Reports to org FMOP Attributes of an account include the following:Attributes of an account include the following: –Chart, Organization and Fund Group specific –Self-balancing –Seven numeric digits

13. Sub-Accounts m Sub-accounts achieve further division of an account for internal reporting purposes. m Example: custr (FMS Customer Service) Reports to 19-126-10 Reports to 19-126-10 m Attributes of a sub-account include the following: Account specificAccount specific Up to five alphanumeric digitsUp to five alphanumeric digits Assumes all attributes of the account it reports toAssumes all attributes of the account it reports to

14. Chart of Account Attributes Consolidations Levels Object Codes Sub-object codes

15. Object Codes m Object Codes are detailed identifiers for Income, Expense, Asset, Liability and Fund Balances. Chart specificChart specific Four numeric digitsFour numeric digits Example: BL 1504 “Animal Care Income”Example: BL 1504 “Animal Care Income” IN 1504 “Card Services Income” IN 1504 “Card Services Income”

16. Sub-object Codes m Sub-object codes achieve further division of an object code for internal reporting purposes m Attributes of a sub-object include the following: Specific to an accountSpecific to an account Assumes all attributes of the object code it reports toAssumes all attributes of the object code it reports to

17. Levels and Consolidations m All object codes report to a higher Level code and each Level code reports to a higher Consolidation code Approximately 80 LevelsApproximately 80 Levels Approximately 20 ConsolidationsApproximately 20 Consolidations Example:Example: Object Code 2403 “Exempt Staff Salary Savings” Object Code 2403 “Exempt Staff Salary Savings” Level PRSA “Professional Salaries” Level PRSA “Professional Salaries” Consolidation CMPN “Compensation” Consolidation CMPN “Compensation”

18. Hierarchy of COA at IU - Example Highest Organization Level Organization that is also a Campus Organization that is also an RC Organization that is also an RC Organization Organization Account Sub Account VPPF UA IU FMS FMOPFMSY 19126101912810 aucapcustr

19. Management Control and COA m How can I use the chart for organizational management? Flexibility in ReportingFlexibility in Reporting Flexibility in making Routing decisionsFlexibility in making Routing decisions Hierarchy for Responsibility ManagementHierarchy for Responsibility Management Facilitates internal controls by assigning fiscal officers, account managers, account supervisors and delegates.Facilitates internal controls by assigning fiscal officers, account managers, account supervisors and delegates. Tool for measuring the performance of a subunitTool for measuring the performance of a subunit

20. Management Control and COA m What tools do I have to achieve my reporting objectives? With the Approval of the Chart ManagerWith the Approval of the Chart Manager –Organizations –Accounts –Object codes Sub-accounts (budgeting / spending)Sub-accounts (budgeting / spending) Sub-object codes (budgeting / spending)Sub-object codes (budgeting / spending) FDRS ReportsFDRS Reports FISFIS

21. GROUP EXERCISE: Creating a Reporting Structure m IU has decided to add a new academic school – The School of Engineering. m Your handout contains a summary of the school’s activities. m Develop an organizational and reporting structure for the new school using at least one organization, one account, and one sub-account.

22. Creating a Reporting Structure What are your results? What are your results?

23. Org Carry Forward and Reversion m What is Organization Carry Forward and Reversion? Definition: Organization Carry Forward and Reversion is a year-end General Fund closing process that defines how remaining balances in an organization are handled at year-end.

24. Org Carry Forward and Reversion m Driven by the Org Reversion Table in the FIS m Reversion table codes are defined for each Organization at a given Consolidation m Exclusive to the General Fund Only m Process occurs only at year-end m Carry Forward / Reversion process for each org is at the discretion of the RC with the approval of the Campus. m Table can only be changed by the Campus Administration

25. Org Carry Forward and Reversion How do we define a remaining balance? 1)Current Budget – Actual or or 2) Current Budget – Actual – Encumbrances Balances can be carried forward or reverted BEFORE or AFTER encumbrances.

26. Carry Forward / Reversion Table What are the options? (For each Organization at each Consolidation level) Code Encumbrances Positive Balance Negative Balance A Carry Forward Carry Forward Carry Forward C1 Carry Forward Carry Forward Revert C2 Revert Carry Forward Revert N1 Carry Forward Revert Carry Forward N2 Revert Revert Carry Forward R1 Carry Forward Revert Revert R2 Revert Revert Revert

27. Carry Forward / Reversion Example A ORGANIZATION: GBPD REVERSION TABLE OPTION: R2 DESIGNATED REVERSION ACCOUNT : 1000000 Object Level Budget Actual Encumbrance Balance Wages10,000 9,000 01,000 S & E 5,000 3,000 1,0001,000 Travel 3,000 3,200 0 (200) All available positive and negative, budget and cash balances REVERT at year-end to account 1000000 which reports to the RC. No balances remain in the Organization after year-end.

28. Carry Forward / Reversion Example B ORGANIZATION: GBPD REVERSION TABLE OPTION: A DESIGNATED REVERSION ACCOUNT : 1000000 Object Level Budget Actual Encumbrance Balance Wages10,000 9,000 01,000 S & E 5,000 3,000 1,0001,000 Travel 3,000 3,200 0 (200) All available positive and negative, budget and cash balances are CARRIED FORWARD within organization GBPD at year-end. No balances are reverted to account 1000000, which reports to the RC, at year-end.

29. Carry Forward / Reversion Example C ORGANIZATION: GBPD REVERSION TABLE OPTION: N2 DESIGNATED REVERSION ACCOUNT : 1000000 Object Level Budget Actual Encumbrance Balance Wages10,000 9,000 01,000 S & E 5,000 3,000 1,0001,000 Travel 3,000 3,200 0 (200) All available POSITIVE, budget and cash balances are reverted to account 1000000, which reports to the RC, at year-end. The negative $200 balance is carried forward within organization GBPD into the next fiscal year.

30. Conclusions about the COA m Accomplishes organizational goal congruence HierarchyHierarchy FlexibilityFlexibility m Meets Internal and External Reporting Requirements m Carry Forward and Reversion facilitates responsibility accounting

31. Conclusions about the COA Questions?