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1 ACCOUNT CODES REVISITED Presented by John Brandt 5/11/09 1.

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Presentation on theme: "1 ACCOUNT CODES REVISITED Presented by John Brandt 5/11/09 1."— Presentation transcript:

1 1 ACCOUNT CODES REVISITED Presented by John Brandt 5/11/09 1

2 2 Prepared in collaboration with: HSC Unrestricted Accounting Main Campus Unrestricted Accounting Inventory Control (University Services) Tax Accounting (Main Campus Unrestricted Accounting) Purchasing 2

3 3 There are about 291 account codes. You are expected to select the most correct account code for each expense you oversee. This is not always easy 3

4 4 When it comes to choosing account codes, we do not want you to feel you are doing this.

5 5 We do not want you to feel like this.

6 6 We certainly do not want you to feel like this. Originators may get frustrated when a transaction request is returned.

7 7 Certain account codes can be affected by: Compliance with UNM policies External/internal reporting requirements Alignment with business purpose and any relevant UNM policy Taxation requirements Facilities & Administrative (F&A) - overhead costs exclusion/reporting requirements 7

8 8 Choosing an Account Code

9 9 Account Codes Revisited Topics: 1.Operating Ledger Categories 2.Business Purpose \ Item Text 3.Account Code Selection Guideline Specific account code groupings that need to be accurately coded F&A Excludable Foreign National New Employee Relocation Travel Food Computer Furniture, Fixtures, & Equipment (FFE) 4.You make the Call

10 10 Operating Ledger Categories Three main areas: Revenue Salary Expense Other Expense We will focus on the subcategories under Other Expense 10

11 11 Basic Account Structure First Digit of Account Code Type of Account 0Revenues 1Income &Transfers 2Labor expenses 3Supplies & Travel 4Student and Research Costs 5Patient Care Costs 6Communication Charges and Services (See Services, below) 7Plant Maintenance (ie: repair, maintenance, painting. Frequently a type of service.) 8Other Expenses, Special Contract & Grant Expenses 9Capital, Bond, and non-cash expenditures 11

12 12 Operating Ledger Expense Categories CategoryNote Salaries (20xx)Payroll only use Payroll Benefits (21xx)Payroll only use Supplies (31xx – 37xx)Food & computer related expenses scrutinized Travel (38xx – 39xx)Special rules/policies apply Student Costs (4xxx – 45xx) Research Costs (46xx – 49xx) Patient Care Costs (5xxx) Communication Charges (60xx)Charges through FUPLOAD by ITS Services (63xx – 69xx)Requires SPQ (USP statement) Plant Maintenance (70xx – 75xx)Requires SPQ (USP statement) on services Utilities (76xx – 79xx)For PPD Utilities division use only Other Expenses (80xx – 81xx)Not frequently used by Depts (8045-special rules apply) Special Grant Contract ExpensesPrimarily all subawardees Capital Expenditures (90xx – 95xx) When in doubt, call Main Campus - Unrestricted Accounting 12

13 13 Operating Ledger Expense Categories CategoryNote Salaries (20xx)Payroll only use Payroll Benefits (21xx)Payroll only use Supplies (31xx – 37xx)Food & computer related expenses scrutinized Travel (38xx – 39xx)Special rules/policies apply Student Costs (4xxx – 45xx) Research Costs (46xx – 49xx) Patient Care Costs (5xxx) Communication Charges (60xx)Charges through FUPLOAD by ITS Services (63xx – 69xx)Requires SPQ (USP statement) Plant Maintenance (70xx – 75xx)Requires SPQ (USP statement) on services Utilities (76xx – 79xx)For PPD Utilities division use only Other Expenses (80xx – 81xx)Not frequently used by Depts (8045-special rules apply) Special Grant Contract ExpensesPrimarily all subawardees Capital Expenditures (90xx – 95xx) When in doubt, call Main Campus - Unrestricted Accounting 13

14 14 Finding Account Code Lis ts Web Site-Frequently used account codes: Operating Ledger Account Code List pdf pdf Definitions: Print FGRACTH (eprint) 14

15 15 Business Purpose or Item Text: Be detailed and specific Complete and accurate descriptions are required for the business purpose or item text on ALL transactions for several reasons: Compliance with internal controls & auditing standards Allows approvers of transactions to make informed decision Leads to quicker processing of transaction, which is more efficient for your Departments operations Saves UNM time and processing costs 15

16 16 In todays business world, the buzzwords are … Transparency Accountability

17 17 Business Purpose or Item Text: Be detailed and specific Many documents are disapproved not because the wrong account code was selected, but because the document text or business purpose did not sufficiently explain the transaction to support your account code choice. Who (students, faculty, staff, vendors, names, titles, UNM or not) What - Explain the transaction! (Banner ID # & date, event, activity, purchase, contract) Why - How does it represent a public purpose benefitting UNM? (business purpose) 17

18 18 Business Purpose or Item Text: Be detailed and specific Your document will NOT be denied if you give more information than is needed. It MAY be denied if you do not give enough. For example: An insufficient business purpose may state: Attend medical conference in Hawaii 18

19 19 Business Purpose or Item Text: Be detailed and specific A more Sufficient business purpose would state: Attend the AMA Cardiology Conference on cardiovascular imaging, which benefits Dr. Smith and UNM with learning the latest imaging technology that can be taught in the classroom, and used in the clinical operations. 19

20 20

21 21 Is the Expense Allowable? The expense must be for a public purpose that benefits the University. Please refer to UNM Business policy 4000 – Allowable and Unallowable Expenditures If you are not sure if an expense would be allowable, contact your Accountant or Fiscal Monitor 21 BEFORE you make the purchase.

22 22 Maintenance and upkeep of privately owned vehicles Personal gifts Holiday decorations Political or charitable contributions (donations) Office refreshments Entertainment of University employees Alcoholic beverages Insurance coverage which replicates University insurance The following are some of the types of expenditures University funds may NOT be used for : 22

23 23 Is the purchase for a service? A purchase for services has specific requirements due to IRS regulations, the State Procurement Code, and other laws: 1.Independent contractor vs. employee relationship 2.Conflict of interest 3.Purchase Requisition or Non-Standard Payment form Refer to the SPQ/USP guidelines 23

24 24 Is the purchase for a service? If it is for a service, then a requisition must be done in LoboMart An online SPQ must be completed. If vendor is approved as a Universal Service Provider (USP), the following statement MUST be included in the Item Text section of the requisition: The vendor has been approved as a Universal Service Provider, and to my knowledge there is no conflict of interest per Policy 4325, Section 3. Select appropriate account code NOTE: Central Accounting verifies USP status-Banner Form FTIIDEN Please refer to UNM Business policy 4325 – Purchasing Services from Independent Contractors 24

25 25 Is the Expense F&A Excludable? AccountPurpose 31B0-Food F&A Excludable Alcoholic beverages. Food expenses for entertaining, fund raising, and marketing. Student Activities and Alumni Expenses. 37Y0-Supply Costs F&A Excludable Supplies used for promotional activities. 39Y0-Travel F&A Excludable Travel associated with lobbying, entertainment Promotional Exp F&A Excludable Gen Promotional items, gifts, and the costs of advertising and public relations designed solely to promote the University. 69Y0-Professional Service F&A Excludable Services purchased for F&A excludable activities or items. 25

26 26 Payments to Foreign Nationals Foreign Students and Visitors, Vendors If you have a transaction involving a foreign student, or visitor, you must use one of the account codes listed on the following page. These account codes have tax implications for the Foreign payees: Please refer to UNM Business policy 2180 – Foreign Nationals 26

27 27 Travel3850,4682,4683 Awards4021 Participant Fees40A1 Stipends4661 Honoraria63E1 Services63V1 Royalties8081 Sub-Contracts88XX (C&G only) 27 Payments to Foreign Nationals

28 28 Must use 38L0-New Employee Moving Expense These expenses include: Travel House hunting Transport of household goods & furnishings This account code is used ONLY for appropriate expenses related to moving a newly hired employee. 38L0 is critical due to IRS reporting requirements. Please refer to UNM Business policy 4020 – Moving Expenses 28 New Employee Relocation Related Expenses

29 29 31A0-Business Food-Local 31B0-Food F&A Excludable 31M0-Recruitment Expense 31M1-Staff Recruitment Expense 3860-Bus Meals and Hospitality 40C0-Food Services 29 Food Account Codes

30 30 31A0-Business Food-Local Food consumed primarily by guests of the University Or at a business meeting food is incidental to the meeting Should not be associated with travel Provide detailed list with names, companies, job titles if 20 attendees Provide a general list of who from where if > 20 attendees Provide a meeting agenda Note: Incidental means the food was in addition or secondary to the meeting. 30 Food Account Codes

31 31 Food Account Codes 31B0-Food IDC Excludable All alcohol Food for student activities (that are not instruction- related) Marketing, entertaining, fundraising, and promotional activities Events involving the public/community/ students Provide detailed list with names, companies, job titles if 20 attendees Provide a general list of who from where if > 20 attendees Provide a meeting agenda

32 32 Food Account Codes 31M0-Recruitment Expense Food purchased for faculty/athlete recruitment 31M1-Staff Recruitment Expense Food purchased for staff recruitment Provide names, companies, job titles Accounts are also used for non food recruitment expenses

33 33 Food Account Codes 3860-Bus Meals and Hospitality All business related food expenses, (excluding meal expense incurred in the recruitment process) incurred by UNM Employees while traveling. This account is under the Travel subcategory. No local food expenses belong in this account. Provide who attended - names, companies * Must deduct meal from related per diem meal on travel reimbursement

34 34 Food Account Codes 40C0-Food Services Includes meal expense specifically subsidized by funding agency for student participants. Please provide detailed list with names, description C&G grants, normally, or Athletics

35 35 Travel Account Codes 3800-In State Travel 3820-Out of State Travel 3840-Foreign Travel 3850-Foreign Visitor to UNM Travel 3860-Business Meals and Hospitality 38N0-Travel Recruiting 38N1-Travel Recruiting Student 38P0-Travel Group 39Y0-Travel IDC Excludable 39Z1-Travel Non UNM Employee-Non Foreign 4080-Student Travel

36 36 Travel Account Codes Travel must be accurately expensed to the appropriate account code. Travel expenses/categories are analyzed by: Internal Auditors The New Mexico Higher Education Department UNM Executive staff Some types of travel have tax implications. For all travel account codes or policy items, please refer to UNM Business policy 4030 – Travel

37 37 Computer Related 3189-Computers <$5,001 includes desktop PCs-CPU only, laptops, tablet computers 3150-Computer Supplies and Servers <$5,001 includes printers, servers, mice, monitors, keyboards, handheld PCs 9020-Computer Hardware >$5,000 computers that are movable and have life greater than one year 37

38 38 Furniture/Fixture/Equipment Purchase Furniture/Fixture/Equipment Accounts 3180-Non Capital Equipment <$5, C&G Non Capital Equip $1,000-$5, Equipment/Furniture >$5, Equipment Non UNM Titled 9060-Equipment Fabricated 9300-Fixed Equipment 38

39 39 Other Coding Issues Local conferences: Best practice is to accurately record expenditures in the appropriate account codes The common practice has been to lump the expenses into one account code Frequently used accounts: 31A0-Business Food-Local 31B0-Food F&A Excludable 3850-Foreign Visitor to UNM Travel 39Z1-Travel Non UNM Employee-Non Foreign 7060-Facility Rent Expense 70F0-Equipment Rent Expense 39

40 40 Other Coding Issues Software All software expenses belong in 3140 Some expenses seem like software, but are not. For example: 6310-Internet Fees Gen Services accessed online, including computer programs that are rented or leased 40

41 41 Other Coding Issues Capital Purchases 9000 or 9020 – code any amount for an extended warranty separately to 70C1 Extended warranties cannot be part of the capitalized cost 41

42 42 All Other Expenses Code appropriately according to Account Code Definitions found at 42

43 43 Need help on an account code? Contact your Unrestricted Accountant for Assistance on Unrestricted Funds Contact your Fiscal Monitor for Assistance on Restricted Funds 43

44 44 This is how you should feel! Department Originator Im using the Account Codes workshop notes.

45 45 You Make The Call 45

46 46 1) Dr. Smith had an advertising brochure produced for his office. He hired Marty Johnson of ABC Printing to assist with the design of the document and produce it. You just received Martys invoice, which reads: ABC Printing Invoice Design Costs …………………………………….……..$ Brochure paper (2,000 sheets)……………… Cover Sheets (500 sheets)………………… Binding (500 brochures)……………………….… Total Brochure Costs…………………………$ What account(s) will you use to expense these charges? Why? 46

47 47 1) Advertising Brochure A)Account 3100-Office Supplies General. We purchased paper with printing on it. This is a supply. B)Account 6370-Printing/Copying/Binding Gen. We purchased the design of the brochure. This is a service that includes printing and binding. C)Account 6350-Promotional Expense F&A Excludable. This is a service for an F&A excludable item D)Account 55Z0- Other patient supply costs. These brochures are for patients, so they go in the Patient Care Cost category. 47

48 48 2) Popejoy had VanJohnson Designs, Inc. create an educational brochure produced for elementary school teachers to advance cultural awareness of their program. You just received their invoice, which reads: What account(s) will you use to expense these charges? Why? VanJohnson Designs, Inc. Design brochure.……………………………………. $2, Brochures $1.20 each) …12, Total Due………..……………………….…….. $14, Thank you for your business. 48

49 49 2) Non Promotional Brochure A)Account 6350-Promotional Expense F&A Excludable. This is a service for an F&A excludable item. B)Account 6370-Printing/Copying/Binding Gen. We purchased the design of the brochure. This is a service that includes printing and binding. C)Account 3100-Office Supplies General. We purchased more paper ($12,000) than design ($2,500). This is a supply. D)Account A801-Inventory Other. We got a lot of brochures, so they are inventory now. 49

50 50 3) Dr. RedMond needed surveys for his patients. He hired Ralph Getty to design the surveys and had them printed in-house. Ralphs hand written invoice, which Dr. RedMond just gave you, reads: What account(s) will you use to expense these charges? Why? Bill for designing surveys for Dr. RedMond: $ Ralph Getty 50

51 51 3) Survey A)Account 20P0-Temporary Salary Gen. Ralph is an individual, not a business. He was temporarily employed by UNM to design this survey. B)Account 0280-Testing Fees General. These surveys will be used to test patients for various diseases. C)Account 3100-Office Supplies General. I LIKE Office Supplies General. I put everything here. D)Account Account 69Z0-Other Professional Services. Ralph provided a service by designing the brochures. 51

52 52 4) You are doing your P-card reallocation in Banner. (FWAINVT). You are reallocating a purchase for your department that totaled $3, This order was for: 1.Reams of paper ($2,006.00) 2.Toner cartridges for the new copier ($892.17) 3.New copier ($629.15). The paper will be used for the various printers and the copier. Your routine work includes making copies of forms, instruction sheets, and brochures for various Doctors in your department. What account or accounts will you use to expense these charges? Why? 52

53 53 4) P-Card Reallocation A)Account 3100-Office Supplies General. These are all office supplies. This is the correct category. B)Account 3100-Office Supplies General for the paper and Toner. Account 3150-Computer Supplies and Servers <$5,001 for the copier. C)Account 3100-Office Supplies General for the paper and Toner. Account 9530-Site Improvement General for the copier. The copier greatly improved our work site. D)Account 3100-Office Supplies General for the paper and Toner. Account 3180-Non Capital Equipment <$5,001 for the copier. 53

54 54 5) Your department maintains records for copier usage and charges the users index based on the number of copies made each month at 5 cents/page. 4,000 copies were made by various departments this month. What expense account(s) will you use to expense these charges? Why? What revenue account(s) will you use for these charges? Why? 54

55 55 5) Revenue Account A)Revenue account? I will credit 3100-Office Supplies General for the cost, to reduce the cost of the paper and toner we used to make these copies. B)I will credit the new Internal Service center revenue account, 0699-Miscellaneous Services. C)I will credit account 08Z0-Miscellaneous Gen. for this small amount of revenue. D)I will credit 37Z0-Other supply Costs General, because it is currently overspent and we still need to purchase more supplies using this account. 55

56 56 5) Expense Account A)I will expense these copies to 3100-Office Supplies General. This is paper and toner. B)I will expense these copies to 69Z0-Other Professional Services General. We provided a service to the other departments by making these copies for them. C)I will expense theses copies to 63C0-Copying Gen. We are selling copies. D)Our department uses the barter system. The copies are offset by some used furniture they gave our department last month. No entry is required. 56 Hmmm. Say again…

57 57 6) Your department purchased a desk top computer with a monitor, keyboard, and mouse. At the same time you also purchased from the same vendor two new printers. The invoice is below: What account(s) will you use to expense these charges? Why? Computers R Us, Inc. Acme SE 340 computer…………… $1, Acme 22inch Monitor…………….… Acme Printer )….……… Total: $2,

58 58 6) Computer and Printer Purchase A)I will use 9020-Computer Hardware for all of these charges. B)I will use 3189-Computers for the computer (CPU cost was not itemized) and 3150-Computer Supplies & Servers for the monitor & printers. C)Since this is one purchase, I will use 3189-Computers for the entire invoice. D)I will use 3180-Non Capital Equipment for all the charges, since the total is under $5,

59 59 7) Your office is being renovated. An outside company has been hired to tear down two walls, replace six windows (two of which are cracked), and replace the worn carpet with new carpet. They are also supplying 3 new workstations, at a cost of $4,500 per station. 1.Each station includes cubicle walls ($1,970) 2.Two upper ($800 each) and one lower ($450) cabinet 3.A desk surface ($300) 4.A chair ($180). The invoice was itemized as follows: 59

60 60 What account(s) will you use to expense these charges? Why? Rigolito Construction, Renovation, Repairs, and Maintenance, Inc. Labor for windows & carpets (at $75/hour)…………………………………….… $5, Windows $275)………………………………….…. 1, Carpet(85 32/yd)…………………………….. 2, Modular Furniture: Cubicles $1,970) Desk surface $300) Cabinets: Lower $450) Upper $800) Total Modular Furniture…………………………………. 12, Chair $180)……………………………………………… Total: $23,

61 61 7) Renovation? Repair? Maintenance? A)I have no idea, so I will guess that 9220-Building Improvement Gen is correct. It sounds pretty good… B)I have no idea, so I will divide it all up, as follows: Labor to:69Z0-Other Professional Services General The rest to:9000-Equipment/Furniture >$5,000 (If Im wrong, maybe no one will notice…) C) I have no idea, so I called my friend in another department that had a similar expense last year. We decided: Labor, windows, carpet to 7000-Plant Repairs Furniture to 9000-Equipment/Furniture >$5,000 61

62 62 7) Renovation? Repair? Maintenance? D) I have no idea, so I called Inventory Control, and I am expensing it the way they told me to: Labor, windows, carpet to 7000-Plant Repairs Modular furniture to 9000-Equipment/Furniture >$5,000 Office chairs to 3180-non capital equipment <$5,001 62

63 63 Bonus Question! 63

64 64 8) Your department purchased a piece of equipment. What account or accounts will you use to expense these charges? Why? Gizmos and Whatzits, Inc. Gizmo…………….………………..………… $ 7, Warranty on Gizmo………………..…… Shipping………………………………..…… Gizmo installation………………..…… Staff Training. Gizmo Actualization 7 $325/class………………..2, Total: $11,

65 65 8) Gizmos and Whatzits A)Account 9000-Equipment /Furniture >$5,000, because this is capital equipment, and the entire amount is capitalized. B)Account 9000-Equipment/Furniture for everything except the Warranty. The Warranty goes in account 70C1-Equipment Warranties/Service Contracts. Warranties are not capitalized 65

66 66 8) Gizmos and Whatzits C) This is nerve-racking. Okay… Equipment goes in 9000-Equipment/Furniture >$5,000 Warranty in 70C1-Equip. Warranties/Service Contracts Shipping in 31D0-Freight In-Bound Installation in 63X0-Technical Services Training in 63T0-Contract Services General D) One look at this and I got a headache. I went home sick and my supervisor did something with it. Wherever it went, it is not my fault! 66

67 67 8) Gizmos and Whatzits And the Answer is: B) Account 9000-Equipment/Furniture for everything except the Warranty. The Warranty goes in account 70C1-Equipment Warranties/Service Contracts. Warranties are not capitalized. It is ok to ask for help. Really ! 67

68 68 Account Codes Revisited Handout For further information and resources on account codes, refer to the handout: 1.Common Errors 2.Appendices

69 69 You are Ready to Play Ball! 69


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