1. Accounting Basics for FIS Users

2. Overview 1.Types of Accounts 2.Basic Account Structure 3.Budget Transfers 4.Journal Entries 5.Inter-fund Transfers 6.Miscellaneous Accounting Basics for FIS users

3. Section 1 – Types of Accounts Operating Accounts (Departmental) Trust Accounts Grant Accounts Accounting Basics for FIS users There are 3 main types of accounts

4. Operating Accounts 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

5. Trust Accounts 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

6. Trust Accounts-Endowment 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

7. Trust Accounts-Expendable 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

8. Grant Accounts 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

9. Section 2 - Basic Account Structure Made up of the following components – Business Unit19250Dept A Object Account8560Special 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 19250.8560

10. Basic Account Structure 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 19250.8560.1

11. Basic Account Structure You will notice that some accounts in your area have budget dollars but the spending occurs in other accounts. Eg. General Office Supplies The entire budget for Supplies, Photocopy supplies, Printing and Stationary, Telephone resides in one account -8420- but the spending occurs in the individual line items such as 8422, 8424, 8426. The avoids having to micromanage these accounts and allows you greater flexibility when preparing Budget Submissions. ie. You would ask for an increase to your General Office Supplies budget of $5,000 rather than having to ask for an increase to Photocopy supplies of $1,000, an increase to Telephone of $2,000 etc. Accounting Basics for FIS users

13. Basic Account Structure Another example of this is your equipment budget. Your area may have a budget of $20,000 to purchase Equipment and Computer Equipment. When planning your spending, you may forecast a total of $20,000 for the whole project which includes Equipment, Computers, and Printers but you may not be sure of the exact split between them. By having the entire budget in the 8860 Equipment line, you can then spend in the 8870 and 8875 accounts without having to move Budget funds around. Accounting Basics for FIS users

15. Budget Transfers 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 When do I do a budget transfer?

16. Budget Transfer –General Rules Accounting Basics for FIS users 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 year- end

17. Section 3: Budget Transfers 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: –BO – a basic budget transfer used for one time transfers between accounts –BB – a Base Budget transfer used to transfer base budget funds on a permanent basis. Accounting Basics for FIS users

18. Budget Transfers – General Rules Accounting Basics for FIS users 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

19. Budget Transfer –Example 1 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 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.

20. Budget transfer –Example 1 Accounting Basics for FIS users

21. Budget Transfers-Example 2 The spending must occur in the equipment line so you will have to transfer funds from the One time account to your equipment account using Doc type “BT”. The budget transfer will look like this: Accounting Basics for FIS users Your Dept has been given One Time Funds for Equip. Funds have been deposited to 19250.8894.0506

22. Budget Transfers-Example 2 Accounting Basics for FIS users

23. Budget Transfer –Example 3 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 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.

24. Budget Transfer –Example 3 Accounting Basics for FIS users

25. Budget Transfer –Example 4 The actual cost of the Speaker will remain in Dept B’s Seminars/Workshops/Guest lecturer account. The budget transfer will be as follows: Accounting Basics for FIS users You have agreed to pay for a guest speaker that Dept B is inviting to campus..

26. Budget Transfer –Example 4 Accounting Basics for FIS users

27. Section 4 - Journal Entries Journal Entries are completed when expenses have been incorrectly charged to an object account or cost centre or when you are doing internal transfers Keep in mind that you want to ensure that charges are made to where they most accurately reflect the nature of the expense. The following examples are provided. When do I do a Journal Entry? Accounting Basics for FIS users

28. Journal Entries–Example 1 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: 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. Accounting Basics for FIS users

29. Journal Entry –Example 1 Accounting Basics for FIS users

30. Journal Entries–Example 2 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: An order for office supplies has come in and you assign object account 8550 to the invoice. Accounting Basics for FIS users

31. Journal Entry –Example 2 Accounting Basics for FIS users

32. Section 5 - Interfund Transfers Accounting needs to properly report all dollars moved from one type of fund to another These are transfers that occur between Operating, Trust, and Grant accounts. Accounting Basics for FIS users

33. Interfund Transfers 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: –8975.1Transfer to Operating –8975.6Transfer to Trust Fund –8975.8Transfer to Research Grants Accounting Basics for FIS users

35. Interfund Transfers There are offsetting revenue objects to accurately track these transfers. –5901Rev-Internal from Trans-Operating –5902Rev-Internal from Trans-Grants –5903Rev-Internal from Trans-Trust Acct Accounting Basics for FIS users

37. Interfund Transfers –Operating to Trust This transfer will be from your operating account to a trust account. You have funds available in your miscellaneous account to pay for this. The budget transfer will be as follows: HRG has a trust account XXXXX setup for a special Speaker series and you have promised them $500 to help pay for this. Accounting Basics for FIS users

38. Interfund Transfers –Operating to Trust Accounting Basics for FIS users

39. Interfund Transfers –Operating to Trust 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 have to have a balancing Journal entry to physically move the funds from our Operating to the Trust account. The trust account records this as revenue, and the operating account records this as an expense. The journal entry will be as follows: Accounting Basics for FIS users

40. Internal Transfers –Operating to Trust Accounting Basics for FIS users

41. Internal Transfers-Operating to Grant The transfer will be from your operating account to the grant account. You have funds available in your miscellaneous budget to pay for this. The budget transfer will be as follows. 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. Accounting Basics for FIS users

42. Internal Transfers-Operating to Grant Accounting Basics for FIS users

43. Interfund Transfers –Operating to Grant 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. The journal entry will be as follows: Accounting Basics for FIS users

44. Internal Transfers-Operating to Grant Accounting Basics for FIS users

45. Section 6 -Miscellaneous The Budget Department is staffed as follows: –David Butcher – Manager, Budgets x2130 –Bonnie Bashura – Budget Secretary x2130 –David Smith – Budget Analyst x2082 –Sue Holiga – Budget Analyst x2022 –Shelley Daigneault – Budget Analyst x2021 For further information, please visit our Budget website at : www.uwindsor.ca/budgets Accounting Basics for FIS users

46. Miscellaneous – Other Financial Issues If you have questions relating to FIS such as getting Security on accounts or training for staff members, please contact : –Sandy Mehenka, Systems x2143 Accounting Basics for FIS users

47. Miscellaneous – Other Financial Issues Accounting Basics for FIS users Any Grant related questions should be forwarded to : -Heather Pratt-Supervisor, Grant Accounting X2127 -Donna Bergamin-Grant AccountantX2132 (CFI,OIT,Sharc-Net,HRDC) -Kathy McGorman-Grant AccountantX2129 (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.