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General Ledger Overview June 2014

General Ledger Overview June 2014. Background.

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General Ledger Overview June 2014

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  1. General Ledger Overview June 2014

  2. Background Historically, each federal agency developed its own accounting structure and reported to the federal government using its agency structure. Because each agency accounted for its funds differently, it was difficult to consolidate the data across the federal government. In order to provide consistent reports and to enhance financial control, the federal government adopted the United States Standard General Ledger (USSGL), which is a standard chart of accounts that must be used by all federal agencies.

  3. Standard General Ledger (SGL) • Provides basic general ledger (G/L) accounts • Agencies are allowed to expand the basic SGL chart of accounts to accommodate agency specific needs • More standardization as USDA agencies converted to FMMI • Defines proprietary, budgetary, and memorandum accounts to be used in agencies' accounting systems 3

  4. SGL Account Types • Assets • Liabilities • Net Position • Budgetary Resources • Appropriations, Collections, Borrowing Authority, Contract Authority, Interagency Work Agreements • Status of Budgetary Resources • Unapportioned, Apportioned, Allotted, Committed, Obligated, Expended, Expired, Canceled

  5. Budgetary vs Proprietary Accounting • Budgetary Accounting • Facilitates the controlling and accounting for budget authority and funds. It has four main purposes: • Record the appropriation receipts and status of appropriations • Delegate budget authority • Record valid obligations • Control the use of budgetary resources • Proprietary Accounting • Facilitates the accounting for assets, liabilities, net position, revenues, and expenses. It has two main purposes: • Determine result of operations from revenues and expenses • Determine financial position

  6. Accounting Equations • Budgetary Budgetary Resources = Status of Budgetary Resources • Proprietary Assets = Liabilities + Net Position Expanded as: Assets = Liabilities + Net Position + Revenues – Expenses + Gains - Losses

  7. Accounting Events 7

  8. FMMI General Ledger • The General Ledger (G/L) is the record where each financial transaction that occurs in FMMI is document. • In FMMI, the Financial Accounting (FI) module is responsible for ensuring that USDA’s G/L is kept accurate, up-to-date and in balance • By keeping the G/L up-to-date, the FI module enables USDA to report its financial status • When postings are made, FMMI automatically posts the document to the appropriate G/L accounts • FMMI also records all financial activities in “real-time,” which means that when a transaction is processed, it is immediately posted to the General Ledger • For instance, a FMMI user based in Kansas City could view a customer invoice posted in Minneapolis just seconds afterwards.

  9. FMMI Organizational Hierarchy

  10. Financial Accounting Module (FI) • The Financial Accounting (FI) module addresses USDA’s financial, budgetary, and statutory reporting requirements. • Immediately after the user enters the appropriate data, FMMI displays updated information on the relevant accounts, account totals, and balances. It also has the capability to display information regarding the Balance Sheet and Statement of Net Cost • Every transaction resulting in a financial impact posts to the FI module • The account balances of each G/L Account (USSGL + sub-account) are housed in the FI module • The FI module houses three special ledgers • Ledger 95: Holds data for the Trial Balance by Fund • Ledger 96: Holds data for the FACTS I reporting • Ledger 97: Holds data for the FACTS II reporting • The FI module is a source of many financial reports

  11. FMMI G/L Structure • The FMMI General Ledger follows the structure mandated by the United States Standard General Ledger (USSGL). • The USSGL provides a uniform Chart of Accounts and technical guidance for standardizing federal accounting • The USSGL contains five major sections: • Chart of Accounts • Accounting Descriptions • Accounting Transactions • USSGL Attributes • Report Crosswalks

  12. The Chart of Accounts provides the basic structure for the USSGL, incorporating both proprietary and budgetary accounts. Chart of Accounts 12

  13. Chart of Accounts (Cont.) • Example Account – • Account Number: 2190 • Account Title: Other Liabilities with Related Budgetary Obligations • Normal Balance: Credit • Definition: The amount of liabilities for which there is a related budgetary obligation (USSGL account 49X1). This account does not close at year end. • For a complete list of accounts go to:http://www.fms.treas.gov/ussgl/tfm_releases/13-02/fiscalyear-2014/part-2/part2_current.html 13

  14. FMMI Chart of Accounts • FMMI incorporates the United States Standard General Ledger (USSGL) and uses the USSGL's Chart of Accounts: • G/L account numbers are assigned within the predefined ranges detailed above

  15. FMMI G/L Account Structure • FMMI uses the four-digit USSGL accounting numbering system. FMMI also captures a lower level of detail by expanding the standard numbering system by sub-account and RSC/BOC. • This expanded numbering system allows subsidiary accounts to be created for USSGL accounts. These accounts roll up to the 4-digit USSGL accounts. FMMI

  16. Finding the Chart of Accountsin FMMI • The G/L Chart of Accounts can be found in FMMI by running an ECC report located under: General Ledger Management>Financial Reports>General Ledger Reports>G/L Chart of Accounts Report • Account Definitions (Long Text) help us determine how to record events that should be captured in the accounting system.

  17. Adjustments; Accruals; and Posting Models • As part of the monthly activities, various transactions such as accruals and G/L adjustments are recorded and processed through the G/L Posting Model, as follows: • A G/L Adjustment is a corrective action to an accounting error identified as a result of reconciliation or other detailed analysis • This adjustment is processed as a direct entry using the Create Parked G/L Account Document transaction • The accrual entry is processed as a direct entry by the General Ledger Processor, using the Create Accrual transaction. • FMMI uses G/L posting models to derive dependent characteristics. It performs validations for each entered FI document line item, and if any of these validations fail, FMMI prompts the user to correct the relevant item. • FMMI automatically creates the budgetary ledger postings from the proprietary postings derived by the posting model.

  18. G/L OverviewQuestions • Ledger ____ holds data for FACTS I reporting. • True / False: In FMMI the General Ledger account number is a 12 digit number. • Which FMMI module has the Chart of Accounts? _____________ • True / False: One purpose of Budgetary Accounting is to record the appropriation receipts and status of appropriations.

  19. G/L OverviewQuestions (Cont.)(Match the G/L Account to the G/L Classification) G/L Account G/L Classification Expense ___ Liabilities ___ Net Cost ___ Assets ___ Memorandum Accts (Credit Reform) ___ Budgetary Accounts ___ Revenue & Other Financing Sources ___ Agency Statistical/ Memorandum Accounts ___ • A. 1000 • B. 2000 • C. 3000 • D. 4000 • E. 5000 • F. 6000 • G. 8000 • H. 9000

  20. Where to Find More on the USSGL • USSGL Main Page: http://www.fms.treas.gov/ussgl/index.html • USSGL Common Questions: http://fms.treas.gov/ussgl/questions.html 20

  21. Where to go with questions: 1) Supervisor 2) Program Budget Office Where to go forMore Information

  22. G/L OverviewAnswers • Fill in the Blank: Ledger _96_ holds data for FACTS I reporting • True / False: In FMMI the General Ledger account number is a 12 digit number. (FMMI G/L account numbers are 10 digits – page 15) • Which FMMI module has the Chart of Accounts? _Financial Accounting - FI Module_ • True/ False: One purpose of Budgetary Accounting is to record the appropriation receipts and status of appropriations.

  23. G/L OverviewAnswer (Cont.)(Match the G/L Account to the G/L Classification) G/L Account G/L Classification Expense _F_ Liabilities _B_ Net Cost _C_ Assets _A_ Memorandum Accts (Credit Reform) _G_ Budgetary Accounts _D_ Revenue & Other Financing Sources _E_ Agency Statistical/ Memorandum Accounts _H_ • A. 1000 • B. 2000 • C. 3000 • D. 4000 • E. 5000 • F. 6000 • G. 8000 • H. 9000

  24. General Ledger OverviewCertification • Please complete this page and print it out, it should be included with your AD1143 requesting FMMI access. • ___________________________ has reviewed this document (Employee’s Name) • _______________________________ (Supervisor’s Name – Same as on AD 1143) • _______________________________ (Supervisor’s Signature – Same as on AD 1143) 24

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