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Account codes revisited

Account codes revisited. Presented by John Brandt 5/11/09. 1. Prepared in collaboration with: HSC Unrestricted Accounting Main Campus Unrestricted Accounting Inventory Control (University Services) Tax Accounting (Main Campus Unrestricted Accounting) Purchasing. 2.

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Account codes revisited

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  1. Account codes revisited Presented by John Brandt 5/11/09 1

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

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

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

  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. Choosing an Account Code

  9. Account Codes Revisited Topics: Operating Ledger Categories Business Purpose \ Item Text 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) You make the Call

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

  11. Basic Account Structure 11

  12. Operating Ledger Expense Categories 12

  13. Operating Ledger Expense Categories 13 13

  14. Web Site-Frequently used account codes: • Operating Ledger Account Code List http://www.unm.edu/~gacctng/resources/OpLegAcctDef 6-23-08.pdf • Definitions: http://www.unm.edu/~gacctng/ • Print FGRACTH (eprint) Finding Account Code Lists 14

  15. 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 Department’s operations • Saves UNM time and processing costs Business Purpose or Item Text: Be detailed and specific 15

  16. In today’s business world, the buzzwords are … Transparency Accountability

  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. 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 Business Purpose or Item Text: Be detailed and specific 18

  19. 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. Business Purpose or Item Text: Be detailed and specific 19

  20. 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 Is the Expense Allowable? BEFORE you make the purchase. 21

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

  22. Is the Expense “F&A Excludable”? 25

  23. 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 Payments to Foreign Nationals 26

  24. Payments to Foreign Nationals 27

  25. New Employee Relocation Related Expenses • 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

  26. Food Account Codes 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

  27. Food Account Codes • 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

  28. 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 31

  29. 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 32

  30. 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 foodexpenses belong in this account. • Provide who attended - names, companies * Must deduct meal from related per diem meal on travel reimbursement 33

  31. 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 34

  32. 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 35

  33. 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 Nope. We're not showing that IRS guy again! 36

  34. 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 Computer Related 37

  35. Furniture/Fixture/EquipmentAccounts 3180-Non Capital Equipment <$5,001 3185-C&G Non Capital Equip $1,000-$5,000 9000-Equipment/Furniture >$5,000 9040-Equipment Non UNM Titled 9060-Equipment Fabricated 9300-Fixed Equipment Furniture/Fixture/Equipment Purchase 38

  36. 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 Other Coding Issues 39

  37. 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 Other Coding Issues 40

  38. 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

  39. All Other Expenses Code appropriately according to Account Code Definitions found at http://www.unm.edu/~gacctng/forms.html 42 42

  40. 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 43

  41. This is how you should feel! I’m using the Account Codes workshop notes. Department Originator

  42. You Make The Call 45 45

  43. 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 Marty’s invoice, which reads: ABC Printing Invoice Design Costs …………………………………….……..$500.00 Brochure paper (2,000 sheets)………………... 25.00 Cover Sheets (500 sheets)…………………....... 175.00 Binding (500 brochures)……………………….…. 250.00 Total Brochure Costs…………………………$950.00 What account(s) will you use to expense these charges? Why? 46 46

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

  45. 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: VanJohnson Designs, Inc. Design brochure .……………………………………. $2,500.00 Brochures (10,000 @ $1.20 each) ..........…12,000.00 Total Due………..……………………….…….. $14,500.00 Thank you for your business. What account(s) will you use to expense these charges? Why? 48 48

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

  47. 3) Dr. RedMond needed surveys for his patients. He hired Ralph Getty to design the surveys and had them printed in-house. Ralph’s hand written invoice, which Dr. RedMond just gave you, reads: Bill for designing surveys for Dr. RedMond: $375.00 Ralph Getty What account(s) will you use to expense these charges? Why? 50 50

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

  49. 4) You are doing your P-card reallocation in Banner. (FWAINVT). You are reallocating a purchase for your department that totaled $3,527.32. This order was for: Reams of paper ($2,006.00) Toner cartridges for the new copier ($892.17) 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 52

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