2016 General Ledger and Why ChartFields Matter

Alternative formats for this
presentation can be found on the Financial Services website. Visit the
Financial Services Training page. Email us at [email protected] or give us a call at (613) 533-2050. “The General Ledger and Why ChartFields
Matter.” In this tutorial topics will include: The General Ledger, Fiscal Year
and Accounting Periods, ChartFields and Why they Matter. We’ll define ChartFields and discuss those that are required versus those that are optional. How to
request a new ChartField and other tips and noteworthy items. Part One, “The General Ledger.” The General Ledger, commonly referred to as the GL, is the central
place that stores every accounting transaction the university makes. The
entries, called journal entries, are debits and credits made to various
accounts. These accounts fall into categories such as assets, liabilities,
revenue, expenses, just to name a few. Why the GL Matters. The General Ledger
is the source of all financial reporting. From your monthly departmental Statement
of Operations, to the university’s Income Statement, Balance Sheet and Cash Flow
Statement. As such, it is critical to keep the GL error free and secure. Ledger
Groups store financial transactions in the GL. There are multiple ledgers within the
GL. However, there are three most visible and meaningful to end users. General
Ledgers include: Actual, Budget, and Commitment. The Actual, represents the amount
actually received, expensed and/or transferred. The Budget amount, is the
amount approved for spending. And the Commitment ledger represents the amounts
encumbered or set aside to prevent overspending. For example, advances issued
by way of the Expense Reimbursement System, the Graduate Research Assistant
Fellowship Contracts, Purchase Requisitions, Research Overhead, and
Salary Contracts Approved Appointments, and Fringe Benefits. Part Two, “Fiscal Year
and Accounting Periods.” The university’s fiscal year runs from May to April. For
example, fiscal year 2016 represents the calendar period May 1st, 2015 to April 30th, 2016. This calendar period represents accounting periods 1 through 12.
Accounting periods record GL transactions for the calendar months.
Calendar periods 1 through 12 will close five business days following each
calendar month. For example, May 31st will close on the 5th business day of June.
During these five business days the system will continue to post to both May
and June accounting periods, whichever period the transaction is applicable to.
On the 5th business day of June, the May period officially closes, signifying the
current period is now June. Periods 998 999 and 0 are periods used by Financial
Services to record year-end adjustments, accruals, deferrals, annual closings, and
opening balances where applicable. Part Three, “ChartFields and Why they Matter.” What is
a ChartField? ChartFields are information fields used to provide the
university’s financial system with the basic structure to segregate and
categorize transactional and budget data. In other words, ChartFields organize
financial data into different “buckets”, defining the data and reporting who, what,
and where. Why do ChartFields Matter? Assigning the correct ChartField values,
when coding revenue and expenses, ensures data integrity. What is data integrity?
It’s about making sure the data you enter is accurate and consistent. Why is
data accuracy important? Data drives financial reporting. Inaccurate or
inconsistent data means inaccurate reporting. Inaccurate reports could misrepresent the
effectiveness of programs and affect future funding. Who is looking at my data
and why? Users of financial information depend on accurate data to make informed
decisions. Within Queen’s this includes a wide range of groups; from the Board of
Trustees to Department Heads. Outside of Queen’s this includes decision-makers at
the local, provincial, federal, and other levels of governing bodies. What causes
inaccurate data? Choosing an account that does not best define the transaction, selecting the wrong ChartField value in
a drop-down field, duplicate entries (like processing the entry more than once), processing the journal entry backwards,
recoding a transaction posted to the GL in a previous fiscal year. Part Four, “ChartFields Defined.” A typical
ChartField string may include up to six ChartFields; Fund, Department, Account,
Program, Class, and/or a Project. The Fund ID is used to segregate, control, and
monitor resources to help ensure and demonstrate compliance with legal and
administrative requirements. For example, Fund 10000 represents the operating
fund. This fund includes teaching and administrative activities at the
university. Operating fund revenue includes government operating grants,
student fees, and unrestricted investment income. Fund 15000, the Non-Credit Fund,
accounts for all revenues and expenses associated with lectures, courses, and
similar activities which are not recognized by the institution for the
purpose of granting credit. The fund is comprised mainly of non-credit
professional development and self-interest courses, such as continuing
medical education and executive development programs. The Ancillary Fund, Fund 20000 includes business units that provide
goods and services to the university community and cover their full operating
costs; including indirect costs and may also contribute to general operating
expenditures. Examples of ancillary operations include residences and
housing, hospitality and conference services, parking, and other general
services. Fund 30000 represents Externally Sponsored Research. This fund
includes all research activities and contract research funded from restricted
sources such as government, private industry, and donors. Unspent monies in
this fund are deferred at year end. Fund 31000 represents Internally Sponsored Research.
This fund includes all research activities funded from internal
University sources. The Capitol Fund, Fund 40000, includes activity related to the capital infrastructure on campus. The Capital Fund reflects amortization of
both cost and deferred capital contributions, interest on debt to fund
capital expenditures, the capitalization of assets purchased through other funds,
the deferral of funding received to purchase assets, and renovations and
alterations activity. Restricted Trust include funds that begin with 5 and
those that begin with 8 through 84999. These funds account for
expendable designated gifts, benefactions, grants, or contracts, which
must be spent in accordance with specific instructions. These funds must
have Donor Terms of Reference or for grants/contracts must include repayment
provisions should the funds not be used for the intended purpose. Funds that
begin with 6 are Internally Restricted Endowments. These are funds that the
university has set aside to generate income for specific purposes. The
University at the Board of Trustees level can decide to use funds that were
previously unrestricted and make an internal endowment. Funds that begin with
71000 through 79999 range are Externally
Restricted Endowments. These are funds that have been donated externally and
the donor has requested that the income from the endowment be spent for a
specific purpose. There are specific reporting requirements to the donors for
these endowments and these reports are completed by Advancement. External
Endowments are managed by the departments that spend the income that
is generated each year from the Pooled Endowment Fund. Annuities are
represented in fund range 70000 through 70999. Annuity funds are no longer being
offered and will be phased out. Annuities are set up as an externally
restricted endowment whereas regular payments are made to the annuitant. When the annuitant dies the residual value of the fund may be used by the University. At this
point the residual value of the fund is transferred as stipulated by the annuitant.
Funds in the 90000 range are Agency Funds. These funds are used to
record monies or transactions for outside groups who have a close
relationship with the university. Balances in these funds do not belong to
the university and are not reported in the university financial statements,
unless consolidated as a separate entity. These funds are only used in exceptional
circumstances. Now, let’s talk about the Department ID. The Department ID identifies the
divisional breakdown of an entity into operating units. This ID is also used
to grant system access to users. The Account ID identifies the nature of a
transaction and is used consistently across all departments to record
revenues and expenses. Accounts that begin with 4, 5, and 6 are those
reflected on your monthly Statement of Operations report. Accounts that begin with 8 are used to record equity transfer entries to capital projects. Accounts
that begin with 9 are used to record University revenue allocation and carry
forward allocation entries to funds 10000, 15000, and 95000. These accounts
also appear on your Statement of Operations, and are typically processed by
central finance. The Program ID identifies activities or events directed towards the accomplishment of a
set of objectives. For example, a conference, workshop, event, or program. The Class ID identifies activities relating to people or locations. For example,
employee, faculty, student, team, visitor, city, or a building. The Project ID
identifies activities directed towards the accomplishment of a set of
objectives that have a defined beginning and end. Project ID’s are used to track
research projects, ID’s that begin with 3 and/or capital projects, ID’s that
begin with 4. Part Five, “ChartFields Required versus those that are Optional.” Required
ChartFields are used for university accounting and reporting. Optional ChartFields are used internally by departments to track internal financial
activity or to further define transactions. Here is a sample ChartField string. Notice the Fund, Department, Account are all required
ChartFields. The Program ID is a required or mandatory ChartField when coding to CFI research projects, otherwise it’s optional. The Class ID is an optional ChartField. The Project ID is required and used only when coding to research and
capital project funds. In these cases it is a mandatory ChartField. Accounts,
Programs, Classes have no boundaries and can be used by all departments. Here is a
typical sample ChartField string. Let’s suppose a Principal Investigator
whose home department is in Biology has an NSERC research grant and wishes to
reimburse their student for conference travel that took place in Calgary. When
coding the reimbursement it might look like this: Fund 30000, representing Research
Externally Sponsored funds, Department 11540, representing Biology, Account 640001, representing the travel account, Program 11601 recording Conference 01 activity,
Class 1319, representing Calgary activity, and the researcher’s Project ID 388001,
representing their NSERC grant. Part Six, “How to Request a new ChartField
ID.” Before requesting a new ChartField ID authorized users of the FAST
financial reporting tool should first check to see if the ChartField ID
already exists. Where can I view ChartField listings? Begin on the FAST
homepage; select pinned reports, select all public pinned reports, and finally
select the desired listing from the drop-down menu. Where can I view current
project listings? From the FAST homepage begin by selecting Finance Reporting, two, select Research Reports, three, select Project Summary, four, begin to input the
desired report parameters, five, and finally, select Execute Report. How to
Request a new Account ID or Department ID. Generally speaking, all required ID’s
in these two categories currently exist in the GL structure. However, in special
circumstances, where it is determined that a new ID is required, discussions will begin with the
requesting department or unit and the unit’s Business Officer. The requester
will complete a ChartField Request Form and forward it to Financial
Services. How to request a new Class ID or Program ID. Occasionally, when a
generic ID or one that best describes the required purpose in either of these
categories does not already exist in the public listings, the requester will
complete a ChartField Request Form and forward it to Financial Services. How to
request a new Fund ID. To request a new Trust or Endowment Fund be established,
the requester will complete a ChartField Request Form, attach all terms
of reference documents (typically coordinated through Advancement) and
forward all documents to Financial Services. For additional Trust and
Endowment information, view Financial Services Faculty Staff page, or contact
the Advancement Office. If you’d like to speak with someone in Financial Services, email
[email protected] How to request a new Project ID.
The process for requesting a new Research Project ID begins with the
Principal Investigator and University Research Services. To learn more visit
the Tools for Research at Queen’s website. The process for requesting a new
Capital Project ID begins with Campus Planning and Development. To learn more,
visit the Campus Planning and Development website. Part Seven, “Tips and
Noteworthy Items.” Budget Nodes. Budget Nodes are Account IDs ending in 0.
These accounts are used to record budget and commitment activity and are used for
reporting purposes. In this example, all expense accounts that begin with 606
roll up to budget node 606000. This node reports the total budget, total
outstanding commitments, and total expenses all relating to Printing
Services. Smart Coding. Smart coding is a coding method used by Queens that group similar
items together making it easy to identify what budget node these expenses
or revenues roll up to for reporting purposes. In this example the group of
accounts that begin with 606 is reflective of smart coding. Each account
can be easily identified as a type of expense relating to Printing Services. Internal Cost Recovery (ICR) Accounts.
Every expense node contains an ICR account. When recovering all or any portion
of the cost from another internal source the ICR account used to record the entry is the one located
under the node containing the account that was originally expensed. Well, let’s
look at an example. Suppose your monthly departmental photocopying is charged to
your Operating Fund 10000 Account 606001. The ICR entry to credit the
department operating fund back and recover the costs from a researcher,
would be a debit to the researcher’s project using the same account 606001
and a credit to your operating fund 10000 using account 606002. Account
450101 Internal Sale, is used to record the sale of a good or service from an
ancillary operation like Event Services, Donald Gordon Center, Creative Design
Unit, to a Queen’s department unit where the price of the good or service
includes a mark-up, which provides for recovery of other indirect costs
incurred. Only the Ancillary Operations Fund 20000 should use Account 450101.
There is no impact on the cash flows or net income of the university. Account
450101 is used to record the internal revenue in the appropriate expense
account that begins with 6, is used to record the expense side of a transaction.
For example, the Creative Design Unit creates custom signage inserts for the
Biology departmental office. The journal entry would be a debit to Fund 10000,
Department 11540, Account 606007 and a credit to Fund 20000, Department 56005, Account 450101. Account 480001 Revenue University
Funds is used when reallocating funds from one unit within Queens to another
unit within Queens. Revenue University Funds are funds that cannot be tied back
to an external source. There is no impact on the cash flows or the net income of
the University. Account 480001 must be used on both sides of the entry. For example Faculty of Arts and Science
Operating Fund provides research start-up funds to Biology research
principal investigator’s internal research project research fund. The
journal entry debits and credits the appropriate funds and departments and
uses account 480001 on both sides of the entry. Account 480001 should
never be used to transfer between Operating and Non-Credit funds and
Trust and Endowment funds. This account should never be used to transfer to or
from the Agency Fund 9000 series, to or from externally sponsored Research
Projects in Fund 30000. And this account should never be used to transfer in year
revenue activity that could be tied to an external source. For guidance and
assistance with these types of transactions contact your Departmental
Faculty Unit Business Officer or email [email protected] Consider the Impact: Example #1, Account 614 Capital Equipment for items greater
than $10,000. If these accounts aren’t used for these purchases, they won’t be
capitalized. To learn more, visit Financial Services Training page. Example
#2, Account 641017, Miscellaneous Expenses versus Account
600009, Other Supplies. Neither account is ideal, but proves how
important it is to choose the most accurate account; as the smallest wording
can have an impact on reporting. These two accounts fall under two different
reporting nodes. Consider, if the fiscal year reports Account 600009 Other Supplies
as 35% of the total of the 600000 Office Supplies expense node. Does this
really help with decision-making? Example #3, Every Expense Node
contains an ICR Account. Using an ICR Account outside of its reporting node,
means one node will be over-valued and one node will be under-valued. Combination
Edits or Combo Edits. Combination Editing is a set of rules used to improve data
integrity at the time transactions are being entered into the
system. Combo Edits prevent ChartField entries that are not valid and will
display an error message to the user. Combination Edits do not prevent all
incorrect ChartField combinations, and is the reason why it is important to
fully understand the impact of choosing the correct ChartField and ChartField string. Combination Edit Rules. Here is a sample rule: All transactions require a
Fund, Department, and Account. The string below would not pass this Combo Edit
rule, as the rule is looking for a valid Department ID. Here’s another sample
rule: Transactions posted to a Research Project ID, must include a valid ID
applicable to the Project ID. The string below would not pass this Combo Edit
rule, as the entry is posting to Research Project ID 388001, which means the
rule is looking for the Fund to be 30000, not 10000. Combination Code or
Combo Code. A Combination Code is a six digit unique number used solely in the HR
Module. The code represents the complete combination of ChartFields
required to process a salary payment. Users processing a salary payment by way
of the HR Module must include a valid Combo Code containing valid ChartFields.
Who can assist me with choosing the correct Account ID? Contact your
Departmental Faculty Unit Financial Business Officer or email [email protected] Remember, we all have a role to play in producing relevant, accurate, financial
information to support decision-making at Queen’s.
How may we help you today? Give us a call at (613) 533-2050. Email us
at [email protected] and visit the Financial Services website.
We are located at 207 Stuart Street, 3rd floor, Rideau Building. Hours of Operation
are Monday through Friday, we are open from 8 a.m. to 4 p.m. To learn more or to review
additional training resources and video tutorials, visit the Financial Services
Training page.

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