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Disbursement Funding & Accounting

Business Manager Curriculum

February 2014

Facilitators:

Sonja Austin Kim Seamans

Agenda & Objectives

Agenda

: Refer to handout

Objectives

: By the end of this session, you should 1. Be familiar with the main types of University

Funds

and what they can be used to pay for 2. Understand the general principles of choosing correct Expense

Account

Codes 3. Be able to identify key issues related to disbursement funding and accounting, analyze why these issues exist, and determine potential solutions

Disbursement Funding

What am I allowed to buy with what funds?

Presented by:

Sonja Austin, Treasury Services

Types of Expenditures

Ordinary Business Expenditures

are

routine

,

operational

, and easily documented as those

supporting the University’s mission

:

Faculty/Staff Salaries Classroom, Research, and Support Equipment and Supplies Plant Operation and Maintenance

Unallowable Expenditures

Those that confer a personal benefit Nonoperational expenditures

Types of Expenditures “In-between” Expenditures

Food & Beverage Sponsorship Amenities, Awards, Gifts Entertainment for The Food, Beverage & Amenity (FB&A) Form (on requests.

FS Forms website ) is required to be submitted with these reimbursement See Instructions tab for examples. Remember to: • Submit form with reimbursement request, including supporting documentation • Have the form signed by the individual requesting reimbursement 1.

Business Relations Conferences, Seminars, Workshops, Committee Meetings, Training Sessions, Retreats Cultivation of donors and development of community/institutional relations Recruitment Retirement and Faculty Receptions Student-oriented activities Convenience item for employees Other expenditures that have certain restrictions: Gross-up payments Parking expenses Relocation and moving costs

Use of Funds

Appendix A of Policy 601.8 - Matrix of

Allowable Expenses by Fund Type

COLOR OF MONEY

• Determined when money comes into the University.

• Cannot be changed by anyone within the University.

• Drives many accounting decisions.

– Fund accounting

Unrestricted Funds

• State General Funds • Tuition and Fee Revenue • Institutional Trust Funds

– Unrestricted gifts – Endowment income (unrestricted endowments) – Contract/grant residuals – Certain Conference residuals – F&A Funds (Overhead receipts) – Sales and Services (Recharge Units, Conference & Event fees) – Student Auxiliary funds – Student fees

Restricted Funds

• Must be determined by external parties • Institutional Trust Funds: – Grants and contracts (except exchange transactions) – Restricted gifts • Restricted by donor for the college or department • Can be further restricted to how you spend the funds (e.g., scholarships) – Income from restricted endowments • Restricted Appropriations

Discretionary Funds

• Can be Restricted

Unrestricted • For Restricted funds, if outside party did not restrict funds to certain account codes (books, scholarships), funds can usually be labeled as discretionary – Still must have a business purpose and follow all the expenditures policies and procedures of the University • Identification of Discretionary Funds – New funds will be marked when created as discretionary (if applicable) – Older funds will be reviewed at dept.’s request to see if they qualify for discretionary spending

Other Types of Funds

• Endowment Funds • Agency Funds • Capital Funds • Debt Service funds • Annuity and Life Income Funds • Loan Funds

Endowment Funds

• True Endowment Funds – Only created by outside party – Must be held in perpetuity – Only the income can be spent (i.e., spending policy) • Quasi Endowment Funds – Restricted if formed with restricted sources – Unrestricted if formed with unrestricted sources – Function like endowments – Management/Board decision to treat funds as endowment – Generally, only income is spent, but principal can be divested upon management decision • Term Endowment

How These Funds Work at UNC Charlotte

Summary of Fund Types*

Type of Fund

Appropriated (General) ITF: Overhead Receipts ITF: Unrestricted ITF: Auxiliary & Student Fee ITF: Grants & Contracts ITF: Restricted Agency Foundation

Fund # Range

100000-119999 120xxx 137000-139699 3xxxxx 5xxxxx 6xxxxx 83xxxx N/A for Chart 1

Managed by

Budget Office Treasury Services Treasury Services Budget Office Grants & Contracts Admin Treasury Services Treasury Services Treasury Services * Main fund types generally used by campus for spending purposes

Main Colors of Money at UNC Charlotte

Money comes from (in the form of)

State (Appropriations), Students (Tuition, General Fees), Misc. (surplus sales, utility reimb) Customers/Students (Auxiliary Services fees, revenues) Donors (Gifts)

Type of Fund

General Funds

Purpose Restrictions*

Mainly Unrestricted.

Must be used by end of fiscal year (6/30).

Fund # Range

100000 119999

Managed by

Budget Office ITF: Auxiliary & Student Fee Foundation (initially) Unrestricted to owners of funds.

Must be used consistent with purpose required by donor. primarily restricted, but may be unrestricted.

3xxxxx N/A (Chart 1 6xxxxx) Budget Office Treasury Services Research agencies (Grants & Contracts awarded) ITF: Grants & Contracts Must be used consistent with grant/contract restrictions.(restricted) Restricted to designation.

5xxxxx 88xxxx Designated Student fees (e.g., Debt Proceeds paid from student fees) Other Capital ITF Depends 12xxxx 13xxxx Grants & Contracts Admin Budget Office Treasury Services

Important Takeaways

• University Funds hold different use restrictions depending on the source of funds • Discretionary Funds are a type of fund that have the most flexibility in terms of use • Refer to Policy 601.8 for spending restrictions on certain funds • Expenditures can generally be lumped into 3 categories of allowability: 1.

Ordinary business expenditures Unallowable/nonoperational expenditures Expenditures that require additional documentation (e.g., via FB&A form)

The following slides are for Reference Only

Disbursement Funding

What am I allowed to buy with what funds?

Appropriated Funds

Type of Fund

Appropriated (General) ITF: Overhead Receipts ITF: Unrestricted ITF: Auxiliary & Student Fee ITF: Grants & Contracts ITF: Restricted Agency Foundation

Fund # Range

100000-119999 120xxx 137000-139699 3xxxxx 5xxxxx 6xxxxx 83xxxx N/A for Chart 1 • •

AKA

General Funds State Funds

Definition

• Moneys appropriated by the State • All other moneys collected that must be deposited into the General Fund • Generally Unrestricted

Examples

• Regular Tuition • Distance Ed Tuition • Summer Tuition • Extension Instruction Fees • Surplus Sales Saturday, April 25, 2020 UNC Charlotte - Financial Services

Institutional Trust Funds (ITFs)

Type of Fund

Appropriated (General) ITF: Overhead Receipts ITF: Unrestricted ITF: Auxiliary & Student Fee ITF: Grants & Contracts ITF: Restricted Agency Foundation

Fund # Range

100000-119999 120xxx 137000-139699 3xxxxx 5xxxxx 6xxxxx 83xxxx N/A for Chart 1 UNC Charlotte - Financial Services • • • • •

AKA

ITFs Trust Funds

Definition

Non-appropriated Funds that aren’t General, Special, or Capital funds Not bound by G.S. 143C restrictions of State Budget Manual,* but same guiding principles apply Source determines allowable use of funds Restricted and Unrestricted ITFs can be Discretionary *Still bound by other budget manual policies such as travel, personnel regulations, etc.

Saturday, April 25, 2020

Type of Fund

Appropriated (General) ITF: Overhead Receipts ITF: Unrestricted ITF: Auxiliary & Student Fee ITF: Grants & Contracts ITF: Restricted Agency Foundation

Fund # Range

100000-119999 120xxx 137000-139699 3xxxxx 5xxxxx 6xxxxx 83xxxx N/A for Chart 1 UNC Charlotte - Financial Services

ITFs: Overhead Receipts

Definition

Funds generated by charging the F&A (Facilities & Administrative) rate to externally sponsored projects (grants & contracts) of which departments retain 10% as cost recovery monies.

Examples

120048 O/H Biology 120018 O/H School of Architecture Use is governed by UNC BOG Policy 500.5 – must support scholarly development of faculty, staff, and students to sustain academic programs and campus infrastructure, and to encourage and expand research.

Saturday, April 25, 2020

ITFs: Unrestricted

Type of Fund

Appropriated (General) ITF: Overhead Receipts ITF: Unrestricted ITF: Auxiliary & Student Fee ITF: Grants & Contracts ITF: Restricted Agency Foundation

Fund # Range

100000-119999 120xxx 137000-139699 3xxxxx 5xxxxx 6xxxxx 83xxxx N/A for Chart 1 • • •

Sources include:

Gift funds not restricted by external party in terms of purpose Residual balances of fixed fee contracts Sales/services revenue from recharge units • • •

Examples

University Unrestricted spending portion of endowments 137051, Matthew Whelan Research Residual 137066, Urban Education RU Use is unrestricted UNC Charlotte - Financial Services Saturday, April 25, 2020

ITFs: Unrestricted – Subcategories

22 • •

Research Residuals

Residual balances of fixed-fee contracts (5xxxxx) Generally, funds are unrestricted per terms of the contracts, but UNCC practice is that spending is related to the original contract purpose or at least research-related.

• •

Recharge Units (RU)

Primary purpose: provide goods and services to UNCC community for a fee (may also be provided to external users). Should help further the University’s educational, research, and community service goals.

Generally, funds are unrestricted, but UNCC practice is that spending must support operations, and revenues must be reinvested in the RU.

Contact Cost Analysis department within Grants & Contracts Administration (currently Sandra Haynes) to establish a Recharge Unit.

UNC Charlotte - Financial Services Saturday, April 25, 2020

ITFs: Student Auxiliary & Student Fee

Type of Fund

Appropriated (General) ITF: Overhead Receipts ITF: Unrestricted ITF: Auxiliary & Student Fee ITF: Grants & Contracts ITF: Restricted Agency Foundation

Fund # Range

100000-119999 120xxx 137000-139699 3xxxxx 5xxxxx 6xxxxx 83xxxx N/A for Chart 1

Definition

Funds generated by fees and activities that support student attendance at the University

Examples

Housing, Dining, Student Centers (e.g., Student Union), Student General Fees (e.g., Education & Technology, Application Fees), Athletics Use is unrestricted except for certain student fees (e.g., Athletics) UNC Charlotte - Financial Services Saturday, April 25, 2020

ITFs: Grants & Contracts

Type of Fund

Appropriated (General) ITF: Overhead Receipts ITF: Unrestricted ITF: Auxiliary & Student Fee ITF: Grants & Contracts ITF: Restricted Agency Foundation

Fund # Range

100000-119999 120xxx 137000-139699 3xxxxx 5xxxxx 6xxxxx 83xxxx N/A for Chart 1

Definition

Funds received from federal, state, municipal, non-profit, and industrial entities restricted to support a specific use or purpose defined in the award document or agreement.

Examples

501132 Secure Info Sharing 501307 Efficacy of Soybean-based Vaccines

Restrictions:

As defined in the award document/ agreement.

UNC Charlotte - Financial Services Saturday, April 25, 2020

ITFs: Restricted

Type of Fund

Appropriated (General) ITF: Overhead Receipts ITF: Unrestricted ITF: Auxiliary & Student Fee ITF: Grants & Contracts ITF: Restricted Agency Foundation

Fund # Range

100000-119999 120xxx 137000-139699 3xxxxx 5xxxxx 6xxxxx 83xxxx N/A for Chart 1

Definition

Gift funds restricted by the donor in terms of purpose

Examples

600050 Africana Studies Scholarship Fund 660971 Urban Design Studio Fund Donor-driven

Restrictions:

UNC Charlotte - Financial Services Saturday, April 25, 2020

Type of Fund

Appropriated (General) ITF: Overhead Receipts ITF: Unrestricted ITF: Auxiliary & Student Fee ITF: Grants & Contracts ITF: Restricted Agency Foundation

Fund # Range

100000-119999 120xxx 137000-139699 3xxxxx 5xxxxx 6xxxxx 83xxxx N/A for Chart 1

Agency Funds

26 • • •

Definition

UNCC acts as custodian or agent UNCC has fiduciary relationship with organization, club, etc.

Associated with campus activities • • •

Examples

Student Orgs (830278, Phi Kappa Phi) Funds donated for benefit of faculty/ staff, e.g., flower, coffee funds Residual conference funds that do not belong to UNCC (830271, UNC Financial System Conf 2013) Can be used for any expenditures that comply with agency restrictions UNC Charlotte - Financial Services Saturday, April 25, 2020

Foundation Funds

Type of Fund

Appropriated (General) ITF: Overhead Receipts ITF: Unrestricted ITF: Auxiliary & Student Fee ITF: Grants & Contracts ITF: Restricted Agency Foundation

Fund # Range

100000-119999 120xxx 137000-139699 3xxxxx 5xxxxx 6xxxxx 83xxxx N/A for Chart 1

Definition

Non-appropriated Funds held in the Foundation or Athletic Foundation • • •

Examples

Donor gifts – Restricted & Unrestricted (Chancellor’s Fund) 420396 Esther Fishel Art Schlshp (670396) 448575 EPIC Manf. Research (660575) • •

Can be used for

If Restricted, uses must be consistent with donor restrictions If Unrestricted, spend in accordance w/Foundation board approved budget UNC Charlotte - Financial Services Saturday, April 25, 2020

Transferring Funds

28 Concept: Transferring money from one fund to another to support another department/fund/program (via JV).

Example: Deficit cash coverage for a program in another department.

General Rule: A transfer of funds to another fund must follow the same restrictions imposed by the external parties.

Examples:  Cannot transfer Restricted funds to Unrestricted funds.

 Cannot transfer General Funds out of the General Fund.

UNC Charlotte - Financial Services Saturday, April 25, 2020

UNC Charlotte - Financial Services

New Banner Funds

29 Link to form: http://finance.uncc.edu/sites/fina nce.uncc.edu/files/media/Forms/ NewBannerFundRequestForm.xlsx

See Instructions tab for documentation needed depending on source of funds.

• • • Remember to: Attach requested support Complete Attachment A Have the form signed and approved Saturday, April 25, 2020

Also see

30 University Policies:  706 , Alcoholic Beverages   601.15

, Control and Management of University Equipment and Other Property 101.18

, Employee Gifts, Prizes, and Awards (under development) University Manuals:  Purchasing Manual  Purchasing Card Manual  Allowable/Non-Allowable Expenses on the Purchasing Card   Travel Procedure Manual Petty Cash/Change Fund Procedures Statewide Guidance:  North Carolina Budget Manual (see http://www.osbm.state.nc.us/ ) UNC Charlotte - Financial Services Saturday, April 25, 2020

The Puzzle of Endowments

How are University investments accounted for?

Presented by:

Sonja Austin, Treasury Services

Objectives

By the end of this presentation you will be able to: Item 1 Define an endowment fund and distinguish between true, term , and quasi Understand how endowments are recorded in Banner Item 2 Item 3 Item 4 Item 5 Item 6 Understand what the current endowment spending policy is, and what is meant by “underwater endowment” Have a cursory understanding of the regulatory environment and of reporting standards for endowments Have an introductory understanding of the investment side of endowments, (asset allocation, investment managers, UNCCIF) Understand the importance of pledges, and also endowments in general to universities

When you think of endowments do you turn into one of these people?

What exactly is an endowment, and how does it differ from other funds?

Elements that make up a typical endowment: • Donor gift is received that meets or exceeds endowment levels as determined by University Advancement • Donor states (via the endowment document) that the gift is to be maintained in perpetuity • Distribution of income is via the annual spending policy calculation

Types of Endowments

•

True Endowment

- a fund in which the donor has specified that the gift must be maintained in perpetuity and invested to produce income •

Quasi Endowment

a fund set aside by the institution’s governing board to be managed as if they carried external endowment stipulations •

Term Endowment

- a fund that a donor specifies must be held as an endowment until the passage of a specified period of time or the occurrence of an event

Endowment Principal

• Original & subsequent gift(s) that were received to establish the endowment (aka corpus) • Historic dollar value – fair value of the fund when received, plus subsequent gifts and other additions specified by the donor(s) • Fund numbering in Banner: – H2xxxx for University – H1xxxx for Foundation – G6xxxx for Athletic Fdn.

Endowment Earnings

• Come from market gains and losses • Represents investment performance over the life of the endowment. • Funds the endowment spending.

• Fund numbering in Banner: – R2xxxx for University – R1xxxx for Foundation – R6xxxx for Athletic Fdn.

Total Market Value

• Combination of : – Principal – Earnings and realized gains and losses – Unrealized gains and losses • Fund numbering in Banner: – E2xxxx for University – E1xxxx for Foundation – E6xxxx for Athletic Fdn

In summary: 39 • Start with “H” or “G” • Original and subsequent gifts, • Add the “R” values.

• Result is “E” • Investment performance less spending to date.

Fair market value, or FMV

Spending Policy

Competing Objectives New Spending Policy – Why? – Good business practice to review, especially with roller coaster returns of last few years. – Ideally, long-term investments returns should equal or exceed the inflation rate + spending rate.

– Average returns over the next 8 years estimated at 6.2%, and inflation is estimated at 2% per annum. With a 5% spending rate, we need to at least earn 7% (2% + 5% = 7 %, yet returns are estimated to only be 6.2%). – Management and Finance Committee do not believe 5% spending rate is sustainable over time.

– Historically a high level of volatility to spending because our spending methodology is based solely on the market (i.e. 5% of market value).

– Staff and finance committee believe the Foundation can do a better job of meeting spending goals budget stability and maintenance of purchasing power.

Spending Policy

Competing Objectives • • • New Spending Policy: More dependent on changes in Consumer Price Index Estimated to result in moderate increases over the next couple of years. Barring any deflation, there should not be any decreases • • Maintain spending in FY 2014 at the same dollar amount as FY 2013 Thereafter annual spending will be calculated as follows: 80% times prior years spending adjusted for inflation + 20% times the 4.5% of the average of the prior three years market values as of December 31 each year

Regulatory Environment of Endowments

• UPMIFA – Uniform Prudent Management of Institutional Funds Act • Provides better guidance on what is considered prudent use of endowments based on 7 criteria: – Duration/preservation of the endowment – Purposes of the charity and of the endowment – General economic conditions – Effects of inflation & deflation – Expected total return from earnings & gains – Charity’s other resources – Charity’s investment policies

Financial Reporting of Endowments

• Accounting standards require that endowment principal (original and subsequent gifts) be recorded separate from the earnings and market gains and losses •

Pledges

, although they are very important, are not tracked in Banner Finance, and an endowment fund at UNC Charlotte is not created when a pledge is received, but rather when payment is received on the pledge

Underwater Endowments

How do we manage risk?

What are Underwater Endowments and how do we manage them?

How are Endowments Invested?

Then

Venture Capital; 1,1% Cash; 0,6%

Now

Cash; 7,1% Fixed Income; 35,8% Large Cap Growth Equity; 30,3% Diversifying Strategies; 9,8% Real Estate and Natural Resources; 14,4% Domestic Equity; 11,6% Global Equity; 1,3% International Equity and Emerging Markets; 14,0% Large Cap Value Equity; 14,1% International Equity; 9,9% Small Cap Equity; 8,0% - 11 managers in 2009 - Total Value of $63.4M (2002) to $92M (2009) - 3-year average return (2007-09) = -3.3% - 5-year average return (2005-09) = 6.6% Fixed Income; 13,0% Private Equity; 12,3% - Close to 200 managers - Total Value of $126.2M ( 12/31/2012) - 3-year average return = 8.9% Hedged Equity; 16,4%

The Importance of Endowments

• Importance grows in an economic downturn • Large endowments make a university more appealing – allows university to provide a variety of programs, services, and opportunities • Wisely invested endowments provide assurance for the continuity of programs and opportunities for students and faculty • Endowment ratios are used to compare universities to one another

Disbursement Accounting

How do I classify this purchase?

Presented by:

Kim Seamans, Financial Reporting

Importance of Using Correct Accounts

Reporting needs: • Financial Statements • Contributors (e.g., NCAA) • Regulators (e.g., bond issuers) • Management • Governing bodies (Legislature, OSBM, OSC)

If expenses are coded incorrectly, decisions are made using bad information.

(This may result in bad decisions!)

General Rules

• Use resources on General Accounting website: http://finance.uncc.edu/controllers-office/general-accounting Updates are posted to the Admin Chat Listserv [email protected]

• NOT an exact science!

• Goal =

Consistency

• Consult

Reporting & Fixed Assets department

• Avoid using “Other” or “Miscellaneous” accounts for recurring expenses • If you do not see a description that fits your situation,

ask

! We may need to revise an account description or create a new account.

Our Resources

• The resources we look to and the process that occurs when you ask us an account question: OSC’s Chart of Accounts for NC Accounting System (NCAS) Our Banner accounts are linked to these accounts UNC System Chart of Accounts Our internal documents

Specific Areas of Confusion

• Student Financial Assistance • Accounts in ARCHIBUS • Food Costs • Equipment • 49er Mart Purchases • Service v. Maintenance • Telecom, Internet, & Data Processing • Other FAQs

See “for reference only” slides

Examples of Inconsistencies

Item/Service Account Code Used Purchased Parking tokens 920700, Other Contracted Svcs © and Publishing fees Videotaping & transmitting Food supplies Chartwells orders Staples orders 928170, Printing/Binding/Duplicating 920700, Other Contracted Svcs 951360, Administrative Meals 930200, Food Supplies 930200, Food Supplies Correct Account Code 925440, Non-Employee Transportation 953100, Other Admin Costs 928130, Video Transmission Charges 930200, Food Supplies 922150, Contract Svc-Food Svc Event Various – Should be itemized

Recent Updates

• Notification is sent via the Admin Chat Listserv when significant updates are made • Updates are noted in

red font

in Expense Account documents

Important Takeaways

• Expenses coded incorrectly  Decisions!

Bad Information  Bad • Account code choice ≠ Exact Science • Goal

Consistency • Know your Resources.

• The expense account used should describe

what is being purchased, not why.

• Avoid using “Other” or “Miscellaneous” accounts for recurring expenses.

• If you don’t see an account/description that fits your situation, ASK!

Website/Contact Information



Spending Guidelines:

   Treasury Services website: http://finance.uncc.edu/treasury-services Jane Johansen, Director of Treasury Services, 7-5432 Sonja Austin, Financial Reporting and Outreach Analyst, 7-5811 

Expense Account Codes:

   Reporting & Fixed Assets website: http://finance.uncc.edu/controllers office/reporting-fixed-assets Tony Georges, Financial Reporting Manager, 7-5755 Kim Seamans, Senior Financial Reporting Accountant, 7-5752

The following slides are for Reference Only

Disbursement Accounting

How do I classify this purchase?

Specific Areas of Confusion

57  Student Financial Assistance  Accounts in ARCHIBUS  Food Costs  Equipment  49er Mart Purchases  Service v. Maintenance  Telecom, Internet, & Data Processing  Other FAQs UNC Charlotte - Financial Services Saturday, April 25, 2020

Student Financial Assistance from Departments

Student Scholarships

(e.g., $100 for student’s books) Should be processed via the Scholarship Database* and coded to: 

960550, Other Educational Awards



960050, Appropriated Grants



960200, Academic Enhancement Scholarships

Scholarships cannot be paid from the General Fund unless approved by the Board of Governors.

*Use DPR for Non-resident Aliens

Travel Scholarships

(e.g., $100 to help student attend a conference) Should be processed via DPR w/attached scholarship form. Account 960540.

When for individual student benefit only .

Travel related to valid University business purpose

Should be processed via a Travel Reimbursement and coded to

Travel Accounts .

UNC Charlotte - Financial Services Saturday, April 25, 2020

ARCHIBUS – Basic Work Requests

59 Click small gray box at column heading to sort descending or ascending See “ ARCHIBUS Banner Account Codes info ” on FM Archibus Training site UNC Charlotte - Financial Services Saturday, April 25, 2020

ARCHIBUS – Informal Project Requests

60 Account Account Descr Use 928355 Projcts Repair/Maint/ Replace Noncap For Informal Non-capitalized projects - Projects performed by FM Design Services that repair, maintain, or replace an existing building/asset. Examples: roof, plumbing, electrical repairs; interior decorations; replacement of a part or building component with a new part of the same type and service capabilities.

948355 Projcts Constr/Renov/ Imprv Captlize For Informal Capitalized projects - Projects performed by FM Design Services that are new construction or projects to renovate and/or improve an existing building/asset that increase future service potential of the building/asset. Examples: projects that increase square footage; conversion of shell space to usable office, research, or classroom space; attaching new structures to buildings; original installation or upgrade of heating/cooling systems, plumbing, electrical wiring, etc.

FM = Facilities Management WR = Work Request UNC Charlotte - Financial Services Saturday, April 25, 2020

Purpose/Use

Employee Travel meals Non-employee meals (incl. board members) Food for Resale Catering (Contracted service), incl. Chartwells Food supplies (food, beverages, condiments; not prepared meals)

Alcohol

Prepared Administrative Meals and food costs not classified elsewhere

Food Costs

Account

925200/ 925360/ 926150 925460

Account Name

Employee Subsistence-Meals (in-state/out of state/out of country)

Examples

Reimbursable meal at training Board/Non-Employee Subsistence 931550 922150 930200 Purchases for Resale-Food & Drinks Contract Svc-Special Food Svc Event Food Supplies Lunch for interviewee Candy, soda for sale Catering for event Snacks for training; bread for sandwiches 930210 951360 Unallowable F&A – Alcohol Administrative Meals Business-related meals Reference: “Food Costs” tab of List of Expense Account Codes Saturday, April 25, 2020

Equipment and Furniture

62   Capital v. Non-capital Thresholds   $5,000 for each piece of equipment/furniture $100,000 for each item of software  Items whose costs are equal to or greater than these thresholds are considered capital and will be depreciated over their estimated useful lives What’s included in the cost of each item?

 Purchase price + all costs necessary to place the asset in service, including: Shipping and delivery costs, setup and installation costs, legal fees, sales tax  Allocate if multiple items purchased with one shipping charge.

See Fixed Assets Guidebook: http://finance.uncc.edu/sites/finance.uncc.edu/files/media/Reporting_FixedAssets/FixedAssetsGuid eBook2012.doc

Reference: 1 st tab of List of Expense Account Codes > Fixed Asset Accounts Saturday, April 25, 2020

49er Mart Purchases

63 • • • •

Make sure to include adequate DETAIL so that reviewers can determine correct accounting Full description of item/services Itemized documentation of goods/services Reason/purpose for the purchase

•

Don’t lump total costs if separable items and services are being purchased.

UNC Charlotte - Financial Services Saturday, April 25, 2020

Service v. Maintenance

64 Repairs & Maintenance • One-time or short-term service to repair property • Both parts and labor should be coded to this expense account Maintenance Contracts/Service Agreements • Ongoing support for property • Usually an agreement of 1 year or longer • Note – Repairs are corrective and restorative following wear and deterioration. Maintenance is preventive and anticipatory.

Contracted Services • Contracts/agreements other than maintenance • For professional and consultative personal services UNC Charlotte - Financial Services Saturday, April 25, 2020

Telecom, Internet, & Data Processing

ITS/Telecom ONLY

Campus Phone and Data Services Data Processing

Telephone Services

Local Long Distance UNC Charlotte - Financial Services

Internet/Network Device Services Dept. Use

928110, MCD Allowances 928140, Misc Internet (Wi-Fi) 928141, Telecommuting Internet Reimb.

Misc Services

Teleconference Email/Calendar Services Video Transmission Saturday, April 25, 2020

FAQ #4 – Accounts describe the ‘What’

Q: I am purchasing software to be used exclusively in the classroom. Should this be classified in account:

  

930250 Educational Supplies 944090 Other Educational Equip Non-Cap, or 942050 Software-PC/Printer Non-Cap?

• •

A: The expense account used should describe what is being purchased, not why.

We want to record all software being purchased as “software,” regardless of intended use, e.g., in a classroom or office. The fund number will indicate the function supported by the expenditure, e.g., administrative, instructional, research. Therefore, the best account to use here is 942050 Software PC/Printer Non-Cap. UNC Charlotte - Financial Services Saturday, April 25, 2020

FAQ #10 – Educational Supplies

Q: What expenses should be recorded using account 930250 Educational

Supplies?

A: For “purchase of materials and supplies used exclusively for instructional and training purposes.” • • • • Examples: Exam/testing kits Educational videos to be watched in class Teacher’s edition books Materials for Senior Design Projects • • • Examples of items NOT to record to Educational Supplies: Paper (Office Supplies) Educational software (Capital Equipment - Software) Chemicals (Lab Supplies) UNC Charlotte - Financial Services Saturday, April 25, 2020

FAQ #28 – Current v. Contracted Services

Q: What is the difference between accounts 951760 and 920700?

A: Current v. Contracted services:

Account 951760 Other Current Services: For non-contracted services That cannot be more specifically categorized Account 920700 Other Contracted Services: For contracted services That cannot be more specifically categorized in other Contracted Services accounts UNC Charlotte - Financial Services Saturday, April 25, 2020