Best Practices: Department Chart of Account Requests and Maintenance

Overview
  • Describes the process for requesting additions or changes to the department chart of accounts as well as maintenance of the chart of accounts
Goals

  • Uniform classification of revenues and expenditures in accordance with guidelines developed by the National Association of College and University Business Officers (NACUBO)
  • Uniform reporting across the University System of Georgia
Why are these best practices?
  • UGA's chart of accounts serves as a filing system for categorizing all of its funds as well as classifying all transactions according to the funds they affect. The chart of accounts has eleven ChartFields. All but two of the ChartFields are predetermined and institutionally defined. College and Units can utilize the Department ID and ChartField 1 to structure a chart of accounts that form the basis for department budgets that track expenditures.
  • To provide for ease of reporting and consistency within colleges or units, a standard sequencing of numeric or alphanumeric Department IDs is recommended. In a standard system, each major category will begin with a certain number, or a set of numbers/letters, and the sub-categories within that major category will begin with the same number, set of numbers/letters, and so on.
Best Practices
  • At UGA, the Department ID field is an 8-digit alphanumeric value. The first two digits represent the intermediate unit with budgetary responsibility for the department (unit) ID. The next three digits identify the department within that college or unit. The last three digits are used to designate needs for sub-departments or groupings.
    • Example 1: If the source of funds is specific to the original budget, the last three digits of the Department ID begin with 9. The last two identify the flavor of original budget funding: salaries or operating.
      • 19640951 = PSYC FCOB Fac & Staff Slrv
        • 19 = Franklin College of Arts and Sciences
        • 640 = Department of Psychology
        • 9 = Original budget funding
        • 51 = Salaries
      • 19650971 = SOCI FCOB Operating
        • 19 = Franklin College of Arts and Sciences
        • 650 = Department of Sociology
        • 9 = Original budget funding
        • 71 = Operating
    • Example 2: If the source of funds is specific to Departmental Sales and Service (DSS), the last three digits of the Department ID begin with 2. The subsequent two identify the specific activity or lab group.
      • 19330202 = MUSI Lesson Non Mir
        • 19 = Franklin College of Arts and Sciences
        • 330 = Department of Music
        • 2 = DSS funding
        • 02 = Lessons for non-majors
      • 19210202 = BCMB BFF
        • 19 = Franklin College of Arts and Sciences
        • 210 = Department of Biochemistry and Molecular Biology
        • 2 = DSS funding
        • 02 = Bioexpression and Fermentation Facility
    • Example 3: If the funds are attributed to a specific faculty member, the last three digits of the Department ID are the first, middle, and last initials of the faculty member.
      • 19460JDE = LING Jonathan Evans
        • 19 = Franklin College of Arts and Sciences
        • 460 = Department of Linguistics
        • JDE = Jonathan D. Evans
      • 19520H1P = CSCI Hao Peng
        • 19 = Franklin College of Arts and Sciences
        • 520 = Department of Computer Sciences
        • H1P = Hao Peng (note: 1 was used as a placeholder when a middle initial was not provided/used)
  • The number of Department IDs needed will be dependent on the size and complexity of a unit. Too many Department IDs can create a cumbersome accounting system to work in and crate inaccurate reporting as transactions can be misclassified. On the contrary, too few can make it hard to report financial data with a useful level of detail and to utilize the data for decision making. Bottom line, units should aim for the smallest number of Department IDs that allow them to maintain enough details to make informed decisions.
  • If the budget or expenditure can be tracked by utilizing other fields in the chartstring, a new Department ID is not needed. To differentiate expenditures, within the same support function or unit, one option is to utilized ChartField 1. ChartField 1 can be used to track transactions for departmental or institution-wide activities. The field is an alphanumeric value and is up to ten digits in length. ChartField 1 provides units some flexibility in tracking certain or unique categories of expenditures without having to create a separate Department ID.

  • Roles and Responsibilities
    • Chief Business Officer (CBO): The CBO is responsible for establishing and maintaining the standard Department ID structure and the associated approval hierarchies within their units. The CBO should communicate the requirements of the department ID structure and the responsibilities to approvers of transactions within their units. The CBO must ensure that transaction approvers have appropriate training and are knowledgeable regarding acceptable business practices and University policies and procedures. They should provide guidance to units on nonstandard expenses and internal controls including separation of duties.
    • Distributed Business Staff: Distributed Business Staff are responsible for ensuring adherence to the standard Department ID structure when requesting new IDs or updating existing ones. They are responsible for ensuring that roles and responsibilities are communicated to all individuals who approve transactions and that an adequate organizational processing structure is in place to ensure all transactions are properly prepared, documented, and approved. Local units are responsible for identifying employees who will use the various processing systems and assigning the associated role (e.g. proxy, initiator, or approver). Units must work with the CBO to ensure that transaction approvers have appropriate training and are knowledgeable regarding acceptable business practices and University policies and procedures.
Policy and Other Requirements
Resources

 

Contributed by Stephanie Rosso

Last updated 09/09/2020 BTN Qu ood

 

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