1 ACCOUNT CODES REVISITED Presented by John Brandt 5/11/09 1.

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ACCOUNT CODES REVISITED

Presented byJohn Brandt

5/11/09

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Prepared in collaboration with:

HSC Unrestricted AccountingMain Campus Unrestricted AccountingInventory Control (University Services)Tax Accounting (Main Campus Unrestricted Accounting)Purchasing

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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

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When it comes to choosing account codes, we do not want you

to feel you are doing this.

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We do not want youto feel like this.

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We certainly do not want youto feel like this.

Originators may get frustrated when a transaction request is returned.

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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

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Choosing an Account Code

Reporting

Account Code

Specific Policies

3xxx4xxx5xxx6xxx7xxx

UNM Big RedIRSF&A AgencyNM Regs.

80 % of the time it is clear what account code to use.Other times it becomes cloudy what to choose.

External andInternal ReportingRequirements

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Account Codes Revisited Topics:

1. Operating Ledger Categories

2. Business Purpose \ Item Text

3. 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)

4. You make the Call

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Operating Ledger Categories

• Three main areas:• Revenue• Salary Expense• Other Expense

• We will focus on the subcategories under

“Other Expense”

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Basic Account StructureFirst Digit of

Account CodeType of Account

0 Revenues

1 Income &Transfers

2 Labor expenses

3 Supplies & Travel

4 Student and Research Costs

5 Patient Care Costs

6 Communication Charges and Services (See Services, below)

7 Plant Maintenance (ie: repair, maintenance, painting. Frequently a type of service.)

8 Other Expenses, Special Contract & Grant Expenses

9 Capital, Bond, and non-cash expenditures11

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Operating Ledger Expense Categories

Category Note

Salaries (20xx) Payroll only use

Payroll Benefits (21xx) Payroll only use

Supplies (31xx – 37xx) Food & computer related expenses scrutinized

Travel (38xx – 39xx) Special rules/policies apply

Student Costs (4xxx – 45xx)

Research Costs (46xx – 49xx)

Patient Care Costs (5xxx)

Communication Charges (60xx) Charges through FUPLOAD by ITS

Services (63xx – 69xx) Requires SPQ (USP statement)

Plant Maintenance (70xx – 75xx) Requires SPQ (USP statement) on services

Utilities (76xx – 79xx) For PPD Utilities division use only

Other Expenses (80xx – 81xx) Not frequently used by Depts (8045-special rules apply)

Special Grant Contract Expenses Primarily all subawardees

Capital Expenditures (90xx – 95xx)

When in doubt, call Main Campus - Unrestricted Accounting

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Operating Ledger Expense Categories

Category Note

Salaries (20xx) Payroll only use

Payroll Benefits (21xx) Payroll only use

Supplies (31xx – 37xx) Food & computer related expenses scrutinized

Travel (38xx – 39xx) Special rules/policies apply

Student Costs (4xxx – 45xx)

Research Costs (46xx – 49xx)

Patient Care Costs (5xxx)

Communication Charges (60xx) Charges through FUPLOAD by ITS

Services (63xx – 69xx) Requires SPQ (USP statement)

Plant Maintenance (70xx – 75xx) Requires SPQ (USP statement) on services

Utilities (76xx – 79xx) For PPD Utilities division use only

Other Expenses (80xx – 81xx) Not frequently used by Depts (8045-special rules apply)

Special Grant Contract Expenses Primarily all subawardees

Capital Expenditures (90xx – 95xx)

When in doubt, call Main Campus - Unrestricted Accounting

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Finding Account Code Lists

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)

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Business Purpose or Item Text:Be detailed and specific

Complete and accurate descriptions are required for the businesspurpose 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

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In today’s business world, the buzzwords are …

Transparency

Accountability

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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)

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Business Purpose or Item Text: Be detailed and specific

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

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Business Purpose or Item Text: Be detailed and specific

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.

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Account Code Selection Guideline

Type of Expense?Write detailed description in

business purpose or item text(include how benefits UNM)

Choose Appropriate Account Code

Is the Expense Allowable?(UNM Policy 4000)

Represents a public purpose benefiting UNM

No

Yes

Is this a service?

Need SPQ orUSP statement

(per IRS regulations)

Use 6xxx

F&A Excludable?Advertising, promotion, marketing,

alcohol, etc.

(see Federal Circular A-21)

31B0, 37Y0, 39Y06350, 62Y0, 69Y0

75Y0

Involve a Foreign Student, Visitor, or Vendor?

(Taxation related)

3850, 4682, 46834021, 40A1, 466163E1, 63V1, 808188xx (C&G only)

New Employee Relocation Related Expense?

(Taxation related)

Travel, household goods &

furnishings, househunting, etc.

Use 38L0 only

Travel or Food Expense?

Food: 31A0, 31B0, 31M0, 31M1, 3860, 40C0

Travel: 3800, 3820, 3840, 3850, 38N0, 38N1, 38P0, 39Y0, 39Z1,

4080

Computer (or related) Purchase?

3140, 3150, 3189, 9020

Furniture/Fixture/Equipment Purchase?

3180, 3185, 9000, 9040, 9060, 9300

All Other ExpensesCode appropriately according to

Account Code Definitions found at http://www.unm.edu/~gacctng/forms.html

3xxx, 4xxx, 5xxx, 6xxx, 7xxx, 8xxx, 9xxx

Need Help on Account Code?Contact your Unrestricted

Accountant for Assistance on Unrestricted Funds

Contact your Fiscal Monitor for Assistance on Restricted Funds

Other Coding Issues Local conferences: breakout costs as 31A0/31B0, 39Z1, 63A1, 63B1, 7060, etc Software: 3140 for all purchases that we own & have physical possesion Capital purchase: 9000/9020 - code extended warranty separately to 70C1

STOP

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Is the Expense Allowable?

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

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BEFORE you make the purchase.

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Is the purchase for a service?

A purchase for services has specific requirementsdue to IRS regulations, the State Procurement Code,and other laws:

1. Independent contractor vs. employee relationship2. Conflict of interest3. Purchase Requisition or Non-Standard Payment form

• Refer to the SPQ/USP guidelines

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Is the Expense “F&A Excludable”?

Account Purpose31B0-Food F&A Excludable

Alcoholic beverages. Food expenses for entertaining, fund raising, and marketing. Student Activities and Alumni Expenses.

37Y0-Supply Costs F&A Excludable

Supplies used for promotional activities.

39Y0-Travel F&A Excludable

Travel associated with lobbying, entertainment.

6350-Promotional Exp F&A Excludable Gen

Promotional items, gifts, and the costs of advertising and public relations designed solely to promote the University.

69Y0-Professional Service F&A Excludable

Services purchased for F&A excludable activities or items.

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Payments to Foreign Nationals

Foreign Students and Visitors, VendorsIf 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 Nationals26

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Travel 3850,4682,4683

Awards 4021

Participant Fees 40A1

Stipends 4661

Honoraria 63E1

Services 63V1

Royalties 8081

Sub-Contracts 88XX (C&G only)

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Payments to Foreign Nationals

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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

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New Employee Relocation Related Expenses

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31A0-Business Food-Local 

31B0-Food F&A Excludable

31M0-Recruitment Expense

31M1-Staff Recruitment Expense

3860-Bus Meals and Hospitality

40C0-Food Services

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Food Account Codes

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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.

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Food Account Codes

3131

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

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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

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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 food expenses belong in this account.• Provide who attended - names, companies

* Must deduct meal from related per diem meal on travel reimbursement

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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

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Travel Account Codes

3800-In State Travel3820-Out of State Travel3840-Foreign Travel3850-Foreign Visitor to UNM Travel3860-Business Meals and Hospitality38N0-Travel Recruiting38N1-Travel Recruiting Student38P0-Travel Group39Y0-Travel IDC Excludable39Z1-Travel Non UNM Employee-Non Foreign4080-Student Travel

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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

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Computer Related

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

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Furniture/Fixture/Equipment Purchase

Furniture/Fixture/Equipment Accounts

3180-Non Capital Equipment <$5,0013185-C&G Non Capital Equip $1,000-$5,0009000-Equipment/Furniture >$5,0009040-Equipment Non UNM Titled9060-Equipment Fabricated9300-Fixed Equipment

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Other Coding Issues

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-Local31B0-Food F&A Excludable3850-Foreign Visitor to UNM Travel39Z1-Travel Non UNM Employee-Non Foreign7060-Facility Rent Expense70F0-Equipment Rent Expense

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Other Coding Issues

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

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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

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All Other Expenses

Code appropriately according to Account Code Definitions found at

http://www.unm.edu/~gacctng/forms.html

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Need help on an account code?

Contact your Unrestricted Accountant for Assistance on Unrestricted Funds

Contact your Fiscal Monitor for Assistance on Restricted Funds

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This is how you should feel!

Department Originator

I’m using the Account Codes workshop notes.

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You Make The Call

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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?

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1) Advertising Brochure

A) Account 3100-Office Supplies General. We purchased paper with printing on it. This is a supply.

B) Account 6370-Printing/Copying/Binding Gen. We purchased the design of the brochure. This is a service that includes printing and binding.

C) Account 6350-Promotional Expense F&A Excludable. This is a service for an F&A excludable item

D) Account 55Z0- Other patient supply costs. These brochures are for patients, so they go in the Patient Care Cost category.

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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:

What account(s) will you use to expense these charges? Why?

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.

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2) Non Promotional Brochure

A) Account 6350-Promotional Expense F&A Excludable. This is a service for an F&A excludable item.

B) Account 6370-Printing/Copying/Binding Gen. We purchased the design of the brochure. This is a service that includes printing and binding.

C) Account 3100-Office Supplies General. We purchased more paper ($12,000) than design ($2,500). This is a supply.

D) Account A801-Inventory Other. We got a lot of brochures, so they are inventory now.

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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:

What account(s) will you use to expense these charges? Why?

Bill for designing surveys for Dr. RedMond:

$375.00

Ralph Getty

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3) Survey

A) Account 20P0-Temporary Salary Gen. Ralph is an individual, not a business. He was temporarily employed by UNM to design this survey.

B) Account 0280-Testing Fees General. These surveys will be used to test patients for various diseases.

C) Account 3100-Office Supplies General. I LIKE Office Supplies General. I put everything here.

D) Account Account 69Z0-Other Professional Services. Ralph provided a service by designing the brochures.

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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:

1. Reams of paper ($2,006.00)

2. Toner cartridges for the new copier ($892.17)

3. 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?

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4) P-Card Reallocation

A) Account 3100-Office Supplies General. These are all office supplies. This is the correct category.

B) Account 3100-Office Supplies General for the paper and Toner. Account 3150-Computer Supplies and Servers <$5,001 for the copier.

C) Account 3100-Office Supplies General for the paper and Toner. Account 9530-Site Improvement General for the copier. The copier greatly improved our work site.

D) Account 3100-Office Supplies General for the paper and Toner. Account 3180-Non Capital Equipment <$5,001 for the copier.

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5) Your department maintains records for copier usage and charges the users’ index based on the number of

copies made each month at 5 cents/page. 4,000 copies were made by various departments this month.

What expense account(s) will you use to expense these charges? Why?

What revenue account(s) will you use for these charges? Why?

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5) Revenue Account

A) Revenue account? I will credit 3100-Office Supplies General for the cost, to reduce the cost of the paper and toner we used to make these copies.

B) I will credit the new Internal Service center revenue account, 0699-Miscellaneous Services.

C) I will credit account 08Z0-Miscellaneous Gen. for this small amount of revenue.

D) I will credit 37Z0-Other supply Costs General, because it is currently overspent and we still need to purchase more supplies using this account.

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5) Expense Account

A) I will expense these copies to 3100-Office Supplies General. This is paper and toner.

B) I will expense these copies to 69Z0-Other Professional Services General. We provided a service to the other departments by making these copies for them.

C) I will expense theses copies to 63C0-Copying Gen. We are selling copies.

D) Our department uses the barter system. The copies are offset by some used furniture they gave our department last month. No entry is required.

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Hmmm. Say again…

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6) Your department purchased a desk top computer with a monitor, keyboard, and mouse. At the same time you

also purchased from the same vendor two new printers. The invoice is below:

What account(s) will you use to expense these charges? Why?

Computers R Us, Inc.

Acme SE 340 computer…………… $1,200.00

Acme 22inch Monitor…………….…. 400.00

Acme Printer (2 @ 375.00)….……… 750.00

Total: $2,350.00

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6) Computer and Printer Purchase

A) I will use 9020-Computer Hardware for all of these charges.

B) I will use 3189-Computers for the computer (CPU cost was not itemized) and 3150-Computer Supplies & Servers for the monitor & printers.

C) Since this is one purchase, I will use 3189-Computers for the entire invoice.

D) I will use 3180-Non Capital Equipment for all the charges, since the total is under $5,001.

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7) Your office is being renovated. An outside company has been hired to tear down two walls, replace six

windows (two of which are cracked), and replace the worn carpet with new carpet. They are also supplying

3 new workstations, at a cost of $4,500 per station.

1. Each station includes cubicle walls ($1,970)

2. Two upper ($800 each) and one lower ($450) cabinet

3. A desk surface ($300)

4. A chair ($180).

The invoice was itemized as follows:

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What account(s) will you use to expense these charges? Why?

Rigolito Construction, Renovation, Repairs, and Maintenance, Inc.

Labor for windows & carpets (at $75/hour)…………………………………….… $5,625.00

Windows (6 @ $275)………………………………….…. 1,650.00

Carpet(85 yards,@ 32/yd)…………………………….. 2,720.00

Modular Furniture:

Cubicles (3 @ $1,970)

Desk surface (3 @ $300)

Cabinets:

Lower (3 @ $450)

Upper (6 @ $800)

Total Modular Furniture…………………………………. 12,960.00

Chair (3 @ $180)……………………………………………….. 540.00

Total: $23,495.00

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7) Renovation? Repair? Maintenance?

A) I have no idea, so I will guess that 9220-Building Improvement Gen is correct. It sounds pretty good…

B) I have no idea, so I will divide it all up, as follows:Labor to: 69Z0-Other Professional Services GeneralThe rest to: 9000-Equipment/Furniture >$5,000

(If I’m wrong, maybe no one will notice…)

C) I have no idea, so I called my friend in another department that had a similar expense last year. We decided:

Labor, windows, carpet to 7000-Plant RepairsFurniture to 9000-Equipment/Furniture >$5,000

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7) Renovation? Repair? Maintenance?

D) I have no idea, so I called Inventory Control, and I am expensing it the way they told me to:

Labor, windows, carpet to 7000-Plant RepairsModular furniture to 9000-Equipment/Furniture >$5,000Office chairs to 3180-non capital equipment <$5,001 

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Bonus Question!

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8) Your department purchased a piece of equipment.

What account or accounts will you use to expense these charges? Why?

Gizmos and Whatzits, Inc.

Gizmo…………….………………..………… $ 7,000.00

Warranty on Gizmo………………..…… 225.00

Shipping………………………………..……. 820.00

Gizmo installation………………..…….. 935.00

Staff Training .

Gizmo Actualization

7 classes @ $325/class………………..2,275.00

Total: $11,255.00

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8) Gizmos and Whatzits

A) Account 9000-Equipment /Furniture >$5,000, because this is capital equipment, and the entire amount is capitalized.

B) Account 9000-Equipment/Furniture for everything except the Warranty. The Warranty goes in account 70C1-Equipment Warranties/Service Contracts. Warranties are not capitalized

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8) Gizmos and Whatzits

C) This is nerve-racking. Okay…Equipment goes in 9000-Equipment/Furniture >$5,000Warranty in 70C1-Equip. Warranties/Service ContractsShipping in 31D0-Freight In-BoundInstallation in 63X0-Technical ServicesTraining in 63T0-Contract Services General

D) One look at this and I got a headache. I went home sick and my supervisor did something with it. Wherever it went, it is not my fault!

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8) Gizmos and Whatzits

And the Answer is:

B) Account 9000-Equipment/Furniture for everything except the Warranty. The Warranty goes in account 70C1-Equipment Warranties/Service Contracts. Warranties are not capitalized.

It is ok to ask for help. Really!

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Account Codes Revisited Handout

For further information and resources on account codes, refer to the handout:

1. Common Errors

2. Appendices

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You are Ready to Play Ball!

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