UH Function Code Webinar 03032015 - University of Hawaii · research –very few like this (e.g., UH Hilo seed money grants) Means research activity funded from appropriations like
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Financial Management Office
Susan Lin, Director of Financial Management and Controller
Pearl Iboshi, Director of Office of Institutional Research & Analysis
Kevin Hanaoka, Director of Data Analysis, Office of VPR
Webinar Chart of Accounts – Expenditure Function Code Revision
University of Hawaii Financial Management Office
2
Webinar Instructions
• Web conference login:
▫ URL: http://www.hawaii.edu/halawai/login.htm
▫ Use your regular user name and password
• Questions can be submitted via Halawai function and will be
addressed at the end of the presentation
• Presentation will be posted to UH FMO website:
▫ http://www.fmo.hawaii.edu/fmo/
University of Hawaii Financial Management Office
• What is a Function Code
• Key Issues Impacting
▫ Indirect Cost Proposal
▫ IPED and Cost of Education Measures
• Revised Expenditure Function Codes
• Next Steps
Points to Cover
University of Hawaii Financial Management Office
▫ Function code is an attribute on an account that separates
expenditures by major spending category.
▫ It is used for 1) calculating indirect costs reimbursement rates on sponsored
projects for indirect cost proposals and cost of education; 2) reporting to
Department of Education (e.g. IPED), Board of Regents, senior
management, etc.
Expenditure Function Code Definition
Instruction
Academic Support
Research
University of Hawaii Financial Management Office
Relationship of
Account Code, Object Code, and Function Code
Account Code
Which
organization
does the
transaction
belong to?
Where does
the money
come from?
Which
activity is
the
transaction
tracking ?
What is the
cost center or
unit
responsible
for the
transactions?
Object
Code
What is the
accounting
classification?
e.g. expense, revenue,
accts receivable
What is the
function for
the
transaction?
Expenditure or Revenue
Function Code
Financial
Transaction
e.g. instruction, academic
support, research, etc.
University of Hawaii Financial Management Office
Key Issues Impacting
Indirect Cost Recovery Proposal
University of Hawaii Financial Management Office
Key Issues
• Reclassification of costs from research to other functions
▫ Draws attention of Federal auditors/negotiators
▫ “Correction” lead to loss of two points (i.e., 41.5 rate could’ve been 43.5)
University of Hawaii Financial Management Office
Proposed change (non-extramural)
• Actively remap accounts to departmental research or other appropriate category
▫ Unless research activity costs are accounted for like an extramural project (i.e., on a project-by-project basis) the account should not be coded as research – very few like this (e.g., UH Hilo seed money grants)
▫ Means research activity funded from appropriations like G-028 and R-860 (RTRF) should not be coded as research, but to another category called departmental research� Many major research universities do this
University of Hawaii Financial Management Office
Proposed change (continued)
• Training activity funded by RTRF should be classified as Sponsored
Training
• Non-research or non-training activity funded by RTRF should be
classified as Public Service
• Administrative or facilities costs funded by G-028 or RTRF should be
coded as academic support, institutional support or O&M as applicable
(see higher ed function code instructions)
University of Hawaii Financial Management Office
Key concepts
• Rate denominator total far outweighs benefit from allocation
▫ In other words, it is better to keep research denominator as low as possible
• Remaining method to increase research rate is investing in new research
facilities or concentrating sponsored research in most expensive
buildings
University of Hawaii Financial Management Office
Key Issues Impacting
IPED and Cost of Education
University of Hawaii Financial Management Office
The Cost of Education
12
Total Education and General
Expenditures
• Instruction
• Research
• Public Service
• Academic Support
• Student Services
• Institutional Support
• Operations and Maintenance
• Scholarships and Fellowships
expenses
Total Education and Related
Expenditures
• Instruction
• Student Services
• Pro-rated share of Academic
Support, Institutional Support and
Operations and Maintenance
• Does not include Research, Public
Service and Scholarships and
Fellowships expenses
University of Hawaii Financial Management Office
Total education and general expenditures has increased an average of 6.6% annually while education
and related expenditures has increased by 3.7%
13
Education
$646.7
Research
$525.0
Public Service
$84.6
Scholarships
$85.3
0
300
600
900
1,200
1,500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
Average Annual Percentage Growth:
Total 6.6%
Education 3.7%
Research 11.3%
Public Service 3 .1%
Scholarships 25.6%
Components of Education & General Expenditures – UH System
Total E&G Exp, 2012
$1,341.5M
University of Hawaii Financial Management Office
Growth in E&R spending was higher in percentage terms at UHH and UHWO
than at UHM and the UHCCs
14
$275.2
UH Mānoa, $342.9
$36.6
UH Hilo, $73.7
$4.7 UH West O‘ahu, $11.1
$131.2
UHCCs, $203.7
0
100
200
300
400
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
Total Education & Related Expenditures – UH Units
All dollar amounts adjusted to 2010 dollars.
University of Hawaii Financial Management Office
Instruction expenditures comprises 75% of total E&R expenditures for UH
Mānoa
$275.2$261.8 $257.2
$290.1 $290.9 $292.8$311.8 $317.4
$333.4$357.9
$342.9
0
100
200
300
400
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
E&R Expenditures by Type – UH Mānoa
Instruction Student Services Academic Support Institutional Support Operation & Maintenance
15
All dollar amounts adjusted to 2010 dollars.
University of Hawaii Financial Management Office
Instruction expenditures comprise 54% of E&R expenditures at UH Hilo
$36.6 $36.4 $37.2$41.9 $44.1
$46.8$49.8
$53.2
$62.3
$69.8$73.7
0
20
40
60
80
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
E&R Expenditures by Type – UH Hilo
Instruction Student Services Academic Support Institutional Support Operation & Maintenance
16
All dollar amounts adjusted to 2010 dollars.
University of Hawaii Financial Management Office
Instruction expenditures comprise 58% of
E&R expenditures at UH West O‘ahu
$4.7 $5.1 $5.0$5.5 $5.6 $6.0
$6.6
$7.8
$9.6
$12.0$11.1
0
5
10
15
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
E&R Expenditures by Type – UH West O‘ahu
Instruction Student Services Academic Support Institutional Support Operation & Maintenance
17
All dollar amounts adjusted to 2010 dollars.
University of Hawaii Financial Management Office
Instruction expenditures comprise 59% of E&R expenditures at the UHCCs
$131.2 $126.8 $131.1$147.4 $150.3 $152.7 $151.3
$165.7$181.8
$201.3 $203.7
0
50
100
150
200
250
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
E&R Expenditures by Type – UHCCs
Instruction Student Services Academic Support Institutional Support Operation & Maintenance
18
All dollar amounts adjusted to 2010 dollars.
University of Hawaii Financial Management Office
Instructional expenditures have been rising at average annual rates of 2.5% for UHM,
5.1% for the UHCC, 8.7% for UHH and 11.7% at UHWO
19
$207
UH Mānoa, $258
$21
UH Hilo, $40
$3 UH West O‘ahu, $6
$79
UHCCs, $120
0
50
100
150
200
250
300
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
Instruction Expenditures – UH UnitsAll dollar amounts adjusted to 2010 dollars.
University of Hawaii Financial Management Office
Student services expenditures have been rising at average annual rates
from 5% to 9% at all campuses
20
$20.5
UH Mānoa, $31.9
$4.8
UH Hilo, $9.3
$0.7 UH West O‘ahu, $1.0
$17.3
UHCCs, $26.4
0
10
20
30
40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
Student Services Expenditures – UH Units
All dollar amounts adjusted to 2010 dollars.
University of Hawaii Financial Management Office
Academic support expenditures have been rising by 3% to 4% at UHM and the
UHCCs, but by more than 11% at UHH and UHWO
21
$48.8
UH Mānoa, $65.5
$4.1
UH Hilo, $9.2
$0.6 UH West O‘ahu, $1.2
$16.8
UHCCs, $24.0
0
20
40
60
80
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
Academic Support Expenditures – UH Units
All dollar amounts adjusted to 2010 dollars.
University of Hawaii Financial Management Office
Institutional support expenditures have been rising sharply at all
campuses, except at UH Mānoa
22
$10.6
UH Mānoa, $8.0
$3.5
UH Hilo, $12.2
$0.4
UH West O‘ahu, $2.3
$14.5
UHCCs, $22.5
0
5
10
15
20
25
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
Institutional Support Expenditures – UH Units
All dollar amounts adjusted to 2010 dollars.
University of Hawaii Financial Management Office
Operations and maintenance expenditures have been rising modestly, with the
largest percentage increases at the UHCCs and UHWO
23
$35.1
UH Mānoa, $41.1
$5.8UH Hilo, $8.6
$0.2 UH West O‘ahu, $0.3
$10.2
UHCCs, $19.5
0
10
20
30
40
50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$ M
illio
ns
Fiscal Year
Operation and Maintenance Expenditures – UH Units
All dollar amounts adjusted to 2010 dollars.
University of Hawaii Financial Management Office
Strategic Direction Measure: Education & Related Expenditures per
Completion
Source: IPEDS Finance survey.
• Education and Related expenditures consists of Instruction and Student
Service expenditures, plus a pro-rata share of expenditures for Academic
Support, Institutional Support and Operation & Maintenance of Plant.
• Finance data for Fiscal Year 2010 and later have been adjusted to account
for changes in the IPEDS collection, so that data as reported on the IPEDS
New Aligned Form are comparable to data for prior years.
• Completions include all degrees as well as certificates with duration of
one year or more (Certificate of Achievement and above).
24
University of Hawaii Financial Management Office
Education & Related Expenditures per Completion
25
$87.9
UH Mānoa, $86.6
UH Mānoa, $73.8
$64.3Peer Group, $58.6
$74.7IPEDS Group, $73.1
$105.0
Benchmark Group, $95.0
0
20
40
60
80
100
120
140
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
$ T
ho
usa
nd
s
Fiscal Year
UH Mānoa and Comparison Groups
All dollar amounts adjusted to 2013 dollars.
Brown markers indicate target values.
University of Hawaii Financial Management Office
Education & Related Expenditures
per Completion
26
$93.4
UH Hilo, 98.9
UH Hilo, 82.7$82.3 Peer Group, 77.1
$79.3 IPEDS Group, 75.4
0
20
40
60
80
100
120
140
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
$ T
ho
usa
nd
s
Fiscal Year
UH Hilo and Comparison Groups
All dollar amounts adjusted to 2013 dollars.
Brown marker indicates target values.
University of Hawaii Financial Management Office
Education & Related Expenditures
per Completion
27
$36.8
UH West O‘ahu, $66.6 UH West O‘ahu, $53.0
$69.1
Peer Group, $60.2
$71.9 IPEDS Group, $69.7
0
20
40
60
80
100
120
140
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
$ T
ho
usa
nd
s
Fiscal Year
UH West O‘ahu and Comparison Groups
All dollar amounts adjusted to 2013 dollars.
Brown marker indicates target values.
University of Hawaii Financial Management Office
Education & Related Expenditures
per Completion
28
$69.3
UHCC Average, 66.4
UHCC Average, 44.6
$90.8
Peer Group, 62.8$81.2
IPEDS Group, 58.5
0
20
40
60
80
100
120
140
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
$ T
ho
usa
nd
s
Fiscal Year
UHCC Average and Comparison Groups
All dollar amounts adjusted to 2013 dollars.
Completion excludes Certificates <1 Year.
Brown marker indicates target values.
University of Hawaii Financial Management Office
• Goals
▫ Reduce number of codes (currently we have 117 codes)
▫ Make sure the revised codes address the key issues
▫ Meet the reporting requirements for major expenditure categories across
all campuses
▫ Provide clear definitions to the fiscal administrators
Revised Expenditure Function Codes
University of Hawaii Financial Management Office
11 Expenditure Function Code Categories
• Instruction (Prefix - A)
• Research (Prefix - B)
• Public Service (Prefix - C)
• Academic Support (Prefix - D)
• Student Services (Prefix - E)
• Institutional Support(Prefix - F)
• Student Financial Aid(Prefix - H)
• Auxiliary Enterprises (Prefix - J)
• Operation & Maintenance Plant
(Prefix - K)
• Capital Projects – New Constructions
(Prefix - U)
• Not Applicable (Prefix - Z)
University of Hawaii Financial Management Office
• Offered for credit in fall and spring semesters as part of a formal post-
secondary education degree or certificate program:
▫ Department chairs and administrators supporting instruction
▫ Faculty committee work, recruitment, governance and administration
▫ Excludes:
1. Conferences and workshops and curriculum development (falls under
academic support)
2. Administrative activities of the offices of the academic deans and organized
research unit directors (falls under academic support)
3. Instructional offering for degree or certificates at levels below the higher
education level, such as adult basic education.
Instruction, General Academic for Credit (A100)
University of Hawaii Financial Management Office
• Instructional, teaching and training activities offered for non-credit through academic departments that do not result in credit toward any formal postsecondary degree or certificate:
▫ Includes noncredit instructional offerings carried out by the institution’s extension division as well as noncredit offerings that are part of the adult education or continuing education program.
▫ This subcategory also includes expenses for activities associated with programs leading toward a degree or certificate at a level below the higher education level, such as adult basic education.
▫ Excludes:
1. Conferences and workshops and curriculum development (falls under academic support)
2. Administrative activities of the offices of the academic deans and organized research unit directors (falls under academic support)
Instruction, General Academic for Non-Credit (A101)
University of Hawaii Financial Management Office
Sponsored instruction and training (A106)
• Instructional or training activity funded by extramural grant or contract or by RTRF
funds:
▫ US Department of Education Title xx grants except Student Financial Aid (fall
under function code H100)
� Training awards, grants and programs, except for K-award and F-32 and T-32 fellowships (falls
under organized & sponsored research); includes internal, competitive grants for training or
training institute development.
University of Hawaii Financial Management Office
Instruction Category
Function Code Name Function Code
Instruction, General Academic for Credit A100
Instruction, General Academic for Non-Credit A101
Instruction, Remedial/Developmental A102
Instruction, Professional Education A103
Instruction, Summer Session A104
Instruction, Vocational Education A105
Sponsored Instruction and Training A106
University of Hawaii Financial Management Office
Organized & sponsored research (B100)• Extramurally funded research & development projects that are separately budgeted and accounted
for:
▫ Activities funded through a research grant or contract Includes research training such a K awards
and F-32 and T-32 fellowships
▫ Excludes:
� Clinical trials for pharmaceutical companies; curriculum development; dissertation research; equipment
acquisition grants; conferences/workshops; publication grants; preservation, cataloging and archiving
activities; ship operations; and evaluations.
• Intramurally funded research & development projects that are separately budgeted and accounted
for:
▫ Look like and operate like grants and contracts (i.e., need competition, separate accounting, final
reporting, and closeout)
� Seed money grants
� UH Hilo Seed Money Grants (hilo.hawaii.edu/research/SeedMoneyGrants.php)
� One time UH Manoa VC for Research sustainability grant
University of Hawaii Financial Management Office
Departmental research (B101)
• Research activities that are internally funded, and separately
budgeted:
▫ Research funded from a department or organized research unit’s (ORU) own resources
or allocations (i.e. general funds, research & training revolving fund (RTRF), or tuition &
fee funds) or with funds secured by the department or ORU from other sources such as
an RTRF allocation from the Vice President for Research or Vice Chancellor for Research
sources to support a department or faculty member's research if separately budgeted,
but not accounted for on a project-by-project basis.
▫ Faculty travel awards from the University Research council.
▫ Research incentives and research/faculty start-up funds if separately budgeted.
University of Hawaii Financial Management Office
Function Code Name Function Code
Organized & Sponsored Research B100
Departmental Research B101
Research Category
University of Hawaii Financial Management Office
Public service (C100)• Activities sponsored by University or external sponsors that make available to the
public various resources and special capabilities:▫ Community service programs and cooperative extension services▫ Performances and exhibitions▫ Small business development centers▫ Extension services; publication grants; sponsored activity for broadcasting services;
outreach or community awareness programs; operation of health clinics; etc.▫ Tobacco or alcohol sales enforcement activities.▫ Private or intergovernmental personnel agreements▫ Consultation services relating to evaluation of non UH programs or services▫ Grants solely for the purpose of conducting symposia, conferences and workshops or to
fund employee travel to such meetings and conferences▫ Non-Federal clinical trials (Phase IV or V)
University of Hawaii Financial Management Office
Function Code Name Function Code
Public Services C100
Public Service Category
University of Hawaii Financial Management Office
• Expenditures incurred to provide support services for the institution’s primary missions: instruction, research, and public service:▫ Retention, preservation, and display of educational materials;▫ Educational media and audiovisual services▫ Academic computing▫ Conferences, workshops, course and curriculum development, including internal,
competitive grants for curriculum research and development▫ Departmental libraries that are not open to campus community or public ▫ Dean's office administrative activities ▫ Consultation services relating to evaluation of existing programs or services▫ Preservation, cataloging and archiving projects not conducted by the campus libraries ▫ Organized research unit director's office administrative activities (e.g., director's office,
fiscal office, personnel office, etc.)▫ Faculty development or capacity building grants.
Academic Support (D100)
University of Hawaii Financial Management Office
Function Code Name Function Code
Academic Support D100
Academic Support, Museums Galleries D101
Libraries D102
Academic Support Category
University of Hawaii Financial Management Office
• Includes functions whose primary purpose is to contribute to the physical and
emotional well-being of students and to their intellectual, cultural, and social
development outside the context of the formal instructional program:
▫ Office of admission and registrar
Student Services – Admissions & Records (E100)
University of Hawaii Financial Management Office
Function Code Name Function Code
Student Svc, Admissions & Records E100
Student Svc, Counseling & Career Guidance E101
Student Svc, Financial Aid Administration E102
Student Svc, Social & Cultural Development E103
Student Svc, Student Health Services E104
Student Svc, Student Services Admin E105
Student Services Category
University of Hawaii Financial Management Office
• All activity for central units and functions that provide core services to
the entire campus:
▫ System and Campus level central office administration
▫ Excludes offices:
� Office of Research Services, VP of Research Innovations, Vice Chancellor for
Research and Graduate Education, IT, Public Relations, Student Accounts and
Financial Aid administration
Institutional Support & General Administration
University of Hawaii Financial Management Office
• All activity for ITS administration and systems that support UH
Institutional Support – Information Technology
University of Hawaii Financial Management Office
Function Code Name Function Code
Institutional Support & General Admin F100
Institutional Support, Information Technology F101
Institutional Support, Public
Relations/Development
F102
Sponsored Research Admin F102
Institutional Support Category
University of Hawaii Financial Management Office
• Student financial aid awards, grants, scholarships and fellowships that do not
require the student to perform service (such as work study) or repay the amount
to the funding source. This would include:
▫ Scholarships
▫ Graduate student training grants for tuition and fees and living expenses only
▫ Tuition and fee waivers
▫ Excludes:
� Training and fellowship grants
� Cost of the Student Financial aid office, which is Student services
Student Financial Aid
University of Hawaii Financial Management Office
Function Code Name Function Code
Student Financial Aid H100
Student Financial Aid Category
University of Hawaii Financial Management Office
• All activities for units that exist to furnish goods or services for a fee to
students, faculty, staff and other non-University customers, and are
managed with the intention to be self-supporting:
▫ General services
▫ Facilities operations and maintenance for auxiliary enterprises
Auxiliary Enterprises (J100)
University of Hawaii Financial Management Office
• All activities for units that exist to furnish goods or services for a fee to
students, faculty, staff and other non-University customers, and are
managed with the intention to be self-supporting:
▫ Campus Center
▫ Facilities operations and maintenance for auxiliary enterprises
Auxiliary Enterprises – Campus Center (J104)
University of Hawaii Financial Management Office
Auxiliary Enterprises - Recharge Centers (J112)
• All activities for units that exist to furnish goods or services for a fee to students, faculty, staff and other non-University customers, and are managed with the intention to be self-supporting:
▫ Recharge centers
▫ Facilities operations and maintenance for auxiliary enterprises
�Ones that support research should be part of Auxiliary Enterprises – Recharge Centers �Specialized service facilities – SOEST Ship Ops; SOEST Computing; SOEST Engineering; IFA Job
Order Services
�Allocation of RTRF or other funds to subsidize costs of revolving accounts operating at RCUH
�Other recharge operations – IFA Administrative Recharge System; IFA Computing Services
University of Hawaii Financial Management Office
Function Code Name Function Code
Auxiliary Enterprises J100
Aux Enterprises, Intercollegiate Athletics J101
Aux Enterprises, Aux Services Admin J102
Aux Enterprises, Bookstore J103
Aux Enterprises, Campus Center J104
Aux Enterprises, Child Care Program J105
Aux Enterprises, Faculty Housing J106
Aux Enterprises, Food Services J107
Aux Enterprises, Student Housing J108
Aux Enterprises, Parking Operations J109
Aux Enterprises, Telephone & Communication J110
Aux Enterprises, Transportation J111
Aux Enterprises, Recharge Centers J112
Auxiliary Services Category
University of Hawaii Financial Management Office
Operation & Maintenance (O&M) Plant – Building
Maintenance (K100)
• All activity for central services, excluding self-supporting units (e.g.
Aux. Services), pertaining to the maintenance and operation of the
physical plant:
▫ Routine building maintenance under $100K
University of Hawaii Financial Management Office
Operation & Maintenance (O&M) Plant – Major Repairs
and Renovations (K103)
• All activity for central services, excluding self-supporting units (e.g.
Aux. Services), pertaining to the maintenance and operation of the
physical plant:
▫ Major repairs and deferred maintenance that are over $100K
University of Hawaii Financial Management Office
Function Code Name Function Code
Operation & Maintenance Plant, Building Maintenance K100
Operation & Maintenance Plant, Custodial Services K101
Operation & Maintenance Plant, Physical Plant Admin K102
Operation & Maintenance Plant, Major Repairs and Renovations K103
Operation & Maintenance Plant, Landscape & Grounds Maintenance K104
Operation & Maintenance Plant Category
University of Hawaii Financial Management Office
Function Code Name Function Code
Capital Projects - New Constructions U100
Capital Projects – New Construction Category
University of Hawaii Financial Management Office
• A complete list of the codes can be downloaded at the FMO Website under Chart of
Accounts Attributes Table – Higher Education Function Code:
▫ http://www.fmo.hawaii.edu/account_codes/index.html
Complete list of Function Codes and Definition
University of Hawaii Financial Management Office
• Conversion▫ Map the existing values to the new values
� FMO will be providing the mapping to the FAs for review and update
▫ Use the mapping table to update KFS account codes with the new function codes
▫ FY 2015 transactions will be mapped to the new function codes
▫ New account codes may need to be created for FY 2016 to separate major spending categories
• Timeline▫ Two primary drivers for the timeline
� Since FY 2016 is the Facilities and Administrative (F&A) base year, the changes have to be made prior to July 1, 2016.
� However, the change of function codes will impact IPED data. In order to have comparative data for FY 2015, FY 2014 data will need to be updated. The deadline is April 2015.
• Further Communication▫ FMO will provide some criteria that FAs can use to determine if/when they would need a
separate account for the different functions
Next Steps for Revising Function Codes
University of Hawaii Financial Management Office
Questions
Financial Management Office
Susan Lin’s Contact Information:
Email: slin@hawaii.edu
Phone: 808-956-5445
Thank You for attending the Webinar
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