Management Accounting Chart of Accounts - PDF

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					                        Financial Management Practices Manual
                                                       7.2 Chart of Accounts


Approved by Chief Financial Officer: 29 January 2009
Date of Effect: 29 January 2009

Replaces:              Section 7.6
                       Approved by Chief Financial Officer
                       9 / 2008


1     OVERVIEW................................................................................................................................................ 2
    1.1       PURPOSE............................................................................................................................................... 2
    1.2       COVERAGE ........................................................................................................................................... 2
2     DEFINITIONS ............................................................................................................................................ 2
3     CHART OF ACCOUNTS STRUCTURE................................................................................................. 4
    3.1       UNIFI CHARTFIELDS ............................................................................................................................ 4
    3.2       OPERATIONAL UNIT ............................................................................................................................. 4
    3.3       SITE ...................................................................................................................................................... 4
    3.4       FUND .................................................................................................................................................... 5
    3.5       FUNCTION ............................................................................................................................................ 6
    3.6       ACCOUNT ............................................................................................................................................. 7
    3.7       PROJECT ............................................................................................................................................... 9
4     FORMS ...................................................................................................................................................... 10
5     CONTACTS AND REVIEW ................................................................................................................... 11
    5.1       CONTACTS .......................................................................................................................................... 11
    5.2       REVIEW .............................................................................................................................................. 11




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1 Overview
1.1 Purpose
The purpose of this policy is to:

    •    Explain the structure and rationale for the Chart of Accounts.

    •    Define the key components (ChartFields) of the Chart and how they are to be used for
         coding transactions and reporting.

The Chart of Accounts is the fundamental structure that underpins management and financial
reporting within the University. In order to ensure consistent, timely information is delivered
to internal and external information users, it is essential that all Finance staff understand how
the Chart is to be used.

1.2 Coverage
The Chart of Accounts applies to all University staff involved in financial transactions and
management reporting. The Chart applies to Faculties, Schools, Units, Institutes and Central
Areas.

2 Definitions

 Term                        Definition

 Accounting                  The term Accounting is defined as the process of identifying,
                             measuring and communicating economic information to permit
                             informed judgments and decisions by users of the information.

 Financial Accounting        Financial Accounting is defined as reporting of the financial
                             position and performance of a firm through financial statements
                             issued to external users on a periodic basis.
                             Financial Accounting is primarily focused on meeting the needs
                             of external users.

 Management                  Management Accounting is the process of identifying,
 Accounting                  measuring, analysing, interpreting, and communicating
                             information for the pursuit of an organisation’s goals.
                             The key difference between financial and management
                             accounting is that financial accounting is aimed at providing
                             information to parties outside the organisation whereas
                             management accounting information is aimed at helping
                             managers within the organisation make decisions.




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 Term                       Definition

 Chart of Accounts          In its simplest form, a Chart of Accounts is a list of all accounts
                            tracked by a single accounting system and should be designed to
                            capture financial information to make good financial decisions.
                            Each account in the chart is assigned a unique identifier,
                            typically an account number. Each account in the chart is
                            classified into one of five categories – Assets, Liabilities, Equity,
                            Income and Expenses.

 ChartField                 The term “ChartField” is the term UniFi uses to describe
                            accounting segments in a multi-dimensional Chart of Accounts.
                            For the purposes of this policy, accounting segments will be
                            referred to as ChartFields.

The complexity of a Chart of Accounts is driven by the size and complexity of the
organisation which it supports. A small organisation may be able to operate with one
Balance Sheet (Assets, Liabilities and Equity) and one Income and Expenditure Statement.
Accordingly, one account segment would be required.

However, for large organisations such as the University of Queensland, multiple accounting
segments are required. The Chart of Accounts must meet the needs of both internal and
external users. It must facilitate the preparation of audited financial statements for external
use as well as monthly management reports to support management decision making.




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3 Chart of Accounts Structure
3.1 UniFi ChartFields
The UniFi ChartFields for UQ are as follows:


 XX XXX XX                  XX        XXX             XX          XXXXXX          XXXXXX

  Operational               Site     Fund         Function         Account          Project
     Unit

Each of the ChartFields is explained in detail in the following sections.

3.2 Operational Unit
The Operational Unit structure is based on the University’s organisation structure. The
Operational Unit comprises three components, as follows:

    •    First two characters represent the Faculty / Institute code;

    •    Middle three characters represent School / Centre code; and

    •    Last two characters represent Section code.

An operational unit should have a manager who has budgetary responsibility. An
Operational Unit cannot be created to “collect costs” unless a manager has been assigned to
the Operational Unit. Many Operational Units will generate Income and therefore Income
and Expenditure Statements would typically be produced on a monthly / quarterly basis.

Whilst it would be theoretically possible to create a Balance Sheet for an Operational Unit, it
is UQ practice to operate one centralised Balance Sheet for the University as a whole.

Executive Offices within Faculties and Institutes are identified using “01” as the last two
characters of the Operational Unit ChartField.

3.3 Site
The Site ChartField defines the three main campuses of UQ (St Lucia, Ipswich and Gatton) as
well as the teaching hospitals, health centres, farms and research facilities. Examples of Sites
include:

    01        St Lucia Campus
    02        Ipswich Campus
    03        Gatton Campus
    10        Herston Precinct (excluding Hospital)



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3.4 Fund
The Fund ChartField defines key sources of funds derived by the University. Examples of
Fund codes include:

    101 Operating
    102       International Postgraduate Research
    103       Income OS-HELP Advance
    104       Income Fee – HELP Advance
    105       Higher Education Loan Program

    200 Strategic Initiatives
    201       Vice-Chancellor Strategic

    230 Capital Funding

    240 Consultancies

    250 Trading Activities

    300       CORPUS
    301       CORPUS Investment Portfolio Earnings

    400 Research – Contract
    410       ARC
    411       LP – ARC Linkage Projects

The Fund code allows for Income and Expenditure to be prepared by fund. This can be
useful in identifying key sources of funds and identifying budgetary variations.




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3.5 Function
The Function ChartField is designed to allow the University to capture high level data
relating to major functions or activities of the University.

The function codes are as follows:

    01        Teaching and Learning
    11        Academic Services
    21        Research
    31        Research Support
    41        Administration
    51        Consultancy
    61        Trading

The Function definitions are as follows:

    •    Teaching and Learning: this function relates to the primary objective of meeting the
         needs arising from undergraduate and post-graduate teaching and learning.

    •    Academic Services: Key academic services functions include the library, computer
         centres, language laboratories and animal breeding houses.

    •    Research: Relates to activities specifically focussed on the advancement of
         knowledge through experimental, theoretical or original work. It also relates to the
         creation or development of new or improved materials, products, devices, processes
         or services.

    •    Research Support: relates to the direct support of research or research projects.

    •    Administration: relates to the central administration function associated with the day-
         to-day operation of the University. Administration functions include financial
         management, IT, human resources, marketing and business development. This
         category also includes administrative services in non-central administrative offices.

    •    Consultancy: relates to projects where income is generated from the provision of
         external consulting and testing services.

    •    Trading: this function code is only to be used by Operational Units that undertake
         commercial activities. Examples include Customs House (Brassiere), ICTE and ITS
         (UQ Connect).




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3.6 Account
The Account ChartField includes both Balance Sheet accounts and Profit and Loss accounts.

Sample Balance Sheet accounts include:

    1         ASSETS

    10        Current Assets
    100000         Cash at Bank – ANZ
    101000         Receivables
    102000         Inventories

    15        Non Current Assets

    150000         Receivables NC
    151000         Other Non Current Non-Financial Assets
    152000         Investments



    2         LIABILITIES

    20        Current Liabilities
    200000         Trade Creditors Current
    201000         Payroll Creditors Current


    25        Non Current Liabilities
    250000         Sundry Creditors
    251000         Borrowings Non Current
    252000         Provisions Non Current


    3         EQUITY

    300000         Reserves
    301000         Retained Profits




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Examples of Income and Expenditure Statement account groups include:

    4         REVENUE

    400000         Commonwealth Government Financial Assistance
    401000         Higher Education Loan Programmes
    402000         Queensland Government Funding
    403000         Tuition Fees

    6         EXPENDITURE

    60        Employment

    600000         Salaries and Oncosts – Academic
    601000         Salaries and Oncosts – General
    603000         Salary Reimbursements

    70        Non-Employment

    700000         Consumables
    702000         Services
    704000         Marketing and Advertising
    705000         Equipment
    706000         Telecommunications
    707000         Travel and Hospitality
    708000         Properties and Insurances
    709000         Scholarships and Prizes
    800000         Financial Costs and Taxes
    801000         Corporate Overheads
    802000         Faculty Overheads
    803000         Internal Expenses
    850000         Depreciation, Amortisation and Impairment
    851000         Interest Paid




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3.7 Project
The Project ChartField is to be used to track the cost of Research projects, operating projects
and consulting projects.

Certain criteria must be satisfied before a Project can be set up in UniFi. A project that meets
the UniFi Project requirements will typically have the following:

    •    Start and end date;

    •    Contract;

    •    Deliverables;

    •    Responsible Officer;

    •    Budget; and

    •    Minimum value of $20,000.

An Income and Expenditure Statement can be produced for a project. Project costs can be
tracked over multiple accounting periods – i.e. over multiple years.




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4 Forms
Forms regarding this policy can be obtained from the following link
http://www.fbs.uq.edu.au/index.html?page=45336&pid=0.

The forms relevant to the Chart of Accounts policy are as follows:

Form                                            Form Description

New Chartfield / Op Unit Change Request         This form is to be used to request changes to
Form (includes Budget Holder)                   Operational Unit details and request new
                                                Chartfields.




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5 Contacts and Review
5.1 Contacts
The key contact regarding the Chart of Accounts is:

         Management Accounting Group
         Finance and Business Services

The latest Chart of Accounts can be found at the following link: www.fbs.uq.edu.au/pmo/

5.2 Review
The Chart of Accounts policy will be reviewed by the Chief Financial Officer on an annual
basis. The physical Chart of Accounts on UniFi can be updated based on the established
approval process.




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