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Section 3: Fund Accounting Principles

Chart of accounts

Effective Date:

05/19/11

Approved By:

Lenora Chapman, Associate Vice President, Financial Affairs

Last Revised On:

05/01/12

For Assistance Contact:

Assistant Vice President, Financial Affairs and University Controller

PURPOSE/SCOPE

To provide an overview of the UTSA Chart of Accounts.

AUTHORITY


UNIVERSITY GUIDELINES

Table of Contents

A. Fund Accounting

Universities have unique obligations to regulatory agencies, grantors, donors, external customers, and other stakeholders to account for the appropriate use of funds according to their source. Fund accounting is used to accomplish this by segregating resources into categories (Fund Groups) to identify the sources and uses of funds received. This helps UTSA to appropriately account for the funds with which it is entrusted by reporting income based on the funding source and expenses based on their use.

Fund accounting helps UTSA:

  1. Enhance accountability and stewardship by carrying out and documenting the appropriate use of funds to help ensure and demonstrate compliance with legal and regulatory requirements;

  2. Determine financial condition by tracking the value of assets and assessing the financial impact of maintaining/replacing them;

  3. Facilitate planning and budgeting by determining what should be done with existing resources, and how much is needed to accomplish goals;

  4. Evaluate organizational and managerial performance by determining the actual cost of programs (efficiency) and whether the objectives for which the funds were received were accomplished (effectiveness);

  5. Determine/forecast cash flow (the amount of cash coming in, and how much is needed for contingencies); and

  6. Communicate relevant, clear, reliable, timely and comparable financial information to all who need to know.

B. Fund Groups

Fund Groups form the basis of fund accounting, enabling UTSA to properly account for sources and uses of funds received. UTSA uses the following fund groups:

Fund Group Purpose Source of Funds Restrictions

12/14 Educational and General (E&G)

To support general educational operations. Activities typically include faculty salaries, instructional department operating expenses, general administration, student services, campus security, operation and maintenance of E&G facilities, and research enhancement. See also UTSA Financial Management Operational Guideline (FMOG) Accounting for Cost Sharing

  • State appropriations

  • Statutory tuition

  • Certain lab fees

  • Designated funds (transfer from designated tuition and other fee income)

  • State pass-through grants

18 Service Centers

Ongoing operations that sell products and provide technical or administrative services to the UTSA community and external customers. Examples: Facilities, telephone services, animal care.

See FMOG Establishment and Financial Management of Authorized Service Centers and Specialized Services Facilities

  • Income from sales and services charged to internal (UTSA departments) and external customers. If 80% or more of income is from internal customers, all revenue and expenses including those related to external customers are recorded in Fund 18; otherwise a separate Fund 19 account is established for external customers.

  • Not profit/loss centers: rates charged must be based on historical cost or analysis of reasonable, projected costs

  • Must break even or operate within +/- 10% margin at year-end

Billing rates: see FMOG Establishment and Financial Management of Authorized Service Centers and Specialized Services Facilities

  • All users must be charged

  • External customers must not be charged less than internal customers or the federal government for the same service

  • UTSA purchasing procedures

  • No gift income

  • No entertainment expenditures

  • No scholarships

  • Income/expenses must be matched

  • Service Centers must be reviewed periodically to assure no excess balances

  • OMB Circular A-21

19 Designated Funds

To support UTSA activities or special purposes for which revenue has been authorized.

  • Designated tuition

  • Mandatory fees (other than auxiliary)

  • Incidental fees (including course fees)

  • Miscellaneous other income

  • Indirect cost recovery from sponsored programs (Facilities & Administrative–F&A – see FMOGs Accounting for Grants and Contracts and Cost Accounting Standards)

  • Service Center income and expenditure for service centers with more than 20% of income from external customers (see "18 -Service Centers")

26 Grants and Contracts

To provide support for research or educational programs as specified by sponsors or agencies, usually federal research or student financial aid.

  • Federal, state, local and private grants, contracts and agreements (majority is federal)

29 Auxiliary Enterprise Funds

To furnish goods/services to students, faculty or staff outside the instruction and research functions of UTSA. Examples: residence halls, food service, book store, parking, intercollegiate athletics.

  • Fees charged directly related to, but not necessarily equal to, the cost of the goods or services provided

  • Mandatory and non-mandatory student fees

30 Gift Funds

To record receipts and expenditures of funds received from donors and external agencies in accordance with any donor restrictions.

  • Gifts

  • Endowment distributions (majority is for scholarships and salary supplements for endowed chairs)

32 Loan Funds

To account for loans to students (short-term and long-term). Most are revolving funds: repaid principal, interest, and other charges are returned to the individual loan account making funds available for future loans.

  • Gifts

  • Texas Public Education Grants (TPEG)

  • Institutional contributions and matching funds

  • Interest income on principal loaned

  • Late fees net of collection costs

  • Investment income

  • UTSA purchasing procedures
  • Only collection costs including litigation expenses, write-offs and certain other expenditures allowed

  • Perkins/NDSL Federal Student Loan funds are governed by Department of Education guidelines and federal regulations

36 Plant Funds (Unexpended Plant)

Major capital improvement projects for new construction, remodeling and renovations to existing buildings and grounds. Primarily controlled by UT System Office of Facility Planning and Construction (36-9xxx-xx), some are institutionally controlled (36-6xxx-xx and 36-8xxx-xx).

See FMOGs Financial Management of Capital Assets, Capital Projects (Budget Group 36-9xxx-xx) Procedures, and Institutionally Managed Capital Projects (Budget Group 36-6xxxx-xx and 36-8xxxx-xx) Procedures

  • UTSA purchasing procedures

  • No salaries (but may be transferred in as distributed wages)

  • Travel rarely used

  • No entertainment expenditures

  • Expenditures must be within approved scope of project

  • LERR and Faculty STARs:

    • Capital equipment is non-expendable, tangible personal property with useful life of more than one year

    • No charges for capital equipment warranties or maintenance agreements

    • No software maintenance costs (bundled software included in initial acquisition of computer hardware is eligible)

    • Leased or licensed software that requires payment of an annual fee and that will not be owned when license expires is not eligible (software licenses with a useful life of more than one year that will be owned are eligible)

    • No faculty salaries

    • No student housing, intercollegiate athletics or auxiliary enterprises

39 Invested in Plant

Carries fixed assets:

  • Land

  • Buildings (new, under construction, additions to existing)

  • Facilities and other improvements

  • Equipment

  • Library books

  • Museum and art collections

  • Construction in progress

  • Infrastructure

  • Intangible assets

  • Accumulated depreciation and amortization

  • Assets are purchased and expensed in other fund groups

  • Not applicable (no expenditures except for amortization and depreciation expense)

41 Agency Accounts

Funds held in custody for others.  Examples: student organizations and faculty accounts for external organizations. Residual funds should be returned to the sponsor once the purpose for the agency account is accomplished.

N/A (these funds do not belong to UTSA)

N/A (these funds do not belong to UTSA)

For more information on fund group purposes, funding and restrictions contact Accounting Services.

C. Chart of Accounts Elements

1. Account Number

The basic unit of UTSA financial accounting is the Account Number, a ten-digit number used for recording transactions. Account Numbers consist of an eight-digit Budget Group, which includes the Fund Group, and a two-digit Sub-Account:

Budget Group

Sub-Account

Fund Group

 

14

025000

50

Budget Group: The first two digits in the Budget Group represent the Fund Group, a broad category based on the source of funds. Each Fund Group has distinct uses and restrictions based on statutory, regulatory and other requirements (see "Fund Groups").

The next six digits denote the type of activity, department, or other information used to classify the Budget Group. In the example above, 025000 is Accounting Services.

Sub-Account: The last two digits of the Account Number comprise the Sub-Account, which indicates the purpose of funds. A Budget Group could have multiple Sub-Accounts. In most Fund Groups, Sub-Accounts 01-90 are used for expenditures and 91-99 are used for revenues, balance forwards and reserves (see Note below for exceptions).

Expense

   

Revenue

 

01 – 21

Salaries, Wages and Fringe Benefits

 

92

Fee Income

40 – 45

Utilities

 

93

Gift Income

50

Maintenance, Operations and Equipment

 

94

Investment Income

60

Visiting Lecturers and Consultants

 

95

Sales & Services Revenue

68

Student Athlete Recruitment Travel

 

96

Miscellaneous Income

69

Work Order (19 Fund Group)

 

98

Balance Forward (system generated)

70

Scholarships, Fellowships and Stipends

 

99

Unallocated

75 - 79

Travel

     

80 - 89

Special Equipment

     

NOTE: Sub-Accounts for Fund Groups 26 (Grants and Contracts) and 36 (Unexpended Plant Funds) do not follow the standard numbering conventions listed above. This is because the accounts in these fund groups are grant or project driven. In Fund Group 26 the grant is driven by a budget and the Sub-Accounts follow the grant budget. In Fund Group 36 the Sub-Accounts reference various segments of the project.

2. Expense Classification

Object Class Code (Natural Expense Classification): Although Object Class Codes are not part of the basic account number, they are an important element of the Chart of Accounts because they are used to categorize transactions for financial reporting. They indicate the "natural" classification of the expense (what was purchased). Object Class Codes include Faculty Salaries, Furniture and Equipment, Building Maintenance/Repair, Contracted Services, Telecommunications Charges, and other specific items of expense. Every transaction must have an Object Class Code.

EXAMPLE: Accounting Services Equipment Purchase

Budget Group

Sub Account

Object Class Code

Fund Group

 

 

14

025000

50

1836

Accounting Services

Maintenance, Operations and Equipment

Furniture and Equipment

A list of Object Class Codes is available on the Financial Affairs Website (click on "Object Code Listing"), and also in DEFINE using command GG8.

NACUBO Program Code (Functional Expense Classification): In contrast with Object Class Codes, which indicate the object of an expense (supplies, equipment, salaries, etc.), functional classifications tell us why the expense was incurred. This enables UTSA to report expenses in a way that helps stakeholders understand UTSA's mission-related activities and their relative importance.

UTSA uses the following functional expense classifications developed by the National Association of College and University Business Officers (NACUBO) to indicate the mission-related purpose of expenses:

02–Instruction:

Expenses for instructional programs, including credit and non-credit courses; academic, vocational, and technical instruction; remedial and tutorial instruction; and regular, special, and extension sessions. Expenses for departmental research and public service that are not separately budgeted should be included in this classification.

06-Research:

Organized research activities, whether commissioned by external agencies or budgeted by a unit within UTSA. Subject to these conditions, the category includes expenses for individual and/or project research as well as that of institutes and research centers. Expenses for departmental research that are separately budgeted are included in this category.

12-Public Service:

Non-instructional services that primarily benefit individuals and groups outside UTSA, such as conferences, institutes, general advisory services, reference bureaus, radio and television, consulting, extension services, and other community service activities.

14-Academic Support:

Support services for the primary missions of instruction, research, and public service. It includes libraries, museums and galleries, media such as audio-visual services and information technology, academic administration and personnel providing administrative support and management direction to the primary missions, separately budgeted support for course and curriculum development, and other ancillary support services that directly assist the academic functions of the institution.

16-Student Services:

Activities outside the context of a formal instructional program that contribute to students' emotional and physical well-being and intellectual, cultural, and social development. Includes programs such as student services administration, counseling and career guidance, cultural events, student activities, student newspaper, intramural athletics, student organizations, financial aid administration, student health services, student admissions, student records, and other activities that benefit students outside of formal instructional programs.

20-Institutional Support:

Management and long-range planning for the entire UTSA. Includes executive management, planning and programming operations, legal services, fiscal operations, administrative information technology, space management, employee personnel and records, logistical activities that provide procurement, storerooms, printing, activities concerned with community and alumni relations, including development and fund raising and other activities that provide university-wide support.

22-Operation and
Maintenance of Plant:

The administration, supervision, operation, maintenance, preservation and protection of UTSA's physical plant. Includes janitorial and utility services; repairs and ordinary or normal alterations of buildings, furniture, and equipment; landscape and grounds maintenance; utilities; security and safety; hazardous waste disposal; property, liability, and all other insurance relating to property; space and capital leasing; facility planning and management; and central receiving.

48-Scholarships
and Fellowships:

Scholarships and fellowships. Includes grants-in-aid, trainee stipends, tuition and fee waivers, and prizes to undergraduate students.

70-Auxiliary Enterprises:

Activities that provide goods or services primarily to students, faculty, and staff, and charge a fee that is directly related to the cost of the goods or services. The distinguishing characteristic of an auxiliary enterprise is that it is managed to operate as a self-supporting activity. Over time the revenues will equal or exceed expenses. Examples include residence halls, food service, college stores, parking and intercollegiate athletics.

The expenses in the Statement of Revenues, Expenses and Changes in Net Assets in the UTSA Annual Financial Report are reported by NACUBO Program Code.

D. Unit Code

A Unit Code is a seven-digit number that organizes Budget Groups together by function for processing purposes and establishes organizational hierarchy for reporting purposes. Unit Codes denote the department, division or college to which an account belongs according to the DEFINE reporting hierarchy. The individual responsible for the Unit Code (Unit Code Administrator) is also the Account Administrator for all accounts within a Unit Code. The monthly Statement of Accounts report is generated and distributed by Unit Code. For more information on the Statement of Accounts see FMOG Statement of Accounts (SOA) Reconciliation Process.

The account in the example above belongs to Unit Code 0250000 – Accounting Services. A list of Unit Codes is available with DEFINE command GG5. A list of the accounts assigned to a specific Unit Code can be accessed by entering a "B" next to a Unit Code on this screen.


DEFINITIONS

Term

Description

Account Administrator

An individual with fiscal responsibility and decision making authority for university resources who has approval access to commit funding using the institutional financial accounting system. This is typically the department head for non-grant accounts and the principal investigator for grant accounts.

DEFINE

The administrative system used to process transactions for accounting, budget, payroll and human resources. DEFINE is an acronym for DEpartmental FInancial Information NEtwork. For more information on DEFINE, see FMOG Financial Information Access and Security – DEFINE Access.

Permanent University Fund (PUF)

A public endowment that provides financial support to the University of Texas and Texas A&M University Systems.

LERR (Library, Equipment, Repair and Rehabilitation)

Library books, library materials, capital equipment, or major repair and rehabilitation projects funded in whole or in part with PUF debt proceeds.

Faculty STARs (Faculty Science and Technology Acquisition and Retention)

A grant program to support recruitment and retention of highly qualified faculty through building and enhancing research infrastructure (typically funded with PUF debt proceeds).

Revenue Financing System

A System designed to provide cost-effective debt program to UT System institutions.

THECB

The Texas Higher Education Coordinating Board

 

REFERENCES/LINKS

RELATED FORMS/WORKSHEETS

None at this time.


REVISION HISTORY

Date Description

05/01/12

  • Deleted references to Texas Comptroller of Public Accounts FPP A.036: Reporting Requirements for Annual Financial Reports of State Agencies and Universities - July 2010.

  • Corrected the NACUBO Program Code for Public Service from 21 to 12.

  • Deleted references to FMOG - Statement of Accounts (SOA) Reconciliation Process.

06/14/11 In the Fund Group Chart (section B) for Fund Group 12/14, added "State pass-through grants" to the Source of Funds column, as well as "Award requirements (state pass-through grants)" to the Restrictions column.
05/19/11 Published new FMOG.

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