Changes to the Structure of the New Chart of Accounts

Finance

Chart of Accounts

Guide

Index

Introduction

Chart of Accounts

Changes to the Structure of the New Chart of Accounts

Balance Sheet Codes.

I&E Codes

Security Rules

Mapping Spreadsheet and Migration of Balances.

Financial Procedures & Information

Accounting Flexfield/GL Code......

Other Coding Structures and Workflow

Procedures

Reports

Research Contracts Administration

Research Reports

Personnel and Payroll

Procedures

Personnel Reports

Appendix 1: College Building Blocks

Appendix 2: Common Activity Codes......

Appendix 4: Analysis Codes (I&E)

Appendix 5: Analysis Codes (Balance Sheet)

Appendix 6: Category Codes

Appendix 7 Detailed examples of changes in the use of codes.

Introduction

The existing Chart of Accounts at Imperial College will change from February 2004 to the structure as indicated below. Changes to the chart of accounts have included the review and ‘clean-up’ of codes as well as changes to the physical structure of the Analysis segment.

The change has had an effect on various ICIS modules at Imperial College and this document highlights the changes within each of the affected business areas.

All the changes for each department have been duly agreed to and signed off by the head of each department.

Chart of Accounts

The chart of accounts will be changed from 25 characters over 7 segments to 28 characters over 7 segments, as follows:

It is important to note that the old codes will not be disabled immediately but access to the codes will be restricted to specific users and for specific purposes only. (Security rules will be put in place to control this). The old codes need to remain enabled, as the encumbrances that remain on the old codes will automatically create an entry to the old code when the invoice is matched.

It is anticipated that the old codes will be closed following a clear down period of 2 to 3 months. Even then, codes may be opened and closed by a dedicated user as and when required.

To assist in reporting and reconciliation, a new month-end process will transfer all old account balances to the new mapped accounts for the next few months.

Changes to the Structure of the New Chart of Accounts

Company Segment:

No changes have been made to the company segment.

Cost Centre Segment:

There have been no structural changes to cost centre segment.

However some departments used this opportunity to reduce the number of cost centres in use and replaced their structures with the new cost centre codes.

Activity Segment:

There are no structural changes to activity segment.

However over 5000 activity codes have been either mapped to new activity codes and discontinued or mapped to analysis codes and discontinued. Where the activity code was found not to be required, it has been discontinued.

Several activities have been replaced with equivalent analysis codes to avoid duplication. In some cases, there has been one to one mapping of these codes, in others, entire account code combinations have had to be mapped. The default activity code G00000 has been used in those cases. However, there are also activity codes that have not changed.

A new range of activity codes has been introduced to distinguish ‘Staff accounts’ from ordinary departmental activities. These have been designated by ‘Fxxxxx’ range. It is important to remember that ‘Gxxxxx’ and ‘Fxxxxx’ activity codes should be viewed together when arriving at departmental surplus/deficit position.

For budget purposes, budgeting will now have to be done down to the analysis code level for all activities.

Analysis:

The analysis segment denotes the type of income or expenditure incurred/ earned and is now 6 numeric characters in length. Several new analysis codes have been created which have been mapped from now defunct activity codes. Also several new analysis codes have been created due to business need, examples of some detailed changes in analysis codes are explained in appendix 7.

All analysis codes are MANDATORY and therefore the general codes / Headcodes have not been replicated in the new chart of accounts structure (e.g. there is no general code for ‘Professional services’; the user will be required to use a specific analysis code for the particular type of professional service he/she is using). The only exception will be overtime staff pay codes, which can be used at the departments’ option.

Workflow becomes introduced together with the new chart of accounts meaning that category codes used in purchasing will automatically generate an analysis code in GL as indicated in appendix 6. It is therefore crucial that category codes are used correctly as this will determine the accuracy of data reported in GL.

Indicator:No changes have been made to the indicator segment.

Sub1:No changes have been made to the Sub 1 segment.

Sub 2:No changes have been made to the Sub 2 segment.

Balance Sheet Codes.

The balance sheet codes will be represented mostly by a single analysis code with the cost centre and activity defaulted to ‘0’ value. Only departmental suspense accounts will retain the departmental cost centre with ‘0’ activity segment. Some central control accounts, such as land and buildings and endowment funds will retain the existing Zxxxxx activity codes. The balance sheet codes consist of the Asset codes, the Liability codes and the owners Equity codes.

All analysis codes in the range of 700000 – 799999 are Asset codes

All analysis codes in the range of 800000 – 899999 are Liability codes

All analysis codes in the range of 900000 – 999999 are Owners Equity codes.

The table in Appendix 5 depicts all the Balance Sheet codes. In most cases, there has been a one-to-one mapping from a cost centre/activity combination to a single analysis code; this has resulted in a large number of new analysis codes created. The description of these codes depicts their usage. When looking for a code to use, look for the old code and the code it has been mapped to, also in other cases, look for the code that best matches your requirement.

I&E Codes

The I&E codes consist of the Income (Revenue) codes and the Expense (Expenditure) codes.

All analysis codes in the range of 100000 – 199999 are Expenditure codes

All analysis codes in the range of 500000 – 599999 are Income codes

The table in Appendix 4 depicts all the I&E codes. In most cases, there has been a one-to-one mapping of analysis codes while there have also been a large number of new codes created. The description of these codes depicts their usage. When looking for a code(s) to use search for the code(s) that best matches your requirement.

Security Rules

In order to restrict user access to the old 3 character codes and new activity codes, security rules have been created for each responsibility where users generate GL transactions, for example: enter journals, enter invoices, enter purchase orders, etc. However, inquiry functions will not be affected, even when present in the same responsibility.

This means that when the users are inquiring on accounts, they will be able to see both the old and new accounts, but will only be able to enter data to the new 6 character analysis codes as the old codes will not be available on the List of Values for them to select. However, some super users will still be able to enter data to the old codes for a limited period.

When running reports, Users will be able to select from both the old and new codes.

Research Analysis Codes Set:

There will be no restriction on the expenditure analysis codes that can be used with Research Projects, however cross validation rules will be put in place to ensure that only certain income analysis codes can be used, i.e.

Mapping Spreadsheet and Migration of Balances.

For each of the individual divisions/departments/business units, spreadsheets have been created that have mapped old account code combinations to the new account code combinations. These spreadsheets are based on the worksheets that have been reviewed and signed off by each of the individual business units. The spreadsheets which can be found on the intranet at are explained in detail in the table below.

1. ‘Keep’-retain existing activity
2. ‘Activity NLR’-existing activity is no longer required as the analysis code can be used instead usually with G00000 general activity
3. ‘NLR’-discontinued activity code
4. ‘Staff account’-the Gxxxxx activity will be replaced with Fxxxxx activity

1. NLR – The Cost Centre – Activity combination is no longer required. This means the combination in the previous column now no longer exists and has been discontinued.

Additionally a ‘Source and destination’ sheet will be included listing all existing code combinations (the source code) and the code combinations that the source codes have been migrated to (the destination code).
The balances existing on individual code combinations at the time of chart of accounts change have been migrated by a number of ADI journals for budgets, actuals and encumbrances. The individual transactions have not been migrated; only the balance as at the month end has been moved according to the following rules:

-For the current financial year the balances have been moved monthly and for that purpose all the periods from August 2003 to January 2004 have been reopened.

-The balances on project type activity codes P/R/C/H/L/S/W from inception till 31st July 2003 have been moved as a single journal in Adjustment 2003 (ADJ-03). It is therefore vital that all enquiries for the period up to and including July 2003 should be performed excluding period ADJ-03.

-The closing balances on balance sheet/suspense accounts have been migrated as a single journal entry in ADJ-03.

There is a standard description for all the migrated journals in the format of:

COA_ UPG_ numeric identifier

with a standard description on individual journal lines of:

Numeric identifier: The source account code combination_Originating period

e.g. 1234: MEAD_G00100_144210_Sep-03

As the general analysis codes/Headcodes have not been replicated in the new chart of accounts structure (e.g. there is no general code for ‘Professional services’ or ‘Postage and Telephone expenses’) the balances on those codes have been migrated to the new analysis code closest in meaning to the old analysis code (e.g. ‘Professional fees-other’ 162137 and ‘Telephone calls/Rent’ 163210 respectively). This will make reporting on those new analysis codes inaccurate for the first six months of this financial year 2003-04.

Financial Procedures & Information

Accounting Flexfield/GL Code

The finance account code, or general ledger (GL) code, is made up of seven segments with a maximum of 28 characters in length as follows:

Where A is an alpha, n is a numeric and x is either an alpha or a numeric character

Not all segments are mandatory (for example sub1 and sub2 are optional) and some can be defaulted (for example company). Each segment is used for a specific purpose and is independent, and as such each code or value within a segment must be unique. Segments can be combined into valid combinations of values to produce a GL code.

• Company: This segment denotes the accounting entity and is two alpha characters in length. For departments/divisions it will always be IC. If no company code is supplied, it will be assumed to be IC.
• Cost centre:

The second segment, which is a maximum of 5 alpha characters in length, denotes the cost (or budget) centre. The first two characters, the top level parent cost centre, is defined centrally and equates to the ‘building blocks’ of the College. See Appendix 1 for list of building blocks. The remaining characters are defined by the administrator of the cost centre, and should denote a sub-department or section.

• Project/Activity:

The project/activity segment is 6 alphanumeric characters in length and the majority of cases will have one alpha character followed by 5 numeric characters. In certain cases, such as research projects or WOBs there could be 2 or possibly 3 alpha characters: the remainder will be numeric. The first alpha character will be used to identify the activity areas; for example G01100 would be a recurrent (G) activity code. The ranges of activity codes are shown in Table 1.

Table 1: Activity Ranges

There are two types of activity values: common activity codes and common departmental activities.

Common Activity Codes

Common activity codes define values, which are mandatory or recommended and should be used to record specific activities undertaken. These are shown in Appendix 2. Common activity codes can be used by any department but their purpose and description are defined centrally. Note that if analysis codes are used to track specific expenditure, such as equipment, these need not be replicated with an activity code. If, however, a department or division wishes to account for expenditure at activity level, the common activity codes should be used where possible.

Departmental Activity Codes

Departmental activity codes are allocated for specific purposes within departments and divisions, and are defined by the departmental administrator. A table of activity ranges allocated to departments is shown in Appendix 3 (Those ranges are to be used with G/F/S activity codes).

• Analysis code:

This segment defines the type of income or expenditure incurred/earned. The values within this segment are defined centrally, but valid combinations of analysis codes with cost centres and/or activities can be defined. A full list of available analysis codes are shown in Appendix 4 and 5.

All analysis codes are MANDATORY with the only exception of overtime staff pay codes which

can be used at the departments’ option. Further details are to be found in Appendix 7.

Analysis codes within ICIS are defined as either income or expenditure codes. Income analysis codes can only have income budgets associated with them, while expenditure codes can only have expenditure budgets (see Budgets).

• Indicator

The indicator segment is provided to enable departments/divisions to record and monitor internal trading, i.e. both inter (R) and intra (I) departmental activities such as ‘sales’ from departmental stores, provision of services etc. This segment enables departments to analyse their income generated from within as well as outside the College, while allowing the College Financial Accounts to account only for true income.

In the indicator segment, there are only three valid values:

Null value - default

R - to be used to flag internal income/recharge between departments/divisions

I - used to flag internal income/recharge within a department/division

The indicator segment should be used only on journals and for credit values, and may only follow an expenditure analysis code.

If, for example, Department A sells telecommunication services to Department B, Department B should record the original telecommunication charge on analysis code 163216 with the indicator defaulted to Null. Department A should record the internal income on the same analysis code 163216 using an indicator value as R If this example was between sections within a department or division, the value in the indicator would be I instead of R.

The same expenditure analysis code must be used by the two departments/divisions or sections.

• Sub1 and Sub2

The sub1 and sub2 segments are optional and provide the facility for additional analysis of the income and expenditure or for recording statistical information against transactions.

These segments should only be used in relation to specific types of transactions and should not be used unless specifically instructed. Your departmental finance administrator, in association with the Finance Division, will define the codes to be used by your own department, if appropriate. Queries should be addressed to your departmental administrator in the first instance. For further information on the use of these codes please contact the Budget Control Office.

At present Sub2 remains unused.

Parent and child relationships

Within each segment of the GL code, it is possible to establish parent-child relationships for reporting purposes. All transactions are posted at the child level. Segment values can be grouped together for reporting purposes by defining a common parent. Further groupings and relationships can be defined (parent and/or child) to create grandparents, and a parent and a child may share the same parent. Transactions and balances are only held at the child level.