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Fund Accounting Jim Corkill Sandra Featherson Accounting Services &amp; Controls November 2007
Definitions Fund Groups Budgeting Profit vs. Non-Profit Organizations Financial Statements ,Goals Concepts of fund accounting
Understanding the various fund groups How are we different than a profit organization? ,What is Fund Accounting? A method of segregating resources into categories (i.e., funds), to identify both the source of funds and the use of funds.
,Objectives of Fund Accounting Demonstrating accountability and stewardship
Determining financial condition Planning and budgeting ,Objectives of Fund Accounting Evaluating organizational and managerial performance
Determining/forecasting cash flow Communication ,Definitions Fund: A fund is a segregation of resources established to control and monitor resources and to help ensure and demonstrate compliance with legal/administrative requirements.
,Definitions Fund Balance: Equity within a fund.
Assets = Liabilities + Fund Equity Fund Assets – Fund Liabilities = Fund Balance Assets – Claims Against Assets = Fund Balance The fund balance may also be known as Net Assets, Capital, or Net Worth. ,Chart of Accounts How do we track the sources and uses of funds?
,Definitions Fund Group: A separate entity with a self-balancing set of accounts consisting of assets, liabilities, fund balance, and, where appropriate, revenue and expenditure accounts.
,Fund Groups Six basic fund groups: Current Fund
Plant Fund Endowment &amp; Similar Funds Group Annuity &amp; Life Income Group Loan Fund Agency Fund ,Current Fund Group of funds expendable for operating purposes in support of the institution’s mission; expected to be expended in the near term. Unrestricted
Restricted Designated Funds ,Current Fund Unrestricted Funds: Includes all funds received in which a donor or other external agency has not specified the purpose(s) for which the funds should be expended. Examples: General funds
Reg. Fee funds Unrestricted gifts ,Current Fund Restricted Current Funds: Includes funds available for financing operations, but that are limited to specific purposes, programs, or departments specified by donors or external agencies. Examples: Federal funds for contracts &amp; grants
Work Study funds Endowment income ,Current Fund Designated Current Funds: Unrestricted funds the governing body designated for a special purpose. Examples: Special State Appropriations
Breast Cancer Research ,Scenario #1 For each of the fund numbers and titles listed, mark the fund either:
a) Restricted b) Unrestricted c) Designated For each transaction, assign the appropriate fund number. ,Plant Fund The plant fund group is used to record acquisition of assets, replacement of assets, pay off debt, and record the investment in assets (equity). There are four subgroups of plant funds: Unexpended Plant Funds
Renewal and Replacement Retirement of Indebtedness Investment in Plant ,Plant Fund Unexpended Plant Fund: Used for recording construction or acquisition of long-lived assets. This includes items such as: Land and building acquisition
Construction of new facilities Renovation Remodeling ,Plant Fund Renewal and Replacement: Used for extraordinary repairs and maintenance or equipment replacement. Retirement of Indebtedness: Used to record the accumulation of funds and disbursement for repayment of long term debt for assets.
,Plant Fund Investment in Plant: Used to record the equity of campus assets. This subgroup in plant should reflect the total amount of resources expended for additions to assets.
,Discussion #1 For each transaction or situation, name the correct fund (Current or Plant) where it should be recorded.
,Endowment &amp; Similar Funds This fund group is used to record donations to the University which require that the principal is invested and only the interest income is e