Charles Darwin University - PowerPoint Presentation

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Charles Darwin University Chart of Accounts (COA) - Overview

University Finance

Presenters: Garrett

McGrath

Purpose of Demonstration

To introduce the changes to the Charles Darwin University’s Chart of Accounts (COA) and provide further understanding on how these changes will establish an improved, dynamic and simplified view to facilitate the reporting needs of the University in 2018.

Desirable outcomes:

Making the COA meaningful and accessible to all staff in the UniversityEnabling better tracking and reportingReducing the number of Natural Accounts and Sub AccountsRemove the double up of areas and activitiesLocation / Campus to be introducedThe new Chart of Accounts will become effective as of January 2018http://www.cdu.edu.au/finance/office-financial-services#ap31_7

The University’s Chart of Accounts (COA)

What is a Chart of Accounts

The Chart of Accounts is a financial organisational tool that provides a complete listing of every account in CDU’s financial system.

The COA is a coding system used to record income, expenditure, assets & liabilities for the University and prepare financial reporting.CDU’s Financials system is used to facilitate management of the University's financial resources and to provide information to stakeholdersThe Structure of CDU’s Chart of Accounts:CDU’s Chart of Accounts is made up of 5 segments totalling 15 characters, this is also known as the Cost Code. The five segments are: Area – 4 characters Activity – 4 characters Account – 3 characters Sub-Account – 2 characters

Entity / Location – 2 characters

The University’s Chart of Accounts (COA)

Hierarchy - http://www.cdu.edu.au/sites/default/files/fas/docs/hierarchy.pdf

The Hierarchy segment defines the grouping they belong to.

Each Hierarchy will have a division, branch / college, and a section.The Hierarchy can be classified under the following: 1000 – Vice Chancellor & President 2000 – Indigenous Leadership 3000 – Operations 4000 – Research & Research Training 5000 – Teaching Group 7000 – Global Strategy & Advancement 8000 – VET

The University’s Chart of Accounts (COA)

Area

Area is

used to identify the business or organisational unit where transactions are controlled. It will closely follow the official Organisation Chart at the higher levelsThe Area or posting segment (division, branch / college and section) defines the internal management structure or areas of responsibility within a Hierarchy.2018 Chart of Accounts changes –Appropriation - http://www.cdu.edu.au/sites/default/files/fas/docs/area_and_approp_activity_-_old_to_new.pdf

Restricted -

http://www.cdu.edu.au/sites/default/files/fas/docs/area_and_restricted_activity_-_old_to_new.pdf

The University’s Chart of Accounts (COA)

Activity Appropriation and Restricted

The segment identifies jobs or projects under the control of an Area where transactions need to be separately identified and monitored.

Appropriation - http://www.cdu.edu.au/sites/default/files/fas/docs/appropriation.pdfAppropriation is the operational budget an area receives to carry out their operational activities for the year. 0500 Series – recurrent overhead activity – non-Academic 1000 Series – recurrent administration support activity – non-Academic

2000 Series – recurrent academic teaching HE activity – Academic

3000 Series – recurrent academic teaching VET activity – Academic

The University’s Chart of Accounts (COA)

Activity (continued)Restricted -

http://www.cdu.edu.au/sites/default/files/fas/docs/restricted.pdf

Restricted funding relates to activities funded for a specific purpose and the University uses them for self-funded and project related activities.Restricted accounts are subject to funds control which means the expenditure cannot exceed the funds received. 4000 Series – Acquittable Contracts/Projects 5000 Series – Non Acquittable Projects / Consultancy 6000 Series – Research & Scholarship

7000 Series – Facilities Management

8000 Series – Entrepreneurial (Only to report income)Restricted guidelines - http://www.cdu.edu.au/sites/default/files/fas/docs/restricted_activity_-_operating_guidelines_2018.pdf

The University’s Chart of Accounts (COA)

Natural Account and Sub Account - http://www.cdu.edu.au/sites/default/files/fas/docs/accounts_sub-accounts.pdf

The Natural Account segment is used to describe the nature of the transaction, it is for financial reporting and management control purposes.

The Sub Account itemises the natural account to an individual expense adding an additional description to describe the nature of the transaction. Each natural account must have a sub account. Income – 100 – 199 Expenditure – 200 – 699 Assets – 751 – 899 Liabilities – 901 - 999 Equity – 711 – 7492018 Natural & Sub Account Changes – http://www.cdu.edu.au/sites/default/files/fas/docs/natural_and_sub_final_-_old_to_new.pdf

The University’s Chart of Accounts (COA)

A major change to the Chart of Accounts is the introduction of Location as a reporting segment. CDU operates from many locations throughout the territory and nationally so to improve reporting, decision making and management of operations, a Location segment was necessary.

Entity / Location -

http://www.cdu.edu.au/sites/default/files/fas/docs/location_or_entities.pdfEntity is used to identify the various Business Enterprises of CDU and the Separate Legal entities within the University. The Location segment is used to determine the assignment of campus or physical locality to transactions.The Entity / Location is an independent segment that is a two digit numeric value (01-99)

What is Location??

Location will be used to define where a transaction belongs to e.g

:

- A new computer is purchased for an office at the Waterfront Campus = 05 Darwin Waterfront. (The computer will be used at the Waterfront Campus, the cost is coded here) - A lecturer from Casuarina books a flight to Sydney for a conference = 02 Casuarina (The lecturer works fulltime in Casuarina the cost relates to their primary work location) - A Nursing student in Sydney attends placement in Royal Darwin Hospital

= 03 Sydney (the cost to enter the student on the placement program is coded to where the student is based for study)

Certain Colleges / Areas will have multiple locations e.g

: - VET area operates in multiple locations

- College of business operates from multiple locations

Central Support Service costs are coded to CDU Head Office 01 and Teaching/Research costs are coded to a location 02-19

What is Location (continued)

For every staff member, a location code will be assigned based on their principal place of work

e.g

: - A nursing lecturer from Darwin teaching in Sydney = 03 Sydney (Sydney is where the lecturer works, where they are from is not relevant) - A business lecturer at the waterfront who lives in Palmerston works from home 1 day a week = 05 Darwin Waterfront (principal place of work is Darwin Waterfront, the cost relates to this location). - The College Dean for Business and Law has three locations to manage, 50% of his time is spent at the Waterfront, 20% in Sydney and 30% in Casuarina

= 05 Darwin Waterfront (College Dean spends the majority of time at Darwin Waterfront, where a staff time is split it should be based on the largest %).

- A finance staff member working in Casuarina performs tasks for multiple locations

= 01 Head Office (Central Support Services provided to the University as a whole are coded to Head Office regardless of where the person works).

What is CDU Head Office and why is it different to Location?

CDU Head Office is to be used for Central Support Services provided to the University as a whole.

Head Office expenses will mainly relate to non-academic activities.

Some of the following are considered Central Support Services and should be coded to CDU Head Office:

What is CDU Head Office and why is it different to Location?

Some examples of CDU Head Office expense and exceptions:

-

Marketing engage a consultant from Melbourne to develop an advert = 01 CDU Head Office (the advert is for all of CDU). - ITMS purchase a new software licence which can be used by all staff = 01 CDU Head Office (the software is for all CDU staff). - Major projects renovate an office in Jabiru = 11 Jabiru (the project is only for Jabiru) Buildings on the Casuarina Campus will be either Head Office 01 or Casuarina 02. - http://www.cdu.edu.au/sites/default/files/fas/docs/building_locations_cas.pdf

What to do from here:

Delete, Shred or Destroy any old ‘Cheat Sheets’ you may have at your desk or saved on your computer

Become familiar

with the new Chart of Accounts in particular the areas that you use mostObtain and make reference to the new Chart of Accounts which will be available to all staff online. New Chart of Account Versions made available will include:The New 2018 Chart of AccountsOld to New Chart of AccountsWhat will happen to Historical data:Historical data will now be under the new numbering format, no past data will be lostHistorical data for Location

will not be mapped to the new COA as this was never classified by location in the past, all historical data will remain at 01.

Historical data for Entity Codes 21-99 will be mapped to the new codes where a code has been changed

What was achieved by the project:

Reporting by

location

will now be possible.The COA will be aligned with the new Organisational StructureThe number of activity accounts has reduced.The number of natural and sub-accounts has reduced.Additional resource documents will be availableRegular training will be provided on the COA and the use of Cost Codes

The COA will have a fresh new look.

Thank you

Office of Financial Services – Finance FAQs

http://www.cdu.edu.au/finance/office-financial-services