Finance Definitions
Below are common finance definitions. UM System provides another excellent resource for General Ledger
Account: Describe and classify transactions as assets, liabilities, revenues and expenses according to uses and/or regulations, restrictions or limitation in compliance with the financial reporting requirements.
ARBI (Accounts Receivable & Billing): The automated system (database) which provides a record of charge transactions by non-University clients to University departments.
Balance Sheet: Not commonly used by departments. A quantitative summary of the University's financial condition at a specific point in time, including assets, liabilities and net assets. The first part of a balance sheet shows all the productive assets the University owns, and the second part shows all the financing methods (such as liabilities and net assets).
Base Budget: This budget is permanent and recurring. It is the initial financial plan of action of proposed university activities that typically consists of: a salary budget, a benefits budget, and an expense and equipment (E&E) budget. This budget is loaded each fiscal year and typically funded by the general revenue allocation.
Benefit Rate: Consists of: Medical, Dental, Life, Long Term Disability (LTD), Retirees Health & Welfare, Retirement, Stabilization Reserve Funding, Unemployment, Workers Compensation, Educational Assistance (EA), Education Fee Reduction (EFR), Service Awards (SA), Wellness (W), and Employee Assistance Program (EAP). Insert Benefit Rate link to our website once it is built
Budget: A financial plan that specifies how revenues and expenditures will be allocated and/or spent throughout the fiscal year. Typically consists of: salary, benefits, expense and equipment (E&E).
Budget Variance: The budget management reports begin with BudVar. These are used primarily in the budget management phase to see how changes affect the Actual and Budget scenarios.
Business Unit: A PeopleSoft Chartfield that identifies which campus in the financials. For Missouri S&T the business unit would be ROLLA.
Capital Asset: An asset used in operations that has an expected Useful Life of greater than one year. Expenditures that meet or exceed thresholds are recorded as capital assets and depreciated over their Useful Life rather than being treated as an expense in the accounting period the cost is incurred. Examples would be land, infrastructure, buildings, vehicles, equipment, and art. To view thresholds and further information follow this link, https://www.umsystem.edu/ums/policies/finance/capital_assets
Chartfields: Finance system data fields that are the building blocks of the University’s chart of accounts and provide the structure to segregate and categorize accounting and budget data. Chartfields: Account, Business Unit, DeptID (Department ID), Program, Project and Class.
Chartfield String: Is a unique combination of chartfields that includes business unit, fund, DeptID, program, project, class, and account. .
Class: Optional field, but individual division or departments may mandate its use. This is used to further identify revenues or expenditures within the same chartfield string. Default is 0.
Cognos Reports: Various reports are available through Cognos. These reports are available to show original budget, current budget, actuals, encumbrances, and variances.
Cost Dollars: one-time funds not recurring.These funds are provided to supplement a department’s base budget.
DeptID: Represents the lowest budget level in an organization. Separate DeptIDs are needed for each departmental activity having different program classifications (instruction, research, etc.). Trees representing the organizational structure of the campus are used to organize DeptIDs for reporting purposes.
Dept.Node: A Finance and HR system alphabetic data field that represents each division and department within the system.
Encumbrance: Identifies funds needed to cover unspent commitments. This typically represents purchase orders and payroll.
Equipment: Physical assets that are not permanently affixed to buildings.
Expense Report (ER): Thetool for reimbursement to University employees either for travel or purchases made on the One Card. Must attach documents when processing ERs in T&E.
Fiscal Year: The 12 month period in which a budget is in place. The fiscal year at S&T begins July 1st and ends June 30th.
Fiscal Manager: Point of contact for department financially responsible individuals. Oversees guides, policy, and procedures for the University. Add link to their website once developed.
Fund: Used to classify resources according to uses and/or regulations, restrictions or limitations on the uses in compliance with the financial reporting requirements of the Governmental Accounting Standards Board and the National Association of College & University Business Officers.
General Ledger: The General Ledger of the University of Missouri is the official record of the University’s budgeting and financial transactions. The General Ledger includes budget transactions, revenue and expense transactions, encumbrances, assets, liabilities and fund balances.
General Revenue Funds (GRA): These campus funds are made up of state appropriations, student fees, tuition, recovery of indirect costs and some miscellaneous revenue. These funds are allocated to departments for base budgets to fund salaries, benefits, graduate student stipends, miscellaneous instruction, and E&E.
Gift & Endowment Fund: Programs deriving revenue from donors and endowment distributions. Use of these funds are restricted by donor directed purposes.
Grants & Contracts Funds: These restricted funds are made up of sponsored funding for research. These funds must only be used for the purpose approved by the external funding agency.
Hyperion: System that is used to build budgets (FINPLN) and store position data (SALPLN). This system also has some reporting capability.
Income statement 1: Provides a Detail Income Statement of Revenues and Expenditures by DeptID or DeptNode on a fiscal year to date basis
Income Statement 3: Provides a Summary Income Statement for a DeptNode with the corresponding detail DeptIDs listed
Institutional Base Salary (IBS): is the annual compensation paid by the University through a school, college, or an administrative unit for an individual’s professional services, whether they consist of research, teaching, clinical or other activities, and whether the individual is employed full-time or part-time. The IBS for faculty members may include the following salary components: university base salary, administrative stipends, and clinical base salary.
Journal Entry:
Correcting Entry (CE): Used to move posted revenue or expense transactions to correct ChartFields.
Internal Service Entry (ISE): Used to record revenue and expense transactions for departments that provide materials and/or services provided to other departments within the University.
Journal Entry (JE): Used to record original accounting transactions only
Payroll Correction Entry (PCE): Used to move payroll expense to a different ChartField string
Transfer Journal Entry (TRE): Used to transfer funds between ChartFields
MoCode: a five character field that represents a unique combination of Chartfield values including: Fund, DeptID, Program, Project and Class. Use of the MoCode simplifies the data entry of a Chartfield string in financial transaction when the same set of values is commonly used together. The Chartfield string represented by the MoCodes does not include the account Chartfield.
One Card: A University sponsored MasterCard provided by JP Morgan. Cardholders are issued a One Card for department purchases or travel. One Cards must be reconciled in Travel & Expense (T&E) in an Expense Report (ER).
Operating Revenue: Revenues derived from activities associated with providing goods and services for instruction, research, public service or related support to entities separate from the university and that are exchange transactions. Examples include student tuition and fees, sales and services of auxiliary enterprises, grants, contracts, and interest on student loans.
Peoplesoft: Software designed to provide a streamlined electronic tool for UM System. To include, Human Resources, Financials, Purchasing
Program: Required for activities that need to be captured for System-wide, campus-wide, or interdepartmental purposes.
Project: Used for activities that are temporary in duration and for which revenues and expenditures may be accumulated over more than one fiscal year. Must have a defined start and end dates that may not correspond to a fiscal year.
Rate Dollars: These funds are recurring and generally refer to the general revenue allocation.
Requisition: Requisitions can be PO (Purchase order), or Non-PO. Dependent upon what is being purchased. More information and procedures can be found at https://www.umsystem.edu/oei/sharedservices/apss/
Transactions: Accounting transactions is a confirmed monetary action/decision that impacts the University in monetary terms. Financial transactions are capture or recorded in order to produce financial reports.
Web Applications: UM created Web Applications (Web Apps) for access to various Peoplesoft systems. The access is based on individual security levels.