Each month, a feature of the Financial System Enhancements will be highlighted to help prepare for the upcoming changes.
Chart of Accounts Structure:The COA Structure identifies how you will account for transactions. There will be two structures: one for the General Ledger and one for “Grants,” which will encompass Internal Awards, Capital Projects, and Sponsored Projects.
Segments:Segments are components of an account string. Each segment has a name and defined length. The new Grants COA Structure will be comprised of four segments, each with a defined segment length and set of possible values.
The new Grants account structure will be comprised of four segments, each with defined segment lengths and set of possible values:
What is the Oracle Grants Accounting Module?
Oracle Grants Accounting (Grants Accounting) is a system that holds all of the expense details for Projects, Tasks and Awards (PTA). Grants Accounting is considered a sub-ledger of the General Ledger (GL) and sends information to the GL in a summarized fashion, known as auto-accounting. While the system is called Grants Accounting, it is actually used for much more than just Sponsored awards.
Each of the segments in Grants Accounting is intended to track different information:
The Project segment is a five-digit value that identifies a body of work that is broken into tasks. Project segment values are a system-generated value that is assigned in a sequential order. A project can represent a person or a scope of work and a project can have a single task or, if necessary, multiple tasks. Each project is assigned an organization (org) which is available for reporting purposes only. Projects most frequently used by Planning Units will generally belong to one of two categories: Sponsored Awards and Internal Awards. Some units, such as Housing or Culinary Auxiliaries, will also use Capital Projects. Examples of projects include a sponsored project based on a body of research or a project setup for a faculty member to track funding available to them for startup awards or professional development.
Task represents the work breakdown structure of the project and provides a way of organizing expenditures against a project. The task structure can vary from project to project depending on the nature of the project. Tasks can also have unique start and end dates. Every Project value must have at least one Task because expenditures are posted at the Task level and roll-up to the Project. Each Task is assigned an Organization value which is used to auto-account expenses to the GL organization. A Task may also have a Service Type and auto-accounts to the GL activity segment value.
An Award is an allocation of funding that funds a task(s) on one or more projects. The Award organization is for reporting purposes only. The award purpose auto-accounts to the GL Function segment value and the Award type auto-accounts to the GL source segment. Awards can be funded from both internal departments and external entities. Awards also have specific functionality to track indirect cost rates, compliance terms and conditions associated with the award funding, and allow for revenue generation and invoicing to external sponsors.
How will the Grants Module be used?
At Ohio University, Grants Accounting will be used to track spending for Sponsored programs, cost sharing (both mandatory and voluntarily committed), capital projects, faculty travel and development funds, research incentive and startup accounts, as well as internal award programs that are departmental or planning unit based.
By using the system for these types of accounts, it allows all faculty funding to be tracked in a consistent manner so that it is much more accessible and visible through the new reporting tools. For instance, if a faculty member serves as a Principal Investigator (PI) on a sponsored award, receives research incentive funds, has a departmentally funded professional development allocation and an Innovation Strategy Award, they can see all of their available funding in a single reporting dashboard.
Benefits of the Grants Accounting Module
There are several benefits to using the Grants module:
- Award provides additional functionality to track and report on various attributes associated with funding
- Generates revenue and invoices sponsors
- Allows expenditures to be tracked by fiscal year or on a project inception basis
- Budgets/Funding continues across fiscal years
- Provides for flexible options related to monitoring and controlling expenses
- Provides more robust reporting for projects and tasks as well as awards (funding) by summarizing activity at the Award or Project level
- Tasks can belong to different planning units or departments on the same project
Grants also introduces a multi-funding concept whereby, one Award can fund multiple projects or one project can be funded by multiple awards (funding sources). This provides better visibility to the source of funds for each project, allows for multiple sources of funds to fund a project and allows the task structure to represent the work breakdown structure of the project. See the diagram below for a visual reference.
How Grants is different from Projects
Project Accounting today uses the Task structure to break out the various funding sources for projects. In other cases, multiple projects must be setup when a project gets funding from multiple internal/external sources. In the new chart of accounts, the Award segment will be used to identify the funding source allowing the project to define the scope of work and the tasks to be used to reflect the work being performed on the project.
Today, the Project Accounting module and the General Ledger (GL) share the same account number. In the new chart of accounts, the Project segment will no longer be represented in the GL. Since Grants Accounting is a sub-ledger to the GL, all details supporting the expenses against a Project segment will be housed in Grants Accounting and posted in summary to the GL.
Accounting for Grants in General Ledger
Grants Accounting uses auto-accounting to determine the GL account number. Transactions will be accounted to the GL in summary by source of funds, organization and function. Auto-accounting is simply a set of rules applied to each transaction to determine how the expense transaction will post to the GL. The auto-accounting rules for each PTA are determined at setup and used throughout the period in which the PTA is active.
To help demonstrate how auto-accounting derives the GL values the following diagram is helpful from an overview perspective:
In Grants Accounting, an Award Type is used to determine the source value that will be reflected in the GL for transactions posted against the Award. Each source value is assigned to an Entity segment, entity segment value 10 represents Ohio University. Below is a subset of commonly used Award Types and how they will map to the GL segment for Source and Entity:
| Award Type in Grants Accounting | Maps to Source GL Segment | Source Belongs to Entity Segment |
|---|---|---|
|
NIH Natl Inst of Hlth (441610)
|
441610 | 10 |
|
NSF Natl Science Fnd (441800)
|
441800 | 10 |
|
OH Dept Higher Ed (442100)
|
442100 | 10 |
|
OH Dept of Educ (442200)
|
442200 | 10 |
|
Foundation (445100)
|
445100 | 10 |
|
Osteo Heritage Found (445110)
|
445110 | 10 |
|
Cost Share (113000)
|
113000 | 10 |
|
Planning Unit Startup Funds (112410)
|
112410 | 10 |
|
Research Incentive (112200)
|
112200 | 10 |
In this example, the Award Type represents a planning unit startup award with a Source segment value of 112410. The source value 112410 is assigned to entity 10. When the expense auto-accounts to the GL it will post the expense to Entity 10, Source 112410. In addition, the Award Purpose is used to populate the Function segment value in the GL. For this award, the Function is University Research with a segment value of 20.
In the PTA account, expenditures are applied at the Task level so every project must have at least one Task. Every Task is assigned a Task owning Organization, which may be different from the Organization that owns the Project. The Task Organization is used to derive the Organization value that will “auto-account” to the GL. In the example above, the Project 111564 has a single Task 20 that has a task owning organization of 140800 – Mechanical Engineering. When the Task expenditure auto-accounts to the GL it will post to the Mechanical Engineering department.
If a department has a need to track the task expenditures by not only organization but also by Activity, the Service Type may be used as an attribute on the Task. When the Service Type is populated with a value, this will auto-account to the GL as the Activity segment. If there is not Service Type value, the Activity value in GL will be ‘0000 – Not Specified’.
For more details visit the Chart of Accounts website or email coa@ohio.edu