Chart of Accounts Code Hierarchy

The Chart of Accounts
Hierarchical Structures
Example of a Hierarchy
A Sample Organization Hierarchy

The Chart of Accounts

The FIS Banner Chart of Accounts (COA) is the list of codes used for classifying, recording, and reporting financial information. A chart of accounts can be as simple as a list of the categories of expenditures and income in the ledger of a small business. The code elements of the FIS Banner Chart of Accounts at UCSC are the basis for the classification, recording, and reporting of ALL types of financial information for the entire campus. Chart of Accounts codes appear on most reports, forms, and on-line screens of FIS Banner.

The Chart of Accounts is a systematic classification of the university’s assets, liabilities, fund balances, revenues, and expenditures. It is designed to be compatible with the university’s organizational structure and the form and content of its financial reports.

The COA is also a tool that provides departments and other campus entities with a means of organizing and collecting data needed to run their units. Portions of the chart are based on categories used within the UC system and utilize codes used by the UC Office of the President. Other portions of the chart are “user defined.” For example, Fund is based on the fund accounting system used within UC, while many organization and account codes and all activity codes are largely determined by users.

When using code elements of the chart, it is important to use individual categories in a manner that is consistent with their intended use. For example, use the account code for long distance telephone calls (002250) to record expenditures for long distance calls only, and use the local calls account code (002200) for local calls.

While the overall structure of the Chart of Accounts is difficult to change, individual categories may be changed as needed by users. When a unit determines a change is necessary, the change will need to be coordinated with the Accounting Office and/or Planning and Budget Office.

The chart codes used to specify and report transactions are: Fund, Organization, Account, Program, Activity and Location. These codes are used together to describe each campus entity. Fund, Organization, Account, and Program are required in order to record transactions in the Operating Ledger; Activity and Location are optional. All together, they are referred to as the FOAPAL.

Hierarchical Structures

Five of the chart codes discussed above are structured in hierarchies (Fund, Organization, Account, Program and Location). A hierarchy is a way of organizing information in a “pyramid” - where each step of the pyramid is subordinate to the one above it. The following example demonstrates a simplified Organization code hierarchy. This is one of the five codes with hierarchical structures in FIS. The example begins with the highest level being the Total UCSC Campus. The next level is the Academic Units followed by the Social Sciences. The hierarchy becomes more detailed, splitting into different departments - Politics, Economics, and Psychology.

Example of a Hierarchy

The example above demonstrates the levels of hierarchy that would be used to produce a report for the Division of Social Sciences. The shaded areas are subordinate levels to the Division of Social Sciences level within the hierarchy and would be included in the report.

As mentioned previously, five of the chart codes use hierarchical structures to organize data.

The following diagram demonstrates the similarities and differences among the hierarchical structures of the five chart codes. Each example represents a small portion of the entire hierarchy for each code. For simplicity, only the Code levels for codes are shown. In both the Fund and Account code hierarchies, there are also two Type levels for codes, Level 1 and Level 2, which are not shown.

A Sample Organization Hierarchy

The following example will provide more detail on an Organization code hierarchy (if you need detailed descriptions of any of the FOAPAL codes and what they mean, see the “FOAPAL Codes Described” section later in this chapter). A hierarchy starts at a very broad level and becomes more specific with each additional level. Below is a diagram of an organization hierarchy for the Economics Department.

You will notice the first (highest and broadest) level of organization is the Total UCSC Campus. The campus is divided into academic units and other types of units (not shown). The academic units are made up of divisions; one of these is the Division of Social Sciences. It, in turn, is made up of departments, such as the Economics department. This means that all the accounting information that has to do with the lower levels [from the basic organizations of the Economics department (level 5) to Social Sciences (level 3)] can be “rolled up” or summarized into one comprehensive report for the Dean of Social Sciences.

The hierarchical method of structuring data makes it possible to design a report at Level 1, which summarizes information for the entire UCSC campus, or a report at level 2, which reflects the account information for the Academic Divisions that would include the Social Sciences and the Economics department. With hierarchical level reporting, the FIS system can be used to produce a number of reports at any level in the hierarchy. The ledger reports use hierarchical structures to summarize data.

Continuing with the Economics department example, we are going to examine a complete Organization code hierarchy. Below level four are a number of units in the Economics department. Level five breaks the Economics Department into various subsets, which allows the Economics Department more flexibility in sorting and separating budgetary and financial information.

An organization hierarchy with five levels is shown above. The value used to code transactions and enter them into the system is always the code for the lowest level of its hierarchy. This lowest level of the hierarchy is known as the Data Entry Level. All higher levels are known as Predecessor Levels. The predecessor levels are used to group data for reports. The Data Entry Level can also be used for detailed reports that are specific to that level.

An example would be if the Division of Social Sciences requested a report on all activities within that division. The predecessor level the division would request would be Level 3 (#114). This report would include detail on not only the Economics department, but all other departments and activities that were listed below “Division of Social Sciences” in the Organizational hierarchy.

All values above a data entry level are referred to as “predecessor levels” or “roll-ups”; these levels are used only to group data on reports. Organization codes are always numeric.