FIS BULLETIN Number 18

Announcements | Calendar | Status | T&T-Q&A | Training | Inside Peek | Odds & Ends

March 10, 1998

IMPORTANT ANNOUNCEMENTS

GENERAL: SCHEDULED FIS BANNER DOWNTIMES

Banner FIS AND the Data Warehouse (Business Objects) will be unavailable ALL DAY on Sunday, March 15 for hardware reorganization.

ACQUISITIONS: None.

BANNER REPORTS: None.

OTHER FIS / BANNER ITEMS:

The long-awaited second installment of BannerSlug's 90-second Accounting Lesson. See Insider's Peek.

CALENDAR OF FIS / BANNER EVENTS

FIS STATUS

CONTRACT & GRANT INCEPTION-TO-DATE (ITD) REPORT ENHANCEMENTS: Generally, the new version of the report appears to work well for most grants. Testers did discover problems with information related to grants where problems occurred in the transition from the old accounting system to FIS in 1995. Corrections were made to these grants in fiscal years 1996 and 1998. Investigations continue to determine if a solution exists. So far all solutions attempted solve some problems and create others. The possibility exists that this may be a "lesser of evils" situation. In other words there may not be a cost-effective solution that will entirely solve this problem. In which case, the approach will be to focus on ensuring accurate report information for all grants established now and into the future.

DISTRIBUTED OFFICE OF RECORD (DOOR): Within the next two weeks, all Service Centers will be receiving "DOOR To Do" packets which will contain all information needed to plan for a successful transition. These packets will include details on your current Service Center direct pay input and approval routing access for your review.

FIS UPGRADE: The FIS Database Administrator has begun to build the first test database for the new version of Banner FIS. We have many technical and functional questions about Banner2000, many of which we hope to get answered at the annual SCT Banner conference on March 15-18. Several institutions that have already gone through this upgrade will be hosting a conference session to share their experiences, and we plan to listen intently!

TIPS & TRICKS/QUESTIONS & ANSWERS

TIPS & TRICKS

A reminder about the two Available Balance screens (FZIABAL and FZIGBAL)....we have received several "how do I..." inquiries from users for which use of one of these two forms was the answer.

The FZIABAL form provides summary budgetary, financial, encumbrance, and ending balances for a specific organization code by pool account code from the operating ledger. Queries are performed by specifying an organization code and, optionally, a fund code and/or pool account code.

The FZIGBAL form functions similarly to the FZIABAL form, but returns balances only for non-revenue FOAPALs. In other words, balances associated with Rxxxxx account codes will not be included in the result block of the GBAL form. Access to both FZIABAL and FZIGBAL was automatically granted to all FIS Users who have access to FGIBDST (Organization Budget Status). Data is current as of the end of the preceding day, which is usually around 7:00 p.m. If you need more information about either of these forms, please contact Monique Leduc (mleduc@cats).

QUESTIONS & ANSWERS
None submitted this month.

FIS TRAINING SCHEDULE

Below is the FIS Banner Training Schedule. To register for a course, please send e-mail to njmiller@ucsc.edu and include:
-----the class name and date
-----the attendee's name, phone number, e-mail address and unit.
Class confirmation will be sent to each attendee.

FIS Banner Training Course Schedule --- Location: 247B Kerr Hall

A separate class listing for the Distributed Office of Record Training will be published soon. The eight hour certification training will be offered in two four-hour sections from April 6th through 30th.

________________________
Questions or problems regarding Banner FIS can be directed to
Acquisitions, Accounts Payable - Karsen Jones (kjones@cats)
Ledger Reports, Fiscal Closing - Vicki Gutzwiller (vickig@cats)
Banner Security, Access, Other - Monique Leduc (mleduc@cats)
FIS Training Content, Schedule - Nancy Miller (njmiller@cats)

INSIDER'S PEEK AT FIS

BANNERSLUG'S 90 SECOND ACCOUNTING LESSON

INSTALLMENT 2

(In case you missed it, Installment 1 was in FIS Bulletin #13, way back in October...if you have deleted your copy [accidentally, of course; one would never delete such an important file intentionally] you may request a copy from Monique Leduc mleduc@cats

LESSON #2: Slugs will defend to the death certain unalienable principles - so will accountants (to the last adding machine, if necessary).

If you will indulge us, put yourselves back in the accounting frame of mind so that we can enter the Kingdom of Accounting (a quiet place occupied by quiet people - an atmosphere quite different than the one seen in Bannerland).

The Kingdom of Accounting is governed a few rules popularly referred to asGAAP (pronounced "gap" for the benefit of the phonetically challenged), or Generally Accepted Accounting Principles for long. GAAP provides the rules used by businesses engaged in similar pursuits to account for and report on financial transactions in a similar manner. (Yes, Colleges and Universities are considered businesses in the Land of Accounting.)

There are six key rules (i.e. principles) in the Kingdom of Accounting. Violating any of them can result in a punishment worse than incarceration and torture (i.e. being subjected to repeated accounting lectures from incensed accountants).

We'll go through the first one which is the longest (it's got a lot of subparts) and maybe the most important (it deals with something near and dear to everyone's heart - income, i.e. moolah; dough; cold, hard cash).

1. REVENUE PRINCIPLE ("What goes out, must come in first"...Sir Notwen the Accountant):

1. Revenues are inflows of cash and other items of value received, such accounts receivable (ie. obligations that are to be liquidated for cash in the near future), for goods sold or services rendered. Examples: the state pays the University to provide instructional services to students. Students pay the Campus Housing Office which, in turn, provides them with shelter. Note: In University accounting jargon, revenue is also called receipts.
   
   So what does this mean to me: Probably not a lot, unless you work for one of the campus' auxiliary enterprises (like the housing or the bookstore) that sell things. We can't record income until the service or goods have been provided.
   
   
2. Revenue should be recognized in the period in which the sale is made or the service is rendered. Example: A student is billed and pays a Housing invoice that covers the period of September through December in July. Revenue is recognized over the period from September through December on a prorata basis. (The more astute among you might recognize that the "Time Period Assumption" applies here)
   
   So what does this mean to me: Same as above in that it applies to those involved in campus auxiliary enterprises. If we provided a service in the old fiscal year but don't get paid until the new fiscal year, we record the revenue in the old fiscal year when the service was provided.
   
   
3. Revenue should be measured as cash received plus the cash equivalent of any other items received. Example: A sailing buff alumni donates money and a sailboat to the campus. The campus recognizes both the amount of money and the fair market value of the sailboat as donation revenue. "Fair market value" is the amount of money one would expect to receive in the open market for some good or service. (Pop quiz: can you guess the "Assumption" that relates to this?)
   
   SO WHAT DOES THIS MEAN TO ME: Probably not much since virtually all revenue we receive is in US dollars (Aw shucks, I gave away the answer to the pop quiz).
   
   So you want me to tell you something that means something to you? Okay. Here are the corollaries to the "Revenue Principle" that will be of definite interest to you (maybe not knock the socks off you, but at least tingle the toes):
   
   The flip side of the Revenue Principle: Expenses are the outflow of cash or other resources, or in the incurring of debt (i.e. accounts payable) for goods or services used by the entity to earn revenues. Example: a travel agency bills the campus' Social Sciences Division Service Center for airplane fare for a professor to attend a professional meeting in Los Angeles, the information obtained being helpful in the professor's instructional pursuits. Instruction is one of the missions of the campus for which the state will pay the University (and thus the travel activity generates revenue). The bill is a debt, or liability, incurred by the campus in order to earn revenue (i.e. funding from the state). (A bit of a convoluted definition, but it will make sense when we talk about the "Matching Principle" in a future installment.)
   
   SIDETRIP - LIABILITIES: Debts or obligations owed by the entity to creditors. They arise as a result of the purchase of goods or services from others on credit and through cash borrowings to finance the business. Liabilities include principal owed on bonds issued to finance student housing, unpaid vendor bills, and money owed to the IRS for employee payroll tax withholdings.
   
   You look a bit dazed? Trying to figure out what it all means? Let me try to put it this way: Money (and things like accounts receivable) the campus earns for services *actually provided* as part of the University's mission, is considered revenue to the University. Money that campus spends (including amounts due to vendors for goods and services rendered - yes, the rules of the Kingdom apply to campus vendors, too) that enable us to earn money are expenditures. An example of a something that seems like it might be an expenditure, but isn't, would be a travel advance. Travel for campus business is a revenue-generating activity (i.e. many campus funding sources will pay or reimburse for such travel).
   
   We don't earn revenue until the travel itself has been taken, even though money has been spent. According to the Revenue Principle, since we can't earn revenue, we can't record an expense when the travel advance is paid to the traveller.
   
   What happens to the travel advance? It is recorded as an account receivable, which is an asset fund-account of the campus' general ledger. (For more on this, see Bulletin #13's Insider's Peek) Until travel is completed, the traveller owes the money back to the campus. Once travel is complete, the accounts receivable amount is adjusted, and an expenditure is recorded. In most cases, the revenue side is invisible to folks like you and me. However, it is recorded (trust me). Bet you didn't realize that all departments earn revenue for the campus?

Well, you made it through the first one. It's the first step to be accepted into the Kingdom of Accounting. Hope you're sufficiently dazed but not too confused. Only five more to go. Take heart. The rest of them all relate to this one and are much shorter.

Contributors: Monique Leduc, Kirk Lew, Nancy Miller
Your comments and suggestions are always welcome. Please direct them to the Editors, Monique Leduc (mleduc@cats) or Kirk Lew (kllew@cats)

Financial Affairs | Accounting Offices | Campus Controller | FIS

Comments to: controller@ucsc.edu - Maintained by FIS, Updated