Although the University’s accounting system (Financials) is used to record Foundation accounting activities, the Foundations are separate legal entities that have a different nature of activity from the University.
Account codes and account code descriptions are determined and approved by the State Controller’s Office. Due to the varied nature of the Foundations and the different basis of accounting, FAI has decided to use certain account codes that are applied to Ledger 6 projects. As a result, an account code description as it is shown in WRS for Ledger 6 funds may be misleading and will not always provide helpful insight into what an entry is actually for.
In particular, transfer account codes are used in a unique manner for Ledger 6 funds. For example, FAI makes annual entries using transfer codes to record spending budget withdrawals from endowments, to record endowment assessment fees, and to post endowment spending budgets to the endowment income projects.
Additionally, the process of “rolling over” the year-end balances in Ledger 6 projects differs from that one use for other fund sources at the University. For Ledger 6 funds, this is a manual process completed with two entries:
- The first entry is made by FAI in July to roll forward the system balance as of June 30 into the new fiscal year.
- The second entry is made in December and consists of all year-end adjusting entries (period 998). Transfer account code 40985 is used for this entry. Note: For endowments, 40985 is used for corpus and 40987 is used for spending reserves.
Select this link to access a listing of how FAI uses account codes on Foundation transactions.