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Fund Accounting Overview

NMIMT Fund Accounting Overview

Revised 9/17/08

A. Fund Accounting

Fund Accounting is a method of segregating assets into categories according to the restrictions placed on their use by the funding sources. A fund is an accounting entity with a self-balancing set of accounts for recording assets, liabilities, a fund balance and changes in the fund balance.1

Fund groups used by NMIMT and reported on it’s annual financial statements consist of

1) Current Funds – Unrestricted. Current unrestricted funds are resources received by an institution that have no limitations or stipulations placed on them by external agencies or donors. They consist of funds over which the Board of Regents retains full control to use in achieving any of the Institute’s authorized institutional purposes.

Activities accounted for in the current unrestricted fund include:

· Instruction and General account exhibit 101@@@
· Student Social and Cultural Development exhibit 102@@@
· Institutional Research exhibits

*122's are overhead return accounts.  The funds are state monies that are allocated to the PI (Dept) which earned the overhead. They are subject to all of the standard restrictions on state funds (i.e, no alcoholic beverages) plus the internal restrictions of no professional salaries.

Funds cannot be added from any other source to overhead return account nor can they be transferred except for identified cost share or write offs.

 

103@@@
122@@@

 

· Public Service exhibit 104@@@
· Internal service exhibit 1050@@
· Student Aid grants and stipends 106@@@
· Auxiliary enterprises including dining hall and canteen, dormitories, married student housing, swim center, student center, golf course, bookstore, Macey Center, and other independent operations including the Bureau of Mines and Mineral Resources and athletics. 107@@@,108@@@, 109@@@

2) Current Funds – Restricted. Current restricted funds are resources provided to an institution that have externally established limitations or stipulations placed on their use, but are intended for current purposes. At the direction of the external funding source (for example, individual, corporation, foundation or governmental agency), restrictions can be broad (e.g. use for scholarships) or quite specific (e.g. to analyze a particular research objective).

Activities accounted for in the current restricted fund group include:

· Research Facility Support 1052@@
· Specialized Service Facilities (EMRTC's range, Playas, MRO) 280@@@
· College Workstudy Program 210@@@
· Pell Grant Program 211@@@
· SEOG Program 212@@@
· Perkins Loan Fund 213@@@
· Minority Scholarship  
· Outside College Workstudy 220@@@

·

Departmental Grants

*230's are external funds either donated (gifts) or earned incidentally (not a usual practice or sale).   They are only subject to the terms of the gift, and legal uses of non-state, non-federal funds.

 

230@@@

 

· Undergraduate Student Scholarships 240@@@
· Contracts and Grants FUND Type "29"
· Other Sponsored Activities FUND Type "29"

3) Loan Funds. Loan Funds consist of loans made and resources which are available for financial loans to Institute students.

Activities accounted for in Loan Funds include

·

Loan Funds 410@@@

4) Endowment Funds. Funds in which the original principal must remain intact (nonexpendable) in perpetuity and only the income earned (dividends and interest) can be expended.

Exhibits accounted for under Endowment fund include

510@@@ Quasi Endowment Funds

610@@@ Endowments

5) Plant Funds. Plant funds group is used to account for funds to acquire long-lived assets for institutional purposes. There are subgroups provided for in the plant funds group:

· Unrestricted Plant Funds 910@@@
· Restricted Plant Funds 920@@@
· Internal Plant Funds 914@@@
· Retirement of Indebtedness 940@@@
· Investment in Plant 950@@@
· Renewals and Replacement 930@@@

Source of money for the Unrestricted Plant Funds (910) is the NM Land and Permanent Fund plus the NM Severance Tax Fund. Projects funded from this FUND group are determined internally.

Restricted Plant Funds (920) are generally from an outside source earmarked for a particular project. Funds are generally restricted by the State of NM who is the largest source of plant funds. However, restricted plant funds can also come from other government or private sources. In addition, the funds from a bond issue are also restricted to a particular project.

Internal Plant Funds (914) are generally money loaned to a revenue generating department such as Auxiliary for capital improvements not funded by the state or other sources.

Retirement of Indebtedness (940) FUNDs reserved to pay outstanding bond principle and interest. The source of money is determined by the bond issue. The actual bond is recorded in the 950 exhibit.

6) Agency Funds. Agency funds consist of funds held by the Institute as custodian or fiscal agent for others. The resources are deposited with the institution for safekeeping, to be used or withdrawn by the depositor at will.

Exhibits included in this fund group

810@@@
820@@@ Benefit Trust
830@@@ Investment Pool memo account to track investment pool activity

B. Transfers

Transfers represent changes in spending authority. The main reason for any transfer is to allow the receiving FUND to use money currently held in the transferring FUND. This could be for immediate use in order to increase the spending authority of the receiving FUND or for future use as in the case of a reserve FUND or renewal and replacement FUNDs.

Since transfers always move funds from one FUND to another they must always be in balance within themselves. In addition, transfer account codes are never used to correct erroneous charges in a FUND.

For all FUNDS beginning with 101@@@ (INDEX codes beginning with alpha character A, B, C, D, E if not part of G&C exhibit) the budget determines the authority to spend.  If the transfer is to go to or come from a department within this FUND group the request must be forwarded to the Budget Office in order for them to initiate a budget revision to properly reflect the change in spending authority a journal entry is then prepared and posted.

Inter-fund transfers that is transfers which cross FUNDs or exhibits must be recorded as follows:

from 782012 to 582012 if non-mandatory or
from 781@@@ to 581@@@ if mandatory.

Intra fund transfers that is transfers within the same FUND or exhibit will use the following object codes:

from 782010 to 582010

C. Cost Sharing

Cost sharing refers to NMIMT’s participation in the expenditures of a sponsored program or project. Cost sharing can be mandatory if required by a sponsor as a condition of the award, or it is voluntarily offered by NMIMT as an inducement for award consideration. They should not be viewed as inter-fund transfers.

Refer to the cost share policy for a full discussion on tracking mechanisms for cost share arrangements.

 

References:

1 NACUBO – National Association of College and University Business Officers, College and University Business Administration 1992, Fifth Edition.

NACUBO – National Association of College and University Business Officers – Financial Accounting and Reporting Manual for Higher Education Release 97-3.