Why are new gift cost centers needed?
- New cost centers were created for (at least) two reasons:
- Few if any cost center numbers were available for new endowments and some other types of accounts.
- Gifts are considered "expendable restricted" funds. By putting them in a new 9xxxxxx cost center, we can classify all gifts as expendable restricted. In the past, cost centers' carryforwards were manually computed to identify the gift carryforward (which is restricted) and regular carryforward (which is unrestricted). The new cost centers will more clearly identify the expendable restricted funds for departments and for financial reporting purposes.
Why is this only affecting 2xxxx, 3xxxx, and 4xxxx accounts?
No new cost centers were required for endowments or plant fund gifts since these are already restricted funds.
Do the old 2xxxx, 3xxxx, and 4xxxx cost centers still exist?
Yes. They still exist and will be used for their intended purposes, with the exception that gift revenue will now be recorded in the new 9xxxxxx cost center. If the old cost center was established for gifts only, then it should be closed.
Are we keeping the 66xxx endowment cost centers?
Yes. These are already considered restricted funds so a new 9xxxxxx cost center number is not needed.
Will new endowment holding accounts have a new gift cost center number?
Endowment holding accounts have traditionally been established in the 49xxx cost center range. These accounts are ones which the University expects to receive more than $10,000 in gifts but have not yet reached this level. Once this level has been reached, an endowment account can be established. All 49xxx with balances as of July 1, 2008, will be assigned a new cost center number and the old 49xxx will be blocked/closed. Any new future endowment accounts needed after this date will receive a 9xxxxxx cost center.
Will 64xxx (scholarships) accounts have a new gift cost center number?
Because scholarship cost centers are already considered expendable restricted funds, no new 9xxxxxx cost center is required.
What is the numbering scheme that will be used for the new cost centers?
Some confusion has arisen about the new cost center numbers. They are seven digits in length. All of these cost centers begin with the numeral "9." They are not 9 digits in length. By increasing the field length for these cost centers, there should be adequate room for adding new cost centers as needed by various departments.
The numbering scheme used for the new cost centers is designed to provide the information required for financial reporting of restricted funds. The following categories are used for the new cost centers:
91xxxxx Instruction 96xxxxx Institutional Support
92xxxxx Research 97xxxxx Operation and Maintenance of Plant
93xxxxx Public Service 98xxxxx Scholarship & Fellowship (previously 28xxx)
94xxxxx Academic Support 99xxxxx Future Endowment
95xxxxx Student Services
Are gifts the only revenue being posted to the new gift cost centers?
Yes, the only revenue being posted to the new 9xxxxxx cost centers will be gifts received and processed through Development beginning in July 2008 or transfers of gifts from your old cost center to the new 9xxxxxx cost center in July 2008.
When making non-gift deposits, do we use the new gift cost center or the usual 5-digit cost center?
All non-gift deposits will go to old (5 digit) cost centers. Only gift revenue will go into the new 9xxxxxx gift cost centers beginning July 2008. All gift revenue must be processed through Development
Will the new gift cost centers be used like a regular cost center?
Only gifts should be recorded as revenue in the 9xxxxxx cost centers. The funds should be spent in accordance with the donors' intentions (or restrictions).
Gifts of $25,000 or more are recorded in their own cost center. The spending of such gifts must be recorded in the gift cost center. These gift funds cannot be transferred to a 2xxxx, 3xxxx, or 4xxxx account to offset expenses incurred there.
Purchase orders can be assigned to these new cost centers when spending the gift funds on supplies and equipment. If the expense was incurred on a credit card, the necessary reclassification can be made via ActivePay.
Departments should spend gifts funds directly from their new 9xxxxxx account. Whenever possible, the charge should be made directly to the 9xxxxxx account in order to best illustrate that the gifts were spent in accordance with the donors' wishes. If a department incurs expense in their 2xxxx, 3xxxx, or 4xxxx account that is to be funded by gift revenue, the department should submit a journal entry to move the expense from the 2xxxx, 3xxxx, or 4xxxx account to the new 9xxxxxx gift account. The journal entry request must state what the gifts funds were spent for and provide supporting documentation for the expenditure.
Departments need to be cautious that their spending from a new gift cost center does not create a deficit in the 9xxxxxx. If a deficit arises, it must be covered.
Will colleges be able to put other money in the new cost center and take money out of it?
The only external funds that should be recorded as revenue are gifts. However, departments may need to transfer funds from another cost center to cover any deficit that arises due to over spending in the new gift cost center.
Will the new cost centers be just for gifts that run through the Development office?
All gifts must be processed through the Development office so that the donor receives the proper gift receipt and so that the University can more accurately track gift revenue. No other revenue should be posted to the new 9xxxxxx accounts.
Can a department transfer university funds into a gift cost center that is not theirs?
Only gift revenue (or gift carryforward) can be transferred into the new 9xxxxxx cost centers. If another department wants to help fund expenses for an event or project that is otherwise funded by a gift cost center, a journal entry is required to split the expenses between the two cost centers. The non-gift funds should not be moved into the 9xxxxxx cost center.
What is going to happen with my "old (1 year or more)" gift money? Will it stay in my 4xxxx account or will it be moved into the new gift cost center?
All gift funds that remained in 4xxxx accounts as of June 30, 2008, were carried forward to the same 4xxxx account on July 1, 2008, using the g/l 599803 Carryforward - Gifts. An entry was processed on July 28, 2008, to transfer the unspent gift funds in the old cost centers to their new 9xxxxxx cost centers. When departments review their old cost center account activity, they will see the transfer to the new 9xxxxxx which received these funds.
If I need a new gift cost center, who do I send the cost center create form to?
All gifts are processed through Development. Development and Accounting Services will work in conjunction to create new cost centers on an as-needed basis. Accounting Services will inform departments of new 9xxxxxx cost centers established for their areas. A new cost center should be created when a cost center does not already exist that would accommodate the donor's intentions for the spending of the gift funds.
Can I use internal orders in the new gift account?
Yes, internal orders can be used with the new gift cost centers.