General Ledger FAQ
How does error correction occur? There are two primary methods for error correction. For e-doc errors (very rare due to the on-line edits applied at document creation) and other enterprise level systems (Student, Travel, etc…), the General Ledger Correction Process (GLCP) e-doc is used to correct the error(s) and set the entries back up for processing during the next accounting cycle. The GLCP document provides an auditable trail and access is limited to a centrally controlled workgroup. Transactions originating outside the on-line environment from non-enterprise systems are handled differently. When errors are found from these feeds a notification is sent back to the originating department and they are then responsible for correcting the error. Typically these units are Interdepartmental Billing units.
When the scrubber detects an error do the rest of the transactions on a document post? No. The primary responsibility of the de-merge process is to identify all of the transactions for a document found to have errors and put those transactions is a working table for later processing by the GLCP document. If one transaction on a document has an error the entire document is flagged and none of those entries post until the correction is made. This prevents an out of balance situation within the General Ledger.
How does Capitalization occur? Capitalization occurs by organization. Each organization is set up with its own moveable and non-moveable plant fund account numbers. As expenditures occur in the General Ledger these items are capitalized in the appropriate plant fund account number for the organization incurring the expense. The capitalization process also relies on object code sub type mappings to determine which balance sheet object code to use when capitalizing an item. For example, object code 7000 has an object code sub type of CM (capital equipment moveable). CM maps to object code 8610 on the balance sheet. Setting up plant funds by organization and mapping expenditure object code sub types to balance sheet object codes lets us create balance sheets at various levels: by organization, responsibility center, campus, etc…
How do you handle cost share? There are two types of sub accounts in the system: expense and cost share. For cost share sub accounts, additional attributes are required that identify the source chart, account number, and sub account number that is to cover the costs incurred by the cost share sub account. Each time the accounting cycle runs expenses in a cost share sub account are automatically covered by a system generated transfer of funds. The transfer of funds moves money from the source accounting string to the cost share sub account for the amount of the expenses.
How often do you calculate Indirect Cost? Indirect Cost Recovery (ICR) is calculated each time the accounting cycle runs. Information contained on the account (rate, exclusions, revenue accounting string) and certain maintenance tables are used to calculate ICR based on eligible expenses. The system then automatically generates ICR expense and ICR income ledger entries for posting. In the event that a correction to the calculated ICR needs to occur, users can submit an Indirect Cost Adjustment (ICA) e-doc to fix the amount.
Are accounts self balancing? Flexibility is being designed into the Kuali Financial System to allow institutions to determine where balancing offsets should post. For example, an Interdepartmental Billing unit may send in a charge and an income record without the necessary hit to cash. In this case the accounting cycle would generate the necessary hits to cash to balance both the expense and income transactions. Institutions will have the option to have balancing offsets post to the same account as the original transaction or identify an accounting string where the offset should post. For each account in the system you can set up an offset accounting string by object code (i.e., cash, accounts receivable, accounts payable, etc…), then if the scrubber determines a balancing offset is needed it will create it with the proper accounting string.
Can we view pending items? The balance inquiry screens provide an “include pending” option. This will allow users to pull in pending transactions and view them along with posted transactions to gain a more complete view of the financial well being of an account. Many of the balance inquiry screens also allow the user to drill down on the balances and pull up e-docs that support the balances.
Can you process in both the current and old fiscal year and year-end? Yes. At year-end we activate a special set of “Year-End” e-docs. These documents continue to post to period 12 and 13 (June and Closing for us) of the old fiscal year, while the normal set of e-docs post to the new fiscal year. In essence we have two sets of books open simultaneously. We also take snapshots of key account and organization information at June 30 for year-end reporting purposes.