Guidance about account codes

Generally, we should all strive to code transactions using the most accurate account code available.  However, some distinctions are for the benefit of department financial management and some distinctions are required for compliance with federal regulations.  Here are some helpful tips:

• Pick the correct category

It does matter that you get the broad category correct, and that basically aligns with the account C level:

C700     Salary and Wage Expenses

C720     Total Benefit Expenses

C740     Scholarship Expenses

C750     Supply and Material Expenses

C760     Travel Expenses

C765     Utility and Rent Expenses

C769     Sub-Contract Service Expenses

C772     Professional Fees and Services

C800     Other Expenses

C895     Internal Charge Accounts

Generally, most departments should avoid these:

C870     Depreciation and Amortization (Property Acct, Svc Ctr)

C880     Operating Interest Expense (Property Acct)

C900     Non-operating Interest Expense (Property Acct)

C910      Other Non-operating Expense (Property Acct, RMC)

C920     Non-op Investment Expense (Investment Acct, RMC)

C929     Non-operating Release of Restrictions (Investment Acct)

C930     Life Income Annuity (Investment Acct)

C940     Total Equipment Disposal Gain or Loss (Property Acct)

C990-999     Conversion and suspense

However, once you are in the correct broad category, the details matter less.  Is it an educational supply or an office supply?  That level of detail is mostly for management, for your benefit.

• But for a few accounts the details do matter, primarily because these costs must be accurately identified for the university-wide calculation of our overhead (F&A) rate and/or for federal compliance:
• Dues and memberships – professional associations (7531) should be distinguished from entertainment (e.g. country club, 8166)
• Business meetings (8180) should be distinguished from entertainment (8160). Business meetings have a business purpose and an agenda, while entertainment offers enjoyment and relationship-building.
• Flowers, gifts, and donations (8162) should be accurately coded, since these must be excluded from the F&A rate regardless of department. Any charitable donation receipt you receive should be sent to the tax department of the Controller’s Office at MS 70.
• Alcoholic beverages (8161) should be accurately coded, since these must be excluded from the F&A rate regardless of department.
• Fines, penalties, and late fees (8043) should be accurately coded, since these must be excluded from the F&A rate regardless of department.
• Human subjects (7720) should be accurately coded and any use of human subjects in research should have the IRB protocol information noted.
• Professional fees and services of all types (77xx PF&S) should be accurately coded, since these payments can result in tax reporting on form 1099.
• Scholarship payments for tuition or room and board, for any type of student (undergrad, grad, visitor, preceptor, whatever), should be accurately coded, since these payments can result in tax reporting on form 1098-T.
• Rental expenses from leased facilities (7670) should be accurately coded so the university can comply with accounting rule ASC 842.

As always, there is some nuance about allowable/unallowable costs under certain conditions, particularly for sponsored projects, and when in doubt you should check with the Controller’s Office.