Financial Structure and Master Data Establishment

The following master data elements and financial structure are clearly defined. It is important for finance staff to understand what each element represents, how elements are classified and are used within the structure. Three decision trees, Funded Program Type, Department Account Classification and Faculty Allocation Nodes help the requestor or creator of the internal order/work breakdown structure identify the best fit. The Master Data Theory and Creation showcase outlines the below information and provides an eight page resource that lists funded program types, defines department account classification and institutional grouping, lists type rollup by fund and funded type program and when to create an internal order vs. WBSE for faculty allocations.

Finance Structure Pyramid

Financial Structure Diagram
  • IOs and WBSEs are the lowest level of the new accounting structure.
  • WBSEs are the equivalent of an IO and are used for faculty allocation accounts.
  • All other organizational data elements are derived from the IO/WBSE:
    • Cost Center
    • Business Area
    • Segment
    • Campus
    • Company Code
  • Income statements (revenue, expenses, transfers) are available for all IOs/WBSEs.
  • Available balance is calculated at the IO/WBSE level.
  • IOs/WBSEs are created primarily by business office staff and kept in a held status until a DFA or ADFA reviews and releases them for postings.
  • In FM, IOs/WBSEs are matched with an identical Funded Program.
  • Cost Centers represent organizational units to which IOs/WBSEs AND positions are assigned.
  • There are very limited exceptions to this requirement which include Central Office cost centers and Recharge/Digital Ed cost centers.
  • Every Cost Center in the Finance structure has an equivalent Department (i.e. Org Unit) in the HR structure.
  • Creation of a new Cost Center requires the approval of both HR and the Comptroller’s Office to verify need.
  • Income Statements (revenue, expenses, transfers) are available for all Cost Centers.
  • FTE and Headcount is available for all Cost Centers.
  • Capital assets are also tracked by responsible Cost Center.
  • Cost Centers in FI/CO will be matched with an identical Funds Center in FM.
  • Cost Centers can ‘roll-up’ to another Cost Center and are arranged in a three-level hierarchy: Financial Unit, Financial Sub-Unit, and Program.
  • Financial Units are required to have annual budget plans.
  • Annual budgets are optional for Financial Sub-Units and other Cost Centers.
  • Lower level Cost Centers should still represent units which own positions, have a leader, and have accountability for determining how funds are used.
  • Cost Center Category and alternate hierarchies will be used for some reporting needs
  • A Business Area is primarily a grouping of Cost Centers.
  • Business Area is similar to Major Unit, but is not an exact replacement.
  • Income Statements (revenue, expenses, transfers) are available for all Business Areas.
  • Business Areas represent:
    • Colleges
    • Athletics Departments
    • Units led by individuals who directly report to a Segment Executive and have annual expenditures greater than $7.5M
    • Units which have a reporting requirement that necessitates an SAP-generated balance sheet.
  • Business Area is the lowest level at which SAP-FI automatically tracks all balance sheet components.
    • Some components are tracked at lower levels.
      • Capital Assets at the Cost Center level.
    • Some are only tracked by Business Area.
      • Cash, Inventory
      • These components are not attributed to a Financial Unit or Cost Center, but can be reconciled to them
  • Segments are simply groupings of Business Areas.
  • Segments represent the grouping of Business Areas for which each Executive is responsible.
  • No financial information is available for segments that isn’t already available for all Business Areas.
  • Campus reporting in the future is accomplished by grouping segments
  • Available for Purdue West Lafayette, Purdue Northwest and Purdue Fort Wayne.
  • Separates distinct legal entities which have entries in SAP
  • Available for Purdue International Inc., Purdue Global and Purdue University.

Financial Information Availability

Financial Information Availability

The faculty allocation structure allows the faculty to view all their accounts in one view. (Only allocations that would not be considered departmentally managed or owned should be incorporated into the Faculty Allocation structure.) The faculty allocation structure:
  • Allows departments to identify and segregate resources allocated to faculty for their individual activities.
  • Utilizes the Work Breakdown Structure Elements (WBSE)
    • The WBSE can be assigned to both a project and a Cost Center.
    • Using dual assignment allows the account to be assigned to the responsible department, as well as to the responsible faculty member.
Faculty Allocation Project Structure
Faculty Allocation Diagram and Definitions
  • Project – The WBS project is the highest level in the Work Breakdown Structure (WBS) and identifies the faculty member managing the account.
    • Starts with ‘F’ and is followed by the managing faculty member’s Person ID.
      • Example: F.90001234.02.001
  • Node – The WBS node is the second level in the WBS. It organizes accounts into predefined categories.
    • The 2 digits after the first decimal.
      • Example: F.90001234.02.001
  • Element – The third and lowest level of the WBS where revenue and expenses are posted
    • The last 3 digits in the address.
      • Example: F.90001234.02.001
  • This node is only to be used by units with federal appropriations and matching funding which include Agriculture, Vet, and Health and Human Sciences.
  • WBSEs will be established to track what portion of a faculty member’s salary is charged to the department’s allocation of Federal Appropriations, State Line Items or General Funds.
  • The only node that contains Operating funds.
  • Node 1 WBSE’s balance is calculated from a CO Plan value.
  • This node holds Grant accounts for the faculty member when they are listed as Co-PI of the WBSE.
  • These nodes are for accounts that do not have restrictions on types of expenses or on what projects or programs are benefited by the expenditures.
    • Examples: Research Discretionary, Faculty Scholar Allocations, Grant Residuals, Digital Education Residuals, and Faculty Awards
  • Allocations that have expiration dates but no other restrictions should be assigned to the Discretionary node.
  • Node 3 is designated for assigning WBSEs that should have a balance calculated from the Revenue Increasing Budget (RIB) value.
  • Node 4 is designated for assigning WBSEs that should have a balance calculated from a CO Plan value.
  • This node holds the faculty member’s Start Up Allocations.
  • Multiple WBSEs may appear in this node if the department has restrictions on how certain portions of the start up can be used. 
    • Example: A start up with both a Discretionary Allocation and an Equipment Allocation.
  • Node 5 WBSE’s balance is calculated from a CO Plan value.
  • These nodes contain allocations that support a faculty member’s activities but have some restrictions on how the funds can be used.
    • Examples: Research Seed Grant, Research Lab Upgrade, IMPACT Allocations
  • Node 6 is designated for assigning WBSEs that should have a balance calculated from the Revenue Increasing Budget (RIB) value.
  • Node 7 is designated for assigning WBSEs that should have a balance calculated from a CO Plan value.
  • The Faculty Allocation Node Decision Tree provides guidance to selecting the correct node.
  • The below diagram can be helpful when determining if an internal order or a WBS element should be used. 

if an internal order or a WBS element should be used. (it’s attached)

Business management (director of financial affairs, assistant director of financial affairs and business managers) can request creation of internal orders and work breakdown structure elements. Accounting services audits, approves and releases the order. They post-audit the WBS element. Cost center master data is created by human resources and the comptroller. Creating master data correctly is very important. The information contained in master data is often used for reporting. ‘Type rollups’ offer the ability to group and/or derive master data elements. The following information explains how establishing master data correctly, impacts the structure and enables standardized reporting. This quick reference outlines Type Rollups and the associated Funds and Funded Program Type.

 The information contained in master data is often used for reporting. ‘Type rollups’ offer the ability to group and/or derive master data elements. The following information explains how establishing master data correctly, impacts the structure and enables standardized reporting.


Correctly established master data will allow derivation to work properly in transactions and enable standardized reporting. 

  • Derivation:
    • Derivation is the process of determining what Fund, Functional Area, and other values should be assigned to each transaction based on what is stored on the Master Data of the IO/WBSE.
  • Reporting:
    • The Master Data created upon account setup will be used for reporting purposes.
    • It is important to thoughtfully create the data with the proper elements and information so as not to result in future reporting errors.
  • Substitution:
    • Substitution is determining what some Master Data values should be on the IO/WBSE by looking at other values.  ◦For example: The Institutional Grouping value is determined through substitution based on the DAC.
  • Internal Order/WBS Reporting Master Data

Internal Order/WBS Reporting Master Data

Internal orders and work breakdown structure elements contain the following master data items. The requestor is responsible for entering fund and funded program type, department account classification (dac), responsible cost center, functional area and other fields. The following terms and definitions are important to know.

Master DataDefinition and Classification/Type 
Fund Fund reflects the GASB requirement for reporting restricted vs. unrestricted. It defines the restriction applied to the funding source. 
Funded Program Type The Funded Program Type reflects restrictions as Purdue wants to see them. The type is determined primarily by the fund.
(Funded Program) Type Rollup The rollup is simply a grouping of (and derived from) funded program types. 
Functional Area

Functional Area (FA), Functional Area (FA), Public Indicator and Available Indicator all serve the same purpose as today, but at a lower level.

  • An additional FA, Departmental Research, has been added.
  • Governance changes are being made with regard to Public Indicator to mitigate number of accounts classified as ‘mixed’.
An additional FA, Departmental Research, has been added. Governance changes are being made with regard to Public Indicator to mitigate number of accounts classified as ‘mixed’.
Departmental Account Classification (DAC) The DAC provides an additional reporting layer by subdividing ‘operating’ by reserves, debt and programmatic allocations and ‘non-operating’ by endowments, capital and capital reserve.
Institutional Grouping  The Institutional Grouping is derived from the DAC, provides categorizations for ease of reporting and eliminates the need to cross-reference multiple fields (Operating, Non-Operating, Faculty Allocation, Grants). 
Responsible Cost Center The responsible cost center provides an organizational view.

Other important terms/definitions related to reporting:

Revenue Increasing Budget (RIB) RIB is a mechanism for calculating balance continuously using actual revenues and expenses.
Alternate Budget Address An alternate budget address for RIB entries that does not match the posting address a budget address for RIB entries that does not match the posting address.
SOFA  Statement of Financial Activity

Funded Program Type

Fund
  • Fund categorizes restrictions on accounts from the funding source
  • It reflects GASB requirements for reporting Restricted vs. Unrestricted
  • It also incorporates internal decisions to separate funds restricted for different purposes for ease of management and reporting
    • For example: Separate funds for scholarships and non-scholarship gifts
  • 61 Total Funds
    • Only 22 of which are used outside of Central Offices
    • 14 for Federal Appropriations and matches in Ag/Vet/HHS
    • Most departments will use five or less
    • 23 for Construction (22 for different Bond Series)
    • Three for Endowment and Purdue Investment Pool – Cash (PIPC)
    • 13 for Non-Scholarship Student Aid

Funded Program Type

Funded Program Type
  • The Funded Program Type reflects restrictions as Purdue wants to see them
  • Determined primarily by the fund
    • All but five of the Non-Construction funds correspond to only one Funded Program Type
    • For the remaining five, there are only two or three type options
  • However, on Transaction Postings, the Funded Program Type is used to help derive the correct Fund.
    • For example: Discretionary gifts for a specific department are restricted according to GASB (Fund), but unrestricted according to Purdue (Funded Program Type)
    • Construction is divided between the Plant and Debt Funds, but Funded Program Types enables viewing construction by New Buildings, Major Renovations, R&R, Utilities Projects, Debt.

The following tables define unrestricted, restricted, scholarships/AID, income producing, college of AG, VET and HHS funded program types, Enterprise Asset Management (EAM) and Other types such as Debt.

Funded Program TypeDescription/Use 
Unrestricted to Department Identifies general fund accounts that are not otherwise classified as Income Producing – Other or Digital Ed/Conferences
Unrestricted to Department – Gifts

Identifies gift accounts that have no restrictions on their use, beyond specification of which department is to receive the funds.

Funded Program TypeDescription/Use 
Restricted – State Line Identifies accounts funded by Indiana state appropriation line items.
Restricted – Gifts Identifies gift accounts that have restrictions from the donor on the use of the funds (except to specify what unit is to receive the gift).
Restricted – Other Identifies accounts that operate using the Agency, Endowment, PIPC or Restricted-Other funds and that are not appropriately classified by other funded program types.
Restricted – Grant Identifies all accounts linked to grants that are funded by the sponsor (as opposed to cost share)
Funded Program TypeDescription/Use 
Restricted – Unrestricted and UG Scholarship Identifies all scholarship accounts that are unrestricted or restricted to undergrad/professional students. Replaces the 6201 fund sub-type. 
Restricted – Graduate Scholarship/ Fellowship Identifies all scholarship and fellowship accounts that are restricted to graduate students. Replaces the 6208 fund sub-type.
Restricted – Student Award

Identifies all scholarship accounts that are classified as awards. Replaces the 6301 fund sub-type.

Restricted – Other Student Aid

Identifies all student loan, federal work study and federal student aid accounts.

Funded Program TypeDescription/Use 
Income Producing – Recharge/ General Service Identifies accounts for operations defined by the Income Producing Operations governance policy as being Recharge or General Service Centers.
Income Producing – Ancillary Identifies accounts for operations defined by the Income Producing Operations governance policy as being Ancillary operations.
Income Producing – Auxiliary Identifies accounts for operations defined by the Income Producing Operations governance policy as being Auxiliary operations.
Income Producing – Other

Identifies accounts for operations defined by the Income Producing Operations governance policy as being Income Producing-Other operations.

Digital Education/Conferences Identifies accounts used to manage Digital Education and and Conference activities. 
Funded Program TypeDescription/Use 
Restricted – Regulatory Identifies accounts associated with the regulatory functions assigned to the College of Agriculture by the State.
Restricted – Commodity Identifies accounts associated with the commodity oversight and/or management functions assigned to the College of Agriculture.
Restricted – County Extension Identifies accounts associated with the county appropriation funding managed by the College of Agriculture.
Restricted – Federal Appropriations

Identifies accounts funded by federal appropriations (used primarily in WL Colleges of Agriculture, Vet, and Health and Human Sciences)

Funded Program TypeDescription/Use 
New Buildings Identifies construction accounts associated with New Building construction (as defined by the Enterprise Asset Management project).
Major Renovations

Identifies construction accounts associated with Major Renovations construction (as defined by the Enterprise Asset Management project).

R&R

Identifies construction accounts associated with R&R construction (as defined by the EAM project).

Utilities Projects

Identifies construction accounts associated with Utilities Projects construction (as defined by the Enterprise Asset Management project).

Funded Program TypeDescription/Use 
Debt Identifies accounts associated with the issuance and maintenance of bonds.
Other

To be used only as directed by the Business Process Reengineering team.

Type Rollup

Type Rollup
  • Type Rollup is simply a grouping of (and derived from) Funded Program Types
    • Unrestricted
    • State Line/Federal Appropriations
    • Restricted Gifts
    • Student Aid
    • Income Producing
    • Grants
    • Other Restricted
    • EAM
    • Other
Default Fund by Type Rollup 
Type Rollup (Derived from FP Type)Funded Program TypeDefault FundMultiple Funds?
Unrestricted Unrestricted to Dept - General 21010000 Y
Unrestricted to Dept - Gifts 53010000
State Line / Fed Approps

Restricted - State Line

Y
Restricted - Federal Appropriates
Restricted Gifts Restricted - Gifts 53010000
Student Aid Restricted - Unrestricted & UG Scholarship 65010000
Restricted - Grad Scholarship / Fellowship
Restricted - Student Award
Restricted - Other Student Aid Y
Income Producing Income Producing - Recharge / General Svc 22500000
Income Producing - Ancillary
Income Producing - Auxiliary 24500000
Income Producing - Other 21010000 Y
Digital Ed / Conferences
Grants  Restricted - Grant 46010000
Other Restricted Restricted - Regulatory 36010000
Restricted - Commodity
Restricted - County Extension
Restricted - Other Funds Y
EAM New Buildings 85010000 Y
Major Renovations
R&R
Utilities Projects
Debt
Other  Other

DAC grouping

The requester selects the appropriate Department Account Classification (DAC) in order to better identify activities in the operating and non-operating groupings.

  • The DAC provides an additional layer to some of the Statement of Financial Activity (SoFA) slices
    • Non-Operating subdivided by Endowments, Capital, and Capital Reserves
    • Operating is subdivided by Reserves, Debt, and Programmatic Allocations

Institutional Grouping is a master data field primarily intended to replicate the major slices of the Statement of Financial Activity without the need for complex logic to be coded into reports to create these slices.

  • The Institutional Grouping is derived from the DAC and provides the categorizations necessary to produce the major SoFA slices without having to cross-reference multiple fields.
    • Operating, with Faculty Allocations and Grants separately identifiable
    • Non-Operating

The DAC decision tree provides guidance in selecting the correct classification.

DAC Groupings by Non-Operating and Operating
Non-OperatingOperating
Institutional GroupingNon-OperatingOperatingFaculty AllocationGrants
Dept Account Classification Capital Operating Faculty Allocation Grants
Reserves - Capital Operating - Allocated
Reserves - Equipment
Reserves - R&R
Reserves - General
Reserves - Institutional
Debt
Department Account Classification Grid

Click on example below to open within Excel.

Department Account Classification Grid

IO/WBSE Reporting Master Data

The following fields are entered by the requester, when applicable.

  • Institutional Attributes identify accounts for specific activities that need to be tracked across the institution.
    • Digital Education – For Credit
    • Digital Education – Non Credit
    • Conferences
    • Study Abroad
    • Startup
    • Professorships
    • Internal Grants to Faculty
      • Currently managed in GM
  • They are only used to track activities that require unique accounts.
  • Used for reporting on Federal Appropriations.
  • Eliminates custom table in SAP.
  • Separates line item funding/activity that is using a single fund.
  • Defaults to 12/31/9999 for all accounts.
  • Change date for accounts which expire
  • Optional piece of master data.
  • Used to provide a longer description of the accounts purpose.
  • The character limit is 150. 
  • Denotes if the account contains public funding.
  • Public funding includes:
    • Tuition and Fees
    • State and Federal Appropriations
    • Funds considered to have come from a public source for the purpose of supporting the University's core mission
    • Public and Mixed accounts cannot be consolidated with Non-Public accounts in an IO.
    • For all units except Agriculture/Vet/Health and Human Sciences, Public and Non-Public revenues and transfers allocated to faculty may be combined into a single WBSE.
    • For Agriculture/Vet/Health and Human Sciences, WBSEs need to follow the same rule as IOs. 

Due to requirements related to the matching of federally appropriated funding with general funds, Business Areas which receive and match federal appropriations (primarily, Colleges of Agriculture, Veterinary Medicine, and Health and Human Sciences) will also separate WBSEs receiving non-public funding from those that receive public funding.

  • Tracks whether an account is available or unavailable for use to repay debts (bonds).
  • Unavailable sources include:
    • State Funds
    • Tuition and Fees
    • Other legally pledged funds
Understanding Revenue Increasing Budget (RIB) and Alternate Budget Address with I/O or WBS
  • An Alternate Budget Address exists when the Budget Address for Revenue Increasing Budget (RIB) entries for an IO/WBSE does not match the posting address.
  • Having an Alternate Budget Address facilitates tracking of specific revenues and/or expenses within an activity.
  • A ‘Parent’ IO/WBSE receives RIB entries for itself and possibly other accounts.
  • A ‘Child’ or ‘Subsidiary’ IO/WBSE has a budget address that is different than its posting address.
    • No RIB entries occur on a Child IO/WBSE.

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