Accounting and Financial Reporting - Accounting

New Mexico State University

CHAPTER 1A - ACCOUNTING AND FINANCIAL REPORTING - ACCOUNTING

1A.00	This chapter provides detailed information on the Business and Finance Accounting Office. INTRODUCTION Accounting and Financial Reporting (AFR) is available to assist departmental personnel during various stages of Indexes (FOPALs) administration. This office is responsible for the following activities: Monitoring unrestricted Indexes (FOPALs), agency Indexes (FOPALs), and plant Indexes (FOPALs) Preparing NMSU's annual financial statements Preparing other financial reports Calculating the Facilities and Administrative (F&A) Rate Serving as audit liaison Maintaining NMSU property, plant, and equipment data Maintaining NMSU's administrative Financial System (FR) Maintaining documentation/support for all accounting transactions Preparing equipment reports to Federal agencies Assigning Indexes (FOPALs) to funds, organizations, programs, or activities combination Creating or terming funds, organizations, programs, activities or account Indexes (FOPALs) Instructions for Requesting New Indexes or New FOAPAL elements Overview: The FOAPAL consists of six independent parts. The parts have been grouped together; this grouping is controlled by the assignment of the individual values to a summary Index value. The Index value is six numeric characters that are used for data entry on both on-line forms as well as paper forms. In the Banner system, when an Index is entered, the budgetary string assignment of parts will be filled in on the transactional form you are using. A brief explanation of the parts is as follows: F=Fund. This is the main part of the new string and will account for all Net Asset items such as Cash, Accounts Payable, Fund Balance, etc. It is equivalent to the General Ledger. O=Organization. This part of the string represents the department, college, executive level organization as well as specific funding breakouts. A=Account. The account is the revenue or expenditure code as well as the Net Asset codes for Cash, Accounts Receivable, Fund Balance, etc. P=Program. The program defines how the funds are spent. These categorizations are instruction, research, public service, internal service, auxiliary, etc. A=Activity. This is a special code that will be used to track temporary events at NMSU such as special events concerts. L=Location. This is the building number and room number to be placed on fixed equipment records. Index. The index is a code that groups the FOPAL for ease of data entry and to define the budgetary unit. For all on-line transactions, the campus will enter the Index and an Account. For all transactions, the Fund, Organization, Account and Program values must be entered. An Index value has been assigned to assist in this entry process. For the most part, budgets will be checked at the Fund, Organization and Program level. When requesting new FOAPAL values, it is necessary to determine which part of the FOAPAL does not currently exist in the system. If you have any questions, please call Accounting and Financial Reporting. NOTE: Throughout the manual, all signatures referred to must be original signatures; facsimile signatures, initials and signing another employee's name are not acceptable for internal control purposes. [ back to top]

1A.05	AGENCY INDEX (FOPAL) AND PLANT INDEX (FOPAL) INTRODUCTION This section provides an introduction to Plant and Agency Indexes (FOPALs). Plant AFR is responsible for assigning and maintaining plant fund Indexes (FOPALs) and capitalizing costs, which is the adding of costs from capital projects to the value of the University's fixed or plant assets. AFR will interpret this policy when necessary. Agency AFR is responsible for creating and maintaining agency Indexes (FOPALs). This includes being responsible for the agency Indexes (FOPALs) created for student organizations recognized by the Associated Students of New Mexico State University (ASNMSU) and all other agency Indexes (FOPALs) created through NMSU. AFR will interpret this policy when necessary. [ back to top]

1A.05.05	Agency Indexes (FOPALs) Defined Agency Indexes (FOPALs) are monies held by an institution acting as custodian or fiscal agent. The monies are deposited with the institution for safekeeping, to be used or withdrawn by the depositor at will. These Indexes (FOPALs) may be held on behalf of students, faculty, staff, organizations, or some other third party (collectively referred to as "organization")1. The University is simply acting as the "bank" for agency Indexes (FOPALs). [ back to top]

1A.05.10	Agency Indexes (FOPALs) Assigning Indexes (FOPALs) An organization must submit a written request for a new agency Index (FOPAL) to AFR. The Questionnaire for Establishing Agency Indexes (FOPALs) is available on the Business and Finance Website under Reports/Forms http://www.nmsu.edu/~boffice/. The organization completes the Questionnaire and submits it to AFR for distribution. AFR will decide if the Index (FOPAL) request meets the definition of an agency Index (FOPAL). If it is determined that an agency Index (FOPAL) is appropriate, an Index (FOPAL) will be set up. An authorized person must be assigned to the Index (FOPAL), and will be the contact person. They must have the authority to approve the disbursement of monies for the organization.

1A.05.15	Agency Indexes (FOPALs) Procedures Direct Pay Requests Direct Pay Requests are to be used for all external Index (FOPAL) purchases made on agency Indexes (FOPALs), including travel. Reimbursement Vouchers cannot be issued on agency Indexes (FOPALs) since they are intended for the reimbursement of expenses paid by a University employee for a University purpose. Use of personal monies by a University employee for an agency Index (FOPAL) purpose can be reimbursed on a Direct Pay Request. Turn around time for Direct Pay Requests will be in the same time frame as for University check requests. The Financial Operations Department (FO) does not review or audit Direct Pay Requests for agency Indexes (FOPALs), but they will ensure that the top and bottom portion of the Direct Pay Request balances, and that a fiscal monitor's signature is present. The fiscal monitor is responsible for determining that a sufficient cash balance exists and that the Direct Pay Request has the authorized signatures. Since monies in agency Indexes (FOPALs) belong to a third party, most expenditure types will be allowed. *NOTE:* Vendors are transacting with the organization and not with the University. As such, vendor billings should be made to the name of the organization and not to New Mexico State University. These billings should not be mailed directly to Financial Operations, but mailed directly to the responsible person for the agency Index (FOPAL). Internal Purchases Agency Indexes (FOPALs) can be charged by Interdepartmental Voucher (IDV) when goods and services are purchased from campus departments. If insufficient monies exist in an agency Index (FOPAL) when an IDV is presented for fiscal monitor's approval, the IDV will be returned to the department originating the IDV. It will be the department's responsibility to collect for amounts owed by an organization. Interdepartmental vouchers can be used by agency Indexes (FOPALs) when charging campus departments for sales of goods or services to campus departments. Accounts Receivable The University Accounts Receivable (UAR) Office cannot send invoices to donors, contributors or participants on behalf of an organization holding an agency Index (FOPAL). Petty Cash University Petty Cash Funds cannot be established by agency Indexes (FOPALs). Cash can be withdrawn by completing a Cash Withdrawal form and presenting the form to the Cashier's Office located in the Educational Services Building. As with Direct Pay Requests, the responsible person and fiscal monitor signatures are required before the disbursement of monies. Purchasing Purchase Orders (POs) are not issued for agency Indexes (FOPALs). The issuance of a PO number implies a University legal commitment to purchase. Travel Authorizations Travel authorizations are not issued on agency Indexes (FOPALs). Airline tickets cannot be charged to University agency Indexes (FOPALs) at travel agencies. Travel advances should be made directly from the agency Index (FOPAL) via Direct Pay Request or cash withdrawal. If any portion of student club travel is to be paid from an agency Index (FOPAL) that portion is shown as "cost to external" on the travel authorization. A Direct Pay Request or cash withdrawal for the portion to be paid from an agency Index (FOPAL) can accompany the travel authorization. Payroll Payroll expenditures cannot be charged to agency Indexes (FOPALs) through the University Payroll System, nor can payroll expenditures be transferred into agency Indexes (FOPALs) from a University Index (FOPAL). A University employee acting as a private contractor to an organization, however, may be compensated by Direct Pay Request for services rendered to the organization. Property Equipment purchases in excess of $1,000 should be charged to object code 780700, and, if placed on University premises, tagged by the Property Office as non-University property. If the responsible person of an agency Index (FOPAL) wishes to donate such equipment to the University, a letter must be sent to the Property Office with a copy to the University Advancement Office detailing the donation. Tax-Exempt Status The University's tax-exempt status does not apply to agency Index (FOPAL) purchases. Tax Remittance The University does not assume the responsibility for complying with tax laws on behalf of the organization, such as submission of Federal tax form 1099 or the remittance of New Mexico Gross Receipts tax. [ back to top]

1A.05.20	Agency Indexes (FOPALs) Use of In general, Agency Indexes (FOPALs) monies are the property of the organization and can be withdrawn or disbursed at its discretion. The University has no liability for the expenses and no claim on the surplus, or Index (FOPAL) balance, unless the remaining surplus has been abandoned. Surplus is considered abandoned if the fund balance of an Agency Index (FOPAL) has not changed in three fiscal years and the University has not been formally instructed as to the manner of disbursing the surplus. Monies that are deemed abandoned will be deposited to the University's general Scholarship Fund. When the purpose of an agency Index (FOPAL) is complete, the Index (FOPAL) must be closed. The responsible person for the agency Index (FOPAL) can authorize the donation of any surplus monies to the University or, if desired, the NMSU Foundation, Inc. Some appropriate uses for agency Indexes (FOPALs): Conferences When a University faculty or staff member is acting as a facilitator for an established organization external to the University, and when the conference is funded entirely from registration fees, with no University contribution. Employee Funds Employee funds are employee-originated funding, which is to be used by and at the employees’ discretion. Professional and student organizations, such as fraternities and sororities Fund raising activities by and for student organizations are permissible, but such organizations must submit an activity approval form to the Activities Office of Corbett Center before initiating a club fundraiser. However, agency Indexes (FOPALs) cannot be used to record University fund raising activities. University receipts cannot be issued to donors, contributors, or participants of fundraising activities. The organization is solely responsible for the disbursement of monies and compliance with any funding source requirements. There should be no written or implied agreement between donors, contributors, or participants and New Mexico State University. University monies cannot be deposited in agency Indexes (FOPALs) unless approved by the Controller's Office. University expenses cannot be paid from agency Indexes (FOPALs). Any purchase made from a non-ASNMSU club agency Index (FOPAL) that is later transferred by journal entry to a University Index (FOPAL) will require Central Purchasing Office (CPO) approval. Agency Indexes (FOPALs), established for ASNMSU clubs or organizations, may share in the cost of ASNMSU expenditures paid from unrestricted Indexes (FOPALs), per ASNMSU policy. Expenditures are first incurred by ASNMSU Indexes (FOPALs); then the portion to be paid by a club Index (FOPAL) is transferred by journal entry. Branch Campus student clubs and organizations may do the same, provided a policy exists that indicates how the clubs will share expenditures. [ back to top]

1A.05.25	Plant Indexes (FOPALs) Defined The plant Indexes (FOPALs) group is used to account for unexpended plant monies to acquire long-lived assets for institutional purposes; monies set aside for the renewal and replacement of institutional properties; monies set aside for debt service charges and retirement of indebtedness on institutional plant; and the cost (or fair value at time of donation) of long-lived assets (other than those of endowment and similar monies) and the sources from which the cost is funded, including associated liabilities. Four self-balancing subgroups are provided for in the plant monies group; unexpended plant funds, funds for renewals and replacements, funds for retirement of indebtedness, and investment in plant2. [ back to top]

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	1 Financial Accounting and Reporting Manual, National Association of College and University Business Officers (NACUBO) - http://www.nacubo.org/
	2 Financial Accounting and Reporting Manual, National Association of College and University Business Officers (NACUBO) - http://www.nacubo.org/