Project Accounting
Policy
FIACCT 15-00_00 Project Accounting – Section Overview
Effective: July 1, 1994
Revised:
Purpose
This policy provides the information needed to understand the basic concepts of project accounting, identify the tables that are used, both user controlled and system maintained, and give the instructions needed to enter the project master and charge transactions.
Policy
The Division of Finance will maintain the project accounting functional components in FINET, which include periodic processing of the daily updates (nightly cycles), monthend processing and annual processing. Project-life-to-date information will also be maintained in FINET.
Background
The project accounting component in FINET maintains project related data independent from the organization structure. Each state department can define the project structure and usage that is specific to their department; and can divide projects into sub divisions (sub projects), and account for sub projects by defined phases. The major uses of project accounting are:
To plan and budget for alternate fiscal years and for multiple fiscal years, independent of the State fiscal year and to record revenues and expenditures by year for life of the project,
To record all applicable costs and revenues so that full costs can be matched to revenues for accounting period and over the life of the project,
To provide management with total costs and associated revenues to assist in the decision making process, so that limited resources can be used more cost effectively.
The primary function of the project accounting module is to identify and collect all project-related financial information. All descriptive and financial information pertaining to a project structure will be maintained in the various project tables and ledgers. Information is available to support a wide variety of reporting options. Using the Finance Data Warehouse, reports can be produced on any combination of project attributes needed to support project reporting requirements.
There are a number of system-maintained tables that are updated as project specific data is processed.
These tables contain descriptive data, budgets, encumbrances, expenditures, revenues and balances for
each project, sub-project and phase. In addition, there is a project ledger that maintains inception to date
detail transactions for each project.
Project accounting provides the capability to reject spending transactions which exceed project budgeted amounts. Available funds checks for project spending is performed at the sub project/phase budget line level. Transactions which exceed available funds can be rejected or accepted based on the control level desired. Appropriations and revenue budgets will exist and all transactions are subject to appropriation control, but these are independent of the project budget. In addition, start and end date ranges may be established that identify the time span when project transactions may be processed. Projects and portions of projects may be closed, so that transactions are not allowed.
Frequently projects are not monitored by the same fiscal year as the state accounting fiscal year and often extend over more than one year. FINET addresses this issue by specifically providing a “project fiscal year” for each project which is independent of the accounting fiscal year. This allows the preparation of project budgets that are based on the alternate fiscal year and/or are lifetime budgets. Thus budgets can be established that are not closed at the end of the accounting fiscal year, but continue into the new year and for the life of the project with remaining balances and expended amounts intact. Reports can be produced based upon the state fiscal year, the alternate fiscal year or inception to date for the life of the project on multi-year projects.