FIACCT 01-00-00 FINET- overview

Effective: July 1, 1994
Revised: March 3, 2017
Reviewed: March 3, 2017

Purpose

This is an overview of FINET, a web-based, automated system that provides the accounting and
procurement functionality to support the state of Utah’s business activities. Details about the background
information provided in this overview are found in the various DAS Division of Finance accounting
policies and procedures

Background

The Background section is divided into the following five areas:

Functionality
Account Code Structure
Data Entry
Data Access
Technical Environment

Functionality

FINET provides the accounting functionality to support the state of Utah’s business activities in a user
friendly environment. This includes budgeting, general ledger, purchasing, encumbrance, inventory,
accounts payable, accounts receivable, grant accounting, project accounting, and cost accounting
capabilities.
FINET provides the means to track and update financial information in the following functional areas:

Expenditure accounting and accounts payable
Purchasing
Revenue accounting and accounts receivable
Cost accounting
Grant and project accounting
Appropriation and budget control
General accounting
Inventory control
Fixed assets

A brief description of the functionality of each of these areas follows. For more detailed information, see
the appropriate area of the DAS Division of Finance accounting policies

Expenditure accounting and accounts payable

Expenditure accounting and accounts payable functions include activities related to the processing of
expenditures, vendor payment scheduling, and warrant processing. The business activities include:

Scheduling payments to maximize the State’s cash flow
Paying vendors
Applying discounts when available
Grouping payments to a single vendor
Maintaining vendor information for reporting, historical research and 1099 purposes
Establishing and maintaining spending budgets
Tracking accounts payable
Relieving encumbrances when payment is initiate

Purchasing

Purchasing includes business processes that support the State’s entire procurement process. The business
activities include:

Pre-encumbrance and encumbrance accounting
Requisitioning
Matching purchase orders, invoices, and receipts (optional)
Printing purchase orders
Processing bids
Establishing and maintaining state cooperative and agency-specific contracts
Ordering based on commodities
Commodity history information
Managing vendor information

Revenue accounting and accounts receivables

The revenue and accounts receivable processes involve the management of revenues and
billing/collection procedures. The business activities include:

Budgeting for estimated revenues
Accruals and cash accounting
Processing and tracking accounts receivable
Printing invoices
Cash receipting
Reconciling bank accounts

Cost accounting

The cost accounting functions support the gathering of all costs and revenues relating to specified cost
centers. This is accomplished by using additional coding elements from the FINET account code
structure. The business activities include:

Establishing cost center budgets
Collecting direct and indirect costs
Distributing cost data
Reporting on cost centers for management purposes

Grant and project accounting

Grant and project accounting involves maintaining accounting records necessary to support grants and
other reimbursable program reporting. The business activities include:

Budgeting and accounting for grants and projects
Reporting grants and projects
Allocating costs
Non-state fiscal year reporting
Grant and project life-to-date reporting
Supporting CMIA requirements

Appropriation and budget control

The appropriation and budget control processes establish spending controls and authorization levels. They
are invoked by the system every time a transaction that expends funds is processed. The business
activities include:

Setting up appropriations
Managing organizational spending budgets
Reviewing budgets
Adjusting and transferring budgets

General accounting

General accounting refers to all other general ledger accounting activities in addition to those listed in the
previous functional areas. The business activities include:

General ledger reporting
Processing Journal Vouchers
Intra-governmental accounting activities
Month-end and year-end processing
Auditing and control
Comprehensive Annual Financial Report (CAFR)
Reporting to external groups: auditors, legislators, public and federal agencies

Inventory control

Inventory control supports the functions associated with purchasing, controlling, maintaining, dispensing,
and reconciling inventory stock items. The business activities include:

Requisition processing
Inventory management
Purchasing
Physical inventory reconciliation

Fixed assets

The fixed assets processes involve maintaining and accounting for the State’s fixed assets. The business
activities include:

Recording new fixed assets
Managing fixed assets
Recording changes in fixed assets, such as transfer and disposal
Recording depreciation
FINET provides complete functional and technical integration across modules. This means that all users
have a consistent view of the system, and they will always operate from the same base of information.
FINET eliminates incompatibilities between functions and interfacing processes. This integration is
achieved through the following processes:
Comprehensive front-end editing
Maintaining a single, unified data base
Updating all data base records simultaneously
Using a single account code structure

Account code structure

The account code structure provides a mechanism for meaningful classification and retrieval of financial information. It allows managers to track the flows and balances of monies within their organizations for business purposes. Departments must give careful thought and planning into the definition of their account code structure. Departments are responsible for defining department-related account codes.

Fund accounting

The account code structure is designed to serve both statewide and individual departmental needs. Thus,
certain components of the account code structure have been defined by the DAS Division of Finance to
meet statewide needs. These codes include the following:

Fund
Department
Unit (Departments define groups and units, but the DAS Division of Finance sets them up in
FINET)
Object
Revenue Source
Balance Sheet Account
Appropriation Unit

The DAS Division of Finance is responsible for assigning values for the statewide account code structure
listed above.

Detail accounting

Components of the account code structure that are defined by departments to meet their organizational
and cost accounting needs are as follows:

Activity
Function
Program (with or without phases)

Departments are responsible for determining the structure and values for the department-defined codes
listed above. Because some of the codes available to departments are not department specific, the DAS
Division of Finance has assigned leading characters and/or ranges of numbers to identify the department
assigned to the coding element.

Chart of accounts

The specific values assigned to the account code structure are called the “Chart of Accounts.”
The following table provides an overview of the FINET account code structure and identifies the base
codes, characters’ type (alphabet letters or numbers) and length, purpose, control, and required or optional use.

Account codes may be developed to represent either a hierarchal structure (i.e. roll-up) or relational
structure. Each of these is explained below.

Hierarchical structure

Several codes within the account code structure provide for multilevel hierarchies so that information can
be reported at varying summary levels. The highest level within a hierarchal structure will generally be
the highest level of summary for reports. Levels below the highest level within the hierarchy represent
more detailed levels of accounting information.
The required formats for financial reporting are accomplished using a hierarchal relationship. For
example, expenditures for all governmental funds can be accumulated and reported by defining the
general fund, special revenue fund, capital project fund, debt service fund, and special assessment fund
with a “fund type” of “governmental.” “Fund type” is an element within the hierarchy of the fund code
structure.

Example of hierarchical accounting code use:

Hierarchies may be arranged in any manner, since the base level is always the lowest in the hierarchy.
FINET uses the hierarchies to create reports. Departments may use the hierarchies with the State Data Warehouse to create custom reports.

Relational structure

A relational structure exists when a department defines a level, or levels of an accounting code as linked to the base level code but not to the other levels of an accounting code. The levels may be defined as
completely independent reporting attributes of the base code that do not rollup to a higher level.
For example, an activity hierarchy could be set up so that data is accumulated at different levels.

This allows departments to accumulate all radio costs and all advertising costs independently of each
other.

Reports based on relational or hierarchal roll-ups for department specific codes are the responsibility of
each department to develop and maintain. However, several standard reports, which provide roll-ups by
activity and organization, have been developed.

The roll-up levels for most codes have been defined statewide by the DAS Division of Finance. When a
base level code is created, related roll-up values can be entered with each base code value. Roll-up values
will be verified by FINET before base codes will be accepted. Departments are encouraged to seek
assistance from DAS Division of Finance’s Financial Reporting team when establishing roll-up values
and relationships.

For more information, see FIACCT 02-02.00 Account Code Structure, and FIACCT 02-03.00 Cost
Accounting Structure, in the GENERAL ACCOUNTING area of the DAS Division of Finance
Accounting policies.

Data entry

Data entry is accomplished in FINET through document entry screens and user-maintained tables, which use standard windows features (e.g., multiple windows, point and click, cut and paste, copy). FINET security determines which documents or tables a user may access, what data elements may be used, and what operations may be performed.

For more information on how to use FINET documents and tables, see the FIACCT 01-00.00 FINET –
Overview and FIACCT 01-01.00 FINET – Using FINET Overview. For more information on how to enter
data into specific documents or tables, see the policies in the related functional areas and use online
FINET Help.

Document entry is also accomplished via interfaces with other systems, such as the Department of
Technology Services’ telephone and data processing billings.

Data access

Access to data in FINET is accomplished through two methods

On-line queries using FINET tables
State Data Warehouse, which includes standard FINET reports

Users can access various query tables, which provide easy access to current information relating to all
functional areas in FINET. Users can also view transactions that have been entered but have not yet
posted. This includes entries requiring additional approval, data elements, corrections, or scheduling. For
more information, see FIACCT 01-00.00 FINET – Overview.

AM31 and AM65 reports are distributed by DAS Division of Finance at the end of each month, otherwise, users use State Data Warehouse. To access these and other internal reports, go to the DAS
Division of Finance website’s Services and Info page, “For Accounting” tab or the DAS Division of
Finance website’s Internal Reports page.

The State Data Warehouse allows users statewide to access information quickly and efficiently via the
Internet. It provides agencies with access to a database of financial information for inquiry and ad hoc
reporting.

For more information about the State Data Warehouse, see FIACCT 18-00.00 Data Warehouse –
Overview.

Technical Environment

FINET operates as a web-based application. In order to access the online system, users must have
appropriate hardware and software as well as a link to the State’s wide area network (WAN) or the
department’s local area network (LAN), or else access the online system through a gateway. For more
information, contact the DAS Division of Finance.