Financial Basics: UNL Funding and Cost Objects (8:40)
This video introduces the UNL's main funding sources and explains how funds are identified with the cost object numbering system.
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- [00:00:00.000]This video introduces the University of Nebraska -
Lincoln’s main funding sources and
- [00:00:06.600]explains how funds are identified with the cost
object numbering system.
- [00:00:12.366]Cost objects are numbers assigned to track and
categorize UNL’s financial activity.
- [00:00:18.600]Familiarity with funding sources and the cost
object numbering system will help you to identify
the owner of a cost object
- [00:00:26.433]and the source of funding in SAP and on financial
- [00:00:32.299]Four main funding sources support UNL.
- [00:00:35.500]The first is state-aided funding, which primarily
consists of state funds appropriated by the
Unicameral; and tuition revenue.
- [00:00:43.533]Next are Revolving/Auxiliary funds, which are
dollars generated and used by some university
- [00:00:51.733]The third funding source is comprised of grants
- [00:00:55.433]which are awared to the University for specific
purposes and include rules for how the funding
may be spent.
- [00:01:02.633]Finally, there is University of Nebraska Foundation
funding which is comprised of financial gifts from
- [00:01:10.466]These four major funding sources are broken
down into more detail and identified by cost
- [00:01:17.966]Cost objects are numbers assigned to track and
analyze UNL’s financial activity.
- [00:01:24.600]The phrase “cost object” refers to two types of
numbers: cost centers and WBS numbers. First,
let’s look at the cost center numbering structure.
- [00:01:37.400]Cost centers apply to the first two funding sources
– state aided and revolving/auxiliary funds.
- [00:01:45.033]Cost centers are 10 digits long and each digit
provides information about where the funding
comes from and who is responsible for it.
- [00:01:55.000]The first digit represents the campus -- 2 is for
UNL, which most likely will be the funding that is
most familiar to you.
- [00:02:03.100]Occasionally, you might see cross campus
postings – 3 for University of Nebraska Medical
Center, 4 for UN-Omaha,
- [00:02:12.466]5 for UN-Kearney, and 9 for University of
Nebraska’s Central Administration.
- [00:02:20.100]The 2nd digit represents the funding source. A “1”
indicates state aided, 2s and 3s identify revolving
and auxiliary funds respectively.
- [00:02:30.833]Both revolving and auxiliary funds are considered
“self-supporting” because the revenue is earned
- [00:02:37.633]and used by University entities that perform some
type of fee-based activity.
- [00:02:44.566]Revolving funds are typically earned by an
academic department whose primary mission is
academic, but which incidentally earns revenue.
- [00:02:53.666]Examples of revolving funds include funds earned
by providing a good or service to the campus or to
- [00:03:01.333]registration fees charged by a department hosting
a conference, funds received from student lab
- [00:03:09.100]or the incidental remainder of grant funds after
completion of the grant-funded project.
- [00:03:15.466]In each instance, the revenue would post to the
earning department’s revolving cost center.
- [00:03:22.300]Auxiliary Funds (3’s) are earned by non-academic,
self-supporting entities whose reason for existing
- [00:03:29.000]is to provide their specific service to faculty, staff
and students in a personal capacity.
- [00:03:37.500]Examples of auxiliary funds are housing and
parking fees charged by Housing and Parking
- [00:03:44.500]revenue from athletic ticket sales, and revenue
earned by Campus Union service providers.
- [00:03:51.933]There are also cost centers whose second digit is
- [00:03:55.233]These are endowments that are managed by the
functional Accounting Office and will not impact
- [00:04:02.600]The 3rd and 4th digits identify the subprogram,
which equates to the college or administrative
- [00:04:09.333]For example, by looking at these digits, you would
know if the cost object belongs to the College of
Arts and Sciences, which is numbered 05,
- [00:04:19.033]or Business and Finance, which is 43.
- [00:04:23.700]The 5th and 6th digits identify the department and
are always looked at in conjunction with the
- [00:04:31.533]For instance, there are many departments
numbered “12” but 0512 specifically identifies the
- [00:04:40.000]within the College of Arts & Sciences.
- [00:04:42.966]4312 identifies the Budget Office within Business
- [00:04:48.566]There is a reference sheet for subprograms and
departments available online.
- [00:04:54.600]The last 4 digits of a cost center are purely to
create a unique value after the first 6 digits.
- [00:05:01.166]If a department only has one cost object, which is
more common in administrative areas, the last four
digits of that single cost object are usually 0001.
- [00:05:14.033]Departments can request additional cost objects
as needed to allow them to manage their funds.
- [00:05:20.733]The form to request a new cost center is available
- [00:05:26.500]Now let’s discuss the other type of cost objects –
- [00:05:32.033]WBS numbers are used to identify Grants &
Contracts and Foundation Funds.
- [00:05:37.566]WBS numbers are 13 digits long and are also
smart numbered. WBS numbers for UNL will start
- [00:05:46.766]The 2nd digit represents the funding source.
- [00:05:50.066]4s, 5s and 6s identify grants and contracts. A 4 or
5 indicates a federal grant.
- [00:05:57.700]Any grant that is NOT federal, meaning it could be
from the State, another university, or a company
that is funding UNL research, is identified by a 6.
- [00:06:09.033]7’s are typically foundation funds. However, some
departments hold their foundation funds in a 26
- [00:06:18.633]9’s are either loan funds – meaning they are funds
reserved for student loan programs --
- [00:06:24.833]or plant funds which are used for construction and
renovation of University facilities.
- [00:06:30.833]9’s are managed by the functional Accounting
Office and will not impact departments.
- [00:06:36.933]Just like cost centers, the 3rd and 4th digits of a
WBS number identify the subprogram and the 5th
and 6th identify the department.
- [00:06:46.733]The 7th through 10th digits are used to uniquely
identify the grant, which SAP calls “a project.”
- [00:06:55.200]The last three digits, known as a WBS element,
identify sub-parts of the grant.
- [00:07:01.900]When you are pulling financial reports in SAP, it is
important to understand how the first 10 digits and
the last three digits of a WBS number are used.
- [00:07:14.166]The first 10 digits of a WBS identify the project as
a whole. The last three digits allow the grant
manager to track sub-parts of the grant.
- [00:07:24.533]For example: if a faculty member receives a grant
from the USDA to study grains, all funds related to
that grant would have the ten digit project number.
- [00:07:35.200]However, assigning specific WBS elements to
each sub-part of the project
- [00:07:41.566]makes it possible to track funding and spending at
a more refined level of detail.
- [00:07:47.400]For example, in this instance, a separate WBS
element could be assigned to parts of the grant
related to corn, milo and wheat.
- [00:07:57.733]Sometimes WBS elements are used to track
spending for multi-year grants.
- [00:08:03.100]For example, if spending on a 3 year grant needs
to be tracked by the year, a WBS element can be
assigned for each year of the grant.
- [00:08:13.000]The additional granularity of data provided by
WBS elements can help you to refine your financial
reports in SAP.
- [00:08:22.666]Thanks for taking time to learn a little about UNL
funding sources and about the smart numbering of
- [00:08:29.800]This information should help you better understand
financial information in SAP and in various
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