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GL & SL Fund Group Summaries



FBM061


This is a summary report that is produced at the end of each month. It generates trial-balance reports for the General Ledger and the Subsidiary Ledger.

General Ledger Summary Report

Each month the "General Ledger Fund Group Summary" is generated and disbursed to the University departments. This report lists a summary of all the GL fund accounts belonging under each department.

This summary is similar to a Balance Sheet and uses the concepts of fund accounting to report information. The basic formula for a Fund Accounting Balance Sheet is as follows:

Assets = Liabilities + Fund Balance

or another way to look at the equation would be:

Assets - Liabilities = Fund Balance



Assets are the University's properties and claims against others that can be applied to cover liabilities. Assets include Cash, Account Receivables, Bank Notes, Investments, Buildings, Inventories, Prepaid Expenses, Deferred Charges, etc. These are items that the University owns or are owed to them. The account control for an asset item will begin with '1' such as '1100' for Cash or '1730' for Buildings. Therefore, if the account control is in the form of '1xxx' it is referring to an asset item.

Liabilities are the University's debts to others. They include Accounts & Notes Payable, Deferred Credits and Accrued Liabilities such as interest, wages, salaries and taxes. The account control for a liability will begin with a '2' such as '2100' for Accounts Payable or '2600' for Long Term Debt. Therefore, if the account control is in the form of '2xxx' it is referring to a liability.

If we were talking about a private business, the Fund Balance would be analogous to Owner's Equity or Shareholder's Equity. It essentially represents the value of excess of assets over liabilities in any fund group. In other words, Assets - Liabilities = Fund Balance. It is the "net worth" of an account. Fund Balances can be created through gifts, carry forward budgets, transfers from other funds, grants, etc. The account control for a GL fund balance will begin with '3'. For instance, '3400' is the account control for Loan Fund Balance and '3730' is for Plant Fund Balance.

The Fund Balance is affected by Additions and Deductions to the fund. Additions to the fund are characterized by having account controls starting with '4'. Investment Income has an account control of '4180' and that for Dividends is '4120', therefore both would increase the fund balance. Deductions use account controls beginning with '5' and would include such items as Equipment Depreciation Expense (5413) and Debt Retirement (5500). These would reduce the fund balance.

Now let's discuss how all these categories appear on the GL Fund Group Summary Report. The first thing to note is that the report is organized by fund group within each department. Each fund group will be subtotaled before proceeding to the next fund group. The first column gives the fund identifier followed by the fund name or description in column 2.

The third column is titled "Balance 07/01". This column represents the fund balance as of the start of the current fiscal year. Notice that a negative (-) sign indicates a good position for the fund. Please remember that the Fund Balance is on the same side of the fund accounting equation as the Liabilities, so a negative is "good". It indicates that a fund balance exists as opposed to a positive (+) fund balance, which would indicate a deficit. This whole concept of negative and positive signs can become very confusing to non-accounting individuals. The important thing to remember is that a negative sign on a Liability or Fund Balance really means the opposite of what you have. So, if you have a -$500.00 fund balance, you would have $500 available to use. If, on the other hand, the fund balance was +$500, it would indicate that a deficit exists and you would be short $500. A negative liability such as -$100 would indicate that a liability for $100 existed.

The next two columns are headed "Additions" and "Deductions". These show the amounts affecting a change in the beginning fund balance, which is reflected in the "Present Balance" column. Since these columns are also located on the left side of the fund accounting equation with the Liabilities, the negative sign is considered a "good" indicator of the fund position. For instance, if under "Additions" there appears an amount of -$1000, this would signify an increase of $1000 to the fund balance. If the "Deductions" column showed a +$50, this would indicate a reduction to the fund balance. Here's an example that might help clarify the relationship between the fund balance columns:

Balance   Current
07/01 Additions Deductions Balance
- $1000.00 - $200.00 + $100.00 - $1100.00


The above shows a beginning fund balance of $1000.00. Because the fund balance is located on the same side of the equation as liabilities, it is negative and therefore, means that $1000 is in the fund. The next two columns, Additions & Deductions, net to -$100. Once again, because this is a negative value, it would increase the fund balance and would give a current balance of -$1100.

Or more simply: - $1000 + (-200 + $100 ) = -$1100

So, the above gives you an idea of how the Fund Balance portion of the equation is determined. The last three columns of the FBM061 report show the Liabilities and Assets. The liabilities work the same way as the fund balance when it comes to positive and negative signs. A liability with a negative value tells you that the liability exists as a debt needing to be paid.

The Assets appear in the last two columns of the FBM061 and are split between non-cash assets and current cash. Once again, remember the basic fund accounting equation:

Assets = Liabilities + Fund Balance

Therefore, the sum of the non-cash assets and cash must equal the sum of the liabilities and the current fund balance. Since assets appear on the opposite side of the equation from the liabilities & fund balance, the negative and positive signs act the way they should. That is, a positive is a positive and a negative is a negative. Therefore, an asset with a value of +$100 truly has the value of $100!
 
 
 
 

Subsidiary Ledger Summary Report

The second report printed by the monthly program FBM061 is called the "Subsidiary Ledger Summary". This report summarizes Beginning Budgets, Actual Expenses/Revenues, Open Commitments, Available Balances and Percent of Budget Used for each subsidiary ledger account. Each 6-digit account appears on one line. The total amounts on each line correspond to the bottom line totals on the Account Statement Report (FBM090).

Depending on the ledger, each SL account number may be summarized either by expense only or by revenue and expense. For instance, ledger 2's are expense accounts and the subsidiary ledger summary for these accounts will be summarized by expenses only. Therefore, the relationship between the report columns of an expense only summary would be as follows:

Revised Budget - Actual (expenses) - Open Commitments = Balance Available

The ledgers with SL summary by expense only are ledgers 2, 5, 6, & 7. Ledgers 3 and 4 are summarized by revenue and expense. The subsidiary summary for these ledger accounts will show both the revenue and expense amounts as well as a "Net Total" row. The same equation mentioned above is still applicable to these ledgers except that the Actual amount represents the net total between the revenues & expenses.

The "Percent Used" is calculated by dividing the sum of the Actual and Open Commitment amounts by the Revised Budget value. That is,

Actual + Open Commitments = Percent Used
Revised Budget  


Each ledger is also subtotaled. Remember, this report is only a summary of the SL accounts belonging to a specified department. The detail is found on the FBM090, the Account Statement, as well as the FBM091, the Report of Transactions.

      
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Storrs, CT 06269-2112
michael.virone@uconn.edu
Last updated: 11/21/11