SUBJECT:

Correction - Account Code Validation Process

Recently the Chancellor approved certain sponsored projects system
improvements proposed by the Steering Committee for Sponsored Project
Excellence Achieved through Redesign (SPEAR). One of these projects is the
validation of expenditure transactions' account codes.

In our current environment, many transactions with invalid account
code/fund combinations are not detected until the sponsored project is in
the closing process. This activity causes delays, missed deadlines and
expenditure of additional effort by department administration to track down
supporting documentation that may be several years old. As a result, UCSD
experiences increased processing costs and the risk of federal sanctions
that includes suspension from future federal awards in flagrant cases.

The validation function alerts departments when specific expenditure types
are questionable in terms of applicable regulations that apply to the fund
being charged. Once alerted, departments can correct the inappropriate
expenditures. The validation is comprised of two edit processes. The
first edit (E edit) blocks the expense transaction for prescribed Rule
Classes at the point of entry into the IFIS system. The edit applies to
those items that are unallowable for any federal and state agencies
projects, e.g., fines, penalties, tobacco/confection, gifts and alcoholic
beverages. See the attached appendix for the list of unallowable account
codes when applied to federal/state fund sources. For these items, an
immediate correction to an acceptable funding source is required.
Extramural Funds will be responsible for assigning and maintaining the "E"
account codes used by IFIS in the validation process.

The second edit (W edit) allows the transaction to enter IFIS but attaches
a warning tag to the transaction for Account Code/Fund combinations
prescribed by the department. These transactions will appear on
FinancialLink's Ledger Annotator for the department's review. If no
action is taken, the transaction remains in IFIS as an acceptable charge
to the fund. Departments will be responsible for assigning "W" account
codes to a specific fund for use by IFIS in the validation process.

These edits will be implemented on October 15. Detailed information
regarding the Account Code Validation process may be accessed at the
following Web address:
http://www-bfs.ucsd.edu/emf/proced/afv_act.htm

IFIS recharge journals prepared on line
Beginning in October, the edit feature (E Code) in the account code
validation application will block prescribed expense transactions from
entering IFIS at the point of entry. The edit applies to those items that
are unallowable for federal and state agencies projects, e.g., fines,
penalties, tobacco/confection, gifts and alcoholic beverages. The attached
appendix identifies the unallowable account codes on federal fund sources
and federal fund ranges.

If an Activity Code is rejected, the recharge unit will need to contact the
ordering department for an acceptable funding source. Once an acceptable
funding source is provided, the transaction must be resubmitted on the
journal detail screen. Revised instructions for entering journal vouchers
can be found at the BFS web site:
http://www-bfs.ucds.edu/gen/services/onlnjrnl.htm
THE ABOVE URL SHOULD READ http://www-bfs.ucsd.edu/gen/services/onlnjrnl.htm

Batch recharges
Recharge departments providing batch files have received prior notification
and instructions for the fund/account validation. As a reminder, the new
edits for Account Code validation will be applied to batch recharges
beginning with the October accounting period. Revised interface
specifications can be found on ACT's web site:
http://www-act.ucsd.edu/fis/docs/client/clindex.html

Commodity Code addition to distinguish between "advertising" Account Codes
The following Account Codes are available for classifying advertising costs.

637259 - Advertising - Events & Promotional (Unallowable on federal funds)

637460 - Advertising - Recruitment & Procurement (Generally Allowable on
federal funds)

However, only one Commodity Code (P2512) was originally assigned this
classification for purchase activities. Given the distinction noted above
regarding allowable and unallowable, an additional Commodity Code has been
established so that the following apply:
P2512 is assigned to 637259 - Advertising - Events & Promotional
and
P2525 is assigned to 637460 - Advertising - Recruitment & Procurement

The application of the new commodity code should begin immediately. A
review of your open purchase orders should also be performed and change
orders submitted where applicable to avoid payment problems.

If you have specific questions regarding the process, contact Miles Bowler
at mailto:mbowler@ucsd.edu or extension 21808.

Miles Bowler Project Administrator for SPEAR

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Account
Code
Number    Description

637259 Advertising - Events & Promotional
Cost of advertising media and corollary administrative costs.
advertising media include magazines, newspapers, radio and
television programs, direct mail, exhibits, and the like.

637450 Fines, Penalties & Disallowances
Cost resulting from violations of, or failure of institutions
to comply with Federal, State and Local or foreign laws and
regulations.

637451 Legal Judgements & Settlements
Cost resulting from payment of claims in any criminal, civil or
administrative proceedings.

637452 Cost of Legal Proceedings
Cost of legal services whether performed by in-house or private
counsel and cost incurred in connection with any criminal, civil or
administrative proceedings.

637455 Gifts - Flowers, Tickets, Contributions
Cost of gifts or flowers regardless of the occasion, and tickets to
events. Cost of contributions made by the university regardless of
the recipient.

637461 Advertising - Disposal Sales
Cost of advertising media and corollary administrative costs.
Advertising media include magazines, newspapers, radio and television
programs, direct mail, exhibits, and the like.

637465 Meals - Parties & Social Events
Cost of entertainment including amusement, diversion, and social
activities and any costs directly associated with such costs (tickets to
shows or sports events, meals, lodging, rentals, transportation, and
gratuities).

637466 Meeting Costs - Parties & Social Events
Cost of meetings for social activities including costs such as meals,
lodging, rentals, transportation and gratuities.

637480 Dues/Membership - Civic & Social
Cost of membership in any civic, community or social organizations.

637481 Subscriptions - General Interest
Cost of subscriptions to publications that are not research related.

637930 General Liability Program
Assessment to non federal funds to fund the General Liability Program
which pays for claims filed against the University.

638001 General Books-Paperback
Cost of any books that are of general interest and are not research related.

638014 UCSD Surplus Property Sales
Costs associated with the disposal of surplus UCSD property.

638086 Tobacco/Confection
Cost of cigarettes and tobacco.

638173 Beverages - Alcoholic
Cost of alcoholic beverages such as wine, liquor, beer, etc.

638191 Catering Services - Parties & Social Events
Cost of catering services which includes meals, setup, service charge,
rental, gratuities, etc., for social events. (*)

638194 Catering Recharges - Parties/Social Events
(*) Same description applies

638197 Faculty Club Recharge - Social Catering
(*) Same description applies

LIST OF UNALLOWABLE ACCOUNT CODES AS APPLIED TO FUND RANGES
FOR FEDERAL AWARDS

        Fund   Range   Description
      16000 - 16099 (A-Z) Federal Overflow
      18800 - 18899 (A-Z) Federal Flow Thru (State)
      20851 - 20899 (A-Z) Federal Flow Thru (Local Government)
      21000 - 33999 (A-Z) Federal
      40000 - 40499 (A-Z) Federal Flow Thru (Private)
                except 40004, 40030, 40094, 40181, 40382
      78000 - 79199 (A-Z) Federal Flow Thru (Private)