Fund accounting is the accounting method used to segregate the organization’s money by its sources in order to ensure it is properly spent and accounted for. Fund accounting, which is common to all colleges and universities, allows employees to be good stewards of university assets by segregating funds according to their intended purposes. Some of the funds are intended for specific purposes, while others are for more general use. Some funds can be spent in the short term while others are longer-term.
For additional information on the Funds in Workday, please refer to the Quick Reference Guide to Fund Values in the Workday for Core Users: Finance section of the Administrative Resource Center.
The Seven Fund Groups
The university has seven Fund Groups, which can be organized into Current Funds, Non-Current Funds and Agency Funds. The first digit of each fund identifies the Fund Group to which it belongs.
Current Funds
| Current Unrestricted | Current Unrestricted Funds can be spent in the current operating cycle. No outside person or agency has specified how the funds are to be spent.
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| Current Restricted | Current Restricted Funds can also be spent in the current operating cycle. An outside person or agency has specified how the funds are to be spent.
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Non-Current Funds
| Endowment | Endowment Funds may not be spent and are invested "in perpetuity." A portion of the market value of the Endowment is distributed each year, usually to Current Restricted Funds (Fund FD510), for spending.
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| Annuity and Life Income | Annuity and Life Income Funds are invested by the university to provide the donor with an annuity until a specified date. At the end of the time period, the money reverts to the university.
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| Loan | Loan Funds are monies lent to students, collected from the students and lent out again.
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| Plant | Plant Funds are funds associated with purchasing, maintaining and recording the university's property, plant and equipment.
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Agency Funds
| Agency | Agency Funds do not belong to the university, but are managed by a university employee. Money coming into Agency Funds is generally payment from external entities. (Fund FD900) A typical example is an academic journal of which the editor is a faculty member. Payment is accepted for subscriptions and printing, distribution and other expenditures are recorded, but the funds ultimately belong to the organization that publishes the journal. |
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Current Unrestricted Funds
Current unrestricted funds may be used for any legal and reasonable purpose in carrying out the mission of the institution: Instruction, Research, Public Service and Patient Care.
How do we use our Current Unrestricted Funds?
| TYPE OF USE | FUND NUMBER |
|---|---|
| General Fund | Allocation of funding from the university. FD100 (FD104 for Central Strategic Reserves) |
| Designated Funds | Funds internally designated by for a specific purpose by the Board of Trustees or senior leadership FD107-FD111 |
| Unrestricted Current Use Gifts | Unrestricted gifts for current use (used in combination with gift worktag GFxxxxxx). FD112 |
| Unrestricted Endowment Distributions | Unrestricted distributions from endowments (used in combination with gift worktag GFxxxxxx). FD113 |
| Earnings Recharge Center Fund | Internal revenues and expenses for earnings operations that primarily serve other university departments. FD120 |
| Earnings Conferences Fund | Revenues and expenses associated with conferences and events sponsored by university departments. FD121 |
| Earnings Other Fund | Revenues and expenses associated with other departmental earnings operations. FD122 |
| Shared Service Funds | Activity associated with shared services and internal cost sharing. FD13x |
| Earnings Auxiliary Fund | Revenues and expenses associated with self-supporting earnings operations, including Athletics, Student Life, Business Advancement and University Airport. FD200 |
| OSU Health System | Revenues and expenses associated with the clinical operations of the OSU Health System FD300 |
| OSU Health Plan | Activity associated with OSU Health Plan (university affiliate) FD350 |
| OSU Physicians | Revenues and expenses associated with the clinical operations of OSU Physicians. FD400 |
| Component Unit Fund | Activity and balances comprised of legally separate entities that meet the financial accountability criteria set forth in accordance with Governmental Accounting Standards Board (GASB) FD920 |
Current Restricted Funds
Current Restricted Funds must be spent only for the purpose intended by the outside entity that established the restriction. Because the university has a legal stewardship obligation to abide by fund restrictions, it is important to be aware of the restrictions and monitor the funds for appropriate use.
- Endowment Fund restrictions can be found on the web site of the Office of Financial Services, or in The Advancement System, maintained by the Office of University Advancement.
- Restrictions for Current Use Gifts are established when the gift fund is established. The department maintains these funds and monitors for appropriate use according to the restrictions. The Office of University Advancement’s business office maintains copies of the documents which can be accessed online using The Advancement System.
- Restrictions on grants and contracts can be found in the relevant grant agreement or contract.
The original paperwork used to establish a fund in the General Ledger is also a useful source of information on fund restrictions.
Uses of Current Restricted Funds
| TYPE OF USE | FUND NUMBER |
|---|---|
| Current Use Gifts | Gifts that can be spent currently in accordance with fund restrictions (used in combination with gift worktag GF3xxxxx). FD500 |
| Endowment Distributions | Distributions of endowment income that can be spent currently in accordance with fund restrictions (used in combination with gift worktag GF6xxxxx). FD510 |
| Pending Endowment Distributions | Distributions for pending endowment funds, generally cannot be spent until the associated endowment is approved by the Board of Trustees (used in combination with gift worktag GF4xxxxx). FD511 |
| OSP Sponsored Programs | Grants and contracts administered by the Office of Sponsored Programs (used in combination with a grant worktag GRxxxxxx) FD520 |
| Federal (non-OSP) Grants and Contracts | Federal grants and contracts managed by other units, primarily Student Financial Aid (used in combination with a grant worktag GRxxxxxx) FD521 |
| Other (non-OSP) Grants and Contracts | State, local and private grants and contracts managed by other units (used in combination with a grant worktag GRxxxxxx). FD522 |
| County Extension Funds | Operating grants provided to OSU Extension offices (used in combination with a grant worktag GRxxxxxx). FD523 |
| State Line-Item Appropriations | State operating appropriations that are directed to specific units and programs within the university (used in combination with a grant worktag GRxxxxxx) FD524 |
| Other Current Restricted Funds | Other current funds subject to purpose restrictions FD530 |
Discretionary Funds
Discretionary Funds are given to the university for use at the discretion of a Dean, Chair or other University official. They are generally used to support special departmental needs, as the Administrator determines appropriate, within the limits of reasonableness, legality and university policy. These are not personal funds, so when the Administrator vacates the position, the Fund falls under the stewardship of the succeeding Administrator. Most are restricted current use gifts (FD500) but some come from unrestricted gifts and endowment distributions (FD111 and FD112) that have been internally designated as discretionary.
Important! Discretionary Funds are the only funds that can be used to purchase alcohol. Please see the University Expenditures Policy for additional information.
Non-Current Funds
Non-Current Funds are funds that are either restricted or internally designated for purposes other than current operations. They include endowments, assets associated with annuity and life income agreements, student loan funds, capital asset activity and related debt.
Endowment Funds (FD6xx)
The Endowment Fund group includes the principal of all of the individual Endowment funds and any undistributed income. In most cases the donor restricts the Endowment fund to specific uses, such as professorships or scholarships. However, some Endowment funds are given without any specifications. Most of these are used to provide scholarships for students. Approved endowments are accounted for in FD610; pending endowments are accounted for in FD660.
Distinction between Endowment Principal and Endowment Income & Expense
In Workday, the university uses a combination of the fund and gift worktags to distinguish between endowment principal and (spendable) endowment distributions. Money is not spent directly out of the Endowment Fund principal (FD610). Instead, every year a distribution is made to the department using the Endowment Distribution Fund (FD510). Expenditures are charged against this fund. The distribution is calculated by the Controller’s Office using a percentage of the average market value of the endowment over a five-year period. By using an average market value, taken over a period of time, the university is able to compensate for fluctuations in investment returns.
| FUND TYPE | FUND # | THE FUND . . . |
|---|---|---|
| Endowment Principal | FD610/GF6xxxxx | is held in perpetuity and invested |
| Endowment Distribution | FD510/GF6xxxxx | receives an annual endowment distribution that may be spent in accordance with donor restrictions |
Annuity and Life Income Funds (FD700)
These funds are invested by the university and provide the donor with an annuity (fixed amount of money distributed annually to the donor) until a specified date. At the end of the time period, the money reverts to the university, usually as an Endowment.
Loan Funds (FD750/FD751)
Loan Funds represent monies that are lent to students, collected from the students and lent out again. The money is a mixture of gifts and federal money that is managed by the Office of Financial Aid.
Plant Funds (FD8xx)
Plant Funds are used to account for the university’s capitalized assets and related debt. With the exception of Capital Reserve Funds (FD811), these funds are generally managed centrally and include the following:
- Unexpended Bond Proceeds (FD800)
Used to account for unexpended bond proceeds (generally transferred to FD810 to fund capital project expenditures) - State Capital Appropriations (FD801)
Used to account for state capital appropriations (State of Ohio pays for capital expenditures on the university’s behalf, which are recorded as revenues and expenditures in this fund). Used in combination with a project worktag (PJxxxxxx). - Non-State Capital Projects (FD810)
Capital expenditures funded by sources other than state capital appropriations (used in combination with a project worktag PJxxxxxx). - Capital Reserve Fund (FD811)
Funds internally designated by colleges and VP units for future capital expenditures. - Debt Retirement Fund (FD820)
Funds internally designated by the Office of the Treasurer for principal and interest payments on university debt. - Internal Loan Fund (FD821)
Used to account for internal loans provided by the Office of the Treasurer to colleges and VP units, primarily for capital projects. - Investment in Plant Fund (FD830)
Used to account for capitalized assets, debt and depreciation expense.
Agency Funds (FD900)
Agency Funds are used to account for resources that are not “owned” by the university. Examples include funds associated with academic journals and outside organizations that are hosted by the university.
GASB Adjustment Fund (FD950) – Central Use Only
This fund is used by the Office of the Controller to record annual audit adjustments for university reporting units, including balances associated with pensions, other post-employment benefits and leases.