office of the senior associate vice president for finance financial statement presentation:...

Office of the Senior Associate Vice President

for Finance

Financial Statement Presentation:Functional Expenses

Finance Directors Meeting

May 18, 2010

Office of the Senior Associate Vice President

for Finance

Proprietary and Confidential Page 2

Functional Expenses Defined

Categorization of expenses based on purpose for which expense is incurred (e.g., Instruction, Student Aid) rather than the type of expense (e.g., Salary, Supplies)

FASB/AICPA require only broad categories of “Program” and “Supporting Services” Program - the activities that result in goods and services

being distributed to beneficiaries, customers, or members that fulfill the purposes or mission for which the organization exists

Supporting Services - all activities of a not-for-profit organization other than program services

Office of the Senior Associate Vice President

for Finance

Proprietary and Confidential Page 3

Why is this important?

Functional expenses reported in variety of places: Financial Statement Footnotes (GAAP requirement) IPEDS Form 990 Ad hoc surveys

Interested stakeholders Board/Management Donors Faculty Students Regulators

Office of the Senior Associate Vice President

for Finance

Proprietary and Confidential Page 4

GW’s Financial Statement Presentation

Note 13 – Program and Supporting Activities Expense

The Consolidated Statements of Activities include the following program and supporting activity expenses for the years ended June 30, 2009 and 2008, respectively:

(in thousands) 2009 2008 Instruction and academic support $475,675 $445,224 Research and research support 148,073 159,559 Auxiliary enterprises 84,944 80,170 Student services 81,324 76,749 Institutional support 102,799 85,302 Independent operations 42,783 40,281 Student aid 17,748 15,983 Total $953,346 $903,268

Office of the Senior Associate Vice President

for Finance

Proprietary and Confidential Page 5

How we identify functional categories

The EAS account string:

UN..617002.C100001.G.ADM.FB.000000.000000

http://financeoffice.gwu.edu/comptroller/fss/docs/NaturalAccounts.pdf

EAS provides initial grouping of expenditures in designated ‘buckets’

Some groups are combined or allocated for reporting Analytical review for consistency and

reasonableness

Office of the Senior Associate Vice President

for Finance

Proprietary and Confidential Page 6

Office of the Senior Associate Vice President

for Finance

Proprietary and Confidential Page 7

Commonly Used Functions

ACS – Academic Support

ADM – Institutional Support (aka “Admin”)

AUX – Auxiliary Enterprises

INP – Investment Properties

(Independent Operations)

INS – Instructional & Department Research

SP# – Sponsored Projects (direct expenses)

SPA – Sponsored Project Administration

STS – Student Services

STA – Student Aid

Allocated Functions:

MOP – Maintenance/Operation of Plant

CAP – Capital Expenditures

DSV – Debt Service

TEC – Technology

Allocated Functions require rational and consistent basis for spreading expenses across the reported program and supporting services.

Office of the Senior Associate Vice President

for Finance

Proprietary and Confidential Page 8

Where do you come in?

Requesting new orgs Consider ‘primary’ functional activity

Segregating new/significant activities Academic Advising GWorld 2.0 initiative Unified Web Presence Sustainability

Identifying shifting focus in existing orgs Both C and R funds

Office of the Senior Associate Vice President

for Finance

Proprietary and Confidential Page 9

Questions???

Contact Information:Sharon Heinle

Assistant Comptroller6-1087

sheinle@gwu.edu