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Office of the Senior Associate Vice President
for Finance
Financial Statement Presentation:Functional Expenses
Finance Directors Meeting
May 18, 2010
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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
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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
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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
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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
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Office of the Senior Associate Vice President
for Finance
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for Finance
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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.
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Office of the Senior Associate Vice President
for Finance
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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
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Questions???
Contact Information:Sharon Heinle
Assistant Comptroller6-1087