Financial System Enhancements Highlight: Chart of Accounts structure, segments, and the object segment

Chart of Accounts (COA) Structure: The COA Structure identifies how you will account for transactions. There will be two structures: one for the General Ledger and one for “Grants”, which will encompass Internal Awards, Capital Projects, and Sponsored Projects.

Segments: Segments are components of an account string. Each segment has a name and defined length. Natural account is six digits in the current structure. The new COA Structure will be comprised of six segments, each with a defined segment length and set of possible values.

The OBJECT Segment

The Object Code (Object) segment is a six-digit number used to categorize transactions by account type and further define the nature of a transaction; for expenses it is what is purchased while revenues define the activity that generates the income. The Object segment is similar to the Natural Account Code segment in the current chart. In the Grants Accounting system, Expenditure Type is the terminology used to represent Object; expenditure type is 30 characters and combines the object code number and description.

Why do we use Object Code?

The Object provides a standard set of segment values across all campuses and the Ohio University Foundation. The Object segment is used to categorize and consolidate revenue and expense activity as well as delineate internal and external transactions. This information is used in planning unit management reports, building the budget, reporting to the University Board of Trustees and to entities external to the University (i.e. Federal and State government).

How is the Object Code structured?

The first digit of the Object represent the major groupings for Assets, Liabilities, Fund Balance, Revenue, Transfers and Expense:

Examples of Objects in each category are as follows:

What is different with Object vs Natural Account Code?

To provide better visibility into internal charges (IC), better-defined Object segments have been created for internal charges (IC). This will allow departments to identify external payments separately from internal payments. The revenue and expense Object code used for each type of internal billing will be a paired code. The department will be charged using a specific Object starting with 78XXXX and the department that provides the goods or services will bring in the internal revenue with the paired Object starting with 48XXXX (the XXXX represents uniquely assigned values). As you will see in the examples below, the last four digits of the paired IC codes are the same and help to identify the paired segments.

Also new to the Object segment is the creation of Funding Transfer Objects. These Object codes will be used to identify the movement of funds for specific activities or expenses:

• Within a planning unit (from one department to another),
• The transfer of funds across planning units (i.e. from Arts & Sciences to Engineering), or
• The movement of funds for specific purposes (i.e. funding a capital improvement account or moving funds from an operating reserve)

A single Object is used to represent both sides of the funding transfer (the expense to the unit transferring the funds and the revenue to the receiving unit):

 There will be some consolidation of current natural account codes. In the examples below the ‘what’ (registration fees) will be separated from the ‘why’ (program, camp, clinic, gala, etc.). If there is a need to track the ‘why’ the planning unit can establish an Activity Code to track the specific activity.

Today, some current natural account codes are not descriptive enough and will map to an Object that will be a conversion only code. More descriptive codes already exist, or will be created as needed. As part of the Object lookup tools that will be available, the Object descriptions will guide users to what new Object codes can be used in place of the former Natural Account Code that no longer exists.

In the case of travel expenses, new Object codes have been created that are more descriptive of the expense being incurred:

As with all other new COA segments, the Object segment also uses a hierarchy structure. Hierarchies are a way of summarizing segment values, also known as “parent” values. All Objects roll up to a hierarchy and an example (subset) of the expense hierarchy is provided below to illustrate this concept. As discussed in previous articles, Parent values are only used for reporting and begin with a letter followed by five numbers. Child values represent the individual Object segments that are used to post transactions.

A list of Object codes will be available in September to the broader campus community.
Detailed overviews of each segment are outlined on the Segment Order & Structure page of the COA website.

Questions? Visit the COA Website for information, reach out directly to your Planning Unit’s Change Network member(s) to share feedback or ask questions, or contact the FSE Project Team at coa@ohio.edu.