general ledger overview june 2014
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Transforming Financials at the People’s Department
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General Ledger OverviewOctober 2014
Transforming Financials at the People’s DepartmentBackground
Historically, each federal agency developed its own accounting structure and reported to the federal government using its agency structure. Because each agency accounted for its funds differently, it was difficult to consolidate the data across the federal government. In order to provide consistent reports and to enhance financial control, the federal government adopted the United States Standard General Ledger (USSGL), which is a standard chart of accounts that must be used by all federal agencies.
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Transforming Financials at the People’s DepartmentStandard General Ledger (SGL)
Provides basic general ledger (G/L) accounts
Agencies are allowed to expand the basic SGL chart of accounts to accommodate agency specific needs
More standardization as USDA agencies converted to FMMI
Defines proprietary, budgetary, and memorandum accounts to be used in agencies' accounting systems
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Transforming Financials at the People’s DepartmentSGL Account Types
Assets Liabilities Net Position Budgetary Resources
Appropriations, Collections, Borrowing Authority, Contract Authority, Interagency Work Agreements
Status of Budgetary Resources Unapportioned, Apportioned, Allotted, Committed, Obligated,
Expended, Expired, Canceled
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Transforming Financials at the People’s Department
Budgetary vs Proprietary Accounting
Budgetary Accounting Facilitates the controlling and accounting for budget authority
and funds. It has four main purposes: Record the appropriation receipts and status of appropriations Delegate budget authority Record valid obligations Control the use of budgetary resources
Proprietary Accounting Facilitates the accounting for assets, liabilities, net position,
revenues, and expenses. It has two main purposes: Determine result of operations from revenues and expenses Determine financial position
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Transforming Financials at the People’s DepartmentAccounting Equations
BudgetaryBudgetary Resources = Status of Budgetary Resources
ProprietaryAssets = Liabilities + Net PositionExpanded as:
Assets = Liabilities + Net Position + Revenues – Expenses + Gains - Losses
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Accounting Events
Transforming Financials at the People’s DepartmentFMMI General Ledger
The General Ledger (G/L) is the record where each financial transaction that occurs in FMMI is document. In FMMI, the Financial Accounting (FI) module is responsible for
ensuring that USDA’s G/L is kept accurate, up-to-date and in balance
By keeping the G/L up-to-date, the FI module enables USDA to report its financial status
When postings are made, FMMI automatically posts the document to the appropriate G/L accounts
FMMI also records all financial activities in “real-time,” which means that when a transaction is processed, it is immediately posted to the General Ledger
For instance, a FMMI user based in Kansas City could view a customer invoice posted in Minneapolis just seconds afterwards.
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Transforming Financials at the People’s DepartmentFMMI Organizational Hierarchy
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Transforming Financials at the People’s DepartmentFinancial Accounting Module (FI)
The Financial Accounting (FI) module addresses USDA’s financial, budgetary, and statutory reporting requirements. Immediately after the user enters the appropriate data, FMMI displays
updated information on the relevant accounts, account totals, and balances. It also has the capability to display information regarding the Balance Sheet and Statement of Net Cost
Every transaction resulting in a financial impact posts to the FI module The account balances of each G/L Account (USSGL + sub-account) are
housed in the FI module The FI module houses three special ledgers
Ledger 95: Holds data for the Trial Balance by Fund Ledger 96: Holds data for the FACTS I reporting Ledger 97: Holds data for the FACTS II reporting
The FI module is a source of many financial reports
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Transforming Financials at the People’s DepartmentFMMI G/L Structure
The FMMI General Ledger follows the structure mandated by the United States Standard General Ledger (USSGL). The USSGL provides a uniform Chart of Accounts and
technical guidance for standardizing federal accounting The USSGL contains five major sections:
Chart of Accounts Accounting DescriptionsAccounting TransactionsUSSGL AttributesReport Crosswalks
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Transforming Financials at the People’s Department
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The Chart of Accounts provides the basic structure for the USSGL, incorporating both proprietary and budgetary accounts.
Chart of Accounts
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Example Account –
Account Number: 2190 Account Title: Other Liabilities with Related Budgetary
Obligations Normal Balance: Credit Definition: The amount of liabilities for which there is a
related budgetary obligation (USSGL account 49X1). This account does not close at year end.
Chart of Accounts (Cont.)
Transforming Financials at the People’s DepartmentFMMI Chart of Accounts
FMMI incorporates the United States Standard General Ledger (USSGL) and uses the USSGL's Chart of Accounts:
G/L account numbers are assigned within the predefined ranges detailed above
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Transforming Financials at the People’s DepartmentFMMI G/L Account Structure
FMMI uses the four-digit USSGL accounting numbering system. FMMI also captures a lower level of detail by expanding the standard numbering system by sub-account and RSC/BOC.
This expanded numbering system allows subsidiary accounts to be created for USSGL accounts. These accounts roll up to the 4-digit USSGL accounts. FMMI
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Transforming Financials at the People’s Department
Finding the Chart of Accountsin FMMI
The G/L Chart of Accounts can be found in FMMI by running an ECC report located under: General Ledger Management>Financial Reports>General Ledger Reports>G/L Chart of Accounts Report
Account Definitions (Long Text) help us determine how to record events that should be captured in the accounting system.
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Transforming Financials at the People’s Department
Adjustments; Accruals; and Posting Models
As part of the monthly activities, various transactions such as accruals and G/L adjustments are recorded and processed through the G/L Posting Model, as follows: A G/L Adjustment is a corrective action to an accounting error identified as a result
of reconciliation or other detailed analysis This adjustment is processed as a direct entry using the Create Parked G/L
Account Document transaction The accrual entry is processed as a direct entry by the General Ledger Processor,
using the Create Accrual transaction. FMMI uses G/L posting models to derive dependent characteristics. It
performs validations for each entered FI document line item, and if any of these validations fail, FMMI prompts the user to correct the relevant item.
FMMI automatically creates the budgetary ledger postings from the proprietary postings derived by the posting model.
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Transforming Financials at the People’s Department
G/L OverviewQuestions
Ledger ____ holds data for FACTS I reporting.
True / False: In FMMI the General Ledger account number is a 12 digit number.
Which FMMI module has the Chart of Accounts? _____________
True / False: One purpose of Budgetary Accounting is to record the appropriation receipts and status of appropriations.
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Transforming Financials at the People’s Department
G/L OverviewQuestions (Cont.)
(Match the G/L Account to the G/L Classification)
G/L Account A. 1000 B. 2000 C. 3000 D. 4000 E. 5000 F. 6000 G. 8000 H. 9000
G/L Classification Expense
___ Liabilities
___ Net Cost
___ Assets ___ Memorandum Accts
(Credit Reform) ___ Budgetary Accounts ___ Revenue & Other
Financing Sources ___
Agency Statistical/ Memorandum Accounts ___
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Transforming Financials at the People’s Department
Where to Find More on the USSGL
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USSGL Main Page: http://www.fms.treas.gov/ussgl/index.html
USSGL Common Questions:http://fms.treas.gov/ussgl/questions.html
Transforming Financials at the People’s Department
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Where to go with questions:
1) Supervisor
2) Program Budget Office
Where to go forMore Information
Transforming Financials at the People’s Department
G/L OverviewAnswers
Fill in the Blank: Ledger _96_ holds data for FACTS I reporting
True / False: In FMMI the General Ledger account number is a 12 digit number. (FMMI G/L account numbers are 10 digits – page 15)
Which FMMI module has the Chart of Accounts? _Financial Accounting - FI Module_
True / False: One purpose of Budgetary Accounting is to record the appropriation receipts and status of appropriations.
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Transforming Financials at the People’s Department
G/L OverviewAnswer (Cont.)
(Match the G/L Account to the G/L Classification)
G/L Account A. 1000 B. 2000 C. 3000 D. 4000 E. 5000 F. 6000 G. 8000 H. 9000
G/L Classification Expense
_F_ Liabilities
_B_ Net Cost
_C_ Assets _A_ Memorandum Accts
(Credit Reform) _G_ Budgetary Accounts _D_ Revenue & Other
Financing Sources _E_
Agency Statistical/ Memorandum Accounts _H_
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Transforming Financials at the People’s Department
Provide this page to your supervisor as documentation of completing this required overview.
I certify that I have completed the General Ledger (G/L) Overview.
__________________(Employee’s Name)
___________________ (Employee’s Signature)
General Ledger OverviewCertification
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