Definitions
Accrual and Deferral Entries at the End of an Accounting Period
The University reports financial activity using the accrual accounting method. In accrual accounting, revenues are reported when earned, not necessarily when money is received. Expenses are reported when materials or services are received, not necessarily when money is paid out.
Budget Adjustments and Transfers
Amounts recorded as budgets represent money anticipated or available in a particular C-FOAPAL. Depending on fund type, a budgeted amount may reflect one of the following:
- Dollars allocated to a particular C-FOAPAL that comprise a portion of resources recorded in a larger, University-wide fund
- Amounts available for spending within a particular Banner fund that is managed by a particular University unit
- Estimates of revenues that will be received and a plan for how those amounts will be spent
Under certain circumstances, budget amounts may be increased or decreased (a budget adjustment) or they may be transferred from one C-FOAPAL to another (a budget transfer). Budget transfers differ from fund transfers. Fund transfers move some portion of a C-FOAPAL fund balance whereas budget transfers transfer allocated budget rather than actual funds. Consult the definition for "Fund Transfers."
Debits and Credits
The University uses double entry accounting which requires that the total amount for debits and credits are equal. Each Banner account balance is expressed as either a debit or a credit. Every accounting transaction must include both a debit and a credit. Debits (+) increase expense and asset balances and credits (-) decrease such balances. Conversely, revenue and liability balances are increased by credits (-) and decreased by debits (+). For more detailed information, consult Understanding Debits and Credits.
Educational and Administrative Allowance Assessments
Charges to various C-FOAPALs to recover administrative and overhead support costs. The assessments are made to C-FOAPALs with activity that requires significant administrative assistance or oversight by unit, college, campus, or University of Illinois System Offices units. The proceeds of these charges are recorded as institutional funds. Educational and administrative allowance charges and revenues are usually posted automatically by a Banner-related Allocations and Assessments (ALAS) system, or sometimes by University Accounting and Financial Reporting (UAFR) using journal vouchers with special account codes. The institutional fund resources generated by the assessments are then allocated to units by campus budget offices through a separate budgeting process.
Fund Transfers
Transactions that move some portion of a Banner fund balance from one C-FOAPAL to another C-FOAPAL. They are different from transfers of budgeted dollars that are allocated to units within a single, centrally-managed fund. For more information, consult the definition for "Budget Adjustments or Transfers."
Indirect Cost Recovery (ICR) Assessments
Charges to grant and contract awards based on the Facilities and Administrative (F&A) rate that has been negotiated with sponsors to cover costs such as for purchasing, space, maintenance, accounting. The proceeds of these charges are recorded as institutional funds. ICR charges and revenue are posted automatically by Banner grant processes. The institutional fund resources generated by the assessments are then allocated to units by campus budget offices through a separate budgeting process. For additional information about institutional and other funds, consult Fund Type Descriptions.
Internal Sales
Charges by one University unit for goods or services it provides to another University unit. This includes charges to sponsored projects.
Internal Transactions
Transactions within the University accounting record rather than with external parties. They must be recorded in the Banner general ledger system to meet University financial accounting and reporting responsibilities. Financial transactions can occur between the University and an external party or between units of the University. Internal transactions are used to allocate University-wide resources, record financial activity between C-FOAPALs, and correct or adjust financial activity within a C-FOP. Internal transactions are not used to record the receipt of money from external parties, nor do they generate checks to external parties. Internal transactions include:
- Accrual and deferral entries
- Budget adjustments and transfers
- Educational and Administrative Allowance assessments
- Fund transfers
- Indirect Cost Recovery assessments
- Internal sales
- Revenue and expense transfers and corrections
Related Organizations
Consult the definition for "University-Related Organizations."
Revenue and Expense Transfers and Corrections
Transactions that accomplish one of the following:
- Move revenues or expenses from one C-FOAPAL to another
- Correct a segment within the C-FOAPAL used in a transaction
- Simultaneously transfer revenues or expenses between C-FOAPALs and correct inappropriate account codes
Transfers and corrections of personnel expenses are processed through Banner Payroll using the labor redistribution form.
Transfers and corrections of revenues and non-personnel expense are processed using Banner journal vouchers.
University-Related Organizations
University Related Organizations (UROs) are separate entities created at the direction of the Board of Trustees to meet certain specialized needs of the University. Their relationship to the University is subject to State of Illinois regulations and is governed by a written contract with the University. Examples include the University of Illinois Foundation and the Alumni Association.
Understanding Debits and Credits
Fund Type Descriptions
Capitalized Construction Projects
Plant Fund Reserves Criteria
AFS Reserves per AFS Bond Indenture Agreements
HSFS Reserves per HSFS Bond Indenture Agreements
Last Updated: January 9, 2017 | Approved: Senior Associate Vice President for Business and Finance | Effective: November 2009