Discover UH
Revenue
Why Do We Create Journal Entries?
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Journal entries are created to record the University’s
business transactions.
These transactions are posted to the general ledger.
The general ledger records all account activity for
the University (i.e. assets, liabilities, fund equity,
revenues, and expenses).
The transactions posted to the ledger are used to
prepare the University’s financial statements.
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What are Debits and Credits?
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Debits and Credits are often
characterized as either a positive or
negative number but in reality a
debit or a credit characterizes the
type of account being used.
There are five types of accounts
used in accounting. They each
have either a debit or a credit
balance, which is known as its
normal balance. The normal
balances for each account are as
shown in the table to the right.
To reduce the normal balance of
the accounts listed a reversing
debit or credit would be recorded.
Account
Type
Expected
Balance
Example
Revenue
Accounts
Credit (-)
Sales
Revenue
(4XXXX)
Expense
Accounts
Debit (+)
Office
Supplies
(5XXXX)
Asset
Accounts
Debit (+)
Bank Lines/
AR
(1XXXX)
Liability
Accounts
Credit (-)
Accounts
Payable
(2XXXX)
Fund Equity Credit (-)
Accounts
Fund
Transfer
(3XXXX)
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What is Revenue?
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Revenue is income earned or received by
the University.
The University collects the following types
of revenue:
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Sales of Goods and Services
Contracts & Grants (federal, state, local, private)
Gifts (current & endowed)
Tuition & Fees
State Appropriations
Auxiliary Enterprise
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Sales of Goods & Services
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Revenue is recorded when goods are sold
and/or services rendered by a department
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Types of Sales
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Cash Sales
Credit Card Sales
Service Center Sales
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Sales of Goods & Services
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Cash Sales
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Deposit to local bank
Deposit sent to SFS
GL Journal – Routed along WF Path 2
Credit Card Sales
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Deposit to credit card bank
Deposit not sent to SFS (unless combined with cash deposit)
GL Journal – Routed along WF Path 1
Note: Cash and Credit Card Sales can be combined on the same
GL Journal, WF Path 2 is selected
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Sales of Goods & Services
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Service Center Sales
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Prepared on SC Voucher (unless a cash sale
occurs, GL Journal prepared)
Recovered cost accounts are always used
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50050 (local funds)
50051 (state funds)
50053 (cash sales)
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Sales of Goods & Services
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Supporting Documentation
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Cash Deposit Summary Form (with two
signatures)
Deposit Slip
Totals Report
http://www.uh.edu/finance/pages/References.htm
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Contract & Grant Revenue
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Revenue Estimate Budget is the total amount
of funds to be received from the sponsoring
agency.
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The revenue budget should be equal to your
expense budget in order to create the
appropriate REV actual entry.
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Contract & Grant Revenue
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Revenue recorded to cover expenses of sponsored or
research projects
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As expenditures are posted to Ledger 5 cost centers,
a weekly revenue recognition process is run to
generate a REV (source code) GL Journal entry that
records an accounts receivable and revenue
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When the payments are received via check or ACH,
a manual GL journal is prepared to record the cash
receipt and reduce the project accounts receivable.
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Contract & Grant Revenue
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Once the total amount of the award has
been expensed and payments received,
revenue and expenditures totals should
balance, leaving a zero fund equity and
receivable balance.
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Contract & Grant Revenue
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If the revenue budget is less than the expenditure
budget once the actual expense post over the revenue
budget, it will cause a deficit fund equity balance.
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To clear the deficit fund equity balance, a budget
revision needs to be processed by OCG to increase
the revenue budget or prepare a manual journal to
address the deficit.
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General Accounting Contacts
•
Sales of Goods and Service Revenue
Gretta McClain - ext 3•8729
email: gmcclain@uh.edu
•
Contract and Grant Revenue
Andrea Tebo – ext 3•8722
email: atebo@uh.edu
Training: www.uh.edu/finance/pages/Training.htm
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Gift Revenue
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Gift revenue may be monetary or non
monetary.
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Monetary revenue is money given to the
University.
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Non monetary revenue is goods and/or
services given to University without an
exchange of cash to the University.
(Ex: property, royalties, gifts-in-kind,etc)
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Gift Revenue
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Gift Revenue is recorded when money is
given to the University or when the
University receives goods and/or services
from an external entity.
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Two general categories of gift revenue
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Current operations (non-endowed)
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Endowment
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Gift Revenue - Current Operations
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Current gift revenue is recorded to ledger 4
cost centers.
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When current gifts are given to the
University, the beneficiary department
prepares a Gift Transmittal Form.
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Journal entries are prepared to record the gift
to the General Ledger.
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Gift Revenue - Endowment
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Endowment revenue is also gift revenue, but
endowment contributions are recorded to ledger 6
cost centers.
When money is contributed to an endowment, the
donor designates which endowment will receive
their contribution.
The University has numerous endowments which
provide benefits to specific departments.
Contributions that are received during the fiscal year
are invested in the endowment pool.
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Types of Endowments
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True - principal may never be expended, only the
income derived from investment of principal may
be used.
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Term - principal may be expended after a period
of time or the occurrence of an event as stipulated
by the donor.
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Quasi - created by the University and the principal
can be spent if authorized by the board. A five
year holding period is required.
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Donating Stock to UH
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Book entry form (no physical certificates)
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The donor’s broker can send the stock to the
University electronically.
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The instructions vary depending on whether or not
the gift is to be endowed.
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Treasury can provide instructions.
Physical securities must be in the
University’s name or a stock power must be
included.
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Establishing an Endowment
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University Advancement works with the
donor to establish an endowment agreement.
An endowment cost center is assigned by
Treasury and the cost center is created by the
Budget Office.
The beneficiary department is notified to
create an income beneficiary cost center. This
cost center must reflect restrictions associated
with the gift, if any.
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Distributing Income
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Income is distributed from eligible
endowments each year using a certain
payout rate.
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Income is distributed to the appropriate
beneficiary department’s cost center or
returned to principal depending on the
specifics of the endowment.
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Distributing Income
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Income may be spent for purposes
approved by the donor
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Scholarships
Fellowships
Professorships
Program Support
Other restricted purpose
Unrestricted purpose
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Distributing Income
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Who is responsible for distributing
endowment income?
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The Treasurer’s Office is responsible for
calculating the annual income distribution and
works with accounting to post the entries to
the general ledger.
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Distributing Income
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How is the endowment income
calculated?
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The distribution is based on a percentage of
the average market value of the endowment at
the end of the previous three years. The
Board of Regents determines the payout rate,
which is currently 4%.
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Distributing Income
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What is an under water endowment?
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Any endowment whose current market value
is less than sum of all donations made to that
endowment over its existence.
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Distributing Income
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What is the impact of under water
endowments?
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Any endowment that is under water will have its
distributions suspended. This gives the endowment
time to rebuild its value through market appreciation.
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Distributing Income
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When does the income distribution
occur?
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Revenue and a receivable is posted to the
income beneficiary cost center in period
998 after the accounting for all current year
gifts.
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The receivable is cleared when we move
the cash from the endowment.
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Distributing Income
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Who is responsible for the spending of
endowment income?
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The department to whom the beneficiary income
account belongs is responsible for making sure
the income is spent in accordance with the terms
of the endowment agreement.
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Note: Spending is tested annually by Internal
Auditing and the external auditing firm for
compliance with donor restrictions.
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Distributing Income
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Can distributed income be reinvested in the
endowment?
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Yes, if permitted by the endowment agreement.
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The return of income to principal must be
approved by the Vice Chancellor/Vice President
for Administration and Finance.
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The form should be sent to Treasury.
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Correcting Gift Entries
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A gift was incorrectly deposited to a
restricted cost center instead of an
endowment or vice versa. Can this be
corrected?
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Yes, send a transfer request form to University
Advancement explaining the circumstances
along with donor details.
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L4 Funds and Endowments
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Can I transfer funds from fund 4 to an
endowment?
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Only if the restrictions on the ledger 4
account allow it. Documentation is
required before funds can be moved.
Documentation has to show that the donors
knew the gifts donated were to be
endowed.
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PeopleSoft Navigation to Endowment
Detail
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Set Up Financial/Supply Chain
Common Definitions
Design Chartfields
Define Values
Chartfield Values
Click on Program Code
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Endowment Navigation Cont’d
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Your screen will look like this:
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Endowment Navigation Cont’d
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Click on your search link
Your screen will look like this:
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Endowment Navigation Cont’d
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Click the UHS Endowment Acct tab
This screen provides various endowment details
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Endowment Navigation Cont’d
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Click the Endowment Document Image Tab
Click spyglass for Endowment Agreement
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Tuition and Fee Revenue
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The University of Houston assesses tuition and fees
to students depending on several factors.
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Resident or non-resident status
Undergraduate or graduate
Major
There are three components to tuition
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State mandated
Designated
Premium (e.g. Law, Pharmacy, Optometry)
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Tuition and Fee Revenue
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The University of Houston uses consolidated
rates for tuition and fees.
Refer to the UH web site for a detailed listing
of current tuition and fee rates
When a student registers for a course, the cost
of the course is posted to their student
account, which is maintained by Student
Business Services.
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Tuition and Fee Revenue
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Examples of types of fees
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Mandatory Fees – assessed to all students and are usually
mandated by state law resulting from a student vote
(student service, CRWC, UC)
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Consolidated Fees – academic fees charged to all students
included in the consolidated tuition and fee rates
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Voluntary Fees – charged to students if they register
within a particular course and/or section
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Tuition and Fee Revenue
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How does revenue from tuition and fees
show up in our accounts?
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Consolidated Tuition and Fee revenues are
distributed via the budget process
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Voluntary Fee revenues are recorded directly to
College/Departmental cost centers
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Offsets to Tuition & Fee Revenue
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Waivers and Exemptions
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They have the same effect on your revenue (decrease it)
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Most basic difference
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A waiver allows a non-resident student to pay in state tuition
rates
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An exemption allows a student, generally a resident, to be
exempt from payment of various charges depending upon the
exemption.
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Not all students qualify
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Generally recorded as contra-revenues against tuition and
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fee revenues
Contacts
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Fred Burnett - Treasury
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713-743-8782
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ftburnett@uh.edu
Robbi Puryear – Treasury
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713-743-8780
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rpuryear@uh.edu
Andy Startz – Student Business
Services
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713-743-5886
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ajstartz@uh.edu
Nancy Tran – Student Financial
Services
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832-842-9127
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ntran@uh.edu
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Karin Livingston – Accounting
Services
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713-743-4415
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klivingston@uh.edu
Andrew Hoang – Student
Accounting
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713-743-5629
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alhoang4@uh.edu
Gretta McClain – General
Accounting
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713-743-8729
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grmcclai@central.uh.edu
Andrea Tebo – Research
Accounting
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713-743-8722
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adtebo@central.uh.edu
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