Operating Account Functions

Purpose: To help sorority and fraternity treasurers and other group members understand how
university operating accounts function and how to read statements of account.

Operating Account Function:

The university accounting system and student billing services are made available for
use by sorority and fraternity groups to facilitate their collection of revenues and payment
of expenses. Operating accounts are established for each group to track their
activity, and statements of account are distributed monthly. Each sorority and fraternity
is responsible for ensuring revenues are sufficient to cover expenses; revenues in excess
of expenses charged to the account are returned to the group monthly. These accounts
are monitored by Accounting Services and the Office of the Vice President for Student Affairs.

Operating Account Cycle:

There are twelve accounting periods in the fiscal year (September through August).
Each month, accounting activity is posted to the appropriate expense or revenue lines
of the account. The net total of expenses (debits), and revenues(credits), is the
balance in the account. A debit balance (positive) indicates a balance due to the
university: expenses to date are in excess of revenues to date. A credit balance
(negative) indicates a refund is due to the group: revenues to date are greater than
expenses to date.

Each month Accounting Services reviews the ending account balances and determines
if a refund check is due to the group or if there is a balance due. This process occurs
in approximately the third week of the following month (the accounting period closes
one week after the calendar month end and reports are generated after that).
Accounting Services prepares a packet each month which includes the monthly account
statement and supporting reports (see below). If a refund check is due to the
group, we send the check to the individual authorized to receive it (normally the
treasurer unless otherwise directed).

Expenses are purchases of university provided goods and services such as building
repairs, telephone, food service, and insurance which are charged directly to the
operating account rather than billed to the group individually. Groups may also
have charges posted to their operating account through the procurement card program.
The individual service providers send a statement of detailed charges either directly to
the group (e.g., Facilitates Management, University Services), or to Accounting Services
(e.g., telephone charges) in which case this information is included with the monthly
statement package.The group may also request to have the university student account
system bill and collect for fees and room & board; these revenues are directly posted
to the operating account. A report detailing individual billings is included with the monthly
statement to support the total revenues credited by the student account system (SES).
Groups without system collections send checks to Accounting Services on a monthly
basis to pay the balance due on their account. These checks will be deposited into their
operating account by Accounting Services and the transaction will appear on their monthly
account statement as revenues.Questions about expense and revenue items on the statement
should be directed to the provider of the goods or services. Accounting Services (1-5337)
can also help direct you to the responsible department.

Physical Plant Services-- Facilities Management (1-5201)

Procurement Card (1-3359)

Student Billing/Collection-- Student Accounts (1-5224)

Reading F&S Statements of Account

The monthly statement of account is titled “Detail Trial Balance by Accounting Distribution
for the Period 01 (month) thru 30 (month) (yr)”; report ID is NA11. The banner of the
report includes the name of the group and the account number. The account
number consists of a Fund, Area, and Organization number. The statement summarizes
accounting transactions for the month, beginning and ending balances for each type
of transaction, and the total for the account.

Expenses are categorized as type 22 transactions. Each type of expense is
listed separately with its description. Each transaction is uniquely identified by
a transaction number and a brief description. The first letters of the transaction
number indicate its source: IV-internal services, JV-accounting services.
Accounting Services will use a JV transaction to apply credits (account
revenues) against outstanding expense to “pay” the charge; JVs are also used
to correct errors.

Revenues are categorized as type 31 transactions. Deposits of checks will
appear with a transaction number prefix of CRE. Student account collection
revenues appear with the transaction number prefix JVBR. Revenues generally
are credits although student account corrections may be debits. When Accounting
Services transfers revenues to cover expenses, a JV transaction will debit the
revenue line and credit expense line(s). When excess revenues are returned to
a group, a check will be disbursed from the revenue line. The check
will appear as a PVAS transaction debit. As above, JVs may be used to correct errors.

At the end of each fiscal year the operating account expense and revenue
line ending balances are temporarily moved to a holding account.
This accounting treatment is required to reflect that these transactions
are not part of the university financial accounts but are funds held by
the university for the sorority and fraternity groups. The October
statement of the new fiscal year will reflect the return of the prior year
balances to their respective account lines.

Office of Accounting Services	Updated by: Jamal Davis
619 Clark St. Rm. 217	Last Updated : 7/9/2002
Evanston, IL 60208
Phone: (847) 491-5337