USE OF OBJECT CODE 7200 FOR EXPENSES
Leslie Griffin, Associate Director, & Olga Mery,
General Accounting Manager
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What's the history on object
code 7200 Miscellaneous
Services?
• State audit for fiscal year 2010
• Over $1 billion of expenses systemwide
annually charged to Miscellaneous
Services
• Recommended use of more object
codes to improve transparency
Why are object codes important?
• Object codes identify the type of expenditure
• UCOP collects data from each campus using over 200 object codes
to classify expenditures for financial reporting
• Object codes help us comply with regulatory and financial reporting
requirements such as,
• Government Accounting Standards Board (GASB)
• Integrated Postsecondary Education Data System (IPEDS)
• Federal, State and agency reporting
• Management needs
What have some campuses done in
response?• Eliminate the use of 7200 Miscellaneous Services on campus
• Allow departments to use 7200 with General Accounting
reclassing these expenditures to other object codes on the
General Ledger
• Discourage departmental use of 7200 with General Accounting
reclassing these expenditures to other object codes for UCOP
reporting only (not on our General Ledger)
Where are we now?
• FY17 had 16,130 transactions to Miscellaneous
Services totaling over $11M
• Through January '18 there are 8,153 transactions
totaling about $7M
What we can do working together -
• Departments can TOE major expenses off object
code 7200
• Departments can examine open Vendor Blankets in
Gateway• If VB is over $100K, contact Olga with new object
code change (B&FS to fix in Gateway)
• Discontinue use of 7200 for all new POs
Please do the TOEs as soon as possible
Some Guidelines-Other (under used) Object Codes
• 7235 Consultants (including Executive Recruitment searches)
• 7224 Temporary Services (like Apple One)
• 7213 Outside Purchased Services (like for PSAs to image the
lagoon flora)
• 7260 Maintenance Agreements for Equipment (including
Lab equipment)
• 7185 Software Maintenance & Support
• 7730 Advertising (for costs of promo & public relations items, like
videos)
Procurement is updating the Commodity Codes in Gateway this
week
What else can we do, or are we doing?
• Updating the Object Code Listing (2-3 month project)• More relevant
• Less restrictive categories
• Meaningful for financial reporting
• Email Olga if you are interested in being part of this team
• Discontinuing use of 7200 in Gateway for all new Purchase
Orders
• Examine default object code in Flexcard
Questions & Answers
Q: Why not delete object code 7200 miscellaneous services all
together and use more specific ones?
A: That's a great idea! We could do that. We actually do have more
specific ones already. Some object codes are too narrowly defined or
have confusing notes, so the goal is to make the object codes specific
(but not too narrow) and serve broad campus needs for financial
reporting and budgeting.
Questions & Answers
Q: Is this current? http://objectcodes.lsit.ucsb.edu/
A: No, it isn't. We will get this updated as soon as possible. Please use the
link on the BFS website to the 2012 Object Code Listing, as this is the most
current. We are working on updating the 2012 version, and hope to
complete that in June 2018.
Questions & AnswersQ: What object code would you recommend for water service or other items like
Bay Alarm?
A: During the Mini-tune up I mentioned that water and alarm monitoring should both use
object code 7213-Outside Purchased Services. After further discussion of whether bottled
water is a consumable or a service, and evaluation of the Commodity Code listing, I am
recommending that bottled water be coded (in Gateway) to Commodity Code 50000000 and
Object Code 8000 or 8004 for Supplies & Materials - Other. For alarm monitoring 7213-
Outside Purchased Services is the most appropriate object code, and the Gateway
procurement team is updating the Commodity Code listing to add this object code to CC
72000000 for this service. Hopefully these changes will bring coding consistency among
campus departments for these two types of expenditures.
Questions & Answers
Q: What object code do you recommend for internet/online
database services?
A: I recommend using 7185, which has a current title of Maintenance-
Computer Software. Part of the project to update the Object Code Listing is
to retitle it Software Support & IT Services (or something similar).
Questions & Answers
Q: What object code would you recommend for photography
services?
A: That depends on what the photograph services are for. If it's for creating
promotional brochures, videos, etc., then I would recommend Object Code
7730- Advertising. If the photography services needed for a sponsored
project, then I would recommend OC 7230-Advertising; Federally Allowable.
If the photography is for something like infrared imaging of the lagoon flora,
then I would recommend 7213-Outside Purchased Services.
Questions & Answers
Q: Gateway doesn't seem to allow more specific object codes.
A: Yes, we are noticing that too. We are working with the Gateway team to
update the Gateway Commodity Code listing this week to allow purchasers
to choose the appropriate object codes.
Questions & Answers
Q: What would you use for Internet Service packages for shopping
online?
A: I would recommend Object Code 7185 and that is already set up in
Commodity Code 81000000.
Questions & Answers
Q: Could we have a new object code for ergonomic items? For
purchasing items after the evaluation of the ergonomic coordinator?
A: You could use Object Code 8130-Office Equipment for desks and chairs,
and 8140-Office Supplies for some of the smaller ergo type supplies and
add in a ERGO in one of the departmental FAU fields to separate out the
ergonomic related expenditures.
Questions & AnswersQ: We often use 7200 because it’s unclear which specific object code to use.
How do we manage this once this chat is done. Is there someone we can contact
to help determine which object code to use? If someone has been adjusting
object codes in the background for UCOP’s purposes, can this information be
made available so there is something we can reference as examples of proper
Object Code use?
A: We understand that the current Object Code Listing is not user friendly! Please consider
joining us as we update the listing - we are forming a campus wide team that will meet at 10
am on Fridays beginning this week through April 20th. General Accounting is also willing to
help you determine which Object Code to use. Yes, as part of the Object Code Listing
update we have proposed including the UCOP Object Codes mapping.
Questions & Answers
Q: What about transcription services and translation services?
A: My recommendation is either 7224-Temporary Services (if they are
temporary services that are needed), or 7213-Outside Purchased Services if
this is an ongoing cost for your department.
Questions & Answers
Q: Can we get an object code for purchasing computer
equipment—it is under $5000?
A: Computer object codes - 9900 for $5000 and over items; 8120 generally
for under $5000, but that is for all equipment under $5000 - having a
separate object code is a great idea and something we may consider.
Questions & Answers
Q: What about Bus Charters? Would you recommend travel 2000?
A: Yes, that would be my recommendation - Object Code 2000-Travel
Questions & AnswersQ: Is this something that used to be done by accounting but is now being done by
departments to correct object codes?
A: UCOP would like our Object Code 7200-Miscellaneous Services to be lower by several
millions of dollars. Though we as a campus have done a terrific job in reducing the use of
this Object Code from being over $80M in fiscal year 2009 down to about $11M last year, it
is still too high. General Accounting has done some reclassification entries to meet UCOP's
requirements, however due to the high volume of low dollar transactions it is very difficult to
accurately correct for a year's worth of transactions moving to the correct object codes. This
impairs the reliability and accuracy of the financial statements for our campus. We are
asking departments to analyze their expenditures to OC 7200, and TOE their expenditures
to more appropriate object codes. We are also asking departments to discontinue using OC
7200 going forward - in vendor blankets & one time purchase orders in Gateway; Flexcard,
Form 5s and journals. We have the ability to change the OC on large vendor blankets and
open POs, so please let me know if you have some that you would like changed.
Questions & Answers
Q: We can't find the Sept 2012 object code listing. Can BFS update
the current list?
A: Yes, you will find the September 2012 version of the Object Code Listing
as a link on our website. Please also consider joining our project team
whose goal is it to update the Object Code Listing. We hope to have a new
listing to campus by June.
Questions & Answers
Q: Many departments want to use object code 7470 for student awards from a
78* account. Our guidance has been 7770 only for 78* accounts. Only non-78*
accounts with an "award" that isn't a stipend (i.e. it is a prize, cash award, etc.)
can they use 7470. Is that still correct?
A: The policy is that 7470 cannot be used on 78 accounts and must be 7770 only. I believe
it has to do with IRS regulations and reporting issues (7470 payments are tax reportable,
7770 payments are NOT tax reportable). On C&Gs, "Cash prizes and awards" are generally
not an applicable / allowed expense. As far as this question: "Only non-78* accounts with
an "award" that isn't a stipend (i.e. it is a prize, cash award, etc.) can they use 7470. Is that
still correct?" I believe the answer is yes, this is still correct. It IS tax reportable. The one
we normally see in contracts & grants is 7770 budgeted to a 78 account, which is for
Stipends for Fellowships & Scholarships (which are not tax reportable but may be taxable to
an individual).
Questions & Answers
Q: Can we use financial journal instead of single TOEs for the
conversion?
A: We recommend that you use the TOE system, or if you need to you can
use a manual (paper) TOE. If you have a lot of small dollar transactions,
then please contact Tyler Clark, Manager, Extramural Funds Accounting at
[email protected] or 805-893-3068 .
Questions & Answers
Q: Are new object codes only added and never removed?
A: We may be removing a few old ones, if they have not been used at all
over the past few years.
Questions & Answers
Q: They will have to be manual TOE if they are over 120 days old.
A: Yes, you are correct.
Questions & Answers
Q: Can you add more generic object codes? When was the last
time a new object code was added? Also, you need to think of
things like: shredding, water, bus rentals, etc.
A: These are terrific ideas! Please join our project team. We need to hear
from you, and what Object Codes are important to your department for
financial reporting. If you would like to join our project team, just send me an
email and I will add you to the meeting.
Questions & Answers
Q: Where can we submit topic suggestions for Mini Tune-Ups?
A: Future topics can be submitted here.
Presenter Contact Information:
Olga Mery, General Accounting Manager
805-893-2998
Leslie Griffin, Associate Director
805-893-4738
CLOSING - BFS Mini Tune-ups
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