Business Rules Governing Journal Vouchers

Submission to CAO
Governing the use of journal documents are guidelines or rules for their submission to CAO. These include:

• Only CAO may make changes to Employee Benefit, Allocation, and Overhead accounts.
• Only completed parked journal documents are posted (or reviewed and then posted).
• CAO returns rejected journal documents to the originator's Workflow In Box for modification or deletion.

Not allowed

• Posting to cost objects with termination code 3
• Posting salary G/L accounts to cost objects with calc code 2 (e.g., fabricated equipment)
• Posting payroll, travel, or property G/L accounts to document type SI journal documents

Entry reminders

Posting keys (when creating a JV in SAPgui only):

40 = debits 50 = credits

Document date:

Must be within the cost object's begin and end date.

Required before CAO can post

• A completed parked journal document with:
  - A zero balance
  - Line item text (DTR text) and Extra Text with the justification
• If the G/L account is property, a PO number is required in the line item text (column I in the JV upload).
• If the G/L account is underrecovery (800703-800704, 490318-490321, 420316), a WBS element (the WBS that incurred the F&A underrecovery) is required in the Allocation field (column J in the JV upload)
• Only one cost object is allowed for each line item. You are not allowed to assign a line item to more than one cost center, internal order or WBS element.
• G/L accounts must be consistent with cost objects.
• Within a journal document, the balance of salaries/wages must equal zero.
• The balance of underrecovery reclassifications in/out must equal zero.
• No SAP errors

Reclassification of charges
All reclassifications must be appropriate to the cost object or GL account being charged. If the cost object (usually a sponsored WBS element) or GL account (payroll, equipment, or travel, for example) is subject to budget restrictions or other special rules, the reclassification must be in compliance with these restrictions or other special rules.

Documents involving the reclassification of a charge to a federally sponsored cost object must provide the following information:

• a description of the error
• how it occurred
• how it was discovered
• why it was not reclassified on a timely basis, if the correction is submitted more than 120 days after the original document.

Journal vouchers that alleviate an overrun require all relevant documentation to substantiate the entries.

Journal vouchers that alleviate an overrun in a sponsored project by assigning the overrun to a cost center or internal order supported by the Institute's budget or fund must use the G/L account 420314, Recorded Project overrun - No O/H. This is necessary to preserve the Research Base as required by Federal regulations.

Entries for which the receipt date is within the effective dates of the cost objects. Receipt dates outside the effective dates require compliance approval.

Internal meetings
Journal vouchers for internal meetings must include the following:

• location, date, purpose
• agenda
• a listing of participants.

Post any related alcohol charges to the G/L account 421205, alcoholic beverages.

Travel, equipment, and other fixed assets
Journal vouchers charging travel, equipment, or other fixed asset accounts must follow the Institute's underrecovery, travel, and capitalization policies.

• Travel: The travel office assigns trip numbers and reviews charges.
• Equipment: The Property office generates a report to validate compliance with MIT policy and assigns an MIT property number. Documents must reference the Purchase Order for the equipment purchased.
• F&A Underrecovery: For proper reporting of Institute, school, and DLC underrecovery, funding documents must reference the WBS element incurring the underrecovery.

Compliance with Generally Accepted Accounting Principles

Activity requiring either operational or compliance review will be forwarded to the appropriate office in CAO. Compliance approval is associated with complying to generally accepted accounting principles and government regulations. Operational approval is associated with the need to have a review for data integrity requirements.

CAO approval is required for the following costs before a journal voucher can be posted. JVs requiring compliance approval are reviewed for compliance with generally accepted accounting principles and government regulations. JVs requiring operational approval are reviewed for data integrity (e.g., payroll).

Operational Approval Required
An operational review entails ensuring internal MIT data integrity, e.g., property, payroll, and travel vouchers.

Payroll Activity
Approval required for:

• All current year payroll charges are processed through the payroll subsystem.


• The following Payroll G/L accounts:

G/L Account Description 400005 - 400899 490100 - 490103 Payroll - various Payroll - various

Compliance Approval Required
A compliance review determines whether the journal voucher complies with government regulations and generally accepted accounting principles, e.g., journal vouchers to sponsored research accounts.

Travel advances
Approval required for:

G/L Account Description 420065 Travel Advance & Tickets 422070 Foreign Travel - for approval with WBS elements only

Reclassifications involving non-recoverable costs
Approval required for:

• Review of costs charged to a specific unallowable G/L account (object code) within an otherwise allowable Institute cost object (cost center, internal order, or WBS element) based on the initial G/L selection of the individual initiating the charge.
  
• The following unallowable G/L accounts based on government regulations:

  G/L Account Description 421000 Meetings - Food & Beverages 420166 Entertainment 420302 Promotional Items & Memorabilia 420318 Recreation Related Expenses 421205 Alcoholic Beverages 421584 Membership and Social

• Any transfers involving WBS costs.

Journal voucher entries involving receipt date outside of effective dates
Approval required for:

Any entries for which the receipt date of any transaction does not fall within the effective dates of the cost objects, that is, if the cost object has started after, or ended prior to, the receipt date.

Operational Functionality

1. JV document types

a. Use the document type SA during fiscal year periods 1-12
b. Use the document type FY during the closing periods 13-16

2. For FY documents, use only WBS elements less than 5000000.

 

3. Line item text is required for document types SA and SI.

 

4. You can enter only one cost object (cost center, internal order, WBS element) per line.

a. When a cost object is required for transaction, the system allows you to enter only one of type (cost center, internal order or WBS element) as shown below:

G/L Account	Cost Center	OR	Order	OR	WBS Element
400000-469999	Yes		Yes		Yes

5. Use the document type SI for internal providers. Payroll, travel, property and transfers are not allowed on SI JVs.

 

6. An explanation is required for document type SA.

 

7. When the JV has been compiled successfully, the originator of the JV is notified that either:

-JV was sent for further approval OR
-JV was posted immediately

G/L Account Selection Tables

G/L account numbers between 100000-169999, 200000-299999, 300000-399999

For document types SA, cost objects (cost center, internal order, or WBS element) are not required for G/L account numbers between 100000-169999, 200000-299999, 300000-399999.

G/L account numbers between 400000-499999 or 800000-899999 or any combination

G/L account numbers between 400000-499999 or 800000-899999 or any combination require a cost center or internal order or WBS element. Each line item must have one assignment to complete the entry.

G/L account numbers and use of cost objects

The following table shows which cost objects can use which G/L accounts.