Section 1 - Business and Financial Administration

Section 1.1 – Business and Financial Functions

Date: 9/25/06 — Approved: Finance Board

Associated Students of San Diego State University (“AS”) is a California not-for-profit auxiliary organization of The California State University (CSU), organized and operated in accordance with the Education Code of the State of California and the California Code of Regulations.The function of the organization is to provide essential activities which are an integral part of the San Diego State University educational program.Such activities include student government, cultural programs, and various other services.

One of the tasks of employees at all levels is to ensure the wise and most effective use of AS resources for these purposes. The primary responsibilities of the financial and business function of the A.S. administrative process are to:

DEFINITION OF ADMINISTRATIVE AREAS

When this policy manual uses the term "administration," it means those involved in the management or administration of these areas:

ACCOUNTING DEPARTMENT STAFF

The following are brief descriptions of the responsibilities of the various positions.

Controller

The Controller supervises the accounting department staff and is responsible for all accounting and financial reporting, financial services and cash management.

Accounting Manager

The Accounting Manager has responsibility for the general ledger system (including monthly reports, journal entries, questions and corrections) and for approving all purchase orders.The Accounting Manager also assists in the supervision of the accounting clerical functions and the year end audit.

Payroll Supervisor

The Payroll Supervisor is responsible for processing and maintaining all facets of the payroll cycle.

Accounts Receivable Clerk

The A/R clerk is responsible for processing all billings and mailing all customer statements and the entering of all cash receipts into the accounting system.

Accounts Payable Clerk

The A/P clerk is responsible for processing all properly approved purchase orders, invoices and check requests, and processing and mailing all disbursement checks.

Accounting Assistants

The accounting assistants are responsible for performing various accounting tasks under the direct supervision of the A/R & A/P clerks.

SERVICE OBJECTIVE

Financial management provides information which helps management allocate and use resources (for example, money, time, employees, equipment, etc.) more effectively. It also helps the public, auditors, and others to evaluate how effective management is in achieving the goals of the organization.

The Accounting Department helps directors and managers:

CONTROL OF BUSINESS AND FINANCIAL FUNCTIONS

The Controller has been delegated the responsibility for business and financial functions and services by the Associate Director. The Controller delegates authority to the Accounting Manager to direct the procedures used in all A.S. business and financial matters, even those operations which may fall under the actual line control of another unit of the A.S.

The Accounting Office is sometimes limited by statutes, rules, or regulations of the CSU, SDSU, state, or federal agencies when an individual unit seeks approval for a particular action.

ACCOUNTING PRINCIPLES AND PRACTICES

All business and accounting of the A.S. is to conform to generally accepted accounting principles and practices for educational institutions (unless otherwise stated in this policy manual) and to the requirements outlined in the following publications:

  1. Financial Accounting Standards Board’s (FASB) Statement of Financial Accounting Standards (FAS) No. 117, Financial Statements of Not-for-Profit Organizations.
  2. California Code of Regulations
  3. Education Code of the State of California

If the recommendations in these manuals disagree, their order of precedence is as listed above.

CONVENTIONS

The accounting procedures given in this section are intended to outline only the more relevant conventions which apply to A.S. business and accounting operations. They are not meant to include all the concepts, assumptions, conventions, principles, or rules upon which generally accepted accounting practices are based.

Fund accounting

The A.S. uses double-entry bookkeeping and fund accounting to record and classify business transactions. In fund accounting, resources for various purposes are classified for accounting and reporting under the following provisions:

A fund is an accounting entity with a self-balancing set of accounts for recording assets, liabilities, fund balances, and changes in fund balances. Separate accounts are maintained for each fund to record the use of resources. For accounting and reporting purposes, however, funds of similar characteristics are combined into fund groups.

Expenditure authority

The A.S. accounting records provide for the control of fiscal activity against established fiscal plans in the form of appropriations, budgets, and other expenditure authority.

Basis of accounting

Generally, the A.S. uses the accrual method of accounting modified to include obligations. In accrual accounting, revenues are recorded when earned, not necessarily when received. Expenditures are recorded when materials or services are received, not necessarily when they are paid. Receivables and payables are accrued for year-end reporting purposes.

Expenses incurred at a reporting date, but not yet paid, are accrued. Expenses paid, but applicable to future periods, are deferred.

The same terms are used with revenue. Revenue earned at a reporting date, but not yet received, is accrued. Revenue received, but applicable to future periods, is deferred.

The modified form of accrual accounting still recognizes expenses by the receipt of a good or service. The only basis for the omission of accruals, deferrals, and obligations is when the omission has no material effect on the financial statements.

Asset accounting

Assets owned by the A.S. for the purpose of carrying out A.S. programs are recorded at cost or, in the case of donated assets, at fair market value at the time of donation.

Financial statements

The A.S. reports on its financial condition and fiscal results of current operations in three basic ways:

  1. Statement of Financial Position
  2. Statement of Activities
  3. Statement of Cash Flows

Additional reports are prepared to provide relevant management information. One of the basic management reports is the monthly YTD Summary, a report of financial condition for accounts which summarizes current activity.

Need something else? Go back to the Table of Contents.