McMaster improves financial reporting

[img_inline align=”right” src=”http://padnws01.mcmaster.ca/images/subcode.jpg” caption=”Members of the subcode committee pose for a photo before the last workshop held this week. Pictured in front, from left, are Linda Grocott, Stacey Zucker, Lydia Duarte and Stacey Maxwell. Pictured in the back row, from left, are Marianne Smilie, Jan Peer, Dale Stevens, Nancy Gray, Terri Wetton and Julie Gienuisz.”]McMaster's Financial Services Department is improving its financial reporting by eliminating and clarifying the use of expense subcodes.

A subcode indicates the type of expense that has been incurred by the University, such as travel, telephone charges, book acquisitions or employee wages and benefits. Currently 1,400 subcodes exist for expenses, but the changes and revisions proposed for May 1, 2005 will likely eliminate these by more than half over the next few years.

A Subcode Committee composed of staff from across the University was established in 2003 to standardize and reduce the number of subcodes.

“Our intent is to improve the quality of our financial reporting both internally and externally,” says Nancy Gray, director of finance at McMaster. “Prior to this change, there was inconsistent reporting across the University. This will standardize the use of subcodes and improve the usefulness of all financial reports.”

Many subcodes are too general, she adds, which can lead to misreporting of information. For example, while Maclean's Magazine in its annual ranking consistently ranks McMaster high in total library acquisitions, McMaster could place even higher if expense reporting was less ambiguous, she says. “Often, a departmental library's expenses are reported under Sundry (6006) or Supplies (6100), instead of being listed under the appropriate subcode – Books/Periodicals (6116) so in fact our numbers could be higher if expense reporting was more accurate. The intent of the change is to narrow down and clean up unnecessary subcodes so users know exactly where to code expenses,” she says.

The changes will affect nearly all McMaster employees. Anyone who makes purchases, does cheque requisitions, prepares payroll entries, or does journal entries using Oracle will need to use the new subcodes. Seven workshops were held recently to provide information about the changes.

Further information, including a summary of the questions and answers from the workshops and a list of the key subcode definitions is available at http://www.mcmaster.ca/bms/finance/desc.pdf. The changes in expense reporting will take affect May 1, which is the beginning of the new fiscal year. Later in the fiscal year, the Subcode Committee will review all of the revenue subcodes to prepare definitions and guidelines for these subcodes as well. New members to the committee are welcome.

As well as enhancing both internal and external financial reporting, the establishment and implementation of consistent definitions and reporting standards will provide a key foundational piece for the Business Intelligence Project (BI). The BI project, through the creation of an institutional Data Warehouse and deployment of Web-based query and reporting tools will provide the University community with better electronic access to better data. Workshops will be held in mid to late May to explain more about the project, and provide a demonstration of the site-licensed, Web-based query and reporting tools which will be deployed. For some background information on the project, visit: http://www.mcmaster.ca/cis/bi/.

Questions and feedback on subcodes can be sent to Lydia Duarte at duartel@mcmaster.ca or ext. 23934.