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Glossary of Financial Terms

GLOSSARY OF FINANCIAL TERMS

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Term Definition
Accounts Payable Money owed to suppliers
Accounts Receivable Money owed by customers to the corporation
Accrual Is the process of recording a transaction arising from goods received and accepted or services performed by September 30 that would normally not be recorded, in our normal processing cycle, until the next fiscal year.  Accruals are done so that UCAR can comply with government regulations that require UCAR to accurately reflect our financial position at the end of the fiscal year in our audited financial statements.
Actual Rate An indirect cost rate calculated based on actual costs and actual recovery applicable to a specified past period. An actual rate is not subject to adjustment.
Allocable Accounting Methodology Allocable accounting is a method of accounting that is used when funding is received from multiple sponsors on one proposal in support of a project and the specific expenditures cannot be directly identified with a specific sponsor's funding. The accounting method allocates expenditures accumulated in a "primary" account key to "secondary" account keys where the specific sponsor's expenditures are captured. All allocations of expenditures must be consistently and equitably applied based upon contract provisions.
Allocation The assignment of an item of cost, or a group of items of cost, to one or more cost objectives. This term includes both direct assignment of costs and the reassignment of a share of costs from an indirect cost pool.
Asset Any possession that has value in an exchange
Book Value Acquisition cost of the asset less depreciation
Broker A sponsor who acts as an intermediary in gathering funding for a project
Burn Rate A means to measure how quickly funding is being spent (i.e. the program's average burn rate is $2,000 per month)
Capital Lease A lease obligation which in essence is a purchase of the equipment
Capitalized The recording of a fixed asset on the general ledger of a company
Carrying Value Book Value
Carryover Funds Unexpended funds at the end of each fiscal year, both committed and uncommitted, which are then moved forward (carried over) on accounting records for use in the next fiscal year
Casual Employee An employee who either works on call (occasional and irregular hours) or is a Student Assistant working up to 20 hours per week during the school session and up to full-time during school breaks (Appointment Code C)
Chargeback Center A Chargeback Center provides a service or an activity of corporate-wide benefit for internal convenience, is organizationally established within its own contract, requires a charge rate to distribute the total cost of the Chargeback Center, and is accounted for as a distinct fully recoverable cost center.
Cognizant Audit Agency The Federal agency responsible for negotiating and approving indirect cost rates on behalf of all Federal agencies. The National Science Foundation (NSF) has been designated the cognizant audit agency for UCAR.
Commitment Encumbrance
Committed Carryover Represents goods and services planned or ordered, but not delivered or completed until the next fiscal year. It may also represent approved multi-year projects that extend over several years prior to completion. These committed funds are carried over via the fiscal year end budget process into the next fiscal year.
Computing Service Center (CSC) A system established within the framework of a "Specialized Service Center" in OMB Circular A-122 to distribute division scientific computing support costs to a division's program in an equitable, efficient way
Contractual Authority Authority granted directly by the President or through the Vice-President for Finance and Administration to employees to commit the corporation by signing contracts, grants, agreements, subcontracts, subawards, consulting agreements, nondisclosure agreements, license agreements, and other binding contractual instruments (for example, memorandums of agreement and memorandums of understanding) that commit or obligate the corporation. Note that this definition does not encompass nonbinding memorandums of agreement and memorandums of understanding that are simply agreements to cooperate. (Only the President, Vice-President for Finance and Administration, Associate Vice-President for Business Services, certain individuals in the Contracts and Risk Management office, and others specifically authorized have contractual authority.)
Credit The decrease of an expense or an increase in revenue
CSC Computing Service Center
Debit The increase of an expense or a decrease in revenue
Deobligation The relinquishing of funds previously obligated by a sponsor
Depreciation The amount allocated each year to amortize an asset over its useful life.   An estimate of how much an asset has been used in a given year.
Direct Cost A cost that can be identified specifically with a particular final cost objective, i.e., a particular award, project, service, or other direct activity of the organization
Discretionary Funds UCAR private funds used for approved activities that are not chargeable to program funds but that are in UCAR's interest to support
Encumbrances The setting aside, earmarking, and, in some cases, actual obligation of funds as the result of submitting a "Purchase Requisition," an offer letter of employment, or a "Travel Authorization" (TA). Funds remain encumbered under these documents until the goods or services are received and paid for, at which time the encumbrance is converted into an expenditure. Funds are also encumbered equivalent to the salaries and benefits of all regular and part-time employees for the remainder of the fiscal year, or until scheduled termination dates, as appropriate. Employment encumbrances decrease during the fiscal year as salaries are paid. TA encumbrances remain until a trip is completed and a "Travel Voucher" is filed.
Entity General and Administrative (G&A) Rate An indirect cost rate for a specific UCAR entity. Each entity generally will have only one G & A rate; however, beginning in fiscal year 1994, UOP has calculated two G&A rates. One rate is applicable to work performed at the Boulder site, and one rate is applicable to work performed off-site.
Equipment Fixed Assets of any kind except real property (land, buildings, and their respective improvements).
Expense Pass-Through An expense pass through have actual costs are paid out of one account and later redistributed to another account via a journal entry.  The originating cost center is known at the time of payment but distribution at the time of payment is not feasible or efficient within the accounting system.  A chargeback rate is not required because the actual costs that are redistributed can be identified per the original document.
Expensed Payroll Salaries and wages paid for time worked; excludes salaries and wages paid for non-work time, e.g., holidays, vacation, sick leave, etc.
Expenses The cost of doing business
Facility A Facility provides a service or specialized activity essential to UCAR's scientific mission which enhances UCAR's ability to do science and is organizationally housed within a direct funded scientific program.  A charge rate to distribute direct costs of Facility activity is required and is accounted for as a distinct direct cost recoverable center.
FASB Financial Accounting Standards Board.  Sets accounting standards for US businesses.
Fee A Management Fee
Final Cost Objective A cost objective which has allocated to it both direct and indirect costs, and, in the contractors accumulation system, is one of the final accumulation points.   (definition per CAS, Chapter 9.07)
Fixed Asset An item of tangible, non-expendable personal property which 1) has a acquisition cost of $5,000 or more, 2) an expected useful life of at least one year, and 3) will retain its identity throughout the useful life.
Fixed Rate With Carry forward Provision An indirect cost rate applicable to a specified current or future period, usually the organization's fiscal year. The rate is based on an estimate of the costs to be incurred during the period. The difference between the estimated costs used to establish the rate and the actual costs of the fiscal year covered by the rate is carried forward as an adjustment to the rate computation of a subsequent period.
Foreigner An individual is a foreigner if they are not a U.S. citizen. These individuals may be in this country on one of several types of visas and may or may not have a U.S. social security number.
Formal Rates Internal Chargeback rates which are submitted to NSF for approval. NSF approves both the methodology and the rates.
Funds Available Awarded Funds less expenditures and encumbrances
GAAP Generally Accepted Accounting Principles.  A technical accounting term that encompasses the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time.
General Purpose Equipment Equipment which can be used for other than research, medical, scientific or technical activities, whether or not special modifications are needed to make them suitable for a particular purpose
Honorarium An honorarium is an amount of money paid to an individual (not a UCAR or Federal Employee) for services performed. This may include, but is not limited to, visitor lecturers, instructors, editing and other contributions to publications, speakers, translators, foreigners assisting with foreign meeting plans, etc.
Income The difference between revenue and expenses
Indirect Cost Pool Grouping of incurred costs identified with two or more cost objectives, but not identified specifically with any final cost objectives. Each grouping constitutes a pool of expenses that are of like character in terms of the functions they benefit and in terms of the allocation base which best measures the relative benefits provided to each function.
Indirect Cost Proposal The documentation prepared by an organization to substantiate its claim for the reimbursement of indirect costs. This proposal provides the basis for the review and negotiation leading to the establishment of the organization's indirect cost rate. The Indirect Cost Proposal prepared for UCAR is submitted to NSF, its' cognizant audit agency, on an annual basis.
Indirect Cost Rate A ratio, expressed as a percentage or dollar unit value derived via the allocation of the allowable indirect expenses to an appropriate base (e.g., Modified Total Direct Cost (MTDC), gross assignable square footage, expensed payroll, etc.) Calculation of the rate is as follows:
Indirect Cost Pool / Applicable Allocation Base = Indirect Cost Rate
 
Indirect Cost Variance The difference between the actual cost of an indirect cost pool and the indirect cost recovery for a fiscal year. Indirect cost variances, either positive (over recovery) or negative (under recovery) are carried forward to the next "rate determination fiscal year" for adjustment of that year's rate. For example, FY1997 variance is carried forward as an adjustment to the FY1999 rate computation.
Indirect Costs Costs that are incurred for common or joint objectives, cannot be readily identified with a particular final cost objective, and are treated consistently with other costs incurred for the same purpose in like circumstances. They are costs that benefit more than one final cost objective, and must be allocated equitably to each benefiting cost objective. Indirect costs are reimbursed based  on an organization's approved indirect cost rates.
Informal Rates Internal Chargeback rates for which NSF reviews the methodology but does not approve the rates as part of the formal submission
Intergovernmental Personnel Assignment (IPA) An agreement between UCAR and an U.S. government agency used to assign a government employee to work at UCAR, or to assign a UCAR employee to work for a government agency
Inventory Items being held for sale
Invoice A bill to the customer for services or goods received
IPA Intergovernmental Personnel Assignment
Liability A financial obligation or debt that must be made at a specific to satisfy the contractual obligation
Loaded Rates Chargeback rates include the entity overhead in the markup and therefore, does not incur overhead later
Management Fee A fixed amount calculated as a percentage of projected MTDC plus Applied Entity G&A costs
Modified Total Direct Cost (MTDC) MTDC is total direct costs less the cost of equipment, less participant support costs, less interagency personnel agreements, less the amount in excess of $25,000 per fiscal year expenditures on each purchase order or subcontract, less severance and negotiated agreement costs, and less fully loaded facility use and GAU chargebacks.
MTDC Modified Total Direct Cost
Non-work Time Paid absences including holidays, vacation, sick leave, jury duty, educational time, and facility shutdown
Off-site Rate Entity G&A rate in UOP applicable to salary and benefits of employees who are not located on-site
Overspending The condition that exists when expenditures and encumbrances (legal and binding obligations) exceed awarded funding for an agreement.
Participant Support Costs Participant support costs are direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants, trainees, or speakers (but not employees), in connection with meetings, conferences, symposia, or training projects. These costs are allowable as direct costs with prior approval of the awarding agency. Participant support costs shall be generally excluded from the MTDC base (per A-122, Attachment B, paragraph 34; Attachment A, paragraph D.3.f).
Period of Performance The period of time in which a sponsor allows expenditures for a particular project to be completed 
Pooling Pooling is a combination of resources to achieve some common purpose
Prespending The condition that exists when a program needs to begin to incur costs in order to timely accomplish its proposed statement of work. The program obtains approval to make expenditures in advance of receiving a final agreement for the proposed work.
Primary account key The primary account key is the account key that holds expenditures and encumbrances for a series of account keys that are funding the same project. The purpose of the primary key is to collect all expenditures including overhead, benefits and computing service center costs, which will then be allocated equitably to the secondary keys.
Purchase Order The completion of the purchase requisition
Purchase Requisition The request by UCAR staff members for Contracts to initiate the purchase of off-the-shelf materials, supplies, and services or to establish blanket purchase orders
Reprogramming Reallocating funds in a manner different from the original proposal submitted to the sponsor. Reprogramming requirements may be defined within an agreement's terms and conditions. In some cases, reprogramming may require sponsor approval.
Requisition Authority Authority granted to employees to approve an expenditure of funds up to a specific dollar limit from an account or accounts for which that individual has been delegated responsibility. Requisitioning authority includes the authority to sign purchase requisitions, requests for check, and petty cash vouchers, but does not include the authority to sign or execute purchase orders, subcontracts, agreements or grants of any type.
Secondary Account Key The secondary account key is the account key that is associated with an individual sponsor but the expenditures for the agreement cannot be directly linked with a specific sponsor's funding. The secondary account key is the recipient of allocated expenditures from a primary account key.
Signature Authority Delegated written authority to approve financial transactions for specified dollar amounts and for specified account keys. Approved signature authority is entered into the Bi-Tech signature authority system, which can be accessed via the Bi-Tech main menu by typing UCSA.
Special Purpose Equipment Equipment which is used primarily for research, medical, scientific or technical activities. Capital expenditures for special purpose equipment are allowable as a direct cost. Scientific computing equipment used primarily for research is considered special purpose equipment.
Sponsor A legally binding agreement with an external party who agrees to reimburse UCAR for costs incurred on a specified project
Subcontract Any contractual agreement issued under a contract
U.S. Citizen An individual who is a U.S. citizen has U.S. Citizenship, a domestic home address and a U.S. social security number
UCAR Entity A UCAR Entity is an activity or group of activities under single organizational management that requires a separate indirect cost rate. UCAR entities are the National Center for Atmospheric Research (NCAR) and the UCAR Office of Programs (UOP)
Uncommitted Carryover Represents funds available at the end of a given fiscal year that has not been expensed or committed (encumbered) which is then carried over via the fiscal year end budget process for use in the following fiscal year.
Vacation Liability Vacation accruals, earned in accordance with UCAR's policy, less vacation hours used
Vacation Used Vacation hours taken

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Last updated by dmoulton on January 2, 2014 - 2:30pm.
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