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FI108 Umoja Cost and Management Accounting Overview CBT v15
FI108 Umoja Cost and Management Accounting Overview CBT v15
Agenda
Course Introduction
Course Overview
The purpose of the Umoja Cost and Management Accounting Overview course is to
introduce the cost and management accounting concepts and corresponding Master Data
elements. This course will also explain how cost and management accounting can be
used in efficient management of resources.
Prerequisite Review
You should have completed the following prerequisite courses:
Umoja Overview
Umoja Master Data & Coding Block Overview
Course Duration: 2 hours
Course Objectives
After completing this course, you will be able to:
Describe the Cost and Management Accounting process
Describe the benefits of cost and management accounting
Name the elements that constitute the cost and management accounting Master
Data
Describe the purpose of cost allocations
Agenda
Course Introduction
Module 1 Objectives
After completing this module, you will be able to:
List the key roles and responsibilities in cost and management accounting
Describe the benefits of Umoja cost and management accounting
Describe the Cost and Management Accounting process within Umoja
Key Terminology
Key Term
Description
Expense associated with materials and services used to
produce a programme or activity. A cost can be:
Cost
Controlling
Financial Accounting
Financial
Accounting
Senior User
Financial
Accounting
Closing User
Financial Accounting:
Master Data
Maintainer
Services Delivery:
Master Data
Maintainer
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Services Delivery:
User
Financial Accounting:
Support User
(NEW ROLE)
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Organization will be able to recover full cost for the services provided to
outside/internal entities and allocate costs to voluntary funded projects
Umojas cost measurements will enable better budgeting and reporting on costs
for each component/programme. It will lead to result-based management
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Maintain
Master Data
Analyze Cost
Allocation
Requirement
Update CO
Master Data
Perform Cost
Allocation
Post Allocation/
Update Monthend Activity
Schedule
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Budgetary
Ledger
Grants Ledger
Controlling
Ledger
The Controlling
Ledger records
postings used for
internal cost
allocation.
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PS
Project
Systems
Progen
MM/SRM
SD
Material
Management
Sales and
Distributions
RE
Real
Estate
Galileo
Actual Postings
FI
Financial
Accounting
Umoja ECC
CO
FM
GM
Controlling
(Cost Accntg)
Funds
Management
Grants
Management
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FI
Financial
Accounting
CO
Controlling
(Cost Accntg)
Internal cost
allocations
Balance Sheet
transactions
GM
Grants
Management
FM
Funds
Management
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Procure-to-Pay
Process
FI
FM
CO
1. Purchase
Requisition
No Posting
Pre-commitment
No Posting
2. PO from Req.
No Posting
Commitment
No Posting
3. Goods / Services
Receipt(GR)
DR Expense
CR GR/IR Clearing
Expenditure with
GR status
Actual
4. Invoice Receipt
(GR)
DR GR/IR Clearing
CR Vendor
Expenditure with
invoice status
Update expense if
required
5. Payment
DR Vendor
CR Cash and Bank
Expenditure with
payment status
No Postings
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Learning Checkpoint 1
Which of the following are the benefits of Umoja cost and management accounting?
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Learning Checkpoint 1
Which of the following are the benefits of Umoja cost and management accounting?
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Learning Checkpoint 2
Where do the financial postings in the CO module come from?
GM Module
FI Module
FM Module
Cash Accounting Module
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Learning Checkpoint 2
Where do the financial postings in the CO module come from?
GM Module
FI Module
FM Module
Cash Accounting Module
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Module 1 Summary
The key points covered in this module are listed below:
Umoja cost and management accounting allows UN to optimize the process of cost
management, enable expense prediction and assist in key decision making
The CO module maintains the Controlling Ledger for cost and management
accounting purposes
The CO module allows the user to move costs internally, or allocate costs, to the
responsible programmes, components and operations to show their trust cost
The actual financial posting is done in FI. Corresponding elements are created in
CO, FM and GM
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Agenda
Course Introduction
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Module 2 Objectives
After completing this module, you will be able to:
Describe the elements that constitute Cost and Management
Accounting Master Data
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Key Terminology
Key Term
Cost Element
Description
A cost or revenue item that is linked one-for-one to an expense or
revenue G/L account. It is divided into primary cost element and
secondary cost element.
Cost Object
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Key Terminology
Key Term
Description
Profit Center
Activity Type
Activity Rate
Statistical Key
Figure
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Key
Reference
Data
Transactional Data
(Documents)
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Cost Center
Internal Order
Profit Center
A cost element represents a cost or revenue item. There are two types of cost elements in
CO:
Primary cost elements are linked one-to-one to revenue and expense accounts from FI. It
originates as a G/L account. For example, a mission hires a consultant through IMTC to
provide training on handling hazardous goods to Aviation and MOVCON sections. The cost
of this service is charged to the G/L account 74141030 Training Consultant Substantive
Skills in the IMTC cost center. The account exists in CO as a primary cost element.
Secondary cost elements only exist in CO, and are used for internal transactions. They
may not have a G/L counterpart. For example, staff members from mission Aviation and
MOVCON sections attended the above training. UN will internally reallocate the training
cost from IMTC to Aviation and MOVCON sections based on the number of people from
each section. This can be done using a secondary cost element account 85021010
Internal Allocation Statistical Training. This would reflect the true cost incurred by
both the sections.
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Cost Center
Internal Order
Profit Center
The cost that is captured as secondary cost elements is either real (budget consuming) or
statistical (non-budget consuming).
Real posting consumes a budget in Funds Management (FM)
Statistical posting does not consume a budget in FM. In FM these postings are only for
information purposes and cannot be further allocated. Statistical posting uses cost
elements and FM commitment items that end in the letter S. For example, if IMTC
allocates the previous training cost to Aviation and MOVCON sections, this can be done
regardless of whether Aviation/MOVCON have the budget to receive this cost. A
statistical (non-budget consuming) posting reflects the true cost of managing these
sections
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Cost Elements in CO
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Cost Center
Internal Order
Profit Center
While the cost element defines the cost incurred, the cost object explains who is responsible
for incurring the cost. It is important to understand that every expense posting in FI must go
to a cost object in CO. The following cost objects, which are Master Data elements, are used
in Umoja:
Cost Center
Internal Order
WBSE (Covered in the Project Management course)
Though these cost objects are essentially cost collectors, Umoja also uses them to collect
revenue. This is because Umoja does not define separate revenue collectors, given UNs
limited revenue-generating activities.
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Cost Center
Internal Order
Profit Center
A cost center represents an area/unit of the organization that collect costs and revenues of
on-going operations or functions. It is:
An organization unit with financial responsibility for costs and budgets
A cost collector for more detailed cost monitoring requirements within an organizational
unit
A service or product of internal service providers
In our previous example, IMTC is responsible for training costs. IMTC is an example of a cost
center.
A cost center can be as small as UNIFIL Aviation, or as large as the mission UNIFIL. Cost
centers are part of a cost center hierarchy that follows the organizational hierarchy.
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Cost Center
Internal Order
Profit Center
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Cost Center
Internal Order
Profit Center
Specific task/job
Capital projects
Costs
Internal
Order
Cost Center
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Cost Center
Internal Order
Profit Center
While a cost center is the primary cost and revenue collector, Umoja uses a profit center for a
different purpose. A profit center:
Represents, at a higher level, an organizational function (for example, Transport, Supply,
or Medical)
Is linked to similar functional cost objects (cost center, internal order and WBSE)
Supports reporting on product and services in revenue-producing areas
In a similar way to cost centers, profit centers are part of a profit center hierarchy.
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Supply
Profit Center
Cost Centers
UNIFIL
Supply
UNFICYP
Supply
UNAMID
Supply
UNMISS
Supply
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Statistical Key
Figure
Cost
Activity Quantity
Activity Rate
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Activity Type
Cost
SKF
Activity Rate
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FI Financial Acct
CO Controlling
FM Funds Mgmt
GM Grants Mgmt
COMPANY CODE
CO AREA
FM AREA
GL acc related
GL Account
Cost Element
Commitment Item
Sponsored Class
Funding Source
Related
Fund
Grant
Fund
Grant
Fund
Grant
Fund
Grant
Business Area
Cost Center
(org structure: Department,
Division, Unit)
Funds Center
Funds Center
Internal Order
Work Breakdown Structure
Funded Program
Sponsored Program
Organizational and
activity related
Profit Center
Segment
Programmatic
Financial Period
Related
Functional Area
Functional Area
Functional Area
Functional Area
Fiscal Year
Fiscal Year
Fiscal Year
Budget Period
Budget Period
Budget Period
Budget Period
Legend:
FI Entry
Derived
Derived or entered
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Putting it Together
Using the earlier example, we would like to calculate the true cost of a missions various
sections and components, for the fiscal year 2012. We can start to piece together the
information using the Master Data elements.
In 2012, the various mission cost centers collected following costs:
Helicopter Expense
Generator Fuel Expense
Training Expense
The above costs need to be moved to the responsible cost centers to ascertain
operational cost of various components. The next module will cover methods to move
these costs. This is known as cost allocation.
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Learning Checkpoint 1
Which of the following are cost objects for UN?
Select the correct option.
A.
B.
C.
D.
E.
F.
Cost Center
Internal Order
Work breakdown structure element (WBSE)
Cost Element
A&B
A, B & C
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Learning Checkpoint 1
Which of the following are cost objects for UN?
Select the correct option.
A.
B.
C.
D.
E.
F.
Cost Center
Internal Order
Work breakdown structure element (WBSE)
Cost Element
A&B
A, B & C
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Learning Checkpoint 2
A/an __________ represents a form of productive output by a cost center having a fixed
rate per unit used for allocating costs of internal activities.
Fill in the blank with the correct option.
A.
B.
C.
D.
Derivative
Activity Type
Activity Rate
Cost Object
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Learning Checkpoint 2
A/an __________ represents a form of productive output by a cost center having a fixed
rate per unit used for allocating costs of internal activities.
Fill in the blank with the correct option.
A.
B.
C.
D.
Derivative
Activity Type
Activity Rate
Cost Object
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Module 2 Summary
The key points covered in this module are listed below:
Primary cost element mirrors the income statement account posting from the FI
module
Secondary cost element is used for CO internal transactions only and does not have
a G/L account counterpart
The cost that is captured as secondary cost elements is either real posting (budgetconsuming) or statistical posting (non-budget consuming)
Cost objects are used to collect costs and revenues
An activity type presents a quantity-based service provided by or managed by a
cost center
A Statistical Key Figure (SKF) is a quantity used to allocate costs during the monthend process
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Agenda
Course Introduction
51
Module 3 Objectives
After completing this module, you will be able to:
Define the types of cost allocation transactions
Define the types of cost allocation cycles
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Key Terminology
Key Term
Cost Allocation
Description
It is a general term for CO transactions, which transfer costs
from a sender cost object to a receiver cost object, including
manual cost allocation, direct activity allocation and cost
allocation cycles.
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Cost allocations may cross into FI in case certain FI dimensions are crossed. This will be
explained in the Level 3 course.
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Aviation
Cost Center
Cost Receiver
Fuel
Expense
Credit $6,000
Military
Cost Center
Fuel
Expense
Statistical Secondary
Cost Element
Debit $6,000
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Activity Quantity
Activity Rate
Example: Flight hours used by military component for patrol flights are used to
calculated a one-time, direct activity allocation.
Cost sender: Mission Aviation
Cost receiver: Mission Military
Activity Type: Helicopter flight hours
Actual hours flown (Activity quantity): 20 hours
Pre-determined flight hour (Activity) Rate: $1,000/hr
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Cost Sender
Aviation
Cost Center
Cost Receiver
Military
Cost Center
Helicopter
Expense
Helicopter
Expense
Activity Rate:
$1,000/hr
Activity Quantity:
20 hours
Secondary Cost
Element
Debit $20,000
Credit $20,000
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Distribution Cycle
A method of allocation similar to Assessment Cycle, using a primary cost element
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SKF
Activity Rate
Example: Helicopter hours for military patrol flights are recorded during a month as a
SKF. During the month-end closing processes, the hours are used to calculated the
indirect activity allocation.
Cost sender: Mission Aviation
Cost receivers: Mission Political and Military
Activity Type: Helicopter services
Statistical Key Figure that captures the activity quantity
Military: 80 hours; Political 20 hours
Activity Rate: $1000/hr
Copyright United Nations
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Cost Sender
Aviation
Cost Center
Helicopter
Expense
Cost Receiver
Military
Credit $100,000
80 hours
Debit $80,000
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Cost Sender
Engineering
Cost Center
Cost Receivers
Military
Humanitarian
Cost Centers
Generator Fuel
Expense
Generator Fuel
Expense
66%
Debit $4,000
Credit $6,000
33%
Generator Fuel
Expense
Debit $2,000
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Example: The IMTC charges training expense based on the number of people from each
section who took induction training. $6,000 in training expense is to be allocated based
on the proportion of people who attended the training.
Cost each
office receives
Total training
expense
# of people
Total # of
people
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Cost Sender
Integrated
Mission
Training
Cost Receivers
Supply
Human Resources
Cost Centers
Training
Expense
Training
Expense
40 people
Debit $4,000
Credit $6,000
20 people
Training
Expense
Debit $2,000
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Distribution Cycle
The distribution cycle uses the same allocation method as assessment cycles.
Distribution cycles must use primary cost elements. This retains the original posting
details.
Example: A distribution cycle is used by UNHQ to collect staff assessment expense from
various missions.
Cost sender: UNIFIL, UNAMID
Cost receiver: UNHQ
Expense Account: Staff Assessment Expense
Primary cost: $10,000
UNIFIL: $6,000
International Staff = $1,000
Local Staff = $5,000
UNAMID: $4,000
International Staff = $1,000
Local Staff = $3,000
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Cost Senders
UNIFIL
UNAMID
Cost Receiver
UNHQ
UNIFIL
Staffing
Expense
Activity Rate:
$1000/hr
Credit $6,000
Intl = $2,000
Local Staff = $8,000
Primary Cost Element
UNAMID
Debit $10,000
Credit $4,000
Copyright United Nations
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Description
Indirect Activity
Allocation
Amount-based allocation
Specific amount to recover is
No
entered
Quantity-based allocation
Activity quantities are entered for a No
certain activity type
Primary/Secondary
Cost Element
Secondary
Secondary
Yes
Secondary
Yes
Secondary
Assessment Cycle
Distribution Cycle
Cycle
Primary
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Putting it Together
Returning to our original task to calculate the true cost of a missions various sections
and components, for the fiscal year 2012, we allocated the costs using Master Data
elements and Umoja cost allocation methods.
In 2012, the mission cost centers collected and allocated the following:
Helicopter Expense
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Help Desks
Banking Services
Commissary/Gift Center/Newsstand
Mail, Pouch & Messenger
Supplies
Broadcasting Services
Book Shops
Medical Services
Public Information/Library
Training Services
Special Events
Building/Facilities Services
Space Mgt. & Map/Drawing Services
OPPBA
Catering
HR/Personnel/Counselling Services
DPI
OHRM
Garage Administration
Common/Miscellaneous Services
Property Management
Accounting Services
Financial/Treasury Services
Visitor Services
Insurance Services
Travel/MovCon/Aviation
ICT Services
Postal Services
Legal Services
DSS
Warehouse Operations
Security Services
DGACM
Procurement Services
OICT
PD
Transportation
Conference Services
OLA
Document Services
Publishing
Interpreters/Translators
Some works/services are more internally focus, while others are for
general public & staff (i.e. Revenue Producing Activities)
Revenue Producing Activities (Outsourced in UNHQ)
Revenue Producing Activities (UN Owned Operations
in HQ)
HCM
RE
CO (Controlling)
PM
Cost to be invoiced to
external clients directly?
SD
LE
Reports
An example of a report used in cost and management accounting is:
Cost Center Line items
This report lists, for a certain posting period, cost centers,
cost element and the corresponding amount allocate to/from
each cost center.
For example, for the fiscal year 2012, this report can display
all cost centers in the UNIFIL business area and the total cost
accumulated on each cost center.
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Learning Checkpoint 1
Direct activity allocation is a _________-based allocation
Quality
Quantity
Amount
Product
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Learning Checkpoint 1
Direct activity allocation is a _________-based allocation
Quality
Quantity
Amount
Product
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Learning Checkpoint 2
Which one of the following is amount-based allocation where the specific amount to
recover from the cost receiver is entered, and can only be statistical?
Select the correct option.
A.
B.
C.
D.
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Learning Checkpoint 2
Which one of the following is amount-based allocation where the specific amount to
recover from the cost receiver is entered, and can only be statistical?
Select the correct option.
A.
B.
C.
D.
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Module 3 Summary
The key points covered in this module are listed below:
Cost allocation transactions credit the sender, debit the receiver and may create a
financial accounting transaction if a balancing dimension is crossed
A cost allocation cycle is used where multiple senders allocate certain costs to
multiple receivers. It can be a one-time post or run as a monthly process
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Agenda
Course Introduction
79
Course Summary
The key points covered in this course are listed below:
Umoja cost and management accounting allows UN to optimize the process of cost
management, enable expense prediction and assist in key decision making
The CO module maintains the Controlling Ledger for cost and management
accounting purposes
The CO module allows the user to move costs internally, or allocate costs, to the
responsible programmes, components and operations to show their trust cost
There are several important Master Data elements in CO, for example, cost
element, cost object, profit center, activity type and SKF
A cost allocation is a one-time allocation that credits one cost sender and debits
one cost receiver
A cost allocation cycle is used where multiple senders allocate certain costs to
multiple receivers. It can be a one-time post or run as a monthly process
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Agenda
Course Introduction
81
Course Assessment
Now that you have completed all the modules in this course, you can test your
knowledge by completing the Course Assessment.
To receive credit for completing this course, you must pass this assessment with a
minimum score of 90%.
To complete the assessment you must return to the Learning Management System:
1. Log into Inspira
2. Navigate to Main Menu -> Self-Service -> Learning -> My Learning
3. Search for the name of the course under the My Learning Activities section
4. Click on the Start link of the course assessment
5. Click the Submit button once you have completed the assessment
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Agenda
Course Introduction
83
Course Survey
Your feedback is important to the continuous improvement of our training program.
Please complete the evaluation for this course using the following steps:
1. Log into Inspira
2. Navigate to Main Menu -> Self-Service -> Learning -> My Learning
3. Search for the name of the course under the My Learning Activities section
4. Click on the Start link of the course survey
5. Click the Submit button once you have completed the course survey
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