Frequently Asked Questions

What is the Institute’s chart of accounts?

The chart of accounts is a listing of General Ledger accounts used to record financial transactions.

How do I tell what changed on an 001?

The top section of the email 001report displays basic header information that identifies the cost object being changed, and the next section displays the changed information under the heading “Information below denotes changes to the cost object.” For an easy-to-read presentation of master data changes, try the Brio Query “Cost Object Changes.”

What General Ledger account should I use?

Using the right G/L account is very important to improving the quality of the financial information available from SAP. “Review of Guidelines for Use of G/L Accounts” can be found in the Annual Closing section of this website as part of the closing workshop slide presentation. If you still have a question or need additional information, email cao-cost-objects@mit.edu.

What kind of cost object do I need?

There are three types of cost objects:

• Cost center - A cost object containing general Institute funds. Called a general account in the classic system.
• Internal order - A non-sponsored fund account (for example, funding from the MIT Provost), used to track costs over periods other than fiscal years. Internal orders may be used to track revenues and costs of internal orders or may be associated with other costing units.
• WBS elements - WBS elements are both research and fund accounts. The research accounts are funded by outside sponsors and used to track costs of a particular research project over its entire span of activity. They are numbered 5000000 through 9999999. Fund accounts are sponsored accounts with a four-digit sponsor code. They are numbered 2000000 through 4999999. Cost objects are also called cost collectors. These terms are interchangeable. See FFM cost collector category tab.

What is a fund center?

A collection of SAP cost objects that have been grouped for spending approval purposes. Every cost object is assigned to a fund center.

What is a profit center?

A collection of SAP cost objects that have been grouped for reporting purposes. Most reporting authorizations are granted based on the profit center hierarchy. Every cost object is assigned to a profit center.

How do I request a master data change?

Send an email to CAO cost objects. Forms for requesting changes can be found in the forms section of this website.

Can there be global updates to master data?

Global updates are useful when data such as the addressee or supervisor changes for all the cost objects in the department. CAO Reporting can run a program to make such updates globally. If you need this type of a change, send an email to CAO cost objects.

How do I request a new cost object?

Forms for requesting new cost objects can be found in the forms section of this website.

What is master data?

Master data is the basic structure of codes and fields within SAP. Some common financial master data is cost objects, general ledger accounts/cost elements, fiscal period, document type, material groups, profit center and fund center. Master data is standing data, not transactional data.

How do I get a new profit center?

Currently, Leslie Wright in Payroll assigns profit center numbers. Requests for new profit centers should be authorized by the department AO or assistant dean before they are established, and usually come from them through the school and area coordinators. The request form should be completed and sent to dept-request@mit.edu.

What is the profit center hierarchy? Can it be changed and how?

It is the structure organizing profit centers according to MIT reporting relationships. It can be changed by sending a request to dept-request@mit.eduere. Changes to the profit center hierarchy can have an impact on authorizations.

What hierarchies exist for general ledger accounts (also called cost elements)? Can these hierarchies be changed and how?

We have a series of “cost element group” structures. The most familiar hierarchy is CEMIT-0, the default hierarchy used with the standard summary statement. Other hierarchies are available in SAP and the Data Warehouse. To request a new or to change an existing hierarchy, e-mail CAO cost objects.

How can I tell if the month is closed? The year?

Email confirmation will be sent to gl-eom-l@mitvma.mit.edu and aoquery@mit.edu. Check in SAP by running the Closing Status Report (ZGLU) under Reports in the ZMIT menu.

Who do I call to correct a wrong phone charge?

Send email to is-billing@mit.edu.

Who do I call to correct a wrong gift charge?

Kathy Vitale, 617-258-9693.

Who do I call to correct a wrong payroll charge?

Kelly Murray, 617-253-35580, for administrative or support staff payroll.

Who do I call to correct a wrong student services charge?

Lan Wang, 617-258-5670.

What reporting tools does MIT have for financial reporting?

Central tools include SAP and Brio Query. Brio Query is the query language for the Data Warehouse and the two terms can be used interchangeably.

What reports are available in the Data Warehouse and SAP?

A complete list of reports can be found at the MIT Data Warehouse website.

Can I get ad-hoc reports in addition to the SAP monthly statement?

The monthly statement is designed to show basic information about the financial position for a cost object. All financial data, including much data that is not displayed on the monthly statement, is stored in the Data Warehouse and can be accessed by Brio Query.

How do I get a set of the Institute’s annual financial statements?

The Institute’s annual financial statement, also known as the Treasurer’s Report, is available in PDF format.

How do I know what overhead rates apply to my cost object?

Standard overhead rates are available from the Office of Sponsored Programs. COEUS is the official system of record for sponsored projects. If a particular project has non-standard rates COEUS is the place to look. Non-standard rates are also shown in the header portion of the SAP monthly statement, see summary statement documentation.

My F&A doesn’t look right, what do I do?

Speak to your OSP representative. Each department, lab and center has an OSP representative. For a listing, see the Office of Sponsored Programs website.

What does Commitments mean on the summary statement?

Commitments refer to three possible things.

• Outstanding purchase orders that have balances on them. (Sometimes a purchase order will have a balance when the goods have actually been received in full. To close out a purchase order with a balance that is not expected to be used, write to PO close out and provide the purchase order number.)
• Labor Distribution System (LDS) commitments. The LDS is an MIT-developed system to forecast salary expenses, which can be used at the discretion of your DLC. If there are commitments for salary general ledger accounts they are probably LDS commitments. Users interested in the Labor Distribution System should contact Fred DiPhillipo, 617-258-8879.
• Manual Reservations. MRs are an SAP feature that enables you to commitments funds when you’re not ready to issue a purchase order or when a purchase order is not appropriate, such as with travel expenses.

What is authorized total?

Authorized total is the amount the sponsor has a non-revocable obligation to pay to MIT upon performance of the activities MIT has agreed upon under a sponsored grant or contract through the current project period as determined by the award document.

What is a W-9? How do I get one?

W-9 forms provide MIT’s tax identification number and certification to a requester. The form can be downloaded from the Forms section of this website. An MIT certificate and Adobe Acrobat Reader are required in order to download the form.

I need a form showing MIT is tax exempt. How do I get this?

Massachusetts sales tax exemption forms can be found in the Forms section of this website. An MIT certificate and Adobe Acrobat Reader are required in order to download the form.

My department sells merchandise (mugs, t-shirts, reprints, etc.). Do we need to collect sales tax?

It depends on the nature of the item. Massachusetts sales tax is 5 percent of the sales price of the item. However, many items are exempt from sales tax. For details, see Massachusetts Department of Revenue – A Guide to Sales & Use Tax. If you believe that your DLC owes sales tax on items that it sells, contact Anshu Tiku, 617-252-4532.

What activities at MIT are subject to tax?

In a nutshell, MIT has three main tax areas: sales tax, meals and alcohol tax, and unrelated business income tax. Under each category many activities are exempt. In order to determine whether or not your DLC has taxable activity, please contact Anshu Tiku, 617-252-4532.

How do I get a Form 990 for MIT?

A 990 is an informational tax return required to be filed by all not-for-profit organizations in the United States with the Internal Revenue Service. If you do not have access to Adobe Acrobat Reader, contact Anshu Tiku, 617-252-4532.

What is MIT’s fiscal year?

MIT’s fiscal year begins July 1 and ends June 30. The general ledger and all financial reports are produced on a fiscal year basis.

Is MIT on an accrual basis?

MIT is on a modified accrual basis. At the end of the fiscal year, all obligations incurred but not paid and all revenues earned but not received are recorded, and expenses and revenues relating to subsequent periods are deferred.

What’s the policy on accruals and deferrals?

At the end of the fiscal year, all MIT departments should accrue and defer any material expenses and revenues. Procedures for doing this may be found in the Policies & Procedures section.

What’s the capitalization policy of the Institute?

For buildings, space changes and major repairs operations, see section 4.0 of the Property Policies & Procedures manual.

For equipment, see section 5.0.

What is FRC?

Financial Review and Control is the Institute’s procedure for ensuring that expenses and revenues on cost objects are appropriate, properly documented and reasonable for that cost object. Complete information can be found in the Policies & Procedures section.

What is Pool A, C, D, O, S, L?

MIT’s funds are invested in various pools. Pool A is the Institute’s long-term investment pool and holds primarily endowment funds and funds functioning as endowment. Pool C holds funds invested with a shorter time horizon and is used primarily for currently expendable funds. Others include Pool D for current expendable funds, Pool O for government advance payments, Pool S for separate invested funds and Pool L for student loan funds.

What is the distribution rate for Pool A this year?

FY04 Pool A distribution rate is $41 per Pool A unit for fellowships and scholarships and $30.75 for all other funds.

Can I open a bank account?

It is against Institute policy for an organization to open a bank account with an independent bank using MIT’s name or tax ID number. For any banking issues or concerns, contact the MIT Treasurer’s Office for assistance. PayPal accounts in MIT's name are also not allowed.

What is an unallowable cost and why does the Institute track it?

OMB (U.S. Office of Management and Budget) Circular A-21 prohibits the charging of certain “unallowable” costs to federally sponsored agreements, either as a direct cost to sponsored research or on a recoverable facilities and administration cost center. To avoid cost disallowances on sponsored agreements, the following G/L accounts cannot be charged to a WBS element.

420080 Travel-Unallowable Cost
420166 Entertainment
420254 Non-Reimbursable Expenses
420302 Promotion & Memorabilia
420304 Public Relations
420306 Publicity
420318 Recreation Related Expense
421205 Alcoholic Beverages
421584 Memberships and Dues-Social

What does settlement mean?

Settlement is the SAP month-end process that automatically transfers balances from an internal order or WBS element to another cost object or G/L account. Two reasons to settle to cost objects are to charge specific services (facilities or IS work orders to a DLC) or to group unique projects to a single larger project. When we settle to a G/L account, we are aligning costs to the correct part of the financial statements, most often the balance sheet (assets and liabilities).

What is a costing sheet?

Costing sheets are used in SAP to provide the basis and rates for the calculation of Facilities and Administration (F&A) charges. During the monthly close the costing sheet process is run to charge cost objects with the appropriate F&A or fund fees; the costing sheet used for a cost object is displayed on the Summary Statement.

What is underrecovery?

Underrecovery may occur in a research WBS element where overhead specifications (F&A rates or direct cost base) are established at less than the current negotiated federal rates. The procedure to follow in such circumstances can be found at the MIT Documentation website.

Can I earn interest on my available discretionary balances?

Yes, funds can be assigned to Pool A or Pool C but there are certain rules. The Treasurer's Office would have more information.

Can I access a centrally available printer?

Yes. For instructions on how to set up central printing, see the IS & T website.

How do I close out a cost object?

Send an email to CAO cost objects.

How do I authorize someone to spend on my cost object?

DLCs can manage authorizations with the Roles Database.

Training – what’s available?

See the SAPweb training tab.

How do I learn more about SAP? Data warehouse?

For training, use the link in SAPweb. For SAP click on the Administrative Skills and Computing link, for Brio Query/data warehouse click on the Computer Fundamentals link. For general information on SAP/R3 see the SAP gateway website.