Function Code

Introduction

The Function dimension within the Foundational Data Model (FDM) are purpose codes used to classify a financial activity. Using Function codes is a method of grouping expenses and budget according to the purpose for which the costs are incurred or plan to be incurred in the case of budget. They tell why an expense was incurred as opposed to telling what was purchased (as an ledger account code would do).

Requirements

Function codes are mandated by the UW System Administration and based on the Financial Accounting and Reporting Manual for Higher Education published by the National Association of College and University Business Officers (NACUBO). Moreover, these principles have been adopted by the Federal Office of Management and Budget (OMB) Circular A-21 “Cost Principles for Educational Institutions” and are used in F&A calculations, proposal reviews, and other data items.

Reporting

Reporting expenses by functional classification helps donors, granting agencies, creditors, stakeholders, and other readers of the financial statements to understand the various mission-related activities of the institution and their relative importance. Functional expenses are reported to many different agencies and it is a way to benchmark against peer institutions and for internal fiscal management.

Functions are found in annual audited financial statements; Moody’s credit rating; IPEDS (Integrated Postsecondary Education Data Systems), which is used for benchmarking by higher education institutions and the federal government; assignment of costs in campus grant accounting systems, which are used to allocate costs and determine overhead recovery rates; and cost sharing on sponsored projects.

Questions

Please reach out to the Madison Budget Office for more guidance on using Function codes within your division.

Function Code Worktags Resources

Function Code | Definitions

Function Code | Summarized Version

The function codes below are summarized; a full description can be found in the following document:

Function Codes | Definitions.

FN0000 - Student Services

Expenses for student services administration as well as for activities that contribute to students’ emotional and physical well-being and intellectual, cultural, and social development outside of the context of the formal instruction program. Also includes funds expended for offices of Admissions and Registrar.

FN0100 - Institutional Support

Expenses for central executive-level activities concerned with management and long-range planning of the entire institution. This category should include expenditures for:

central executive activities concerned with management and long-range planning of the entire institution;
fiscal operations;
administrative data processing;
space management
employee personnel records;
logistical activities that provide procurement, storerooms, safety, security, printing, and transportation services to the institution;
support services to faculty and staff that are not operated as auxiliary enterprises; and
activities concerned with community and alumni relations, including development and fund raising.

FN0200 - Instruction

Expenses for general academic instructional programs and for all activities through which a student may earn credit towards a postsecondary degree or certificate granted by the university. Also includes expenses for preparatory/remedial instruction even though these sources may not carry degree credit, expenses for curriculum development, departmental research, and public service that are not separately budgeted.

FN0201 - Instruction Administration

Expenditures for all activities through which a student may earn credit toward a postsecondary degree or certificate granted by the university. Also includes expenditures for preparatory/remedial instruction even though these courses may not carry degree credit. Expenditures for curriculum development, departmental research and public service that are not separately budgeted are included.

FN0202 - Clinical Instruction

FN0300 - Hospitals

This category includes all expenses under appropriation 20.285(6)(g) that are to be reimbursed by the University of Wisconsin Hospitals and Clinics Authority.

FN0400 - Research

Expenses for activities specifically organized to produce research outcomes, whether commissioned by an agency external to the institution or separately budgeted by an organizational unit with the institution. Includes expenses for individual and/or project research as well as institutes and research centers.

FN0405 - Research Administration

All expenditures for activities specifically organized to produce research outcomes, whether commissioned by an agency external to the institution or separately budgeted by an organizational unit within the institution. Subject to these conditions, it includes expenditures for individual and/or project research as well as those of institutes and research centers. This category does not include all sponsored programs (training grants as an example) nor is it necessarily limited to sponsored research, since internally supported research programs, if separately budgeted, should be included in this category under the circumstances described above.

FN0500 - Public Service

Expenses for non-credit instruction and activities established primarily to provide services for the benefit of individuals and groups external to the institution.

FN0600 - Academic Support

Funds extended primarily to provide support services for the institution’s primary programs of instruction, research, and public services. This includes:

retention, preservation, and display of educational materials;
the provision of services that directly assist the academic functions of the institution, such as demonstration schools associated with a department, school, or college of education;
media such as audiovisual services and technology such as computing support;
academic administration (including academic deans but not department chairmen) and personnel development providing administrative support and management direction to the three primary missions; and
separately budgeted support for course and curriculum development.

FN0700 - Physical Plant

Expenses for all operations established to provide services and maintenance related to grounds and facilities.

FN0701 - Physical Plant Administration

Subject to the chargeback policies contained in UW System Administrative Policy 322, Physical Plant Service Chargebacks, this category should include all expenditures of current operating funds for the operation and maintenance of physical plant, in all cases net of amounts charged to auxiliary enterprises, hospitals, and independent operations. It does not include expenditures made from the institutional plant fund accounts. It includes all expenditures for operations established to provide services and maintenance related to grounds and facilities. Also included are utilities, fire protection, and similar items.

FN0800 - Auxiliary Enterprises

All expenses and transfers relating to the operation of auxiliary enterprises, including expenses for operation and maintenance of plant and for institutional support; also included are other direct and indirect costs, whether charged directly as expenditures or allocated as a proportionate share of costs of other department of units.

FN0900 - Financial Aid

Expenses for financial aid to students including scholarships, fellowships, and loans, that don’t require the student to perform services as consideration for the aid, and do not require the student to repay the amount of aid received.

FN0F00 - Farm Operations

All activities which provide laboratory farm support to the primary mission of the institution. Includes field stations which provide laboratory farm support.

FN0203 - Clinical Administration

Reference Policies

For specific instructions regarding chargebacks see the following links below: