Program Code

Introduction

Program codes are purpose codes used to classify a financial activity by function. Using program 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. Program codes tell why an expense was incurred as opposed to telling what was purchased (as an account code would do).

Requirements

Program 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.

Program codes 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 program codes within your division.

 

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

Program Code | Definitions.

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0: 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.

1: 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:

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

2: 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.

3: 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.

4: 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.

5: 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.

6: Academic Support

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

  1. retention, preservation, and display of educational materials;
  2. 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;
  3. media such as audiovisual services and technology such as computing support;
  4. academic administration (including academic deans but not department chairmen) and personnel development providing administrative support and management direction to the three primary missions; and
  5. separately budgeted support for course and curriculum development.

7: Physical Plant

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

8: 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.

9: 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.

F: Farm Operations

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

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Reference Policies

Program Code Transfers