FAQ about Change in Internal Loan Processing

What’s changing for users?  From an accounting perspective, we’re changing the way internal loans are transacted.  For users, this will mean changes in how you view your loan data in Workday Financials.  

How is Finance’s process changing?  Here are the basics:  

  • We’ll be booking liabilities to Central Finance instead of to schools and units.   

  • Monthly Debt Service will be handled via ledger account 8904 transfers from departmental operating funds. 

  • We’re introducing two new spend categories: SC0742 for principal, and SC0817 for interest. 

When does this change go into effect?  The week of February 5, 2024.  Users will begin to see activity on their accounts as we reverse and reload transactions.  

How does this impact my work?  In the short term, we will be reversing and reposting debt service, liabilities and fund balance journal entries related to your loans.  These corrections and new transactions will net to zero.  In the long term, it changes how you view internal loan data.  We’ve detailed the new ways you’ll run reports below.  

How do I run reports to see my loan activity? 

To see transfers in your department, the report and parameters you use will change.  Please see the QRG for recommended parameters LINK.   

Can you explain to me what I’m seeing and how this process works in terms of fund balance?  Since expenses and revenue are rolled into Fund Balance at fiscal year-end every year, prior year activity is sitting in ledger account 3999 Fund Balance. Reversals of prior year activity have been done in the current fiscal year and ledger account 3999 Fund Balance cannot be coded too directly. Reversal activity has been coded to ledger account 7003 Interest Expense. When the trial balance is run for loans, one ledger account (3999 or 7003) will be positive, and one will be negative, but the 2 ledger accounts will net to 0. At the end of the fiscal year, the balances will be rolled from ledger account 7003 Interest.  Expense into ledger account 3999 Fund Balance resulting in both ledger accounts having a 0 balance.  

How does this change benefit schools and units?  There will no longer be a loan liability on financial reports, as the liability will not be recorded to departmental work tags.  Users will still be able to do reporting on their loans based on the loan worktag.   Borrowers will also be able to budget for principal and interest for their internal loans and also can see both the principal and interest in actuals (operating funds).  

Where can I go for more help?