In current state, all transactions are run through Oracle whether or not the involved organization or entity is affiliated with the University. Certain issues often come up because of this policy. For example, sometimes one entity (e.g. UVAMC or UPG) doesn't have a transaction recorded on the Academic side. The Financial Reporting team then has to go in and manually reconcile information between that entity and the Academic side. Also, it can be challenging to identify all intercompany transactions in Oracle.
The Finance Strategic Transformation team wanted to see what could be done differently with inter and intracompany transactions in Workday Financials. They worked with a company called General Counsel to review proper handling of transactions with non-Agency entities. General Counsel recommended UVA maintain an "arm's length" relationship with these external entities.
The FST team then divided entities into three categories and determined proper action taken for entities within each category:
- University-Affiliated Organizations: UAOs will be set up as companies in Workday for consolidated reporting purposes only. Any operational activity must be handled as an external customer/vendor. No intercompany settlement will be done at month-end.
- Agency: Agencies will be set up on the balance sheet only and activity will be recorded to the ledger.
- Non-Agency/Non-UAOs using YYs: Today, Oracle uses LO or YY-prefix projects to track balances and activities for entities that are engaged in intercompany activity with the University. In future state, these will be handled as external customers/vendors. No intercompany settlement will be done at month-end.
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