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CET Glossary

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Activity Code Code used on the DAI and by purchasing to identify the type of the material purchased. For example 414 is the activity code for Computers. The activity code is used in EDH to identify the material and identify special routing if necessary. It is then used in the accounting system in conjunction with the value of the material to post the material to the correct 'nature' in the plan of accounts.
 
Actual Cost The actual cost incurred to perform the work (in CHF). For example if after 6 months where you planned to build 6 widgets at 100 CHF/widget, you may find that your actual costs are only 550 CHF. Actual costs alone cannot tell you the health of a project because for the 550chf you don't know if you actually built all 6 widgets or only 1 widget. (If all six then well done, you are on-schedule and under budget, but if only 1 then you have an overrun of some 550%!).
 
Amendment A modification to an original contract. Not all contract amendments have a financial impact
 
Annual Commitment

This is the commitment viewed from an annual perspective. Imagine the following scenario: In 1999 you make an order of 10,000 CHF. You pay 2000 CHF in 1999. 8000 CHF are therefore carried over to the following year where you pay the remainder.

The annual commitments are therefore:

1999 : 10000 CHF
2000 : 8000 CHF

From a budget-year perspective each of these is correct. In 1999 you committed 10000 CHF and in 2000 you committed 8000 CHF. However note that annual commitments cannot be summed across a pluri-annual view (the sum would give 18000 CHF which is a distortion of the original order), and therefore for pluri-annual views the 'pluri-annual' commitment must be used.

The pluri-annual commitments for the above order would be:

1999 : 2000 CHF (pluri-annual commitment = payment)
2000 : 8000 CHF

 
Annual Open Commitment

This is the remaining left to pay as viewed from an annual perspective. Imagine the following scenario: In 1999 you make an order of 10,000 CHF. You pay 2000 CHF in 1999. 8000 CHF are therefore carried over to the following year where you pay the remainder.

The annual open commitments are therefore:

1999 : 8000 CHF
2000 : 8000 CHF (and later 0 CHF when the order is paid)

As with Annual Commitments these figures are correct from a budget-year perspective, but cannot be summed across a pluri-annual view.

 
Budget Code Also known as 'intersection code'. It is the 5 digit code to which CERN expenditure is charged.
 
Carry Over The open commitments which remain at the end of one financial year, i.e. the 'amount due' at the end of a given financial year is carried forward to the following financial year and becomes known as the 'carry over'.
 
Cashflow Transactions These are the transactions associated with the rebilling mechanism for Teams & Collaborations. For example if a team spends 500 CHF on an order and 500 CHF on telephone bills then at the end of the month they will received an invoice for 1000 CHF. The funding agency may choose to pay this amount, or even credit more to the account. To see the invoices and credits you look at the cashflow transactions on the Team Reports,
 
Commitment

The amount of money engaged to be paid, or already paid at a point in time. For example if you place an order to purchase goods for 10,000 CHF we say you have committed 10,000 CHF. If last year you placed an order to purchase goods for 5000 CHF then you committed 5000 CHF.

In accounting the following golden rule applies:

Commitments = Payments + Open Commitments.

Therefore, if for your 5000 CHF order a bill arrived for 5500 CHF (e.g. because the exchange rates changed against you), then we say you paid 5500 CHF and therefore looking in the accounting system your commitment for last year was also 5500 CHF (although your initial commitment was 5000 CHF).

 
Contract An approved agreement between CERN and a supplier for an agreed amount of goods or services at an agreed price and subject to agreed payment terms
 
Contract Id This is the full contract number including the amendment number, e.g. F264/00.
 
Contract Number This is the contract id excluding the amendment number, e.g. F264.
 
Contractual Delivery Date The delivery date as originally planned according to the signed contract.
 
Cost Performance Index This is the ratio of Earned Value to Actual Costs. If you have built 5 widgets (planned at 100chf/widget) then your EV is 500, and say your actual costs show 500chf then your Cost Performance Index is 500/550 = 0.90% Basically the cost performance index indicates the amount of work you are achieving for every CHF of cost your are incurring. A CPI of 90% indicates that for every CHF spent you are achieving 90% of the work. If you wish to extrapolate then you can say that instead of your planned 100 CHF per widget, every time you spend 100chf you are only building 90% of a widget, so the real cost of a widget is around 110 CHF and not the planned 100 CHF. The cost performance index is vital for extrapolating to determine how much over budget you will be if performance doesn't improve.
 
Cost Variance Cost Variance is the Earned Value - Actual Costs. If for example you have built 5 widgets at a planned cost of 100chf/widget and your current actuals show you have spent 550 CHF then there is a cost variance of -50chf. Negative cost variance indicates cost overrun.
 
CFU ICA reference This is the International Cooperation Agreement reference coming from the Contract Follow Up system.
 
Destination The hierarchy of Activity Codes
 
Destination Code The code given to the destination. The Activity Code is a destination code, e.g. 115 for painting
 
Destination Description The associated description of a destination code
 
Earned Value The actual amount of work performed measured in CHF. For example if after 6 months you have built 5 widgets (planned at 100chf/widget) then your Earned Value is 500 CHF.
 
FC Finance Committee. The committee of member state delegates one of whose roles is to approve on contracts and contract amendments.
 
Foreseen Delivery Date The date at which the goods will probably arrive. This date is usually updated if new knowledge is provided and thus may differ from the Contractual Delivery Date. If the foreseen delivery date falls into a different financial year from the original contractual delivery date then one may consider also shifting the associated commitments to that financial year.
 
Income Debit/Credit The income transactions are associated with Team accounts. Since Team accounts are non-CERN money then the transactions are summed and an invoice is sent to the Team. This invoice is seen as an Income Debit. Payment of this invoice (e.g. via money to the UBS) is seen as an income credit.
 
Job A job is similar to an order, but is carried out internally at CERN (usually by EST) and you are billed using an internal billing system involving authorization of an EDH Job document and debiting of your budget code with a credit to the corresponding 'Job' cost centre.
 
Nature Nature is the generic term to cover the expenditure hierarchy of the plan of accounts. Unlike activity code, nature allows you to differentiate between assets and consumables.
 
Nature Code This is the code coming from the accounting system to identify the Nature of the goods.
 
Nature Description The description associated with the given nature code
 
Nature Category The high level classification of the nature code, e.g. Nature code 6155100 which is for IT maintenance falls under Nature category 61 which is consumables.
 
Non-Recurrent Expenditure associated with a project. Expenditure not pertaining to the recurrent operational activities.
 
Open Commitment Open Commitment is the difference between the initial commitment and the amount paid. It is effectively the amount remaining to pay.
   
Order An order is a request to an outside supplier for the provision of goods or services in return for a payment.
 
Organic Unit The generic term to encompass divisions, groups, sections etc that belong to the CERN organizational structure.
 
Order Status A number given by the purchasing system to indicate the status of an order. For example 30 means the order has been committed, 91 means the invoice has been paid. A complete list may be obtained from the Order Status screen on the Info menu.
 
Paid The amount that has been debited from your budget code. Note that in CET there are two varieties of paid, namely : Paid on Budget Code and Paid to Supplier. In the majority of cases the amount charged to your budget code is the amount received by the supplier, but in the cases where provisions are involved, you may already see a debit on your budget code before the corresponding invoice has arrived and is paid to the supplier.
 
Paid on Budget Code This is the amount billed to your budget code
 
Paid to Supplier This is the amount paid to the the third party (e.g. on an invoice).
 
Pipeline Transactions These are transactions which are not yet in the financial system, but which in the future will have an impact on your budget. Examples are : EDH documents in circulation and not yet fully approved Material Requests for which you have not yet been invoiced CFU future expenditure lines Salaries for Project Associates, Technical students etc paid on the Materials budget.
 
Planned Value The amount of work scheduled measured in CHF. For example if you plan to build 1 widget a month at 100 CHF a widget, then your PV after 6 months is 600chf.
 
Pluri-Annual Commitment

The commitment seen from a pluri-annual perspective. Imagine the following scenario: In 1999 you make an order of 10,000 CHF. You pay 2000 CHF in 1999. 8000 CHF are therefore carried over to the following year where you pay the remainder.

The pluri-annual commitments are therefore:

1999 : 2000 CHF
2000 : 8000 CHF

Totalling these commitments across the pluri-annual view gives 10,000 CHF which is correct as far as the original order is concerned. Note that in reality you originally committed 10,000 CHF in 1999, but as only 2000chf was paid we apply the golden rule:

Commitments = Payments + Open Commitments.

 
Pluri-Annual Open Commitment The open commitments remaining when viewed across several years. See Annual Open Commitments for more information.
 
PPA Unit The Program Project Activity in the CERN PPA structure. In general the PPA view of the budget codes regroups codes of similar activities irrespective of their placement in the organizational structure
 
Price Revision The amount associated with a change (usually increase) in the amount to be paid on a contract due to a 'price revision clause'.
 
Project A code identifying a collection of non-recurrent budget codes used for identifying the expenses related to a particular project. Some projects have a hierarchical structure in their project codes.
 
Projected Payment The commitment re-aligned based upon the latest schedule information. For example if you have a commitment of 100K in 2007, but you know there is a delay and the material will arrive in 2008, then if this knowledge is entered into the project management software (PPT) the projected payment will be shown as 2008 and not 2007. Projected Payments are a useful indicator for re-aligning commitments where schedule variance may alter when the actual payments should be made.
 
Provision Money put aside during one financial year on open orders in order to cover the payment of invoices originally foreseen in that financial year, but which may actually arriving in the following calendar year. The provisioning mechanism ensures that invoices arriving in the following calendar year may still be allocated to the budget of the previous year.
 
Provision Balance The amount remaining to be used in the provisions.
 
Provisioned Next Year The amount of money paid this year to be consumed on the arrival of invoices next year.
 
Provisioned Paid The amount of money paid on an invoice which came from money previously provisioned.
 
Provisioned Previous Year The amount of money previously provisioned for the arrival of future invoices.
 
Recurrent Term used to identify operational, non-project related expenditure
 
Team Code 7 character code, starting with 'T' and ending with 6 digits used to identify the account upon which Team expenditure is charged.

 

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