I need help from someone with experience in using separate account classes.

 Our org. has only one fund - a general operating fund - 01.  When I set up Blackbaud in 2004, I created three separate net asset accounts, 01-30100-00 - Unrestricted net assets, 01-30101-00 - Unrestricted net assets, designated, and 01-30200-00, temporarily restricted net assets.  In the account screen, for class - I have temporarily restricted, unrestricted, and permanently restricted.

 Our assets have always been classified as unrestricted net assets, designated, and so our deficit or surplus for the year always closes into 01-30101.  I am thinking I may have set something up wrong.

 In 2007, we created a new "opportunity fund", that has restrictions on it based upon a committee made up of our org. and another org.  We will take xx amount of dollars each year from our general operating fund/net assets, and set it aside to fund future commitments.  We will also receive xx amount of dollars from the other org to pool into this fund.  Each year I will have a revenue item in the restricted fund for the money received from the other org as well as the funds  we "move" into it, and an expense to "move the funds" from our operating fund.  In future years, we will also have "expenses" related to the restricted fund as they are paid out.

 My first thought was to create a whole separate fund for this - using 02-xxxx.  This can then be reported in a separate column on our financials so our Board understands it.  Our auditors do not want us to create a separate fund.

 My second attempt was to simply classify the accounts that relate to this as "temporarily restricted".  I tried this, and it is not working.  At the end of the year, all of the net assets are still closing into my account 01-30101, unrestricted.  I can do a journal entry to move the appropriate amount from 01-30101 to 01-30200, but it won't let me post.  When I run my balance sheet with the journal entry "unposted", it is presented how I would like it to look, but the JE will not post, it fails.

I want this segregated on our financials so our Board can clearly understand and visually see that our fund balance is made up of two separate classes of assets.  As we go into the future, we will be using the restricted funds, and if those fund are lumped into our regular unrestricted net assets, the Board will not understand it.  (Non-financial people).

 Advice, suggestions? 

Dana-

You need to create a new fund called temporarily restricted fund 02 but continue to use the whatever code you have attributed to net assets. I'm not sure why your auditors wouldn't want you to create a new fund since it sounds like an account that should be temporarily restricted and GAAP would pretty much require that it be designated as such. 

All the transactions (income, expenses, balance sheet accounts) will need to be tagged with the 02; you'll have to create new 02-XXXX accounts.  For example if you currently have an office supplies account 01-12345 and you have expenses from restricted activities you would need to create an 02-12345.  You will also need to create interfund accounts (due to/due from). You can set those up when you create the new fund.

You can still very easily report out on 01 and 02 activity and your net assets will be tracked separately but can also be rolled up to one account as well.

 Hope this helps.

Jessica