The function code indicates the purpose of a project or program (and therefore, the purpose of the org). For example, a project or program might be established for the purpose of instruction, or it may be established for the purpose of research. Instruction and research are different functions, and departments would need a separate account number for each. Function codes are four characters long.

Function codes answer the question, "What are we spending our money on?"

Whenever a department or unit starts performing tasks that are different from the nature of the work they have been doing, a new org with a different function code must be established. For example, if a department that instructs and does research starts fundraising, anew org with a new function code must be created for fundraising.

As a rule of thumb, any single activity equal to or greater than 25 percent of the total account costs should be separated for the assignment of the appropriate function code. To identify and code federally unallowable costs, departments should separately budget and expend the salaries and benefits for any person who spends more than 25 percent of total effort in any particular month performing any of the A-21 unallowable activities (see University Policy 2.1.3,Charging of Direct and Facilities and Administrative (Indirect) Costs for details).

The function code is the fifth part of both an account number and an account string.