2015 Fiscal Year-End Activities for Recharge Centers

Internal / External Sales Office

Learning Objectives

Internal/External Sales Activity related to:

• Year-End Review process

• Rate Assessment

Year-End ReviewReviewing Internal Sales activity annually is a best practice business model and should be completed by all units conducting internal sales.• Activities to consider:

o Invoicing o Depreciation expense o Unallowable costs o Expense allocation o Planned subsidieso Transfers o Variances

Invoicing

• Invoice and record revenue for all completed internal sales activityo Refer to Fiscal Year End Calendar for cut-off date

• Review External Sales contracts and bill accordingly

• Monthly billing is best business practice

Depreciation

• Record journal entries for the accumulated depreciation for all assets recovered in the sales rateso Journal entries

• Record depreciation expense in the operating fund• Reduce the deficit balance in the plant fund

o Net Book Value at year end = Balance in plant fund 7201

• Depreciation expense is typically recovered in the sales rates

• Refer to the Capital Asset Reconciliation job aid

Unallowables

• Identify and remove any unallowable cost incurred in operating fundo If necessary, change the source of the inappropriate expense

(i.e. purchase order)

• Refer to Unallowable Costs job aid According to federal regulations (OMB Uniform Guidance), certain operating costs are specifically unallowable, such as bad debts, entertainment costs, and fines.

Refer to as designated by OMB Uniform Guidance and ensure that all unallowable costs have been excluded.

Expenses Allocation

• Record journal entries/retros for expenses incurred (salaries, materials, supplies, repairs, maintenance, non-capital equipment and/or other)o Internal Sales activity should be allocated to fund 1150o External Sales activity should be allocated to fund 1026 or other

designated funds

• Expenses should be adjusted by Chart of Accounts expense code

Planned Subsidies

Fund all subsidies originally planned in the rate development.

• Examples include:

o Dollar amount (specific or shortfall)

o Expense by account

o Specific individuals

o Specific departments

Transfers• Depreciation is the only allowable transfer out on Internal

Sales funds

• Recording of subsidies is the only allowable transfer in on Internal Sales funds

• Any other transfers should be corrected o Expenses should be adjusted by Chart of Accounts expense code

Variances• Fund deficits that will not be included in the next year’s

rateso Funding deficits will help keep rates at the same level

• If there is a surplus greater than 15% of revenue, contact the Internal Sales Office for options on resolution

• For more details, refer to presentation or Reconciliation of

Surplus or Deficit Balance job aid

Rate Review

Reviewing Internal Sales rates annually is a best practice business model.

• Activities to consider:o Timingo Review of Business Plano Case Study

Timing

• Monitor internal sales activity throughout the year o Identify potential significant surplus or deficito Work with the Internal Sales Office to determine best course of

action

• Rate review should be performed at the close of the fiscal year

• The preceding year's financial information will provide the basis for developing the following year's rate

Review of Business Plan

• Continue to qualify to conduct internal sales activity? o Annual internal sales revenue greater than $25,000 o Charging a federal grant of any dollar amount

• Provide the services that are identified on the original business plan?

• Provide a service that cannot be met elsewhere?

• Should the internal sales activity be continued?

Case Study

• Reporting Center

o Account Budget Status for Current Non Sponsored Fund by Fund

o Actual Account Summary by Accounting Period for Current Funds

o Salary and Fringe Detail by Pay Period

o Asset Management Depreciation Expense/Schedule by Fund

• Internal Sales Activity Reconciliation Template

Summary

• Complete the Year-End Review process using step by step

handouts

• Complete journal entries

• Review rates based on results

Resources

• Fiscal Year End Activities • Internal Sales Activity Reconciliation Template• Capital Asset/Depreciation Reconciliation Process • Unallowable Internal Sales Costs • Reconciliation of Surplus or Deficit Balance • Journal Entries that Internal Sales units can make through the

General Ledger • http://www.finsys.umn.edu/sales/iso.html