Auxiliary Standard Operating Procedures


SUBJECT:

Definition of Reporting Auxiliary and Service Centers

SOURCE:

Auxiliary Accounting, Financial Management Services

DATE ISSUED:

July 2004

DATE OF LAST REVISION:

June 2016

ASOP NO:

2.0

RATIONALE:

To provide guidelines on when an Auxiliary or Service Center organization will be considered a Reporting Auxiliary and Service Center (RASC) by Auxiliary Accounting.

ASOP:

Any Auxiliary or Service Center organization earning more than $750,000 in sustainable revenue in any given fiscal year, and having expected continuing operations as determined by Campus Administration and Auxiliary Accounting, is subject to the requirements outlined in this ASOP. Upon reaching the $750,000 revenue threshold, the appropriate campus administration will be notified by Auxiliary Accounting that the unit is to become a RASC. A RASC that earns less than $750,000 in revenue for two consecutive fiscal years will no longer be considered an RASC. Exceptions may apply as deemed appropriate by University Administration for units falling below the $750,000 threshold.

 

Required tasks of RASCs include:

  • Timely recording of financial transactions on an accrual basis.
  • Timely recording of Auxiliary Vouchers at minimum on a quarterly basis, however, monthly entries are preferred.
  • Timely billing of both internal and external customers.  Customers should be invoiced immediately after the good or service has been provided and no later than the end of the quarter in which the good or service was provided.  If a job takes place over a period of time, progress billings should be done based on the percent of project completion.
  • Completing a Quarterly Variance Analysis.
  • Submitting detailed backup for all balance sheet object code balances on an annual basis (See ASOP 16.0 and ASOP 44.0).
  • Performing an annual physical inventory (units with goods for resale).
  • Reconciling accounts on a monthly basis, as referenced in Policy I-1, Role of Fiscal Officer, Account Manager and Account Supervisor.

In addition, a RASC will work with Auxiliary Accounting to complete an Auxiliary Information Form (AIF) on an annual basis.

DEFINITIONS:

Account Reconciliations: The review of operating reports on a monthly basis to ensure that the revenue and expenditures posted to the account are those that were approved by the Fiscal Officer, or their delegate, and that they are allowable and appropriate.

 

Auxiliary Information Form (AIF): The AIF acts as a permanent file and includes: general summary of business operations, list of management, account information, approximate number of employees, the nature of major assets and liabilities, primary sources of revenue (major product lines and percentage of total revenue generated by each), expense information, accounting process, procedure and entry information, description of subsidiary systems, and identification of a capital plan (if applicable).

 

Auxiliary Activity: An auxiliary activity is one that furnishes goods or services to any non- Indiana University department and charges a fee directly related to, although not necessarily equal to, the cost of the goods or services. This includes sales to students, faculty and staff for non-IU business, or the general public. An auxiliary activity is an entity that is regularly carried on and is managed with the intent to be self-supporting.

Activities that involve Instruction, Research, Public Service, or Student Services are typically not considered auxiliary activity.

 

Reporting Auxiliary or Service Center:  Generally an Auxiliary or Service Center unit that earns more than $750,000 in revenue per fiscal year. Exceptions may apply as deemed appropriate by University Administration.

 

Service Center Activity:  A service center activity is one that furnishes goods or services to another Indiana University department and charges a fee directly related to, and equal to, the cost of the goods or services. Service center rates cannot exceed the rate charged to an external customer. Fundamentally, a service center unit is managed as a self-supporting activity that is to operate at breakeven.

A service center unit is also commonly referred to as a recharge center.

Service center (internal) activity should be separated, at the account level, from external activity

CROSS

REFERENCE:

 

ASOP 10.0 - Inventory

FIN-ACC-I-350 Accrual Accounting
FIN-ACC-I-1 - Role of Fiscal Officer, Account Manager and Account Supervisor

RESPONSIBLE

ORGANIZATION:

 

Auxiliary Accounting, Financial Management Services