Auxiliary Standard Operating Procedures


SUBJECT:

Repair and Rehabilitation (R&R) Reserves for Auxiliary Enterprise and Service Units

SOURCE:

Auxiliary Accounting, Financial Management Services

DATE ISSUED:

March 2017

DATE OF LAST REVISION:

N/A

ASOP NO:

27.0 

RATIONALE:

To provide guidance to auxiliary and service center accounts on the required amount of funding to be set aside for future Repairs & Rehabilitation (R&R) expenditures.

ASOP:

This ASOP applies to any auxiliary enterprise unit that has funded and/or occupies the majority of a university owned building or leased building that will result in IU ownership of the asset; as well as, any university service center that has funded and is utilizing the majority of said buildings for recharge activity.

 

These units are required to set aside, at least annually, an amount equal to or greater than 1.25% of the replacement value of the building(s) for expenditures that meet the definition of R&R as established by the State of Indiana. Service center accounts have an additional restriction that the amount transferred cannot exceed the annual depreciation amount of the building(s) utilized for recharge activity. Transfers in excess of 1.25% should be supported by the unit’s capital plan.

 

Auxiliary Accounting will distribute the required contribution amount to units by February 28th.

 

Any deviation from this standard requires the approval of the University Controller or Chief Accountant.

DEFINITIONS:

Auxiliary Enterprise Units - An auxiliary enterprise unit furnishes goods or services to students, faculty, staff, or the general public and charges a fee directly related to, although not necessarily equal to, the cost of the goods or services. An auxiliary enterprise unit is an entity that is regularly carried on and managed with the intent to be self-supporting.

 

Repairs & Rehabilitation (R&R) - Repair and Rehabilitation, as defined by the State of Indiana, is to be used for the purpose of keeping academic/administrative space in good working condition. R&R projects include, but are not limited to, foundation repair, roofing, HVAC, and plumbing.

 

Replacement Value - Building replacement values are obtained from IU Space Information as calculated by the Indiana Commission for Higher Education (ICHE) using the Marshall Swift index.

 

Service Center Units - A recharge/service center activity is an activity that furnishes goods or services to another Indiana University department for the convenience of the university and charges a fee directly related to, and not more than, the allowable cost to provide the goods or services.

CROSS REFERENCE:

Guidelines for the Use of General Repair and Rehabilitation Appropriations, Appendix B, State of Indiana, 1988

RESPONSIBLE

ORGANIZATION:

University auxiliary enterprise units that have funded and/or occupy the majority of any university owned or leased building that will result in IU ownership of the asset. University service centers that have funded and utilize the majority of any university owned building for recharge activity.

HISTORY:

The requirements for auxiliary enterprise and service units to set aside funds for future R&R was implemented in fiscal year 2012 through the budget guidelines.