Recharge Standard Operating Procedures

 

SUBJECT:

Reporting Requirements for Recharge/Service Centers

SOURCE:

Cost Accounting, Financial Management Services

DATE ISSUED:

November 2015

DATE OF LAST REVISION:

N/A

RSOP NO:

2.0 

RATIONALE:

To define the reporting requirements for different types of recharge/service center activity.

RSOP:

The reporting requirements for recharge/service center activities, excluding exceptions previously approved by the Chief Accountant, are determined by the amount of annual internal revenue the account recorded in the last completed fiscal year. The requirements for each five different categories are summarized below.

 

  1. Activities with estimated internal revenues of MORE than $5,000,000.
  2. Activities with estimated internal revenues of MORE than $500,000 and/or $100,000 in FEDERAL Contract and Grant Billings.
  3. Activities with estimated internal revenues of MORE than $100,000.
  4. Activities with estimated internal revenues of LESS than $100,000.
  5. Conferences managed by OCERS (which are not regularly carried on).

 

 

1.      Internal activities with estimated internal revenues of MORE than $5,000,000:

 

  • Internal activity above $5,000,000 must be segregated into individual recharge/service center (66) accounts.
  • These accounts must use internal billings, service billings and/or ID billings to charge other university departments.
  • These accounts may NOT charge more than allowable cost for products or services sold internally. Internal rates may not exceed external rates for the same product or service.
  • The fiscal officer is required to submit a new recharge rate ANNUALLY using an approved Cost Accounting Rate Setting Template.
    • For reporting auxiliary and service units this rate should be initially submitted to Auxiliary Accounting.
    • For non-reporting auxiliary & service units; as well as any other type of account, rates should be first submitted to Cost Accounting.
    • These units are required to meet ANNUALLY with University Cost and Auxiliary Accounting to go over the unit’s rate setting methodology.

 

2.      Internal activities with estimated internal revenues of MORE than $500,000 and/or $100,000 in FEDERAL Contract and Grant Billings:

 

  • Internal activity above $500,000 must be segregated into individual recharge/service center (66) accounts.
  • These accounts must use internal billings, service billings and/or ID billings to charge other university departments.
  • These accounts may NOT charge more than allowable cost for products or services sold internally. Internal rates may not exceed external rates for the same product or service.
  • The fiscal officer is required to submit a new recharge rate ANNUALLY using the Cost Accounting Rate Setting Template.
    • For reporting auxiliary and service units this rate should be initially submitted to Auxiliary Accounting.
    • For non-reporting auxiliary & service units; as well as, any other type of account, rates should be first submitted to Cost Accounting.

 

3.      Internal activities with estimated internal revenues of MORE than $100,000:

 

  • Internal activity above $100,000 must be segregated into individual recharge/service center (66) accounts.
  • These accounts should use internal billings, service billings and/or ID billings to charge other university departments.
  • These accounts may NOT charge more than allowable cost for products or services sold internally. Internal rates may not exceed external rates for the same product or service.
  • The fiscal officer is required to submit a new recharge rate BIENNIALLY (every two years) using the Cost Accounting Rate Setting Template.
    • For reporting auxiliary and service units this rate should be initially submitted to Auxiliary Accounting.
    • For non-reporting auxiliary & service units; as well as, any other type of account, rates should be first submitted to Cost Accounting.

 

4.      Internal activities with estimated internal revenues of LESS than $100,000:

 

  • Activities that have less than $100,000 in anticipated internal revenue will be required to use Distribution of Income and Expense (expense-to-expense transactions), General Error Corrections (expense-to-expense transactions) or Transfer of Funds to complete transactions between university accounts. Note: The $100,000 is measured at the activity and/or account level, not the transactional level.
  • The fiscal officer will NOT be required to submit rates to University Cost Accounting and costs will NOT be required to be segregated into separate service center (66) accounts; however, the use of a service center (66) account is preferred for internal activity.
  • Accounts with internal activity under $100,000 will NOT be permitted to use internal billings, service billings and/or ID billings. Exceptions requiring the use of internal billing documents may be granted by University Cost Accounting, but will require compliance with the rate setting requirements above for internal sales greater than $100,000.
  • The fiscal officer is responsible for ensuring that no more than allowable cost is distributed or transferred to other university accounts.

 

5.      Conferences that go through OCERS, which are not regularly carried on, require the following:

 

  • This activity is typically not considered auxiliary activity and is not required to be recorded in an account in the auxiliary sub fund group.
  • The activity may charge contract and grant accounts for conferences as long as the charges are allowable per the grant and approved by Office of Research Administration.
  • Any activity related to the sale of goods or services provided in conjunction with the conference must be maintained in an auxiliary account and segregated from the accounting for the conference activity.
  • Please refer to the Chart of Accounts Quick Reference Guide to determine the correct account to record this activity.
  • The fiscal officer is NOT be required to submit rates to Cost Accounting.

DEFINITIONS:

Federal Contracts & Grants Billing: When a department charges an expense to an account that belongs to a FEDR* sub fund group.

 

Rate Setting Template:  Each department is required to submit their rates for review using a template that has been approved by cost accounting. Exceptions to this rule must be approved by the Chief Accountant.

 

Recharge/Service Center Activity: 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:

 

Reporting Requirements Decision Tree (PDF)

 

OMB Uniform Guidance (PDF) "Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards"

RESPONSIBLE

ORGANIZATION:

 

Organizations that bill other Indiana University departments for goods or services