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 Review
Reviewing Internal Sales activity annually is a best practice
business model and should be completed by all units
conducting internal sales.
• Activities to consider:
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o
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o
o
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Invoicing
Depreciation expense
Unallowable costs
Expense allocation
Planned subsidies
Transfers
Variances
Invoicing
• Invoice and record revenue for all completed internal sales
activity
o 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 rates
o 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 fund
o 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, noncapital equipment and/or other)
o Internal Sales activity should be allocated to fund 1150
o 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
rates
o 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 Timing
o Review of Business Plan
o Case Study
Timing
• Monitor internal sales activity throughout the year
o Identify potential significant surplus or deficit
o 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
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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