ANNUAL REVIEW PROCEDURES FOR 60000 FUNDS

Each year, budgets and rates for 60000 funds that are not classified as Campus Support Services are to be reviewed and updated annually at the organizational level. Policy 340 on Sales and Service Activities and Service Enterprises requires this review be submitted to the Director within the Office of Academic Planning and Budget (APB) with POSSSE responsibility. Please ensure that the budgets and rates for these funds are submitted prior to the deadline indicated in the annual Call Letter.

It should be noted that the type of submission required for each fund under Policy 340 varies according to the fund classification indicated in Attachment A of the Policy. At a minimum, these funds generally require that a current rate schedule be submitted, together with supporting calculations, as well as processing any necessary online adjustments to the permanent budget that reflect volume changes or inflationary changes. Whenever there are significant changes to the answers to the current sales fund application questions (e.g. adding sub-codes, adding classes of customers, changing sources of subsidy, etc.), a revised sales fund application must be submitted for approval and the budgetary adjustment will be done by Corporate Accounting. In cases where customers are Federal Contracts and Grants, interest expense and/or depreciation must be excluded unless POSSSE staff has reviewed and approved the method of depreciation and any required use of a dual-rate structure. Note that a dual-rate structure or rebate system is needed whenever any interest expense, depreciation, and/or applicable credits from the Federal government must be excluded from rates charged to Federal Contract and Grant users; a statement is required as to the method that the unit intends to use (i.e., dual rates vs. rebates). Before equipment depreciation can be included in any of the rates, a fund application that reflects depreciation expense and includes the related depreciation schedules must be approved by, or already on file in, the Office of Academic Planning and Budget.

Rate Review Process

Please adhere to the following steps to ensure you are in compliance with the necessary information needed for a complete presentation of the rate and budget review of each Sales and Service Activity (60000 fund).

Note: The fund balance as of June 30 final ledger should “break even” over the years, meaning the balance should consist only of the allowable accumulation of funds for operating reserves and/or inventory credits. 60000 fund balances are carried forward from year to year until expended.

A. Total expense should be revised to reflect the current level of activity. Budgeted Salaries and Benefits will need to be revised to reflect staffing. Supplies and Expense budgets should to be revised as appropriate.

B. Provide the formula used in any calculations to properly identify each type of cost making up your rate(s).

C. Multiply each rate by the volume expected to be sold. Total the results from the calculations to get the expected income from operations. Next determine how much income will be generated from outside customers (for the 2XXXXX account budget figure) versus departmental recharges (for the sub 9 budget figure).

D. After making sure that the projected income is sufficient to cover the projected expenses, compare the new income figures with the prior year revenue figures created for the permanent budget. Note the difference derived from the subtraction of the income figures between the two years. The results of the calculation provide the amount of the incremental adjustments to be made to the permanent budget.

E. Next, determine (by sub object code) the incremental adjustments that will need to be made on the expense side of the budget. (Note: The total of all adjustments to expense must equal the total of all adjustments to income).

F. Enter the incremental adjustments for both income and expense in the permanent budget along with the description “To revise budget for existing Sales & Service activity – (enter fund # and name of fund here)”. Temporary budget adjustments can be processed online as well if you wish, but the permanent entries are required for this review.

If, upon review, no changes to the rates and/or the budget are necessary, a statement that the fund review has taken place must be forwarded to the Director within the Office of Academic Planning and Budget (APB) with POSSSE responsibility by you or your designee. Please include the fund number and fund title in this statement. Also, you should retain any documentation related to the fund reviews that you have conducted.

If you have any questions on this material, please contact the Director within the Office of Academic Planning and Budget (APB) with POSSSE responsibility.