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Procedure: 15-71 |
Effective: July 1, 2014 |
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Latest Revision: New |
Recharge Centers: Accounting and Billing
Scope | System References | Policies | Responsibility | Distribution | Ownership | Procedure Steps
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This document outlines the accounting procedures to be used by Recharge Centers. Recharge Centers are ongoing activities that provide goods or services to University departments, sponsored programs, or other institutional units/activities. A recharge center meets all of the following criteria: · A facility, operation, function, activity, unit or center which normally confines their provision of goods or services to users within University departments, sponsored programs, or other institutional units/activities. · A recharge center must be an ongoing activity and provide goods or services on a regular and continuing basis at significant volume to more than one department/unit/activity/project. · A recharge center provides goods and services that are not readily available from external sources, are more convenient when offered by the recharge center, or are unique. · A recharge center may have only an incidental amount of sales to faculty, staff, students and the general public. Examples of Recharge Centers that bill for goods and/or services include electron microscope, tissue culture center, etc. This procedure does not apply to Auxiliary Enterprises, Medical Center activities, instructional programs currently approved by the Executive Vice President and Provost, and sponsored program activities currently reviewed by the Office of Sponsored Programs, or any units whose rates are approved by the Board of Visitors. System References [Top] Approval Form for New Revenue Generating Activities and Services is available on the UVA Forms Directory as a PDF document. Procedure 1-4 - Monthly Review of GM Project or Award Activity Procedure 1-5 - Monthly Review of GL Project Activity Procedure 15-70 - Approving New or Expanded Services and Activities Recharge Centers List: http://www.virginia.edu/finance/finanalysis/service_r.html Policy [Top] FIN-005: Extension and Collection of Credit FIN-016: Receiving and Depositing Cash & Other Monetary Instruments FIN-049: Revenue Generating Activities Policy V1.A.6, Payments to University Departments Responsibility [Top] The departmental fiscal administrator of the activity is responsible for timely billing, proper accounting of revenues/recoveries and expenditures, account reconciliations, review of rates, and records retention. Distribution [Top] Recharge Center Administrators Department Fiscal Administrators Financial Reporting & Analysis, Office of Cost Analysis Ownership [Top] The Deputy Comptroller is responsible for ensuring that this procedure is necessary, reflects actual practice, and supports University policy. Procedure Steps [Top] A. Overview All new or expanded services and activities that are subject to this procedure must successfully complete the review and approval process before offering their services to the general public or to University departments, faculty, staff, or students. If the new or expanded activities are put into operation before final approval is given under this procedure, then the department will be responsible for absorbing any commitments, obligations, or expenses incurred prior to approval of the proposal. See Procedure 15-70 for instructions on how to Gain Approval to Charge for Goods, Services or Other Fees. B. Billing 1. Timing of Transaction Billing: Recharge Centers must submit cost transfers/invoices for their services to customers at least monthly. If the order is not complete, partial billing should be done for the portion of goods or services that were provided. The description should state that the billing is for a partial order. The amount billed must be based on actual usage. When practical, goods and/or services should be billed in the fiscal month in which they are provided. 2. Correcting a Billing Error: When customers contact the recharge center about a billing correction, the recharge center is responsible for making the correction in a timely manner. Corrections should use the PTAO originally charged, or an alternate PTAO provided by the customer if the original PTAO was used in error. The recharge center should also provide a detailed explanation in the comments section, referencing the original invoice/cost transfer. 3.; External Billing: External users are customers that cannot be charged by using a PTAO. External users can include faculty, staff or students who purchase goods and/or services in a personal capacity, rather than as a University employee, as well as users outside of the University. Billing to external users must be done at least monthly. In addition to the direct costs of the service recovered in the approved rates, the charges to external users may include an amount for University indirect costs, based on the appropriate current F&A rate. Billing to non-University users may be accomplished through the Integrated System Accounts Receivable module or the activity’s own accounts receivable system. Upon initial approval, if the service provided to the external users of a recharge center was determined to be taxable, unless the customer provides proof of tax-exempt status, sales tax must be added to the total invoice. C. Accounting: 1. Break Even Rates of a Recharge center must be based on the actual, allowable costs to provide the goods and/or services. Recharge centers are expected to break even over time. Any actual “profit” or over-recoveries should be generated from external customers. 2. Unique Project/Award Recharge centers must accumulate all of their activity in a unique project/award combination. This unique account should only include expenses necessary to operate the recharge center, including salaries, wages, fringe benefits, supplies, etc., as well as the income (Recoveries or Revenues) generated from that good or service. 3. Accounting To be Used for Internal Customers For all billings to internal UVa customers, (customers with a PTAO), use the expenditure type “Recoveries, RCG” for the credit side of the cost transfer. In the comments section, the following beginning standard wording must be adhered to - “RCG:” must be the first four characters in the comment. Be sure to include the colon. The expenditure type that most closely describes the goods or services provided should be used for the debit side of the cost transfer. For example, if the service is an x-ray or MRI you should use the expenditure type “Svcs, X-ray and Lab” when charging the customer’s PTAO. In the comments section, the following standard wording must be adhered to – “RCG:” must be the first four characters in the comment. Be sure to include the colon. For inter-agency activities, such as charging the Medical Center, UVa Wise, SW Virginia, use expenditure type “Revenue, isp (Non-Aux)”, which maps to object code 4706, for your cost transfers. 4. Accounting To Be Used for External Customers External revenue of recharge centers should be recorded in object code 4705. For all payments from external UVa customers, use object code 4705 in the GL string for revenue being deposited. D. Reconciliations: All accounts associated with recharge centers must comply with account reconciliation policies. See Policy I.A.1, Internal Controls. Note, most recharge center projects are revenue projects and therefore the GL reconciliation procedure must be followed as well as the GA reconciliation procedure. See Procedures 1-4 and 1-5. E. Reviewing and Updating Rates: Rates for a recharge center must be based on the actual, allowable costs to provide the goods or services. All recharge center managers must review their rates at least annually. More frequent updates to rates are encouraged when the service provider knows that existing rates are either creating either a significant deficit or a significant surplus. Contact Rick Johnson for help with approval of new rates. All new or updated rates must be approved by the office of Cost Analysis. F. Record Retention All records relating to a Recharge Center must be retained according to policy IRM-017: Records Management by the Recharge Center. This includes requisitions or logs indicating who ordered the items, the date of the order, and the PTAO to which the expense should be charged, records or logs of usage of each good or service, records of billings to each user, and any other relevant documentation. These records are subject to federal audit. None of these records should be disposed of or destroyed without the approval of Financial Reporting and Analysis. Additionally, records that should be retained in perpetuity include the original Form 15-70 with signatures indicating full approval of activity, rate calculations with verification of approval of rates by Cost Analysis.
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