University of California Davis Self-Supporting Recharge Operations - Account Establishment, Attributes & Assessments
- Account Setup
- Sales Tax
- Core Subsidy
The office of the dean/vice provost/vice chancellor must notify the General Accounting Office when a new activity is approved. If establishing a rate-based, self-supporting recharge activity, General Accounting will establish the fund, the unexpended balance account, create the provision for allocation account, and, if needed, establish reserve fund number, which will be communicated to the unit via the Aggie Service ticket system. The unit must establish the operation and reserve (if applicable) account(s) within the financial system using the Kuali Account (ACCT) document. The unit is responsible for maintaining the accounting attributes (assessment types, rate name and dates, whether the rates have depreciation or reserves associated with it, the income authority and the income type) in the accounting system and any reserves or subsidies associated with the activity.
If establishing a self-supporting activity that is not rate based, please refer to the Setting up Accounts for Non Rate-Based Self-Supporting Activities website.
The Sub-Fund Group Code identifies the type of activity.
|Sub Fund Group Code||Name||Description||Examples|
|SSEDAC||Sales and Services of Educational Activities||Income producing activities operated by academic departments in connection with the training of students or support of research activities||Crocker Nuclear Lab Services, Dental Clinics|
|SERENT||Service Enterprises||Provides service to campus departments and operating costs are primarily supported by recharges||Storehouse, Fleet Services|
|OSSSO||Other Sources||Other sources include income sources which do not fall naturally into any of the other classifications. Primarily sales and services from non-academic departments||Recreation Hall|
When creating or modifying an account, you can't enter the Sub-Fund Group Code directly on your Account document. The Sub-Fund Group Code will automatically default based on the UC Fund entered:
- If you click on the lookup icon on the UC Fund field, you can search by the Sub-Fund Group Code and select an appropriate UC Fund.
On the Account Lookup in KFS, you can enter one of the Sub-Fund Group Codes listed above to locate self-supporting accounts in your organization.
UC Accounting structure reports revenues and expenses in separate accounts. In the Account Maintenance tab of the Account document, the UC Revenue Account Number field identifies the account that will be used to report all revenue/income (object consolidation code INCO) in this KFS Revenue/Expense account.
Note: This field is only used for accounts assigned to self-supporting funds.
The fields in the Rate Names tab on the Account document are required when completing an Account document with one of the rate-based, self-supporting recharge activity sub-fund group types.
- There doesn't need to be a name for every rate, but there should be a name for each group of rates that is presented/reviewed together.
- The Review Date should be the last date that the rate was reviewed by the BIA/CP&A or your Dean's/Vice Chancellor Office. Note: The approval authority for the rate is entered in the Account Indicators tab in the Income Authority Code field.
- The Expired Date field indicates the next time the rate should be reviewed by your Dean's/Vice Chancellor Office. This date should be no more than 10 years later than the Review Date.
The fields in the Account Indicators tab on the Account document are required when completing an Account document with one of the rate-based, self-supporting recharge activity sub-fund group types.
- The Depreciation box should be checked if the approved rate includes depreciation expense. Leave unchecked if no depreciation is included in the rate.
- The Reserve for Improvement box should be checked if the approved rate includes a reserve for improvement expense. Leave unchecked if no reserve for improvement expense is included in the rate.
- The Review Date should be the last date that the rate was reviewed by your Dean's/Vice Chancellor Office.
- The approval authority for the rate is entered in the Income Authority Code field.
- Select the appropriate option for the source of income in the Income Type Code field.
The fields in the Account Assessment Types tab on the Account document are required when completing an Account document with one of the rate-based, self-supporting recharge activity sub-fund group types. The Assessment Type Code field identifies the Non-University Differential (NUD) or other assessment(s) approved/required by your Dean's/Vice Chancellor office, Budget & Institutional Analysis office.
The Non-University Differential (NUD) is an assessment on goods or services provided to non-university customers in order to recoup indirect costs associated with providing the goods or services. Non-university customers must pay at least the full direct and indirect costs. When calculating the cost to charge customers, determine all of the direct costs associated with the activity. Only the direct cost is charged internally because contract and grant accounts will pay indirect costs associated with the goods and services provided as part of their agreement. The full NUD is charged to external customers to ensure that they are paying their share of the indirect costs. Normally, in a rate, the NUD is not separated from the cost per item/service (as it is in contract and grant agreements).
The NUD assessment process is managed by the Budget and Institutional Analysis Division and will post to the ledger on a quarterly basis. The NUD portion (determined by the Assessment Type) of the total income collected for that quarter will be calculated and your income will be debited (reduced) by that amount using object code 0066. If the account has the full NUD Assessment Type, the department portion of the NUD will be returned (credited) to the same account using object code 0076. The adjustments appear the following month. The departmental portion of the NUD may be used at the discretion of the department. Any excess balance of the departmental portion of the NUD available at year end may be transferred to a reserve account for the activity.
Campus Assessments are generally required for all accounts that generate income (object consolidation INC0) or recharges (object consolidation SUB9). The assessment provides a mechanism for self-supporting recharge activities, as part of the campus community, to participate in addressing the reduction in the campus budget. The assessment is 3% of recharges and income. The campus assessment process is managed by the Budget and Institutional Analysis Division and will post to the ledger on a quarterly basis. For additional information on assessments please refer to the Recharge Activity Assessments document.
A recharge activity may charge a mark-up rate in excess of the full direct and full NUD costs to non-university customers. Activities that include a mark-up must charge customers the full NUD. Mark-up funds are retained by the department and can be used in whatever way the department wishes to support the activity, provided their use complies with other university policies.
Mark-up should be recorded using object code 006M and is excluded from the NUD calculation. It is the department’s responsibility to transfer the markup out of the recharge activity's operating fund to a reserve fund at least annually, but no more than quarterly (unless the fund is operating at a deficit), and prior to the run of the assessment program. To transfer mark-up income, provide General Accounting with the accounts, object codes, and calculation of the amount to be transferred via email to email@example.com.
Sales tax is not assessed on recharge rates; therefore, units are not responsible for assessing or collecting sales tax.
Units must develop a base budget and a current budget, using a Budget Adjustment (BA) document, for each recharge activity that reflects the projected revenue and expense for the activity. Units must revise an activity’s base budget at the end of each fiscal year to reflect past performance and anticipated revenue and expenditures for the coming year. At least twice a year, units must review the current year budget and performance of its recharge activities. The budget object codes are SUB9 for recharge activity and INCO for income. If applicable, include Object Consolidation SB74 for the RFI amount. Establish income objects as debit appropriations and expense objects as credit appropriations.
For various reasons, an activity may wish to charge its users less than fully costed rates, and may choose to subsidize unit operations with operating budget or other unrestricted funds. In these circumstances, the amount, funding source, and purpose of all subsidies should be disclosed in the recharge activity's proposal. It is important for the department, division, and UCD-wide administration to properly recognize subsidies when they occur. Subsidized rates must be consistently charged to all internal University unit users. Subsidies should not be used to reduce the rates charged to selected users of the recharge activity in a discriminatory manner.