University of California Davis Self-Supporting Recharge Operations - Training Resources

Content

• Self-Supporting Recharge Operation Forums
• LMS Courses/Power Point Presentations
• Glossary of Terms
• FAQ's
• Self-Supporting Exercises

Self-Supporting Recharge Operation Forums

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LMS Courses/Power Point Presentations

The following classes on budgetary topics will help you gain a further understanding of budget models and concepts. Please click on the link to SDPS for more information and to register for your course. 

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Glossary of Terms

Recharge Operations – Glossary of Terms

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Frequently Asked Questions

• How often should I review my rates?

• You should review your rates annually to ensure you are within the 15% guideline. 

  As per PPM 340-25, recharge activities must operate on a break-even basis. Therefore, units must make every effort to ensure that a recharge activity does not generate a year-end deficit or surplus in excess of 15% of prior-year expenditures. If the activity is subject to seasonal fluctuations, then a calendar year or other twelve-month period may be used to evaluate the surplus or deficit.

• What is the 15% guideline and how do you calculate it?
• As per PPM 340-25, recharge activities must operate on a break-even basis. Therefore, units must make every effort to ensure that a recharge activity does not generate a year-end accumulated deficit or surplus in excess of 15% of prior-year expenditures. If the activity is subject to seasonal fluctuations, then a calendar year or other twelve-month period may be used to evaluate the surplus or deficit.
• What if my activity exceeds the 15% guideline?
• As per PPM 340-25, units must recover any surpluses or deficits that are in excess of 15% of the activity’s annual expenditures within three years.  If the plan to recover the surplus or deficit requires a rate change, then refer to the Rate Proposals & Modifications website.
• Why am I charged the campus assessment?
• Per the Assessment Resources, the assessment provides a mechanism for self-supporting activities, as part of the campus community, to participate in addressing the reduction in the campus budget. The assessment is 3% of revenues generated. This assessment is required for all accounts that generate revenue (recharge and income).
• What assessments are required to be charged to an external customer?
• At minimum you must charge the NUD to all external customers.  Refer to the Account Establishment & Attributes website for more information.
   
• What rate changes require recharge rate committee review and approval?

• Any changes outside of the campus budget planning parameters require review and approval from the recharge rate committee. 

  At a minimum, rates must be reviewed annually and approved by your Dean (D)/Vice Provost (VP)/Vice Chancellor (VC) office to adjust for increased NUD, salary and benefits expenses.   Changes in volume, supplies, personnel, depreciation, etc. may require additional review and approval as outlined on the Authorization webpage.
   

• When updating the rates to capture current salaries and CBR and the volume is modified, does this require BIA or CP&A approval?

• Yes, this would qualify as a change to the calculation methodology.  Changes to volume should be based upon current trends or sound rationale as to what is driving the volume change(s) and consequent impact to calculated rate.

• For only salary and benefits adjustments, only Dean/Vice Chancellor approval needed?

• Correct.  Updates for salary, benefits & NUD can be made to an existing approved rate package and require only Dean/VC approval.  Please send copy of updated approval to recharge@ucdavis.edu.

• What is the best time to prepare a rate proposal and/or modification of rates?

• Rates can be prepared/updated at any time. 

  Minimally, rates should be reviewed at least annually and updated at least bi-annually.  Budget planning parameters should be reviewed at the BIA Budget Process website.   Rate proposals that are requesting updates associated only with budget planning parameters (NUD, salary and benefit rates) should be submitted at least 2 months prior to implementation.  All other rate proposals, which require a full review, should be submitted four to six months prior to implementation.  

• Any approval considerations if recharge operation is primarily external clients and minimal internal?

• Recharge authorization is outlined on the recharge authorization website.

  No exclusions from policies and procedures, still rate based operations that must have appropriate methodology and ensure full cost recovery.  If the recharge operation has less than $50k to contracts & grants and less than $250k internal recharges then it falls under “Low-risk” activities and only requires Dean/VC Office approval.

  As with all approved recharge rates, copies should be sent to recharge@ucdavis.edu Dean/VC may request BIA/CP&A approval for any workbook regardless of the approval matrix. 

• Is it possible to have a different rate for internal vs. external clients?

• Yes.

  Recharge operations should have the same “Base Recharge Rate” calculation for internal and external clients unless subsidized (email recharge@ucdavis.edu if this situation applies to you).  External customers are obligated to pay the base rate plus NUD.  Additional “mark-up” can be added as well to ensure services are charged on par with market conditions. Every effort should be made to charge as much as the market will bear.   

• For core users who have projected costs built into grants, is the recharge unit required to use those rates?

• No. Recharge units are obligated to recover full cost of providing services and are not held to award budgets.  That said, Recharge units are expected to give customers at least a 30-day notice of any rate increases.  Additionally, Users are obligated to build in annual rate increases to award budgets consistent with planning parameters and/or guidance provided by Office of Research. Depending upon sponsor policy, users may be able to re-budget to fulfill project needs.    

• Is it possible to collect advance payments from external clients?

• Yes.

  Cores that collect advance payments on a regular basis should establish a deferred income account to collect and track advance payments.  Cores without a deferred income account must follow fiscal close guidance of deferred income.     

• If a core director salary is subsidized and is not included in internal recharge rates, can it be charged externally?

• Short answer, no this is not appropriate.

  By definition a subsidy is an expense covered under a fund source other than the primary recharge operating fund.  Recharge Operations can only build expenses into rates that are allocated against the operating fund.

  There are no formal restrictions that do not allow core facilities to recover the cost of the Core director’s salary both internally and externally, but rates must be correctly constructed as noted above.

  For recharge operations that bill both internal and external clients, please work with the recharge help desk to utilize an alternative rate calculation worksheet to exclude the subsidy benefit from external clients.  Every effort should be made to exclude rate subsidies from benefiting external customers.

• What is the best way to handle multi-year maintenance agreements that skew annual compliance because the expenses hit every other year or infrequently?

• Rates should be constructed with the appropriate average annual costs that include covering any maintenance agreements.  Agreements that hit infrequently should be described on the Recharge Operation Form (line 38) in advance.

  Annual 193 compliance reporting flags due only to timing of maintenance agreement expenses can be classified as timing issue and will not require an action plan, assuming rate package is appropriately documented and ledger details support this conclusion.

  An Auxiliary Voucher may be used to defer or accrue income/expenses if over $10K

  Click here for more information.   

• Can you provide guidance on when to use “material pass-through” in rate work sheet?

• Pass-through is utilized in a limited fashion for recharge operations that have a significant amount of commodities or materials costs, such as building Maintenance Services or Reprographics. Does not apply to 99% of recharge rates.

  Some administrative recharges will be structured with materials pass-through when providing to internal customers so items are provided “at cost”, this consideration is not required for external customers.

  Supplies and materials charged to contract and grants pay the full F&A costs, so scientific recharges should be consistent in capturing these expenses as part of the overall rate structure and materials pass-through should not be utilized.

  Email recharge@ucdavis.edu with any specific scenario or questions.

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Self-Supporting Exercises

• Exercise 1 - Logging In
• In this exercise, you will log into FIS Decision Support Account Lookup (FIS11).
  
  1. Log into FIS Decision Support (DS).
  2. In the Query Jump field, enter 11.
  3. Enter your fund number into the UC Fund field.
  4. Click Process Query.
  5. In the search results, look for the following types of accounts:
       ◦  Unexpended Balance (UB) account - this is the fund number + 00 or UB.
       ◦  Provision (PR) account - this is PR + the fund number.
       ◦  Revenue Translation - this is 2 + the fund number + 0 and exists if you have external customers.
  6. In the search results, notice whether the UB and PR accounts are in the same org as your operating accounts. In addition, the fiscal officer should be someone in your department.
  7. Write down a few operating account numbers for use in later exercises.
• Exercise 2 - Review DS report Sub Fund Summary by Consolidation (FIS55) to learn how to read reports for your activity.
• 1. In the Query Jump field, enter 55.
  2. Update the Chart field, if necessary.
  3. Enter your fund number into the UC Fund field.
  4. Click Process Query.
  5. In the search results, look at the object consolidations under each account. For each one, compare the Appropriations column to the Expenditures column:
       ◦  UB account - The Appropriations column and Expenditures column should off-set so that the account is always in balance.
       ◦  PR account - If there is anything there, it should be in object consolidation SUB8 - Unallocated. Where should that budget be
           re-appropriated? 
       ◦  Operating accounts - By year-end, you should adjust your appropriations to match your expenditures.
   

  For your operating accounts, are there object consolidations that have 0 in the Appropriations column while having a non-zero amount in the Expenditures column? If so, what does this mean and what should you do?

  What column indicates whether your fund is in overdraft?

• Exercise 3 - Show DS Transaction Listing (FIS2) to show object codes and review account balances.

• 1. In the Query Jump field, enter 2.
  2. Near the top of the input page, click the Object (26) button.
  3. Change the Month Range fields so that you are searching the current fiscal year, from July through the current period.
  4. Update the Chart field, if necessary.
  5. Enter your account number into the Account(s) field.
  6. Click Process Query.
  7. In the search results, notice the object codes:
       ◦  Do you have Income? Hint: It's under Object Consolidation INC0.
       ◦  Do you have Recharges? Hint: It's under Object Consolidation SUB9.
  Is your account currently in overdraft?

  

• Exercise 4 - Use DS report Annual Summary by Object Group (FIS210) to forecast your totals.

• 1. In the Query Jump field, enter 210.
  2. Update the Chart field, if necessary.
  3. Enter your account number into the Account List field and click Add.
  4. Click Process Query.
  5. In the search results, notice there are zeroes for future months.
  6. Go back to the input page and under Projection Type, mark Project Using Prior Year.
  7. Click Process Query.
  8. In the search results, notice that future months have numbers in italics.
  9. Go back to the input page and under Projection Type, mark Project Using Averages.
  10. Click Process Query.
  11. In the search results, notice that future months have numbers in italics.
• Exercise 5 - View DS report Stmt of Operations-Self-Supp Compliance (FIS193) to see a snapshot of your activity
• 1. In the Query Jump field, enter 193.
  2. Update the Chart field, if necessary.
  3. Enter your fund number into the UC Fund field.
  4. Click Process Query.
  5. In the search results, look for the following:
       ◦  Accumulated Balance
       ◦  Net Income or Loss Year to Date
       ◦  Ending Accumulated Balance
  If you had a loss, what adjustments should be made to your activity?
  6. Go back to the input page and change Report Mode to Self-Supporting Compliance Report.
  7. Click Process Query.
  8. In the search results, is your Surplus/Deficit Ratio within 15%? If not, what should you do?
  Net Income or Loss Year To Date - If you had a loss, you should see if your Ending Accumulated Balance is still a credit. If it is, then just continue to monitor the activity. However, if the balance is in overdraft, then determine whether you will reduce expenses or else increase your rates.
  Surplus/Deficit Ratio - If the percentage in the Surplus/Deficit Ratio (Threshold: 15.00%) field is within 15%, then no further action is needed. However, if the percentage is not within 15%, then you will need to determine a way to get it back within 15%.
• Exercise 6 - Revising rates

• Based on these scenarios, determine whether it's necessary to revise your rates.

  View Answers

• Exercise 7 - Independent Exercises

• Use DS to determine the following.  NOTE: Answers are at the bottom of this page.
  
  1. How much was your department share of NUD for the last fiscal year in your operating account? (hint: object code 0076)
  2. Did your department transfer the money from your Provision account to your expense account?
  3. What was the ending balance for your entire fund as of June Final of the last fiscal year?
  4. How does your fund balance this fiscal year to date compared to all of the last fiscal year? (Hint: DS report 193)
  5. Using Project Using Averages on DS 210, which categories will be in overdraft by year-end if you don't make any adjustments? 
  
  The following questions pertain to campuswide assessments.
  
  6. Campuswide assessments that can be charged to my activity based on my revenue:
           a. Campus Assessment
           b. Non-University Differential
           c. Utilities charge
           d. a and bThe
  
  7. NUD:
           a. Recovers overhead costs from non-university clients
           b. Is added to the recharge rate for developing a non-university rate
           c. Is only charged on income
           d. All of the above
  
  8. If I have Income and Recharge what standard code(s) should I enter?
           a. CAI1, CAR1, and NUD3
           b. CAI1 and CAR1
           c. CAI1 and NUD3
           d. NUD3
  
  9. If I have Recharge only what standard code(s) should I enter?
           a. CAR1
           b. CAR1 and NUD3
           c. CAI1 and CAR1
           d. NUD3
  
  10. If I have Income only what standard code(s) should I enter?
          a. CAI1 and NUD3
          b. CAI1
          c. CAI1 and CAR1
          d. NUD3
  
  11. What is exempt from the campus assessment?
          a. Academic unit recharges
          b. Pass-thru costs exceeding 20% of revenues and included in the rate approval
          c. Agency Accounts
          d. University Related Accounts that are not third party
          e. Federal revenue is > 15% of revenue
          f. All of the Above
  The remaining questions pertain to DS 193.
  
  12. The Self-Supporting Compliance Report (DS 193):
          a. Identifies funds that are out of compliance with the break-even policy
          b. Used to find all your funds that have recharge or income
          c. Is reviewed annually by BIA
          d. Nothing I need to worry about
          e. a and c
  
  13. I need to run the compliance report because:
          a. I was told to run it
          b. To know what recharge activities are out of compliance to policy to respond to the annual review
          c. Use to check periodically to see what funds are at risk
          d. Use it to develop a new rate
          e. b and c
  
  14. I can run the compliance report by the following:
           a. Org level or UC Fund
           b. Account number
           c. Project code
           d. Unique Object Code
  
  15. To identify funds out of compliance, I should choose the following parameters:
          a. Recharge Income Only
          b. All Income
          c. Minimum Under/Over Percent = 15.0
          d. Minimum Under/Over Percent = 0
          e. a and c
          f. b and d
          g. a and d

• Exercise 7 - Answer 1 - Department share of NUD

• 1. Open FIS 2.
  2. At the top, click Object (26).
  3. Change the Month Range fields to July through June Final of last fiscal year.
  4. Modify the Chart field, if needed.
  5. Enter your account in the Account field.
  6. Click Process Query.
  7. In the search results, go to Object Consolidation INC0.
  8. Look at the amount for Object Code 0076 - NON UNIV DIFFERENTIAL: CENT / DEPT SHARE.

• Exercise 7 - Answer 2 - Provision account transfer

• 1. Open FIS 1.
  2. Change the Month Range fields to July through June Final of last fiscal year.
  3. Modify the Chart field, if needed.
  4. Enter your fund in the UC Fund(s) field.
  5. Click Process Query.
  6. In the search results, find your provision account (i.e., PR + fund number). If the Appropriations column shows 0, then the transfer occurred.
• Exercise 7 - Answer 3 - Ending fund balance
• 1. Open FIS 1.
  2. Change the Month Range fields to June Final through June Final of last fiscal year.
  3. Modify the Chart field, if needed.
  4. Enter your fund in the UC Fund(s) field.
  5. Click Process Query.
  6. In the search results, find the dollar amount at the bottom of your Expenditures column; this is your ending fund balance.
• Exercise 7 - Answer 4 - Change in ending balance over multiple years
• 1. Open FIS 193.
  2. Change the Fiscal Year field to last fiscal year.
  3. Modify the Chart field, if needed.
  4. Enter your fund in the UC Fund(s) field.
  5. Click Process Query.
  6. If your results didn't open in a new browser window, write down the Net Income or Loss Year to Date as well as the Ending Accumulated Balance before going on to the next step.
  7. Go back to the input page and change the Fiscal Year field to Current.
  8. Click Process Query.
  9. In the search results, compare the results from the prior fiscal year to the current fiscal year.
• Exercise 7 - Answer 5 - Projected overdrafts
• 1. In the Query Jump field, enter 210.
  2. Update the Chart field, if necessary.
  3. Enter your account number into the Account List field and click Add.
  4. Click Process Query.
  5. In the search results, look at the Proj Balances column for amounts that show OD - Overdraft.
• Exercise 7 - Answer 6 - Chargeable assessments

• Campuswide assessments that can be charged to my activity based on my revenue:
  a. Campus Assessment
  b. Non-University Differential
  c. Utilities charge
  d. a and b

• Exercise 7 - Answer 7 - NUD

• The NUD:
  a. Recovers overhead costs from non-university clients
  b. Is added to the recharge rate for developing a non-university rate
  c. Is only charged on income
  d. all of the above

• Exercise 7 - Answer 8 - Recharge and Income

• If I have Income and Recharge what standard code(s) should I enter?
  a. CAI1, CAR1 and NUD3
  b. CAI1 and CAR1
  c. CAI1 and NUD3
  d. NUD3

• Exercise 7 - Answer 9 - Recharge Assessment

• If I have Recharge only what standard code(s) should I enter?
  a. CAR1
  b. CAR1 and NUD3
  c. CAI1 and CAR1
  d. NUD3

• Exercise 7 - Answer 10 - Income Assessment

• If I have Income only what standard code(s) should I enter?
  a. CAI1 and NUD3
  b. CAI1
  c. CAI1 and CAR1
  d. NUD3

• Exercise 7 - Answer 11 - Assessment Exemption

• What is exempt from the campus assessment?
  a. Academic unit recharges
  b. Pass-thru costs exceeding 20% of revenues and included in the rate approval
  c. Agency Accounts
  d. University Related Accounts that are not third party
  e. Federal revenue is > 15% of revenue
  f. All of the Above

• Exercise 7 - Answer 12 - What the report does

• The Self-Supporting Compliance Report (DS 193):
  a. Identifies funds that are out of compliance with the break-even policy
  b. Used to find all your funds that have recharge or income
  c. Is reviewed annually by BIA
  d. Nothing I need to worry about
  e. a and c

• Exercise 7 - Answer 13 - Why run the report?

• I need to run the compliance report because:
  a. I was told to run it
  b. To know what recharge activities are out of compliance to policy to respond to the annual review
  c. Use to check periodically to see what funds are at risk
  d. Use it to develop a new rate
  e. b and c

• Exercise 7 - Answer 14 - Running the Report

• can run the compliance report by the following:
  a. Org level or UC Fund
  b. Account number
  c. Project code
  d. Unique Object Code

• Exercise 7 - Answer 15 - Non-compliant Funds

• To identify funds out of compliance, I should choose the following parameters:
  a. Recharge Income Only
  b. All Income
  c. Minimum Under/Over Percent = 15.0
  d. Minimum Under/Over Percent = 0
  e. a and c
  f. b and d
  g. a and d

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