Yes, use Inter-Departmental (ID) accounts as long as the selling FOPPS is not an Auxiliary Enterprise or an Internal Service Center (ISC). Internal sales within the University are treated consistently whether the transaction takes place between departments on the same campus or between departments on different campuses. Auxiliary Enterprises (Expense Purpose Code of 2000) must use the revenue account range 280000–289999 in order to identify this TABOR-exempt revenue. Internal Service Centers (EPC 2100) must use revenue account range 380000–389999 for interdepartmental sales. For ISC sales to entities outside the University or to Fund 80 (Agency) FOPPS, use miscellaneous revenue accounts 325000–334999.
Non-Auxiliary Enterprise FOPPS in Fund 10, 20, 26, or 29 that make occasional sales to other University departments—on the same campus or on another campus—must use ID Revenue account range 390000–395999 and the purchasing FOPPS must use an appropriate ID Expense account. ID Expense accounts appear in more than a single range in the Chart of accounts, but all are preceded by the “ID” designation.
The reason behind using these specific accounts is so the University does not inflate total revenue and expense that results from internal sales. For more on this topic, see Chapter 4 of the Guide. (5/10)
Per the State of Colorado Higher Education Accounting Standard #2 issued by the State Controller, Instructional Fees are defined as those mandatory fees charged to students where the fee is directly related to specific instructional programs. This includes fees related to whole academic programmatic areas as well as to specific course fees. Examples of this type of fee are a lab fee (e.g., chemistry, anatomy), a microscope fee (when the microscope is required for a particular program or course), music fee, physical education fee, and program fee, (i.e., school of business or college of engineering fee). These fees are recorded in the "Tuition and Fees" program code.
All instructional fees are accounted for in the general fund (fund 10) except for instructional fees charged by Continuing Education that are accounted for in their FOPPS in the Auxiliary TABOR Enterprises fund (fund 20). If the fee has been approved to be dedicated to a specific program, then an expense budget is set up for that program and the continuing expense budget is adjusted at various times during the year to equal the actual fee revenue collected. (10/02)
If your department receives an insurance check for a loss on equipment or other property damage, the check should be deposited to a Renewal & Replacement plant fund (72 or 78) into account code 325400, Insurance Recoveries. Always use account 325400 because these monies are considered non-operating revenue and account 325400 records it as such. Using another revenue account runs the risk of being improperly classified as operating revenue, for example, SSEA (250100) or Miscellaneous Revenue (325100), and would cause our financial statements to be misstated.
There are actually two economic events that occur here. The first is the loss of the property and subsequent insurance payment. The second is the decision on how to use the insurance proceeds. Receiving the insurance check does not require that it be used to replace or repair the asset. We could forgo the asset and use the funds for something else. If used for repair or replacement, do not mistakenly credit the insurance check against such cost. The proper accounting is to record these as two events. Contact your area accountant if you have questions.
Refer to the Revenue Definition & Recognition section of the Accounting Handbook. (1/13)
Departmental self-generated revenue, sales of goods and/or services to parties external to the University, are accounted for in a 2x fund as appropriate for the type of revenue.
Do not record departmental self-generated revenue in the general fund (fund 10), grants and contracts (funds 30/31), gift fund (fund 34), or renewal and replacement plant funds (funds 72/78). (5/02)
Q –Our department sponsored an event that included the participation of an outside organization. The room rental cost $482 and the UMC charged that to our Fund 10. The outside organization then sent us a $482 check as payment for the room. Since we didn’t earn any revenue because we didn’t make a profit, should we just credit the expense? (08/06)
A – No, do not credit the expense. Revenues are inflows or increases in financial resources of the University from delivering or producing goods, rendering services, or other activities that constitute the University’s operations. It doesn’t matter if you sold at a profit, a loss, or in your case, broke even. Profit and revenue are not the same thing, although there is a connection between them. Profit is the excess of revenues over outflows in a given period of time. If you sell something, you earn revenue. Therefore, this does not qualify as an expense credit. You earned revenue and must enter it as revenue.
Q – Do I enter the revenue to my Fund 10 where the expense is?
A – No, don't post self-generated revenue to Fund 10. Fund 10 is limited primarily to revenues generated from State appropriations, tuition, instructional fees, administrative student fees, and some student activity fees. The campus keeps these revenues separate and clean from all other sources of the campus. Departmental self-generated revenue, such as the room rental revenue, should be recorded in a 2x Fund.
Q – But isn’t everything we do to earn revenue really self-generated? I mean, we have to do something to get money. What’s the difference?
A – If you look at the sources of revenue for Fund 10, they are the result of one of our core activities: education of students. All of Fund 10 is essentially managed as one large operation. The money that the University receives for this is pooled at the campus level and then expense budgets equal to the revenue budgets are allocated internally to keep the whole operation going. This ends up as expense budget in your Fund 10. So yes, you do have to perform your normal departmental functions to receive this budget, but that’s because the University considers those as necessary functions to run the University business. But when your department gets paid for doing something outside of and in addition to this process, that’s considered departmentally self-generated revenue.
Q – OK, we have to record the revenue in a Fund 2x. Can we leave the expense in Fund 10 to avoid GAIR? Otherwise it seems like we get penalized.
A – Preferably, expenses and revenues that result from the same business activity are posted to the same FOPPS. This matches costs with revenues. The $482 room rental cost is clearly identifiable and makes this relatively easy to do. If the expense is moved from Fund 10 to 2x, that frees up Fund 10 budget. If the expense stays in Fund 10 while the revenue is put in Fund 2x, eventually that revenue will be spent on something and you’ll pay GAIR at that time. Either way, you’ll pay GAIR.
The Fund 10 budgeting process funds the cost of the University administration and common services that support the generation of Fund 10 revenues. The Fund 2x group falls under auxiliary and self-funded activities. The term self-funded indicates those operations should cover not only the direct costs of the operation but also a share of the indirect costs that support those operations. GAIR is designed to allocate a portion of fund 10 University administration and common services to recognize the support provided to the self-funded operations of the campus.
Royalty income is exempt from TABOR reporting and is accounted for in fund 26 – Auxiliary-Other Exempt for most departments. Departments that have been designated a TABOR Enterprise will account for their royalty income in fund 20. Fund 29 is not exempt from TABOR and cannot be used to account for royalty revenue. (5/02)
This depends on the arrangement you make with Athletics or any other department putting on the event.
First scenario: You can return any unsold tickets to Athletics. You are basically taking the tickets on consignment. Deposit all ticket sales into a fund 29 FOPPS as revenue. Upon settling up with Athletics, move the revenue from your fund 29 FOPPS to the Athletics FOPPS they designate and return any unsold tickets.
Second scenario: You are buying a block of tickets from Athletics and any unsold tickets you have to keep. When you buy the tickets from Athletics, you should record an expense in a fund 29 FOPPS and Athletics will record ticket revenue. You need to use the ID Revenue and Expense accounts for this interdepartmental transaction. All proceeds from your ticket sales should be deposited as revenue to your fund 29 FOPPS.