RBSA Accounting
Recording Expenses
Per policy guidelines, you should allocate expenses with the purpose of the expense. For example, a blender from Target may not seem like a reasonable research supply but it may be needed to process samples. Additional information is needed from the department at the time of purchase to adequately document the expenditure.
The Office of University Controller (OUC) has a chart of accounts that lists all available expense account codes. If you’re not sure what expense code to use, you can always reach out to your campus accountant for guidance.
Note: Expense Account Codes range between 400000 - 989999
Depreciation Expense
Depreciation transfer spreads the cost of equipment over its useful life, helping stabilize service rates. It’s optional, but departments must commit to using or not using it consistently.
- Purpose: Build a reserve to support future equipment needs.
- Use of Funds: Funds can be accessed before the depreciation period ends and used for:
- Replacing equipment (including newer or different models)
- Maintenance and repairs
- Service contracts or other related costs
- Flexibility: Funds aren’t tied to the original equipment—departments can upgrade to current technology or invest in other necessary instruments.
Depreciation expense on an RBSA can only be recorded if the following is true:
- Equipment is to be used for RBSA services
- Equipment at the time of purchase is greater than $5,000 and has been tagged with a CU identity sticker.
- Depreciation is listed on the RBSA rate sheet.
- Equipment has not been fully depreciated and has established annual depreciation in PeopleSoft Finance.
Recording depreciation expense on an RBSA cannot be considered for the following:
- Equipment has exceeded its depreciable life and is considered by university accounting standards to be fully depreciated
- Using manufacturer standards for recording depreciation. Only the CCO determined depreciation schedule in PeopleSoft Finance can be used.
- Using calculations developed by the lab/PI to lower depreciation expense, or inflate the useful life of equipment beyond CU’s expected useful life determination.
- Any portion of the equipment costs that were borne or donated by a federal fund source
If you have any questions regarding the depreciation of equipment, you can contact property@colorado.edu for assistance. More information for recording deprecation can also be found on Ch. 13 of the Departmental Financial Management Guide.
Recording Depreciation
Scenario 1: Equipment is bought outside the RBSA. ex. Faculty Startup/ICR
When recording depreciation in your RBSA, it’s important to account for the percentage of time the equipment is used specifically for RBSA activities.
If a piece of equipment purchased on a Fund 10 speedtype, such as a faculty startup, is used 75% of the time for non-RBSA work and you determine that 25% of the time the machine will be used is for the RBSA, then only 25% of the equipment’s annual depreciation can be allocated to the RBSA.
For example:
Let’s say the equipment’s annual depreciation expense is $2,000 from PeopleSoft Finance:
Only $500 ($2,000 × 0.25) can be allocated to the RBSA.
Scenario 2: Equipment is bought using funds from the RBSA
If a piece of equipment is purchased with funding from the RBSA at 100%, then the equipment should be depreciated using the depreciation schedule from PeopleSoft Finance.
Depreciation Transfer
Depreciation is not booked as an expense to an RBSA in the Finance System general ledger. However, a cash transfer using 995106 – Voluntary Cash Transfer in ISC Depreciation and 997106 – Voluntary Cash Transfer Out ISC Depreciation provides the same effect on fund balance. More information about Depreciation Transfers can be found on Chapter 13 of the Departmental Financial Management Guide. For additional guidance, please contact your campus accountant.
Unallowable, Inappropriate, and Sensitive Expenses
Like any other funds on campus, PI’s and their units are expected to be good stewards of university funding. RBSAs are no exception, and it is essential to be mindful of the expenses allocated to an RBSA.
Unallowable Expenses
Since RBSAs may, during their operations, provide goods and services to sponsored projects supported by federal funds, it is important to be aware of what costs are permissible in billing rates for internal/federal customers.
Chapter 13 of the Departmental Financial Management Guide outlines costs that are unallowable to RBSA’s.
Inappropriate Expenses
While some costs may be allowable on other fund types, like a general or discretionary fund, it might not be the same for RBSA activities and may be deemed inappropriate. A common misconception is that the department can use money generated by an RBSA for other purposes, like official functions or covering overages for travel on a sponsored project. This is not necessarily true. The money generated by the RBSA should only be used to support that RBSA’s activities and should not be used for other activities.
Exception:
If an RBSA generates revenue from an external customer, after its expenses are covered the external profit can be transferred to another Fund 29 to be used for other University approved expenses, such as official functions, travel overages, or conference registration fees for conferences unrelated to the RBSA or can be transferred to the RBSA Fund 78 to be used for later RBSA operations.
Caveat:
If an RBSA generates revenue from an Internal/Federal customer, and after covering its expenses, has a surplus, the surplus can only be used for RBSA activities it was generated for. The surplus can be earmarked for future expenses, such as maintenance and repairs on equipment used to operate the RBSA, replacing items to keep the RBSA running, etc., but cannot be earmarked for other expenses outside the RBSA.
Sensitive Expenses
Any revenue generated by an RBSA is considered university funding. All expenses made using university funds must comply with the Tests of Propriety outlined in APS #4015. The Office of the University Controller (OUC) has a sensitive expense page and tool that can be used to determine if your expenses are considered sensitive expenses.
If you cannot answer yes to the eight questions in the Test of Propriety, then the transaction is not an appropriate use of university funds.
When making purchases, it is important to use your best judgment and understand the intended use of the goods and services. Think about whether an outsider, such as the general public or an auditor, would consider the expenditure a reasonable expense for university business and an appropriate use of university funds.
- “Would a university outsider, such as your dentist, a teacher at the local elementary school, the clerk at your grocery store, or your neighbor, consider the expenditure to be a reasonable and necessary expense of public funds?
- “Would you want others – such as newspapers, radio, television, or other media outlets – knowing and reporting about what you have decided?”
Best Practice:
If you’re making purchases through your PCard or in CU Marketplace, it is best to document the justification for your expenses in the following way to justify the expense:
- What are you purchasing?
- Why is the purchase needed?
- How does the purchase benefit the University of Colorado?
Justifying the expense does not mean it exonerates it from being an inappropriate expense; it only provides reviewers and auditors with insight into the justification for the expense.
Campus Pooled Investment Earnings/Charges (PIE) Interest Expense
Pooled Investment Earnings/Charges (PIE) is a fancy way of saying interest. Similar to overdrawing a bank account or carrying a balance on a credit card, borrowing money incurs a cost. SpeedTypes with a negative cash balance are essentially “borrowing money” and are charged interest accordingly.
For more details about campus PIE, visit CCOs website.