2015 Fiscal Year-End Activities for Recharge Centers Internal / External Sales Office

Learning Objectives Internal/External Sales Activity related to: Year-End Review process Rate Assessment

Year-End Review annually Reviewing Internal Sales activity annually is a best practice business model and should be completed by all units conducting internal sales. Activities to consider: o Invoicing o Depreciation expense o Unallowable costs o Expense allocation o Planned subsidies o Transfers o Variances

Invoicing Invoice and record revenue for all completed internal sales activity Fiscal Year End Calendar o Refer to Fiscal Year End Calendar for cut-off date Review External Sales contracts and bill accordingly Monthly billing is best business practice

Depreciation Record journal entries for the accumulated depreciation for all assets recovered in the sales rates o Journal entries operating fundRecord depreciation expense in the operating fund plant fundReduce the deficit balance in the plant fund 7201 o Net Book Value at year end = Balance in plant fund 7201 Depreciation expense is typically recovered in the sales rates Refer to the Capital Asset Reconciliation job aid

Unallowables Identify and remove any unallowable cost incurred in operating fund o If necessary, change the source of the inappropriate expense (i.e. purchase order) Refer to Unallowable Costs job aid bad debts entertainment costsfines According to federal regulations (OMB Uniform Guidance), certain operating costs are specifically unallowable, such as bad debts, entertainment costs, and fines. Refer to as designated by OMB Uniform Guidance and ensure that all unallowable costs have been excluded.

Expenses Allocation Record journal entries/retros for expenses incurred (salaries, materials, supplies, repairs, maintenance, non- capital equipment and/or other) 1150 o Internal Sales activity should be allocated to fund o External Sales activity should be allocated to fund 1026 or other designated funds Expenses should be adjusted by Chart of Accounts expense code

Planned Subsidies Fund all subsidies originally planned in the rate development. Examples include: o Dollar amount (specific or shortfall) o Expense by account o Specific individuals o Specific departments

Transfers transfer outDepreciation is the only allowable transfer out on Internal Sales funds transfer inRecording of subsidies is the only allowable transfer in on Internal Sales funds Any other transfers should be corrected o Expenses should be adjusted by Chart of Accounts expense code

Variances Fund deficits that will not be included in the next year’s rates o Funding deficits will help keep rates at the same level 15%If there is a surplus greater than 15% of revenue, contact the Internal Sales Office for options on resolution For more details, refer to presentation or Reconciliation of Surplus or Deficit Balance job aid

Rate Review Reviewing Internal Sales rates annually is a best practice business model. Activities to consider: o Timing o Review of Business Plan o Case Study

Timing Monitor internal sales activity throughout the year o Identify potential significant surplus or deficit o Work with the Internal Sales Office to determine best course of action Rate review should be performed at the close of the fiscal year The preceding year's financial information will provide the basis for developing the following year's rate

Review of Business Plan Continue to qualify to conduct internal sales activity? $25,000 o Annual internal sales revenue greater than $25,000 o Charging a federal grant of any dollar amount Provide the services that are identified on the original business plan? Provide a service that cannot be met elsewhere? Should the internal sales activity be continued?

Case Study Reporting Center o Account Budget Status for Current Non Sponsored Fund by Fund o Actual Account Summary by Accounting Period for Current Funds o Salary and Fringe Detail by Pay Period o Asset Management Depreciation Expense/Schedule by Fund Internal Sales Activity Reconciliation Template

Summary Year-End Review processComplete the Year-End Review process using step by step handouts journal entriesComplete journal entries Review ratesReview rates based on results

Resources Fiscal Year End Activities Internal Sales Activity Reconciliation Template Capital Asset/Depreciation Reconciliation Process Unallowable Internal Sales Costs Reconciliation of Surplus or Deficit Balance Journal Entries that Internal Sales units can make through the General Ledger