1. University of Minnesota Internal/External Sales “Annual Requirements and Certification” How to Annually Account for Internal Sales Activity

2. Internal Sales EFS website: http://www.finsys.umn.edu/sales/int.html Administrative Procedure Reviewing Internal Sales Activity Annually: http://policy.umn.edu/Policies/Finance/Accounting/INTERN ALSALES_PROC04.html Internal Sales Training Module: http://www.finsys.umn.edu/sales/iso.html 2 Internal Sales Rate Development Procedure and Website

3. 3 Learning Objectives What are the annual review and recalculation requirements for Internal Sales activities. What are the requirements of the annual certification. Where do I need to send the documents?

4. A review of internal sales activity and recalculation of the internal sales rate is required annually after the close of the previous fiscal year. The preceding year's financial information will provide the basis for developing the following year's rate. 4 Introduction

5. Review the Internal Sales during the year Internal Sales Business Managers with support of their RRC manager should monitor internal sales activity throughout the year to assure a significant surplus or deficit will not exist at year-end. If a significant surplus or deficit is projected, work with the Internal Sales Compliance Office to determine if the rate should be adjusted within the same fiscal year. 5 How to review internal sales activity:

6. Review the Internal Sales Business Plan Does the unit conducting internal sales activity continue to qualify to conduct internal sales activity? Does the internal sales activity continue to provide a service that cannot be met elsewhere? If this service can be provided more cost effectively elsewhere, what is the rationale for sustaining the internal sales activity? Should the internal sales activity be discontinued? 6 How to review internal sales activity:

7. In order to conduct internal sales activity, the unit must meet the following criteria: –Annual internal sales revenue greater than $25,000. –Charging a federal grant of any dollar amount. 7 How to review internal sales activity:

8. Budget to Actual Analysis Compare budgeted revenues and expenditures to the current year-end results on a line-by-line basis. Identify large variances and analyze reason for variance. Determine is all resources are used effectively. Depreciable life versus remaining useful life of capital assets should be analyzed. 8 How to review internal sales activity:

9. Determine the surplus or deficit Surplus or deficits from prior year must be incorporated in the calculation of the proceeding year's rate development. Any excessive surplus may require refunding the customers. Any excessive deficit may require a subsidy from the college or department. Calculate the adjusted rate using the steps described in Administrative Procedure: Establishing Internal Sales Rates.Establishing Internal Sales Rates Use the preceding fiscal year's financial data to estimate expenses and revenues. 9 How to review internal sales activity:

10. Submit a new rate proposal Each year the annual business plan review and budget to actual comparison for the fiscal year just ended must be submitted to the Internal Sales Compliance Office by September 30. Each year the new rate development proposal for the forthcoming fiscal year must be submitted to the Internal Sales Compliance Office by the RRC in compliance with the annual budget process. (See page 12 of Budget Instructions for FY12 – Support Units) 10 How to review internal sales activity:

11. Submit budget information to the budget office In accordance with the annual budget instructions, units conducting internal sales activity must submit their budget information to the Budget Office. (See page 12 & 13 of Budget Instructions for FY12 – Support Units) 11 After review is completed:

12. Implement the new rate Customers are to be charged the new rate, which will be published on the internal sales website, at the beginning of the fiscal year. 12 After review is completed:

13. Submit one certification (Form UM1743) for each Internal Sale activity to Internal/External Sales Office by Sept. 30 th of each year. Activity Name Deputed Chatfield Account String Contact Person 13 Certification of Annual Review of Internal Sales Activity

14. Business Plan Review completed: Activity has been reviewed with Chancellor, Dean or Vice President. Activity continues to qualify as an internal sales activity. Activity is providing a service that cannot be met elsewhere more cost effectively. Activity should continue. 14 Certification of Annual Review of Internal Sales Activity

15. Budget to Actual Comparison and rate development completed: Actual revenues and expenditures were compared to budgeted revenues and expenditures. Rate development has been submitted to the Internal Sales Compliance Office. 15 Certification of Annual Review of Internal Sales Activity

16. Training Certification I and the appropriate individuals who have responsibilities for internal sales activities have completed the following Internal Sales On-line training courses: (List names of all individuals trained on a separate sheet. Course1 Overview of Policy Governing Internal SalesCourse1 Course2 Transacting Internal Sales and Rate Development BasicsCourse2 Course 3 Rate Development ExampleCourse 3 16 Certification of Annual Review of Internal Sales Activity

17. Review Certification I certify that a review of the internal sales activity and recalculation of rates for FY2010 per the internal sales policy “Selling Goods and Services to University Departments” is complete. I followed the procedure “Reviewing Internal Sales Activity Annually”. I have noted any exceptions and have provided explanations and corrective actions on a separate sheet. 17 Certification of Annual Review of Internal Sales Activity

18. Signatures Business Manager Signature RRC Manager Signature 18 Certification of Annual Review of Internal Sales Activity

19. Refer to the information available on the Internal/External website Complete the internal sales activity review, recalculation and certification annually Implement the new rate Send your information and supporting backup to Internal/External Sales 19 Summary

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