NUMBER: BUSF 3.30 SECTION: Business and Finance SUBJECT: Other Educatinal and General Prgram Accunts ("E" Funds) Date: Octber 18, 2006 Plicy fr: Prcedure fr: Authrized by: Issued by: All Campuses All Campuses Richard Kelly Budget Office I. PURPOSE OF THE POLICY The Budget Office is respnsible fr crdinating all financial activities assciated with Other Educatinal and General Prgram Accunts ( E funds). The Budget Office is respnsible fr establishing E fund accunts at the unit s request, mnitring all E fund financial activity t ensure that a psitive fund balance is maintained and ntifying the apprpriate Vice Presidents f actins needed t address accunts with excessive r deficit funding levels, and deactivating accunts at the unit s request. II. POLICY STATEMENTS E fund accunts are typically used t track the unrestricted, self-sustaining, and nging activities f University units such as a cllege, department, institute, center, r ther rganizatinal element. These units retain the revenues generated thrugh these activities t cver the csts f peratins. Balances in these accunts shall carry frward frm ne year t the next fr the purpse f expanding r imprving the services prvided by the unit. Examples f activities using E fund accunts include, but are nt limited, t the fllwing: A. Cntinuing Educatin The University s divisin f cntinuing educatin prvides academic credit (CEU) and nn-credit prgrams. Academic credit prgrams are designed fr students wh need curses at cnvenient sites and times cmpatible with their family and ccupatinal schedules. Nn-credit prgrams incrprate University resurces in spnsring cnferences, wrkshps, shrt curses, and summer prgrams t prvide instructin and/r prfessinal certificatin. The revenues generated fr this activity are based n the user fees charged by the unit fr each prgram ffering. B. Department Operating Accunts Units f the University use E fund accunts t track self-supprting activities assciated with prviding services
t ther University units and external rganizatins. The revenues generated fr activities are based n participant fees and cntractual agreements. C. Departmental Recharge Centers - E fund accunts are used t segregate financial transactins fr services prvided fr ther units f the University n a cst- reimbursement basis. Revenues shuld equal r exceed $10,000 annually t be established as a departmental recharge center. These activities include printing, central supply centers, cpy centers, cmputer services and ther such activities where the department wuld have multiple users f a cmmn service. Activities are required t be priced t recver full csts, in accrdance with the federal regulatins n csting principles (See OMB Circular A-21) that are applicable t the University. Rates assessed by these recharge centers must be cnsistently applied t all University users. All rates established by these units are subject t review at any time by apprpriate University r ther external authrities. D. Endwment Incme Accunts A limited number f E fund accunts exist t track the quasi-endwment funding prvided by University endwment accunts. (Bard f Trustees use nly) E. Technlgy Fee Revenues All students f the University pay a technlgy fee. These funds are designated t imprve access t technlgy fr students, faculty, and staff. Transfer f these funds t ther activities is internally restricted by the University. F. Facility Renvatin Fees The University uses E fund accunts t track the allcatin f student fees cllected fr facility renvatin prjects. G. Research Based Allcatins The University uses E fund accunts t track the allcatin f research-related institutinal csts. E fund accunts classified as cntinuing educatin and department perating accunts are subject t a general administrative fee. If revenues fr the E accunt activity are received frm utside the University the accunt will be charged the administrative fee. The user fees established by these units shuld cver, at a minimum, all the direct csts f peratins, as well as the general administrative fee charged by the University. III. PROCEDURES A. Establishing E fund Accunts Units wishing t establish an E fund accunt must submit a cmpleted Request t Establish E fund Accunts frm t the Budget Office. If the requested accunt is designated as a departmental recharge center, the unit must als
include a cmpleted Other Educatin and General Prgrams Budget Wrksheet frm. All accunts designated as a cntinuing educatin r department perating accunt will be charged the general administrative fee unless the unit has been granted a waiver f the fee by the Vice President fr Business and Finance. The Budget Office will review the unit s request t determine if the use f an E fund accunt is apprpriate. If the Budget Office determines that the activity des nt meet E fund accunt criteria, the Budget Office will cntact the requesting unit t discuss alternatives. If the unit s request fr an E fund accunt is apprved, the Budget Office will cmplete an Accunt Memrandum frm t establish the accunt in the financial systems f the University. In the prcess f cmpleting this frm, the Budget Office will assign a grant type cde t identify the activity as cntinuing educatin, department perating, department recharge centers, fundatin supprted, technlgy fee revenues, facility renvatin fees, research incentive, r research/ prductivity schlarships. If the E fund accunt is determined t be subject t the general administrative fee, the fee shall be treated as an expense and tracked using the 52001 bject cde (Cntractual Services, Direct Charge fr Services). The fee will be applied at 8% f actual expenditures charged t the accunt, excluding the administrative fee itself. The Cntrller s Office prcesses an autmated jurnal entry at the end f each mnth t calculate the amunt f the direct charges t be applied t each accunt based n the actual expenditures fr the prir mnth. The Budget Office will frward the cmpleted Accunt Memrandum frm t Accunting Services fr prcessing and ntify the requesting unit when the accunt has been established. B. Maintaining E fund Accunts Each unit is respnsible fr maintaining the E fund accunt in a psitive fund balance status and in accrdance with the general recrd keeping requirements f the University. In additin, units shuld maintain detailed recrds supprting charges t ther University units, students, and external custmers. The unit s recrds must dcument hw these charges were develped and shuld include at a minimum the fllwing infrmatin: Name f persn and department respnsible fr the service General ledger accunt numbers fr internal custmers being charged fr the service Descriptin and cst f the services being perfrmed Names and addresses f the external custmers being billed fr services
Ttal vlume f activity fr University custmers, including federal grants and cntracts, and fr external custmers Financial infrmatin necessary fr cmputing billing rates Where user fees are designated as the revenue fr an E fund accunt, these fees must be established at a minimal level that is sufficient t cver the entire cst f peratins, including the general administrative fee. If an activity cannt generate sufficient revenue t cver all csts, it shuld be budgeted in a general A fund accunt. Units are expected t annually review E fund accunts fr inactivity and take apprpriate steps t deactivate accunts. E fund accunts shuld nt experience cntinuing deficits. If substantial yearend deficit balances exist, the unit will be asked t submit a plan f actin t reslve the deficit. Cash cllected frm utside surces shuld be depsited n a timely basis int the prper revenue classificatin cde. A unit may nt apply revenue as a credit t reduce expenditures within the same unit. See BUSF 2.06 fr internal business transactins. University units shuld prcess expenditures fr E fund accunts in the same manner as any ther expenditure. Special care shuld be taken t ensure that all csts are recrded as expenditures in the prper accunts based n functin. All direct csts f peratins f the "E" fund prgram shuld be charged t the accunt. This shuld include payments t instructrs, travel expenditures, cntractual services, and ther expenditures clearly assciated with the prgram. The salary f an emplyee prviding administrative supprt t the prgram shuld be charged t the prgram if the emplyee spends 20% r mre f his r her time n the prgram. C. Mnitring all E fund Financial Activity The Budget Office is respnsible fr mnitring all E fund financial activity t ensure that a psitive fund balance is maintained by the unit. The Budget Office will cnduct a bi-annual review f all E fund accunts t identify: Accunts that may indicate deficit spending. Accunts perating in a cntinuing deficit status. Accunts with limited activity ver a year. Accunt with excessive fund balances. In each case, the Budget Office will seek t reslve cncerns n a case-by-case basis by cntacting the unit. Fllwing the fiscal year end review, the Budget Office will prvide each Vice President with a list f the E fund accunts within
their respnsibility area that have cntinuing excessive r deficit funding levels fr their review and actin. D. Deactivating Accunts Units wishing t clse ut an E fund accunt must submit a written request t the Budget Office after taking apprpriate actin t ensure that n charges will be incurred during deactivatin r after the accunt has been clsed. T this end, the unit will need t cmplete the fllwing activities prir t issuing the deactivatin ntice t the Budget Office: Fr any payrll expenditures charged t the accunt, prepare persnnel dcuments t transfer these expenditures t ther accunts. Issue written ntices t service departments f the University (telephne, pstal, cmputer services, etc.) that charges t the accunt are nt apprpriate after a clsing date t be set by the unit. This actin may include discnnecting telephne services and thrwing away preprinted pstal charge slips. Cancel r transfer t anther accunt all utstanding cmmitments indicated n the general ledger fr materials r services that will nt be received and paid prir t the clsing date selected by the unit. Supply the necessary dcuments needed t clear the cmmitment and initiate payment fr materials r services shwn as utstanding cmmitments and received prir t the clsing date selected by the unit. In cnsultatin with the Budget Office, the unit will prepare and frward t accunting services fr prcessing a jurnal entry t transfer any residual funds t the accunt f their chsing. After all financial bligatins have been satisfied in the accunt as demnstrated by n active cmmitment balances and 30 days f expense inactivity, the unit will issue a written request t the Budget Office t deactivate the accunt. The Budget Office will verify the accunt s status, prepare the apprpriate frms needed t deactivate the accunt and frward this request t accunting services fr prcessing. Wrd dcument fr: Request t Establish an E fund Accunt PDF view f: University f Suth Carlina Accunt Memrandum PDF view f: Other Educatin and General Prgrams Budget Wrksheet Excel versin f Other Educatin and General Prgrams Budget Wrksheet IV. REASONS FOR POLICY CHANGE Clarificatin f prcedures fr activities prescribed abve. Send Cmments t Leslie Brunelli