SOURCE:

Cost Accounting, Financial Management Services

DATE ISSUED:

January 2016   

DATE OF  LAST REVISION:

June 2019

RSOP NO:

7.0 

RATIONALE:

To provide guidance on when a transfer of funds (TF) document is permitted within a recharge/service center 66* account.

RSOP:

Transfers In

The recharge/service center 66* account can receive a subsidy through a transfer of funds document to help cover expenses, however, any excess subsidy will not be allowed to be transferred out of that 66* account. Once funds have been transferred into a recharge/service 66* account, they cannot be transferred out for any reason other than what is cited below in the Transfer Out section.

Transfers Out

With the exception of a transfer out of depreciation to the dedicated renewal and replacement 92* account, transfers out of a recharge/service 66* account are not allowed.

Recharge/service center units that have capital assets should annually transfer out cash in the amount equal to or less than their depreciation expense. This transaction is conducted using a transfer of funds document from the 66* account to the 92* account and the intent is to fund future capital purchases. Please refer to RSOP #3 for additional information related to the transfer.

Please include a detailed description on the KFS Transfer document that includes the depreciation period (i.e., “Transferring depreciation expense for FY 2015”).

Recharge/service center units that have debt service should contact cost accounting.

Any exceptions to this standard operating procedure require the approval of the Chief Accountant or Controller.

DEFINITIONS:

Debt Service:   Cash that is required to cover the repayment of principal and interest on bonds and notes issued by the university.

Depreciation Expense: Equal allocation of the cost of a capital asset on the balance sheet to the income statement during the periods in which the asset is used.

Renewal and Replacement Account: Accounts used to set aside funds for replacement of renewable property (typically capital assets or desktop computers).

Recharge Activity: An activity that furnishes goods or services to another Indiana University department for the convenience of the university and charges a fee directly related to, and not more than the allowable cost to provide the goods or services.

CROSS REFERENCE:

OMB Uniform Guidance (PDF) "Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards"

RSOP #3: Including Annual Depreciation Expense in the Recoverable Rate

RESPONSIBLE ORGANIZATION:

Organizations that bill other Indiana University departments for goods or services