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Accounting Office

 


NDSU Recharge Centers

aka - Internal Service Funds

Internal Service Funds are established to finance, administer, and account for departments or agencies of a government whose exclusive or nearly exclusive purpose is to provide goods and services to the government's (e.g. NDSU's) other departments on a cost-reimbursement basis.

(i.e., internal NDSU Customers)

(Governmental & Non-Profit Accounting - 9th Edition)

Purpose

Economy, efficiency, effectiveness is managing resources involving common goods or services used by several departments
Facilitate equitable sharing costs among departments served.

Some NDSU Examples

Telecom
Postage
Electron Microscope
Facilities Management Labor & Supplies
Copy & Print Services
Lab Equipment
State Fleet Vehicles
Airplane

Authoritative Sources

Generally Accepted Accounting Principles
Federal Regs - OMB Circular A-1
NDUS Guidelines
ND State Auditors Office
NDSU Grant & Contract Accounting

Accounting Codes

Fund Range 22000 - 22999
Revenue Codes 479005 - 479020
Revenues closed against expenses for fiscal year-end University-wide financial reporting

Multiple Funds

May be used, but discouraged (Per NDUS Guidelines)
Pros
 - Good detail for management decisions
Cons
 - Limits flexibility

Pricing Policies

Documented support for rates
Break-even pricing
- Based on actual or estimated costs divided by actual or estimated outputs consumed
- Cost recovery only
Consistent & fair pricing to all users
- Regardless of funding source
Avoid duplication of costs in grant F & A rates
Year-end balances minimal
- 60 day rule

60 Day rule

High year-end balance may indicate overpricing
- Net Assets should be less and 2 months of expenses
- Accumulated depreciation of capital assets may be used to reduce Net Assets
Assets less liabilities = Net Assets
Average monthly expenses times 2

Overcharging User Departments

Diverts restricted resources to other purposes
Disallowed by federal government
- Penalties
- Credits back to hundreds of grant awards
- Disallowance of future awards

Operating Expenses

Must be directly related to the goods or services provided to user departments
- Matching concept - match revenues & expenses
Transfers to unrelated activities prohibited
Inappropriate expenses
- Indicator of overcharging

New Recharge Centers

Reviewed by Grant & Contract Accounting
- Rate Justifications/Documentation
- Conflicts with F & A rate agreement
- Disclosure to Feds (significant activities)

 


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North Dakota State University
ACCOUNTING

Phone: +1 (701) 231-7432 / Fax: (701) 231-6194
Campus address: Old Main 11
Physical/delivery address: 1340 Administration Ave, Fargo, ND 58102
Mailing address: NDSU Dept. 3100 / PO Box 6050 / Fargo, ND 58108-6050
Page manager: Accounting

Last Updated: Wednesday, February 17, 2016 3:09:28 PM
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