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Managing IFR Accounts Presented by the Offices of Accounting and Budget
Topics • Defining what IFR Programs are. • How they are funded. • General IFR Guidelines: • Allocations, Fringe Benefits, Admin Overhead • When an IFR account should be used. • How to open an IFR account.
Topics • Service Centers • What reports are available. • IFR Deposits • IFR Allocations • Questions? • Contacts
What are IFR accounts? • Income Fund Reimbursable account • Self-supporting accounts that support activities related to the campus’ missions. • Revenue/Income is directly related to the nature of expenditures • $Cash balances are carried forward from one fiscal year to another. • Incurs additional charges – • Fringe Benefits • Administration Overhead • (except for accounts that have received appropriate waivers – requires approval)
How do IFR accounts acquire allocation? • The Budget Office submits an IFR budget request to System Administration in Albany. Previous year’s expenditure activity is a primary determinant in deciding how much allocation a campus will receive. On top of this System Administration usually builds on an inflation factor and increases for programmatic changes (new or expanding programs.) • IFR worksheets are completed by account managers either online into the Campus Budget Module (CBM) system or on to hardcopy forms.
How do IFR accounts acquire allocation? The VP Coordinator reviews department’s IFR worksheets and compiles that information into a request that is reviewed by the University Budget and Accounting Offices. The Budget Office compiles each VP area’s submissions into a campus file which is transmitted to Albany.
General IFR Guidelines • IFR accounts should have one purpose and one revenue source. • If multiple purposes, need separate IFR accounts • Need to budget for Fringe Benefit and Administrative Overhead charges
General IFR Guidelines • Fringe Benefit and Administration Overhead Rates • The Office of the State Comptroller (OSC) and the Division of Budget analyze the actual fringe benefit costs on an annual basis. • After the rate is computed, OSC notifies all state agencies of the rate specific to a fiscal year and agency.
General IFR Guidelines • The Fringe Benefit rate is assessed on expenditures. • Exception: SUTRA Summer and Winter accounts have fringe assessed on revenue. • The IFR AdministrationOverheadassessment is charged on the revenue. • As revenue is deposited to your account, the assessment is charged. The charge is a direct reduction to your account’s cash balance. It DOES NOT affect your account’s allocation. • Administration Overhead rate = 15%
General IFR Guidelines Example: IFR account will need $54,872 in revenue to cover a $30,000 in Personnel Service: $30,000 Personnel Service $16,644 in Fringe Benefit $ 8,228 in Administrative Overhead Total budget = $54,872 $30,000 x 55.48% ($30,000 +16,644)x 17.64%
General IFR Guidelines Key Points of Stony Brook’s IFR Deficit Policy: • IFR accounts should maintain positive accrued cash balances. The expenses charged to an IFR account should be covered by the revenue which that account takes in. • Twice a year (Dec and June) you will receive the form “IFR Accrual Data”. You are required to complete the form with your accruals and send back to your VP coordinator. After approval by VP coordinator, Budget and Accounting meet to review your accrual statements. • IFR accounts which develop cash deficits as of 6/30 will have one year to eliminate that deficit. If the deficit is not eliminated in that year the Budget Office may reduce that VP area’s state allocation.
When to Use an IFR Account • AnIFR account should be used when ever the activity is state funded. All activity should go through an IFR unless there is an approved exception as stated below. • SBF (Stony Brook Foundation) account • Used only when the revenue is from gifts or contributions. • FSA (Faculty Student Association) account • a) one-time events of short duration, i.e. conferences • b) benefit of individual students, faculty or staff members or appropriately recognized organizations • RF S&F (Research Foundation Service & Facility) account • Used when activity is 100% research - highly technical research. • May include some third party activities.
How to Open an IFR Account • Contact your VP coordinator • Determine what the account is to be used for. • Complete “IFR Allocation Worksheet” (on Accounting weblink) • Projected Revenue and Expenses • Upon VP approval (and Dean/Chair approval if academic dept), the VP coordinator will submit the request to Accounting for processing. • Accounting will inform you and all interested parties once the account has been created.
Service Centers • If the IFR account will be for a service that you will be charging a user fee, there are additional steps: • Determine what the account /service is for. • Obtain approval from your Dean or Chairperson • Submit request to VP area for approval. • Contact Accounting (Sara Lehmann) for guidance to determine the fee to charge internal and external users • You will need to complete a rate worksheet showing: • Projected annual expenses to operate the service • Projected annual unit of service (i.e. annual hours, annual # of analyses/tests). • Once the rate has been calculated, it is then submitted to the VP area for their review and approval.
Service Centers • There’s more …. • The VP coordinator will request Accounting to create the IFR account to house the fee and related costs. • Accounting will review and submit the proposed fee request to the University Controller for final approvaland submit the request to the SUNY System Administration to create the IFR account. • Upon final approval, Accounting will inform you and all interested parties of the new account number and effective date to charge the internal and external fee to users.
Service Centers • Regulations • New Service Center rates - reviewed after one year • Existing rates – reviewed every two years • Exceptions – 25% increase or decrease in the rate, reviewed in a year • Interim review upon request • All Service Center fees MUST be approved by the University Controller PRIOR to charging the users.
Service Centers • Regulations • Internal users should only be charged for the cost of the service/product • Per SUNY guidelines, cannot make a profit on internal users • External users can be charged any fee in excess of the approved external fee. You can be competitive.
Service Centers • Audit Requirements • Account Director must keep a log of all activity of the service center IFR account (including expenses, P.O.s and annual usage) • Information in the logs will be required during the campus rate review process • If you have revenue from external users, a log must be kept for • Excess Revenue from External sources. • Revenue collected in excess of the external rate. • (External rate = Internal rate plus AOH; Breakeven point) • Revenue in excess of break even point – Surplus
Service Centers • Audit Requirements • The account director is responsible for maintaining a log which keeps track of the collection of external revenue and any excess revenue (surplus) as a result. • During the rate review process the logs are used to identify the amount of excess external revenue, which is a component in the rate calculation. • The Excess Revenue from External sources may be kept by the department and used at the department’s discretion as long as the cost is allowable. • Spending of excess revenue (surplus) must also be noted on the log (invoice #s, P.O.s, etc.)
Reports Available Online inquiries • SMRT Monthly reports • SMRT Month-End Management Report • Account Expenditure Summary (AES) • www.stonybrook.edu/eras/
IFR Deposits • All deposits are made at the campusBursar’s office. • Bursar summarizes the deposits on the 15th and 31st • To view deposits in your IFR account: • Cash Collections Report in ERAS (www.stonybrook.edu/eras/) • 15 day lag • (ex: Today we would see cash collection report for 4/1 – 4/15. Report for 4/16-4/30 collections will be available on or about 5/16)
IFR Deposits • If viewing deposits on AES monthly report’s cash page or the SUNY system, the deposit amounts reflected for each month are for the last 15 days of the prior month and the first 15 days of the current month. • For example, if you look at AES report for April, the cash would cover the periods 3/16 – 3/31 and 4/1 - 4/15. • SBU All Funds Reporting – 2 day lag for cash reports • For access, contact Michael Danielson in Accounting. • For details on a specific deposit, contact Bursar with the transaction number.
IFR Deposits • To correct a deposit made to wrong account • Email Karen Shumar or Brenda Zhang in the Accounting dept explaining the error and indicate the correct account. • Accounting will process a transfer of cash between the accounts. • A transfer of cash may generate assessments (overhead).
IFR Allocation • It is the allocation balance in your account which allows you to expend funds, notthe cash balance in the account. • Your account may have plenty of cash, yet Procurement is unable to process an order. • When Procurement processes a purchase order, they make an encumbrance against your account’s allocation, NOT your cash. When you request your account’s initial allocation, your request should be based on your anticipated annual revenue and expenditures. If your cash is greater than anticipated, you may request, through your VP coordinator and ultimately the Accounting Department, additional allocation.
IFR Allocation Basically….. You need your allocation to spend your cash, and you need your cash to get your allocation!
IFR Allocation • Unspent Allocation • Unlike State Purpose funds, IFR accounts do not “lapse”. • Although the allocation is unspent, the cash balance rolls forward. • The cash balance is of the factors used to determine the account allocation for the following year.
IFR Allocation • Unspent Allocation • You may notice that unspent allocation was removed from your account. • When IFR allocation is in short supply and projections indicate that you will not require all of your requested allocation, some may be transferred to other accounts that are short at the VP coordinator’s discretion. This does not mean that your money has been taken; your cash balance is unaffected. • Should you need to request additional allocation, you will have the cash to backup this request.
Web Links • IFR Accounting (Manual, Worksheets, Contacts) http://www.stonybrook.edu/accounting/ifr • Introductions to State Accounts http://www.stonybrook.edu/accounting/help/state_accounts.shtml • Allocation and Expenditure Object codes http://naples.cc.sunysb.edu/Admin/HRSForms.nsf/pub/ACTD0012 • SMRT User Manual http://www.stonybrook.edu/budgetoffice/management.shtml
Office Contacts • Initial Allocation/Campus Budget Module (CBM) • Diane Thide Budget Office 2-6090 • Midyear Allocation Adjustments • Sara Lehmann Accounting Office 2-6040
Accounting Office Contacts Accounting Office 2-6040 Sara Lehmann 2-6029 State and IFR Accounting Chart of Accounts Lolita Sung 2-5716 IFR/Expenditure Accounting Chart of Accounts Libya Williams 2-9517 IFR/Expenditure Accounting Construction GuneetaJaspal 2-6030 IFR/Expenditure Accounting For valuable information regarding Accounting Services, check out our website: www.stonybrook.edu/accounting/
Guide to Problem Resolution BUDGET ALLOCATIONS - FORM 1 2-6090 ALLOCATIONS - INTERCHANGE ACCOUNTING REPORT INQUIRIES 2-6040 JOURNAL ENTRIES ALLOCATION CHANGES PROCUREMENT REQUISITIONS, PURCHASE ORDERS 2-6010 VOUCHERS VENDOR CALLS CLARIFICATION OF FREIGHT CHARGES (OBJ CODE 5010) PETTY CASH TRANSACTIONS BURSAR CASH RECEIPT INQUIRIES 2-9316 (IFR COLLECTION ANALYSIS) HUMAN RESOURCES APPOINTMENT DISCREPANCIES 2-6140 PAYROLL QUESTIONS - OVERTIME, STANDBY 2-6180 AND LOCATION PAY