Internal Service Providers Update Brown Bag Luncheon Series May 11, 2008

1. Internal Service Providers Update Brown Bag Luncheon SeriesMay 11, 2008 Pauline Fagan, Fin Analyst Sponsored Programs x6-4945 Andy Sgambato, Assoc Dir Controller‘s Office x2-9708

3. ISP Billing Standardization Project • Began in August 2006 as Part of 100 Day Plan • Standardize ISP Billing Practices • Format, content and timing of JSA transactions • Create an Oversight Body • The ISP Standards Committee • Update Policy 1410, create Procedures, Forms and Instructions • “Register” all ISPs • Document ISP activities and practices • Assist ISPs with compliance efforts • Communicate compliance pitfalls

4. ISP Billing Standardization ProjectProcess • The initial project engaged ISPs, Business Administrators and Central Administrators on various committees to develop policy and procedures. • The ISP Standards Committee is the permanent oversight body that meets quarterly.

5. ISP Standards Committee • Andrew Rudczynski, Co-owner of Process • Cary Scapillato, Co-owner of Process • Participants include: • Department Administrators • Shared Science Services Branch • School of Medicine FINOPs • Grant & Contract Financial Administration • Controller’s Office (including Tax Dept & General Accounting) • Budget Office • Procurement

6. Why was the ISP Project Necessary? • Timely and consistent information for internal customers • Accurate University Financial Statements • Cost based Rates • Appropriate documentation to support the products or services charged to customers • Unintended consequences of external revenue

7. External Users • Faculty, staff, students for personal use • Agencies • Yale New Haven Hospital • Private Companies

8. External Revenue Unintended Consequences • ISPs which charge external customers must consider: • University’s property tax exemption • Buildings financed with tax exempt bonds • Equipment purchased with Federal funds • Unrelated Business Taxable Income • Sales tax • “Unfair” competition with vendors

9. New Responsibilities • ISPs: Written standards for the Content, Format and Timing of JSA transactions. • Use correct Journal Staging Area (JSA) category and Source System Identifier (SSI) • Customers: Correct PTAEOs • Valid and appropriate • Both: Timely Problem Resolution

10. Policy & Procedures • Revised Policy 1410 Internal Service Providers • yale.edu/ppdev/policy/1410/1410.pdf • Procedure 1410 PR.01 • Registration and Annual Renewal of an ISP • yale.edu/ppdev/Procedures/isp/1410PR.01_ISP_RegistrationAnnualRenewal.pdf • Procedure 1410 PR.02 • Rate Calculations for ISPs • yale.edu/ppdev/Procedures/isp/1410PR.02_ISP_RateCalculations.pdf • Procedure 1410 PR.03 • Accounting for ISPs • yale.edu/ppdev/Procedures/isp/1410PR.03_ISP_Accounting_Billing.pdf

11. Procedure 1410 PR.01: Registration and Annual Renewal of an ISP • Initial registrations are complete • Registration information updated annually each October • Description of operation • Order entry practices • Billing practices • JSA creation practices • General rate setting process • Registered ISPs received Source System Identifier (SSI) • Only registered ISPs will be able to use Internal Revenue accounts and the Interdepartmental Revenue Journal Category • General Accounting sends info by e-mail annually for update

12. Procedure 1410 PR.02: Rate Calculations for ISPs • ISPs need to calculate their cost based rates based on allowable costs and capacity utilization. • capacity utilization = actual usage (not full capacity) • Rate charged to Sponsored Awards must be cost or less. • Rate worksheets sent to GCFA annually for review (This year they were due 4/15/08) • Higher rates may be charged to non-sponsored accounts & external users • Special accounting procedures required should this occur. • ISPs are expected to break even by product line or related services, unless deficit approved by appropriate Budget Authority

13. Procedure 1410 PR.03: Accounting for ISP • Specific transaction format with a unique Source System Identifier, validated against registration table • Bill prior to the fiscal month closing for the month that services/goods were provided, unless alternative is approved • Accumulate ISP activity in a unique organization or project • Segregate internal & external revenue using different expenditure types • New ISP Expenditure Types • Record discounts and premiums in unique expenditure type • Internal Service Provider Income exempt from registration requirements. • Internal Service Provider Clinical Trial Income • Internal Service Provider Medical Services Income

14. Forms and Related Documents Forms and Instructions • New Form: ISP Registration Form & Instructions • yale.edu/ppdev/forms/isp/1410FR.13_ISP_Registration.doc • yale.edu/ppdev/forms/isp/1410FR.13_ISP_RegistrationInstructions.pdf • New Form: Rate Template & Instructions • yale.edu/ppdev/forms/isp/1410FR.13_ISP_Registration.doc • yale.edu/ppdev/forms/isp/1410FR.14_ISP_RateCalculationInstructions.pdf Related Policies • Policy 1308: Program Income Associated with Sponsored Programs • yale.edu/ppdev/policy/1308/1308.pdf • Procedure 1305 PR.04: Unallowable Costs • yale.edu/ppdev/Procedures/gc/1305PR.04UnallowbleCosts.pdf

15. ISP Information • For further information check the ISP website • yale.edu/finance/controller/isp/index.html • For questions email isp@yale.edu

16. Q & A