Search
Controller's Division
 
OUS Logo

OUS Fiscal Policy Manual
Accounting and Financial Reporting

OUS » Controller's Division » Policies » OUS Fiscal Policy Manual » Accounting and Financial Reporting
Section:  Accounting and Financial Reporting Number:  05.650    
Title:  Accounting for Interfund Transactions

 

Index

POLICY

APPENDIX

POLICY

.100 POLICY STATEMENT 

This policy sets forth certain basic system-wide requirements for administration and accounting for interfund transactions.  

.110 POLICY RATIONALE

OUS seeks to ensure that the policies and procedures related to administration and accounting for interfund transactions are documented, communicated, clearly understood, and consistently applied. 

.120 AUTHORITY

.130 APPROVAL AND EFFECTIVE DATE OF POLICY

Approved by the Associate Vice Chancellor for Finance & Administration/Controller on March 9, 2007. 

.140 KNOWLEDGE OF THIS POLICY

All institutional and Chancellor's Office personnel with financial management responsibilities should be knowledgeable of this policy.

.150 DEFINITIONS

Interfund Transaction - An interfund transaction occurs when a fund has a financial transaction with another fund within the same institution or with a fund of another OUS institution or the Chancellor's Office.

.160 RESPONSIBILITIES 

A. CHANCELLOR'S OFFICE

  • Developing accounting and financial reporting policies related to interfund transactions.

  • Determining interfund elimination adjustments to be made for annual financial statements.

B. INSTITUTIONS

  • Determining correct accounting for interfund transactions.

  • Recording interfund transactions correctly in the accounting records.

.170 POLICY OBJECTIVES

The objective of this policy is to ensure that the recording and financial reporting of interfund transactions follows generally accepted accounting principles (GAAP), specifically the guidance of the Governmental Accounting Standards Board (GASB) and the National Association of College and University Business Officers (NACUBO).

.200 GENERAL

An interfund transaction occurs when a fund has a financial transaction with another fund within the same institution or with a fund of another OUS institution or the Chancellor's Office. Types of interfund transactions include the recording of:

  1. Internal revenue

  2. Distribution of revenue

  3. Allocation or reimbursement of expense

  4. Transfer in and transfer out

  5. Interfund loans

  6. Fund additions and fund deductions

Recording an interfund transaction requires the careful selection of the type of interfund transaction because selection of the wrong type could result in misstating a fund's revenues and/or expenses.

Recording interfund transactions can also result in inflated revenue and expenses being reported in an institution's or OUS's annual financial statements. The revenue and expenses reported in the annual financial statements should be limited to revenue and expense from external sources, and should not be overstated by revenue and expense from internal sources. Correct accounting of interfund transactions is necessary to ensure that, at the end of the fiscal year, the Controller's Division can correctly identify the interfund transactions that must be eliminated from the annual financial statements.

This policy describes when to use each type of interfund transaction and the required accounting of each type of interfund transaction.

.210 DESCRIPTIONS AND ACCOUNTING OF INTERFUND TRANSACTIONS

The following lists each type of interfund transactions, along with a description, examples and required accounting treatment:

Type of Interfund Transaction Description of interfund Transaction Examples of Interfund Transactions Required Accounting on Interfund Transactions
Internal Revenue

Revenue earned from selling services or supplies to another OUS entity or institutional department.

The revenue is internal to OUS and therefore considered "internal revenue."

A university printing center earns OUS internal revenue from selling printing services to other institutions or departments within the same institution.

Fund earning the revenue credits the appropriate 09xxx Internal Sales/Service revenue account code.

Fund being charged the expense debits the appropriate expense account code.

Distribution of Revenue Revenue applicable to multiple funds that is initially received by one fund and then distributed to other funds. Chancellor's Office initially receives state appropriations that are to be distributed to the institutions.

Fund distributing the revenue debits the appropriate 0xxxx revenue account code.

Fund receiving the revenue credits the same 0xxxx revenue account code.

Allocation or Reimbursement of Expense Expense applicable to other fund(s) that is initially charged to one fund then allocated to other fund(s).

Chancellor's Office initially pays assessments from the State of Oregon and allocates those assessments to the institutions.

Allocation of institutional overhead cost to operational units.

A department charges another department for use of a copier.

Fund allocating the expense credits the appropriate expense account code. (Account code used would be either the same expense account code that was originally used to record the expense or, for reimbursements of expenses, a 79xxx Internal Sales Reimbursement account code.)

Fund being charged the expense debits the appropriate expense account code.

Transfers in and Transfers out "Non-exchange" transactions between funds due to the transfer not being for result of an exchange of revenue for goods or services. "Non-exchange" transactions are further defined in GASB No. 33. Institutional housing fund transfers a portion of its funds to debt service reserve for payment of long-term debt.

Fund making the transfer debits an expense 92xxx transfer out account code.

Fund receiving the transfer credits an expense 91xxx transfer in account code.

Note: the last 3 digits must match (i.e. 91001 and 92001 should be used together)

Interfund Loans

Loan from one fund to another fund, in accordance with OUS Fiscal Policy Manual Section 05.271: Inter-institutional and Interfund Loans.

The recording of inter-institutional and interfund loans occur infrequently and only in very specific circumstances. Institutional business office should be contacted before recording inter-institutional or interfund loans.

An institutional fund loans funds to another fund with the same institution or a fund of another institution.

Fund making the loan debits "Due From" in an A6xxx or A7xxx asset account code.

Fund receiving the loan credits "Due To" in a B6xxx or B7xxx liability account code.

Fund Additions and Fund Deductions

Movement of a portion of equity (fund balance) and the corresponding assets or liabilities from one fund to another fund, without affecting the operating ledger which measures annual revenue and expense.

The recording of fund additions and deductions occur infrequently and only in very specific circumstances. Institutional business office should be contacted before recording fund additions and fund deductions.

Institutional motor pool moves a portion of its cash into an equipment replacement reserve. Cash is set aside in the reserve fund to save for the future replacement of motor pool vehicles.

Fund receiving assets or moving liabilities credits an Exxxx fund addition account code.

Fund moving assets or increasing liabilities debits an Fxxxx fund deduction account code.

 

Appendix .710 provides a flowchart for helping select the correct accounting for an interfund transaction.

.250 NO TRANSFERS OUT OF FUND TYPE 11 - BUDGETED OPERATIONS TO OTHER FUND TYPES

Fund type 11 – Budgeted Operations is used to account for Education and General (E&G) funds and OSU Statewide Public Services funds that have a legislative expenditure limitation. To ensure that these funds do not lose their identity as E&G or Statewide Public Services funds with expenditure limitation, funds within fund type 11 are spent within fund type 11 and are not transferred out to other fund types.

Transfers out of fund type 11 to other fund types require written approval from Chancellor’s Office Assoc VC F&A/Controller, and Asst VC for Budget Ops, Budget Operations & Planning.

The following specifies the accounting of transactions within fund type 11 that apply to other fund types:

Type of Transaction Recording in FT11 Additional Instructions - Unless noted otherwise, implementation date of items below is March 1, 2009
1) Use of FT11 - Budgeted Operations funds to support other OUS fund types Expense in FT11 We cannot transfer monies outside FT11, because the funds lose their identity as E&G and Statewide Public Service funds with expenditure limitation.
2) Year-end subsidies from FT11 – Budgeted Operations to cover deficits in designated operations

 Expense in FT11 Debit FT11, account code 24901 - "Designated Operations Fund Support."
3)Year-end subsidies from FT11 – Budgeted Operations to cover deficits in service departments

 Expense in FT11 Debit FT11, account code 24902 - "Service Dept Support Chg."

Credit FT13, account code 09398 - "Support for Desig Ops/Serv Depts.
4) Use of FT11 – Budgeted Operations to pay expenses of auxiliary enterprises
Expense in FT11 Debit FT11, expenditure account codes in account types 60 and 70
5) Use of FT11 - Budgeted Operations for capital construction Expense in FT11

Capital Improvement projects less than $500,000 are to be accounted for in fund roll-up 004000 – “Repair and Remodeling” using the appropriate 2xxxx or 4xxxx account codes to record expenditures. Use 9xxxx to transfer funds within FT11 to roll-up 004000 for capital improvements.

Capital improvement projects for statewide public services at OSU are recorded in the 0304xx, 0344xx, and 0374xx funds.

Capital improvement projects for OSU Cascades Campus are recorded in the 00184x funds.

6) Use of FT11 - Budgeted Operations for XI-F debt service Expense in FT11 Effective July1, 2009:
Debit FT11, account code 28831 – “Contributions to Sinking Fund”

Credit FT85, account code “28831 – “Contributions to Sinking Fund.”
7) Use of FT11 - Budgeted Operations for COPS debt service Expense in FT11 Effective July1, 2009:
Debit FT11, account code 28830 – “Contributions to COPs Debt Service.”

Credit Chancellor’s Office Chart K, FT85, account code 28830 – “Contributions to COPs Debt Service.”
8) Use of FT11 to pay SELP loans Expense in FT11 Debit FT11, account codes 38001 – “Loans Repaid to State Agencies” and 28810 – “Interest Expense – Misc.”

At end of fiscal year, the SELP liability balance in the FT87 - Net Investment in Plant Fund is updated with a debit to account code B2500 – “COPS Payable” and a credit to account code E1001 - “NIP Change in Fixed Assets.”

9) Movement of funds from FT11 – Budgeted Operations to repair reserves – for Building Use Credits (applies only to OSU) Negative revenue in FT11 Portion of indirect cost recovery attributable to building use credits in fund type 83 (renewal and replacement funds) should not be recorded in FT11.

Distribution of indirect cost recovery to BUC funds is to be recorded as negative revenue in FT11 account code 03410 – “Indirect Cost Recovery” and as revenue in FT83 account code “03410 – Indirect Cost Recovery.”
10) Charges to FT11 - Budgeted Operations by other funds for services provided by other funds to the budgeted operating funds Expense in FT11 Use appropriate expense account code in FT11. Revenue is a 09xxx internal revenue account code in the other funds.
11) Bad debt expense within FT11 – Budgeted Operations Expense in FT11 Record as expense in 28711 – “Bad Debt Expense.” [OUS Budgets will reclassify the bad debt expense as negative revenue when comparing actual expenditures to expenditure limitation.]
12) Movement of remaining funds to FT11 – Budgeted Operations when terminating a fund not in fund type 11 (e.g., designated operating fund or service department). Transfer In to Fund Type 11 Credit 91001 – “Trnsfr In From Other Funds” in FT11, and debit 92001 – “Trnsfr Out to Other Funds” in the non-fund type 11 fund.

Effective July1, 2009: Credit 91005 – “Tfr In – between FTPY Lvl 2” and debit 92005 – “Tfr Out – Between FTYP Lvl 2”


.300 IMPACT OF INTERFUND TRANSACTIONS ON ANNUAL FINANCIAL STATEMENTS

The annual financial statements should be limited to reporting financial activity and financial balances resulting from external sources. To avoid overstating revenue, expense, assets, and liabilities, the annual financial statements require that internal and intra-entity activity and balances be eliminated.

Internal revenue overstates total revenue and total expense in the annual financial statements. At the end of the fiscal year, the Controller's Division identifies all 09xxx internal sales/service revenue transactions and makes institution-wide and OUS-wide adjustments to remove the overstatement of revenue and expense from the annual financial statements. These interfund elimination adjustments are made for financial statement purposes only and are not recorded in the institution's accounting records.

Interfund loans overstate total assets and total liabilities in the annual financial statements. At the end of the fiscal year, the Controller's Division identifies all A6xxx and A7xxx "Due From" asset balances and B6xxx and B7xxx "Due To" liability balances, and makes institution-wide and OUS-wide adjustments to remove the overstatement of assets and liabilities from the annual financial statements. These interfund elimination adjustments are made for financial statement purposes only and are not recorded in the institution's accounting records.

.350 OTHER ANNUAL FINANCIAL STATEMENT ELIMINATIONS

The following describes other financial statement elimination entries made at the end of each fiscal year. The eliminations are made for financial statement purposes only and are not recorded in the institution's accounting records.

A. Scholarship Allowances

Institutions receive financial aid funds from the Federal Government. The financial aid funds are disbursed to students, who in turn use a large portion of those financial aid funds for payment of tuition and fees, on-campus housing and books. In the institution accounting records, these transactions result in (1) governmental financial aid grant revenue, (2) financial aid expense, and (3) tuition and fee, campus housing and/or institutional bookstore revenue.

At the end of the fiscal year, the Controller's Division follows a methodology to estimate the financial aid expense used by students to pay for tuition and fees, campus housing and books. NACUBO refers to this amount as "scholarship allowance." In the institutional and OUS-wide financial statements, the financial aid expense and the tuition and fee revenue and auxiliary enterprise revenue are reduced by the amount of the scholarship allowance.

B. Distribution of Facilities & Administrative (F&A) Cost Recoveries

The recording of the revenue, distribution and use of F&A Cost Recoveries result in the double-counting of revenue and expense on an institution and OUS-wide basis. Refer to OUS Fiscal Policy Manual section 05.553, "Accounting for Facilities & Administrative (F&A) Cost Recoveries", for additional information on accounting and financial reporting of F&A Cost Recoveries.

C. Sub-Contracts/Grants Within OUS

If an OUS institution is a sub-contractor/grantor to another OUS institution, the movement of funds from one OUS institution to another OUS institution results in a system-wide double counting of revenue and expense. To identify these revenues, the sub-grantee uses account code 03118 "OUS Institution Sub-Contract/Grants", to record the revenue received from the other OUS intuition. The institution disbursing the funds out should use a 399xx sub-grant account code to record the expense.

For the the financial statements, the Controller's Division prepares a system-wide interfund elimination adjustment to remove the overstatement of the OUS internal sub-contract/grant revenue and expense.

D. Financial Aid Administrative Cost Allowance (ACA)

Institutions receive Financial Aid Administrative Cost Allowance in conjunction with certain student federal aid programs, specifically, Perkins Loan Program, Federal Supplemental Educational Opportunity Grants (FSEOG), and Federal Work Study (FWS). The recording of the revenue, distribution, and use of the cost allowance results in the double-counting of revenue and expense on an institution and OUS-wide basis. When distributing the administrative cost allowance, institutions should debit the appropriate financial aid fund using account code 70001 "Financial Aid Administrative Costs" and credit the appropriate Budgeted Operating fund(s) using account code 03302 "Financial Aid Administrative Cost Recovery".

For the financial statements, the Controller's Division prepares an institution-wide adjustment to remove the duplicate revenues and expenses that resulted from the distribution of the ACA

Appendix .780 provides additional information on eliminating interfund transactions from the OUS Annual Financial Statements.

.690 CONTACT INFORMATION

Direct questions about this policy to the following offices:

Subject Contact
General questions from institutional personnel Institution Office of Business Affairs
General questions from institutional central administration and Chancellor's Office personnel Chancellor's Office Controller's Division

.695 HISTORY

03/09/07 - Approved
04/20/09 - Updated

Policy Last Updated 04/20/09

APPENDIX

.710 ACCOUNTING FOR INTERFUND TRANSACTIONS - FLOWCHART

The following flowchart illustrates the thought process for selecting the correct accounting for an interfund transaction:

Interfund Transactions Flowchart

.740 ACCOUNTING FOR DISTRIBUTION OF FUNDS

The following should be considered in determining if the distribution of funds should be accounted for as a (1) transfer or (2) distribution of revenue:

Characteristics of Transfers

A transfer is not revenue. The financial entity receiving the transfer does not earn the funds and does not provide services or goods in exchange for the funds.

A transfer is not part of the financial entity’s normal operating revenue. The transfer is considered another funding source - after revenue, expense, and net operating income/loss.

The revenue belongs to and is earned by the financial entity providing the transfer.

Transfers would tend to be less frequent in self-supporting funds such as auxiliary enterprises and service departments, because to be self-supporting, it is presumed that, except for subsidies, inflows are earned revenue. Transfers would tend to be more common in funds that are not self supporting – e.g., budgeted operating funds.

Characteristics of Distribution of Revenue

The financial entity considers the receipt of the funds as revenue. The financial entity has earned the revenue, or the revenue is non-exchange but an external party has identified the financial entity as the intended recipient of the non-exchange revenue.

The funds are reported as operating revenue in the financial statements.

Distribution of revenue is more common in self-supporting funds such as service departments and auxiliary enterprises – where it is presumed that their inflows will be earned revenue, not transfers or subsidies. A transfer to a self-supporting fund is considered an unusual transaction.

Other Considerations – Definition of Financial Reporting Entity

Transfers are used if the movement of funds is within the funds of the same financial reporting entity. Selection of transfer or distribution of revenue will vary if differences exist in defining the financial reporting entity. For example, one institution may define the financial reporting entity as fund type 11 – budgeted operations; another institution may define the financial reporting entity as specific fund groupings within fund type 11 – budgeted operations. For OUS financial reporting purposes, definition of the financial reporting entity coincides with the baseline fund structure.

The following are specific areas where inter-fund transactions are not recorded in a uniform manner among OUS institutions and the chancellor’s office:

Transaction Accounting Treatment(s)
Distribution of general fund appropriations to ETIC

Distribution of revenue (preferred accounting treatment). OUS has separate baseline funds to account for the ETIC program. The general fund appropriations for ETIC have been determined by an outside party (the legislature), not internally within OUS. ETIC has to provide services in exchange for the general fund appropriation. General fund appropriation is considered operating revenue to ETIC, not “another funding source” or non-operating revenue to ETIC.

Transfer. This option is acceptable if the institution’s policy is that ETIC is part of budgeted operations and is not a self-supporting operation. The legislature includes ETIC within the E&G program and has not identified ETIC as its own separate program. Revenues are earned by the E&G program, from which we have to follow the targeted program allocation requirements. ETIC should be treated no differently than any other budgeted operation. This accounting does not allow one to readily determine total revenue of ETIC programs system wide.
Distribution of student incidental fee revenue

Distribution of revenue (preferred accounting treatment). Student incidental fee revenue to auxiliary enterprises are annual allocations in expectation that the auxiliary enterprise will be providing services that benefit students. Student incidental fees are considered part of the auxiliary enterprise operating revenues and are not considered a subsidy or other funding source.

Transfer. This option is acceptable is the institution’s policy is that the student incidental fee committee has earned the revenue and when they allocate funds, they are transferring their funds to other financial entities in the form of a non-exchange transaction.

Year-end subsidy to designated operating funds and service departments.

Expense to budgeted operations and internal revenue to designated operating fund and service departments.

This accounting treatment is selected because we cannot transfer monies out from fund type 11 – budgeted operations funds. Transfers from budgeted operations would not be included in determining compliance with expenditure limitation.

Monies to OSU ETS

Internal revenue to OSU ETS and expense to the Chancellor’s Office and four regional institutions.

OSU ETS performs services on behalf of the Chancellor’s Office and the four regional institutions. However, funding for OSU ETS is recorded as a budgeted general fund appropriation directly from the Chancellor’s Office, and $75,000 internal sales revenue from each of the regional institutions. As a result, the expenditures are not showing up in the Chancellor’s Office and four regional institutions accounting records. This accounting treatment understates expenses of the Chancellor’s Office and the four regional institutions.

Historically the Chancellor’s Office provided “fifth site” IT services for the Chancellor’s Office and the four regional institutions (EOU, OIT, SOU, and WOU). The IT services were funded within the general fund appropriations of the Chancellor’s Office with a portion of those services being paid by each institution for IT services specific to that institution. The understanding was that for budgetary purposes, IT services are a central service performed on behalf of the four regional institutions to be budgeted and paid for by the Chancellor’s Office. The regional institutions do not have budgetary responsibility for funding those IT services.

In 2004 the Chancellor’s Office IT was combined into OSU IT and because OSU Enterprise Technology Services (OSU ETS). The same arrangement generally applied: OSU now receives general fund appropriations to provide shared IT services to the fifth site. The chancellor’s office and the four regional institutions are not charged for the shared IT services because for budgeting purposes, the chancellor’s office and four regional institutions do not have payment responsibility for the shared IT services. The shared IT services are performed by OSU as a targeted program of general fund appropriations.

To reflect the budgetary organization of who has been given responsibility for payment of the shared IT services, OUS policy is to record the general fund appropriation and expenditures of OSU ETS in the OSU accounting records. ETS is accounted for as a fund type 13 - service department. The general fund appropriation received as a targeted program for ETS is moved as a subsidy from fund type 11 – budgeted operations to fund type 13 – service department.

OSU/UO Cascades partnership This decision is to be made between OSU and UO. The issue is whether or not monies received by UO from OSU Cascades are considered revenue to UO or a transfer. This also impacts the RAM cell funding.


.760 MONITORING OF TRANSFERS

The following monitoring takes place during the year and at year end to ensure that transfers are recorded in the correct fund types and that the transfers out and corresponding transfers in net to $0:

Criteria Account Code(s)
The following transfers in and out net to $0: Within FT11 within each institution 91250 - Tfr In- w/in FT11 Budgeted Ops and
92250 - Tfr Out- w/in FT11 Budgeted Ops
Within each fund type level II within each institution 91001 - Tfr In- w/in FTYP Lvl 2 (not FT11) and
92001 - Tfr Out- w/in FTYP Lvl 2 (not FT11)
Each institution 91005 - Tfr In- between FTYP Lvl 2 and
92005 - Tfr Out- between FTYP Lvl 2
91008 - Tfr In- Debt Retirement w/in Inst and
92008 - Tfr Out- Debt Retirement w/in Inst.
91105 - Trsf In – Incidental Fee Resources and
92105 - Trsf Out – Incidental Fee Resources.
91501 - Tfr In- for Cost Sharing and
92501 - Tfr Out- to Cost Sharing Funds.
OUS-wide 91225 - Tfr In- from Other OUS Inst and
92225 - Tfr Out- to Other OUS Inst
91228 - Tfr In- Debt Retirement CO-Inst and
92228 - Tfr Out- Debt Retirement CO-Inst
The following transfers are only within the following fund types: FT11 – Budgeted Operations 91250 Tfr In- w/in FT11 Budgeted Ops and
92250 Tfr Out- w/in FT11 Budgeted Ops
EOU, OSU, SOU, and CO dedicated cost sharing funds (funds with fund level 3 roll-up of 005000 – Cost Sharing or other dedicated funds within budgeted operations fund type 11 Statewide Public Services fund roll-ups) 91501 - Tfr In- for Cost Sharing
EOU, OSU, SOU, and CO FT 11 – Budgeted Operations but can occur from other fund types such as Auxiliary Enterprise fund FT2x or Foundation Funds – Restricted FT35. 92501 - Tfr Out- to Cost Sharing Funds
FT85 – Retirement of Debt Funds. 91008 - Tfr In- Debt Retirement w/in Inst
Student incidental fee funds, mostly likely in FT 29 – Other Auxiliary Enterprises. 92105 - Trsf Out – Incidental Fee Resources
Chancellors Office Chart K, FT85 – Retirement of Debt Funds. 91228 - Tfr In- Debt Retirement CO-Inst
FT 91 agency funds and must net to $0 within agency funds. 91001 - Tfr In- w/in FTYP Lvl 2 (not FT11) and
92001 - Tfr Out- w/in FTYP Lvl 2 (not FT11)
The following transfers are not in the following fund types: FT11- Budgeted Operations 91001 - Tfr In- w/in FTYP Lvl 2 (not FT11) and
92001 - Tfr Out- w/in FTYP Lvl 2 (not FT11).
Following transfers are between institutions or between institutions and the chancellor’s office and are all on the inter-institutional iijv system. 91225 - Tfr In- from Other OUS Inst and
92225 - Tfr Out- to Other OUS Inst
91228 - Tfr In- Debt Retirement CO-Inst and
92228 - Tfr Out- Debt Retirement CO-Inst


.780 ELIMINATION OF INTERFUND TRANSACTIONS FROM FINANCIAL STATEMENTS

The following narrative explains the process for selecting the interfund transactions to be eliminated from the annual OUS financial statements:

1 Fund-wide level is a term used to represent entries not made to a specific fund type level 2. It can be used at the university level or system-wide level 2.
2 System-wide level is a term used for entries made at the consolidated OUS level, and is not assigned to a specific university or the Chancellor’s Office.

 

An inter-fund transaction occurs when a fund has a financial transaction with another fund within the same institution or with a fund of another OUS institution or the Chancellor's Office. Types of inter-fund transactions include the recording of the following:

Internal Revenue – Revenue earned from selling services or supplies to another OUS entity or institutional department. Fund earning the revenue credits the appropriate 09xxx Internal Sales/Service revenue account code (AT59). Fund being charged the expense debits the appropriate expense account code.
Eliminate Service Department and Auxiliary Internal Sales Activities – Internal sales are double counted between funds at the university level. The entry is made at the fund-wide level1 so no individual fund type level 2 is misstated. NACUBO clearly states that the expense, after elimination, needs to reside in its final home (program code), not where it originates in the service center or auxiliary. The entry is created using the balance of AT59 by fund type level 2.

  • DR – Educational Department Sales and Service (FTxx other than FT20)
  • DR – Auxiliary Enterprise Revenues (FT20)
    • CR – Other Operating Expenses
    • CR – Auxiliary Expenses

Distribution of Revenue – Revenue applicable to multiple funds that is initially received by one fund and then distributed to other funds. Fund distributing the revenue debits the appropriate 0xxxx revenue account code. Fund receiving the revenue credits the appropriate 0xxxx revenue account code. Because revenues offset each other, there is no double counting and no elimination necessary.

Allocation or Reimbursement of Expense – Expense applicable to other fund(s) that is initially charged to one fund then allocated to other fund(s). Fund allocating the expense credits the appropriate expense account code. (Account code used would be either the same expense account code that was originally used to record the expense or, for reimbursements of expenses, a 79xxx Internal Sales Reimbursement account code.) Fund being charged the expense debits the appropriate expense account code. Because expenses offset each other, there is no double counting and no elimination necessary.

When reporting expenses by “natural” classification (i.e. payroll, services and supplies, financial aid, depreciation, and other expenses), 79xxx Internal Sales Reimbursements show up as a credit to other expenses. We reclassify the internal sales reimbursements from “other expenses” to “services and supplies.”

Transfers In and Transfers Out–"Non-exchange" transactions between funds due to the transfer not being the result of an exchange of revenue for goods or services. "Non-exchange" transactions are further defined in GASB No. 33. Fund making the transfer debits an expense 92xxx transfer out account code. Fund receiving the transfer credits an expense 91xxx transfer in account code. Because transfers net to zero when combined across all OUS entities, there is no double counting and no elimination necessary.

Inter-fund Loans – Loan from one fund to another fund, in accordance with OUS Fiscal Policy Manual Section 05.271: Inter-institutional and Inter-fund Loans. The recording of inter-institutional and inter-fund loans occur infrequently and only in very specific circumstances. Institutional business office should be contacted before recording inter-institutional or inter-fund loans. Fund making the loan debits "Due From" in an A6xxx (AT16) or A7xxx (AT17) asset account code. Fund receiving the loan credits "Due To" in a B6xxx (AT27) or B7xxx (AT28) liability account code.

Eliminate Due To/Due From Other Funds and Institutions – Due to/due from activity is double counted at the university and OUS level. Eliminations for due to/due from at the university level and inter-university level are recorded at fund type level 2 at a system-wide level2.

  • University Level:
  • FTXX – DR – Due to Funds (AT27)
    • FTXX – CR – Due from Funds (AT16)

 

  • OUS Level:
  • FTXX – DR – Due to OUS (AT28)
    • FTXX – CR – Net Assets (appropriate to each fund)
    • FTXX – CR – Transfers (AT81)
  • FTXX – DR – Net Assets (appropriate to each fund)
  • FTXX – DR – Transfers (AT82)
    • FTXX – CR – Due from OUS (AT17)

Fund Additions and Fund Deductions – Movement of a portion of one fund's equity and its associated assets or liabilities to another fund, without affecting the operating ledger which measures annual revenue and expense. The recording of fund additions and deductions occur infrequently and only in very specific circumstances. Institutional business office should be contacted before recording fund additions and fund deductions. Fund receiving equity credits an Exxxx (AT91) fund addition account code. Fund moving equity debits an Fxxxx (AT96) fund deduction account code. Because Fund Additions and Fund Deductions offset each other, there is no double counting and no elimination necessary.

Other Types of Eliminations

Eliminate Indirect Cost Recoveries – Indirect cost recoveries are double counted between funds at the university level. Please refer to the OUS Fiscal Policy Manual at http://www.ous.edu/cont-div/fpm/acco.05.553_acctg_example.xls for examples of these entries. The entry is made at the fund-wide level1 so no individual fund type level 2 is misstated. The entry is created using the balance of account 70005 – F & A Cost by program code.

  • DR – Indirect Cost Recoveries
    • CR – Various Operating Expenses

Eliminate Federal Grants Transferred Between OUS Entities – OUS universities have subcontract grant activity with other OUS universities which causes, on an OUS wide basis, activity to be double counted. The entry is made to FT31 (Federal Grants) at the system-wide level2 as each university is properly stated. Activity used to create this entry comes from the SEFA Report (A-133 filing) sub recipient information which has been identified in account 03118 – OUS Institution Sub-Contract/Grants.

  • FT31 – DR Federal Grants and Contracts
    • FT31 – CR – Other Operating Expense
    • FT31 – CR – Research

Eliminate Scholarship Allowances – Institutions receive financial aid funds from the Federal Government. The financial aid funds are disbursed to students, who in turn use a large portion of those financial aid funds for payment of tuition and fees, on-campus housing and books. In the institution accounting records, these transactions result in (1) governmental financial aid grant revenue, (2) financial aid expense, and (3) tuition and fee, campus housing and/or institutional bookstore revenue. At the end of the fiscal year, the Controller's Division follows a methodology to estimate the financial aid expense used by students to pay for tuition and fees, campus housing and books. In the institutional and OUS-wide financial statements, the financial aid expense and the tuition and fee revenue and auxiliary enterprise revenue are reduced by the amount of the scholarship allowance. A simplified version of the entry is as follows:

  • FT11 – DR – Tuition and Fees
    • FT11 – CR – Student Aid
    • FT11 – CR – Transfers
  • FT21 – DR – Auxiliary – Housing
    • FT21 – CR – Student Aid
    • FT21 – CR – Transfers
  • FT3X – DR – Transfers
    • FT3X – CR – Student Aid

Eliminate Financial Aid Administrative Cost Allowance (ACA) – Institutions receive Financial Aid ACA in conjunction with certain student federal aid programs. The recording of the revenue, distribution, and use of the cost allowance results in the double-counting of revenue and expense on an institution and OUS-wide basis. When distributing the administrative cost allowance, institutions debit the appropriate financial aid fund using account code 70001 "Financial Aid Administrative Costs" and credit the appropriate Budgeted Operating fund(s) using account code 03302 "Financial Aid Administrative Cost Recovery". For the financial statements, the Controller's Division prepares an institution-wide adjustment to remove the duplicate revenues and expenses that resulted from the distribution of the ACA . The entry is created using the balance of account 70001 – F & A Cost by program code.

[We are not currently making this entry in consolidations – will need to add for FY08. It will be combined with the existing entry for indirect cost recoveries shown above.]

  • DR – Indirect Cost Recoveries
    • CR – Various Operating Expenses

“Indirect Cost Recoveries” is a caption initially populated by the HFM crosswalk. The above entry brings the amount in “indirect cost recoveries” to $0.

Eliminate Sport Guarantees – Guarantees paid relating to sporting events between OSU, UO and PSU (mainly football and men’s basketball) creates an overstatement of revenues and expenses in FT23 at the OUS level. Guarantees are recorded in revenue account 06471 and expense account 28920. The elimination entry reduces FT23 at the system-wide level2 so that the individual universities are not misstated. The amount to eliminate is provided by the universities.

  • FT23 – DR – Auxiliary Enterprise Revenues (Athletics, Events & Performances)
    • FT23 – CR – Auxiliary Programs

.995 HISTORY

04/20/09 Approved
04/20/09 Updated

Appendix Last Updated: 04/20/09

OUS Index Contacts
 
Contact: Controller's Division
cdwebmaster@ous.edu - (541) 737-3636
©Oregon University System, 2009