An Auxiliary unit is an organization that exists to provide a service or a good for a fee. This policy applies to both auxiliary units that are allowed to provide services to external entities and make a profit and recharge (service) centers that are required to break even and only provide services to other university units. In the IU general ledger system these units have the prefix of 60 through 66.
Source: Financial Policy I-600
Please see the Auxiliary Standard Operating Procedures (ASOPs)
Yes. University policy states that "All University operations should be maintained and compliance reports prepared on the accrual basis of accounting at the end of the fiscal year." The university’s policy is based on AICPA Audit Guidelines 2.09. Furthermore, reporting auxiliary units are required to submit auxiliary vouchers on a monthly basis to ensure proper accrual accounting throughout the fiscal year.
Source: Financial Policy I-350
At the heart of the Accrual Accounting concept is the Matching Principle, which simply dictates that revenues be matched with expenses in the same period whenever reasonably and practically possible to facilitate accurate and meaningful financial reporting. (This is in contrast to Cash basis accounting, where income and expenses are determined as cash is received and disbursed.)
The accrual method provides a more accurate picture of the organization’s financial situation because income is recorded on the books when it is truly earned regardless of when it is received. Likewise, expenses are recorded when they are incurred regardless of when they are paid. Income earned in one period is accurately matched against the expenses that correspond to that period. This provides a better picture of the organization's net profits for each period. It simply provides a clearer picture of the financial status of the organization for a given fiscal period.
Source: ASOP 3.0
Please see ASOP 2.0
Auxiliary Vouchers must be submitted by 3:00pm on the 20th day of the month following the end of the fiscal period. If the 20th falls on a weekend or a holiday, the due date will move to the next working day.
Cost Accounting Standards require the University to disclose the process of establishing rates and to establish university-wide guidelines for establishing rate formulas for the recharge centers.
Recharge center rates should be set to recover no more than actual costs. The formula below should be used to determine the proper amount to charge a university account for service or product. This formula will provide documentation of the rate calculation and identify the costs used in computing the rate. The costs used to compute the rate should include only actual costs.
The University-wide rate formula should include the following components, where each component is distinctly identified:
- All direct costs to the service center for supplying that product or service.
- All indirect costs to the service center for supplying that product or service.
- A variable or projected increment for the anticipated increase in costs for the year in which the rate will be applied.
- A carry forward component equal to the profit or loss from the previous year.
- The amount of any subsidy provided and the source of funds.
- Any unallowable A-21 should be identified as not recoverable in the rate.
- Volume discount used and the basis for the reduction.
- The components should be summed and then divided by the budgeted units (whether service or product) for the year the rate is being determined.
If the prior year component is greater than 5% of total allowable costs, then an analysis should be completed explaining the reasons and sent to the office of the campus business officer with a copy sent to the Chief Accountant of Indiana University.
The costs of the recharge center should be analyzed each year. This analysis should compare actual costs to the estimates that were created the prior year. Costs to recover should be adjusted for prior year profit or loss in order to break-even over the long-term.
Source: Financial Policy I-400
Indiana University policy states that a "physical inventory of items maintained in inventory should be taken at least once every fiscal year."
Source: Financial Policy I-390
The duties and responsibilities of the Fiscal Officer include providing daily oversight on how the funds are spent and managed. This oversight includes ensuring funds are budgeted, where appropriate, that they are spent according to fiscal policy, that funds are spent in alignment with the account purpose, that processes and controls are in place, that assets are safeguarded, that transactions are recorded and reported properly, that the account is reconciled on a monthly basis, and that either the expenditures are in conformity with the budget, or appropriate budget changes have been made to reflect a change in the original budget.
Signature authority on all financial transactions rests with the Fiscal Officer, and the Fiscal Officer is the only person who can delegate signature authority on an account. Because of signature authority, Fiscal Officers are required to utilize IU's Kuali Financial System (KFS).
Source: Financial Policy I-1
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