FAQ's

Are all University assets meeting the University's definition of capitalized equipment (tangible personal property, having a useful life of more than one year, and an acquisition cost of $5,000 ) tagged with a serially numbered University tag?

Ideal Answer: YES. The tag number and the associated asset information are recorded in the University's central database of assets and are used when departments complete their biennial equipment inventory. The tag is also a theft deterrent as it allows for tracking capital asset identifying information (serial number, model number, etc.) allowing for easy identification.

Tag numbers are also assigned to assets acquired by gift and fall under the University's capitalized equipment definition. University tags Without a number can be requested for assets not meeting the University's equipment definition.

Is the Office of Business Operations (OBO) notified of any equipment obtained through sources other than purchasing, such as gifts, transfers from other departments, transferred to the University with new faculty members, and fabricated items that meet the University's equipment definition?

Ideal Answer: YES. The responsibility for providing OBO with all required information for capitalized equipment inventory records lies with the department initiating the acquisition or transfer of the equipment. The equipment information is maintained on a central database to track the University's assets, compute depreciation expense for the University's financial statements, and to provide departments with inventory reports. The necessary forms and instructions can be located at Office of Business Operations’ (OBO)s web site: Fixed Assets.

Is the Office of Business Operations (OBO) notified of any equipment obtained through sources other than purchasing, such as gifts, transfers from other departments, transferred to the University with new faculty members, and fabricated items that meet the University's equipment definition?

Ideal Answer: YES. The responsibility for providing OBO with all required information for capitalized equipment inventory records lies with the department initiating the acquisition or transfer of the equipment. The equipment information is maintained on a central database to track the University's assets, compute depreciation expense for the University's financial statements, and to provide departments with inventory reports. The necessary forms and instructions can be located at Office of Business Operations’ (OBO)s web site: Fixed Assets.

Has a departmental capitalized equipment inventory been conducted within the last two years?

Ideal Answer: YES. Each department is required to conduct a complete physical inventory of capitalized equipment every two years. Any additions, deletions, transfers or corrections (i.e. changes in the location or custodian) discovered during the biennial inventory must be reported to OBO on the proper reporting form. The department can use a current departmental equipment listing provided by OBO to complete the inventory. Upon completion of the inventory, the unit’s chief officer must sign any applicable equipment adjustment forms and forward them to OBO along with the signed certification letter, certifying that the physical inventory has been completed.

The department is responsible for notifying OBO of all changes in the status of equipment between biennial inventories. This shall include, but is not limited to, assets stolen, lost, cannibalized, sent to surplus, changes in location and custodian. The necessary forms and instructions can be located at OBO's web site: Fixed Assets.

When any asset (capitalized and non-capitalized) has been identified for disposal, is the first step to contact University Surplus? 

Ideal Answer: NO. Equipment dispositions result from sales, trade-ins, donations, declarations as surplus property, cannibalizing for parts, scrapping, transfers to another department or another institution related to a departing faculty member. Regardless of the method of disposal for any asset (capitalized and non-capitalized), the proper disposal form must be completed and submitted to OBO for authorization. The responsibility for providing OBO with all required information lies with the department initiating the disposition of the asset. The necessary forms and instructions can be located at OBO's website: Fixed Assets.

When any University property is stolen, destroyed or missing would OBO be contacted first?

Ideal Answer: NO. Any University property, including items of equipment, destroyed, stolen or otherwise missing, must be reported to Public Safety at the time it is discovered missing. If the property is not recovered within 48 hours, the incident must be reported in writing to the University's Risk Manager.  At the same time the Equipment Inventory Deletions Report and a copy of the Public Safety report must be sent to OBO to assure that the item will be removed from the University's asset management system. There are additional requirements if the asset is federal property. The necessary forms and instructions can be located at OBO's website: Fixed Assets.

Are University assets used off-campus properly accounted for?

Ideal Answer: YES. Short-term use: When any equipment belonging either to the University or the federal government, and under the custody of the University, is going to be used off-campus for periods up to six months, it must be approved and documented by the appropriate departmental office. Such records are to be maintained at the department and do not need to be sent to the PMO.

• Long-term use: When any equipment belonging either to the University or the federal government, and under the custody of the University, is going to be used off-campus for periods longer than six months, it must be approved and documented by the appropriate departmental office. The responsible department must notify OBO by submitting UNI’s Authorization Form for Off-Campus Use of University Property. Policy and guidelines for this form and instructions can be located at OBO's web site: Fixed Assets.

Are University employees allowed to use University property for personal use?

Ideal Answer: NO. No public officer, deputy, or employee of the State of Iowa or any governmental subdivision thereof, who has charge or custody of any governmental subdivision of Iowa, or by the federal government while in the custody of the State of Iowa, shall use or operate the same or permit the same to be used or operated for any private purpose (IC 721.2).

Cash Handling

Are there procedures to establish accountability for revenues immediately upon receipt?

Ideal Answer: YES. A cash register, cash receipt journal/log, or other logging mechanism should be used to establish accountability immediately as monies are received. This will provide an audit trail of the funds received and support the recording of the transaction into the University records. It also provides a record for Public Safety in case of loss, misappropriation, or theft. Please refer to Office of Business Operations’ (OBO) Cash Handling webpage to obtain the recommended cash receipt journal/log for use when a cash register is not available.

Are all checks properly endorsed "for deposit only" to the University?

Ideal Answer: YES. Checks should be endorsed immediately upon receipt "for deposit only" to the University to prevent diversion and unauthorized cashing. You can use a stamp or hand-write the following text: "For deposit only, University of Northern Iowa, Department of  ________________". The unit’s account number for the deposit must also be recorded on the back of the check in case it is returned for non-sufficient funds (NSF). Please refer to OBO’s Cash Handling website for additional information.

Are cash and cash equivalent items (checks, credit card receipts, parking stickers, stamps) physically safeguarded against theft and loss?

Ideal Answer: YES. Cash and cash equivalent items are extremely vulnerable to theft and should be secured at all times with access limited to authorized personnel. Ideally, a safe should be used for storage of cash items until deposited. Alternatively, a locking box bolted/secured into a drawer that is also locked could be used. Access to a safe or lock box should be limited to very few and should remain locked while not in use. Safe combinations should be changed periodically and when employees with access leave the department and/or terminate. Combinations and keys should be kept in a secure, secret place. Any substantial shortage or apparent theft must be reported immediately to Public Safety. Please refer to OBO’s Cash Handling website for additional information.

Is there proper separation of duties in the cash handling function (an individual should not have responsibility for more than one of the cash handling components: recording of charges/billing, collecting, depositing, and reconciling)?

Ideal Answer: YES. There should be proper separation of duties so that one employee is not performing all cash handling duties. Different employees should be accepting money, making the deposit, recording the deposit (and customer payment), and reconciling the accounting records. Deposit records should be reconciled to the daily and monthly accounting reports to ensure deposits have been posted to the appropriate account for the appropriate amount. To ensure that differences are discovered, someone who does not handle cash should perform the reconciliation.  Proper separation of duties enhances accountability and reduces the risk of possible wrongdoing. In addition, OBO through the Cashier’s Office requires all employees handling cash and revenue to be certified. Please refer to OBO’s Cash Handling website for additional information.

Are cash shortages identified, analyzed, recorded, and reported?

Ideal Answer: YES. Operational cash overages and shortages should be recorded as part of the deposit process to provide an audit trail of these occurrences. The deposit process should identify the amount of cash overages/shortages. Management oversight should monitor trends and investigate to determine the underlying cause. Appropriate corrective action should be taken to prevent further losses or errors. Any substantial shortage or apparent theft must be reported immediately to Public Safety. Please refer to OBO’s Cash Handling website for additional information.

Are funds collected and deposited at least weekly or when the amount on hand is greater than $250, whichever occurs first?

Ideal Answer: YES. In order to reduce the amount and risk of loss to the University, funds must be deposited at least once a week or whenever collections exceed $250. However, daily deposits are encouraged. Please refer to OBO’s Cash Handling website for additional information.

Are all funds collected properly deposited intact?

Ideal Answer: YES. To ensure that all receipts are posted properly to the unit's account(s), the entire amount of receipts collected must be deposited. None of the cash collected in the unit may be used prior to deposit. For example, the unit cannot use $10 of its cash receipts to purchase postage and then reduce the amount of its cash deposit by the $10 used. In case of cash overages/shortages, the cash overage/shortage amount should be recorded as part of the deposit to equal the total receipts collected. The unit’s authorized change fund should be maintained at its authorized amount at all times and cash overages/shortages not allowed to flow through it. Please refer to OBO’s Cash Handling website for additional information.

Is someone independently reviewing and approving voids and refunds?

Ideal Answer: YES. A strong internal control is to require someone with proper authority to approve voids and refunds before they are processed. The person providing this approval should not be the same person who initiated (received) the transaction. The approval should be documented and retained with the daily records. Please refer to OBO’s Cash Handling website for additional information.

Are steps taken to ensure the safety of the person transporting the deposit to the Cashier's Office or drop site location?

Ideal Answer: YES. Secure the deposit in a locked money bag/pouch. Be as inconspicuous as possible by disguising the money bag in some fashion, such as placing it in a book bag. Alter the route and time of delivery to the designated deposit drop-off location. Please refer to OBO’s Cash Handling website for additional information.

Is your change or reimbursement (petty cash) fund an authorized advance from the Office of Business Operations (OBO)?

Ideal Answer: YES. All University funds must be recorded and properly accounted for. If you are going to make change, then you will need an authorized change fund. Please contact the Cashier's Office to obtain a departmental change or reimbursement fund request form. It must be completed and approved by the applicable department head and submitted to the Cashier’s Office in OBO. Keep the amount of the cash fund to a minimum; it can always be increased if necessary. Do not hold back receipts to create or increase your authorized change fund. The entire  amount of receipts collected must be deposited to the unit's account(s). A Departmental Reimbursement Fund is necessary for numerous reasons, most commonly for "petty cash". With the ability to put most purchases on a departmental procurement card, please conduct a thorough analysis prior       to requesting an advance of this type and subjecting the department to       additional responsibility of safeguarding the money. Please refer to OBO’s Cash Handling website for additional information.

Are the departmental change and/or reimbursement funds balanced daily?

Ideal Answer: YES. To ensure that University funds are properly accounted for, departmental change and reimbursement funds must be balanced monthly and every time they are used. The cash amount (plus original detailed purchase receipts for the reimbursement fund) should always equal the amount that OBO has authorized for the department. Employees are prohibited from using the receipts or authorized funds to make loans(IOU's) or cash personal or payroll checks. The funds must be kept locked in a secure location except when being used to accept funds or transact business. Please refer to OBO’s Cash Handling website for additional information.

General Expenditures

Sales tax:  Are you aware that all purchases made in the State of Iowa as well as goods shipped to the State of Iowa should be tax exempt?

Ideal Answer: YES. Tell the vendor that the University of Iowa is tax exempt from State sales taxes and give the tax exempt number. See Office of Business Operations’ (OBO) website: UNI Sales Tax Exemption.

Purchases from University Faculty or Staff:  Are you aware there is a Conflict of Interest policy regarding purchases from faculty or staff?

Ideal Answer: YES. Purchases from faculty or staff members exceeding $1,000 for one transaction or $2,000 in one year must be approved by the Board of Regents, State of Iowa (BOR).

Low Dollar Purchasing:  Are you familiar with procurement card purchasing?

Ideal Answer: YES. A procurement credit card is available to departments to obtain low-cost, non-equipment items. With this authority, the department assumes the responsibility to comply with all state, Regent, and University policies governing procurement operations. See OBO’s Purchasing webpage for detailed purchasing and procurement credit card guidelines and procedures.

Iowa Gift Law:  Are you familiar with the Iowa gift law?

Ideal Answer: YES. The state of Iowa "gift law" informs us that no more than $3.00 a day is legal to buy something for a person who has authority over aspects of your employment, i.e. supervisors. This is to ensure that neither positive nor negative consequences from a gift would arise for staff. See Policy 10.09 Federal and State Lobbying and Political Activity. 

General Financial

Is there an organizational chart clearly defining lines of authority and responsibility within the unit?

Ideal Answer: Yes. If no organizational chart is available, such lines should be clearly established and communicated to the department or unit. 

Is there a current policies and procedures manual in the department covering all functions? Is there a systematic procedure to keep them updated?

Ideal Answer: Yes. Documenting procedures helps ensure consistency by providing a clear means to communicate standards and expectations to staff. 

Are all funds and accounts reviewed monthly and variances or deficits noted, analyzed and reported to management with corrective action taken?

Ideal Answer: Yes. Departments should ensure financial reports are adequately reviewed, analyzed, and unusual activity, deficits, or trends reported to management so appropriate correction action can be implemented. A review process should be documented with the reviewer’s initials, date of review, and notes of action taken, if any. Please refer to FARS’ Account Reconciliation Process webpage for additional assistance with managing financial information.

Are all financial funds or accounts assigned to a responsible person who is accountable as part of their duties for properly managing the fiscal resources?

Ideal Answer: Yes. Regular monitoring of financial activity promotes frequent communication within the department, which can help reduce misunderstandings and identify and solve potential problems sooner. Please refer to FARS’ Account Reconciliation Process webpage for additional assistance with managing financial information.

Does the department maintain the detail for all journal entries prepared and submitted to the general ledger?

Ideal Answer: Yes. Often the general ledger journal entry is just a summary of many transactions over the course of a day, week, month, etc. Depending on the type of journal entry, supporting documentation is required to be submitted to FARS with the journal entry. The department should always keep a copy of the journal entry and supporting documentation for their records and audit purposes. Please refer to FARS’ Journal Entries webpage for additional assistance.

Are the results of unit operations monitored through the use of measurable performance indicators? Are written reports required by management to evaluate performance?

Ideal Answer: Yes. Departments should have a methodology to identify key business processes and routinely measure how well they carry out those processes. Key processes are the processes the unit engages in to achieve the mission and function of their unit. 

Do supervisors meet regularly and informally with management? Do reports highlight significant or unusual variations?

Ideal Answer: Yes. Frequent communication can help reduce misunderstandings and identify potential problems earlier. 

Does the department have procedures for monitoring compliance?

Ideal Answer: Yes. Departments should identify all significant compliance requirements applicable to their unit and ensure responsibility for maintaining compliance is clearly assigned to appropriate personnel. Please see the Office of Sponsored Programs' (OSP) website for additional compliance information.

Are records maintained in accordance with the records retention guidelines?

Ideal Answer: Yes. Departments should be aware of FARS’ Record Retention Schedule for financial records. Original records generated by a department that are not submitted to another University department should be maintained by the department at least seven years and indefinitely for student and legal records. Please contact University Counsel if guidance is needed for specific records.

Does department record and track issuance of keys?

Ideal Answer: Yes. Departments should be aware of employees who have keys to buildings, labs, safes, etc., and ensure all keys are promptly returned from any employee either no longer requiring access or leaving the employment of the University.

Are all department employees who work with student records familiar with FERPA policies?

Ideal Answer: Yes. University provides FERPA Information and Training to any University employee.

Information Technology

Does each person with system access have a unique (not shared) user ID?

Ideal Answer: YES. Anyone needing access to any IT system must have their own personal ID, which must be obtained through coordination of the offices of Human Resource Services (HRS) and Information Technology Services (ITS).

Are user ID's and passwords kept secret?

Ideal Answer: YES. User ID's and passwords should be kept confidential and never shared with anyone.

Are user passwords composed of a unique 8 to 30 alpha/numeric characters and changed at least every 90 days?

Ideal Answer: YES. See ITS website at ITS Recommended Password Standards.

Are files of personal computers, including laptops and notebooks, backed-up on a regular basis?

Ideal Answer: YES. Files stored on personal computer local drives should either be backed-up to a network drive or to a disk media (floppy/CD-R/DVD-R) on a regular basis.

Does the department maintain individual/site license documentation for all software installed or used on departmental PS's?

Ideal Answer: YES. Documentation showing proof of purchase/license for all departmental software should be maintained in a central file. Any software installation media should be centrally secured and controlled to avoid unauthorized installation and use.

Is the level of IT system access assigned to each staff member regularly reviewed by management to assure that there is still a continuing need for it?

Ideal Answer: YES. User access right to information and systems should be periodically reviewed to make sure a valid job-related need still exists for the access.

Does department management review and approved the request for access by any University employee to the University systems for which the department is responsible?

Ideal Answer: YES. Management should sign all access requests only after verifying that it is necessary for the staff member to perform their job duties.

Is the required paperwork notification completed and filed before a staff member removes any IT equipment from campus for an extended period of time?

Ideal Answer: YES. Before any University property is removed from campus for any length or open period of time, an Authorization Form for Off-Campus Use of University Property must be completed.

Are the hard drives of computers being disposed of, over-written to Department of Defense (DOD) standards or physically destroyed prior to be sent to Surplus?

Ideal Answer: YES. In order to prevent the compromise of confidential data or violation of software licensing agreements, all computer hard drives should either be overwritten using a software utility that meets DOD standards, or physically disassembled and destroyed. Please note that the standard "Format" command is not sufficient, and does not prevent data recovery. See ITS article on Effectively Erasing Data for more information.

Does the department have a documented disaster recovery/business continuation plan?

Ideal Answer: YES. All departments should document the process they would follow to restore operation in the event of a local disaster. The recovery plan should be tested on at least an annual basis.

Other Departmental Operations

Are departmental policies important?

Ideal Answer: YES. University policy is sometimes not detailed enough to provide guidance specific to departmental operations. Departmental policies are useful in helping faculty, staff and students understand management's expectations for that area. They also assist in minimizing conflict between those internal and external to the operation.

Is it important to document key business processes?

Ideal Answer: YES. Key processes should always be well documented so that business can continue as usual in the absence of the primary business process owner. They are also great tools for training new hires and existing staff across positions. Key processes are the processes the unit engages in to achieve the mission and function of their unit.

Does Internal Audit often suggest additional training in audit reports?

Ideal Answer: YES. The lack of appropriate training is often the reason why internal controls break down in processes. People generally want to do the right thing, but they need to know the right way to perform the activity.

Do we need to perform biennial asset inventories?

Ideal Answer: YES. An asset inventory is a significant control to ensure that equipment is appropriately accounted for in the financial statements and that it is still in use and safeguarded from theft or destruction. An asset (equipment) inventory listing should be provided from the Office of Business Operations (OBO) during the fall every other year. Please contact the Fixed Asset Accountant if the department has not received its biennial equipment listing. This listing should be used to verify that all assets costing $5000 or more are included.

Is there a place I can go to find out how long supporting documentation for transactions should be kept in my department?

Ideal Answer: YES. Most supporting documentation for financial transactions are required to be submitted to OBO for deposits, payroll, purchasing, accounts payable, and capital assets; and to FARS for journal entries. Please refer to FARS’ Records Retention Schedule. Recommended guidelines for retention of copies of financial transaction supporting documentation within departments is two years; or the current year plus one full fiscal year. This provides adequate information in the department for the annual budget process.

Can I accept payment for charges that I enter into a billing system?

Ideal Answer: NO. If you currently enter charges or bill for services and accept payments you are not protected from accusations of misconduct. Payments for billed charges should be sent directly to Cashiers/OBO for processing. Segregation of duties is an important internal control that not only ensures the University's assets are protected but also that individuals are not wrongly accused of misappropriating assets.

‌Payroll and Human Resources

Is payroll reconciled after each pay period using payroll reports accessed via the web?

Ideal Answer: YES. Payroll reconciliation reduces underpayments and overpayments. It should be performed by someone other than the person who enters payroll information into the system. Please refer to the Office of Business Operations’ (OBO) Payroll webpage for additional information.

Are Human Resources standard reports viewed on a regular basis at the departmental level?

Ideal Answer: YES. The recommended web reports are designed to give departments a quick update on payroll and human resource data and a means to verify that the payroll is correct. They also serve to remind departments of needed documentation such as I-9's, updated non-resident information, and terminations that need to be processed. Please refer to the OBO’s Payroll and Human Resource Services (HRS) webpages for additional information.

Are Payroll expenses verified to the monthly departmental Statement of Account reports?

Ideal Answer: YES. It is necessary to verify the gross amounts paid and the fringe benefit computation each month and then verify the totals to the monthly  Statement of Account to assure the correct accounts were charged. Please refer to the OBO’s Payroll webpage for additional information.

Are leave requests documented and compared to monthly leave reports to verify the reporting accuracy?

Ideal Answer: YES. Internal controls deter fraud. By comparing what is reported to what is requested, it catches inadvertent errors in reporting and it conveys to the employees that the department is "watchful" of their attendance. Leave requests may be documented using optional Request for Leave forms or they may be noted on a calendar, by e-mail, or other form of record by the supervisor. Please refer to the OBO’s Payroll webpage for additional information.

Can the individual who has approval authority delegated to them initiate payroll transactions in the workflow system and then approve them?

Ideal Answer: NO. Payroll transactions are to be initiated and approved by two separate individuals at the department level to maintain segregation of duties. Please refer to the HRS’s Personnel Action Form webpage for additional information.

Does everyone have their own access to Payroll and Human Resource systems so that passwords are never shared?

Ideal Answer: YES. Passwords should never be shared. Everyone who needs access to perform their jobs should have their own password.

Are weekly, biweekly, and monthly time records reviewed and approved by the employee's supervisor or their designee who has knowledge of the hours worked by the employee?

Ideal Answer: YES. The person who approves the time record is indicating that the hours are recorded correctly. Please refer to the UNI Time/Payroll webpage for additional information.

Are biweekly employees terminated timely?

Ideal Answer: YES. Leaving a biweekly appointment open allows the possibility of submitting fraudulent time sheets. Please refer to the OBO’s Payroll webpage for additional information.

Procurement Card (Pcard)

Are Pcards and their card numbers properly secured?

Ideal answer: Yes. Card holders are responsible for the safe keeping of the card and number to reduce risk of theft or unauthorized purchases. This can be done by storing the card in a locked desk or file drawer.

Are Pcard statements reconciled after the end of each month’s billing cycle and Pcard journal entry vouchers prepared and routed for approval to Office of Business Operations (OBO) prior to the 18th of each month?

Ideal answer: Yes. Each Pcard holder is responsible for timely reconciliation of monthly statements. Accounts Payable policy requires this by the 18th of the month following each billing cycle.

Are all purchases compliant with University Pcard policy?

Ideal answer: Yes. Monthly reconciliations will confirm all transactions are legitimate. Additional information on pcard policy, training, discounts, updates, and other frequently asked questions (FAQ's) can be found on OBO’s website for procurement cards at: Procurement Card Guidelines.

Recharge Centers

Is the official rate schedule complete and current? Is it easily accessible to your users? Are users aware of price changes in advance?

Ideal Answer: YES. To help ensure the recharge center is used to its full extent, new and existing users need to be aware of all the services provided and be able to plan ahead in their budgets for any rate changes. Please refer to Financial Accounting and Reporting Services’ (FARS) Recharge Centers webpage for additional information.

Are rates set to break even?

Ideal Answer: YES. Recharge centers should not attempt to realize a profit on their operation. The recharge center should reduce their billing rates if their account has accumulated a fund balance larger than the standard set by FARS. This can be done by factoring in any excess or deficit into the annual rate calculation. Please refer to FARS’ Recharge Centers webpage for additional information.

Are the rates reviewed before the end of the fiscal year?

Ideal Answer: YES. Rate reviews and adjustments can take place at any point during the year. Performing at least an informal review during the fiscal year will identify the need for rate adjustments early and help avoid large, end of year deficits or surpluses. Rate adjustments should be timed to allow your most active customers to incorporate potential rate increases into their budgets. Please refer to FARS’ Recharge Centers webpage for additional information.

Is the rate schedule supported by cost study?

Ideal Answer: YES. Federal cost principles require recharge center to provide adequate documentation to support costs charged to sponsored agreements. A cost study provides that documentation by showing how the rates are calculated. Guidance for developing a cost study can be obtained from FARS’ Recharge Centers webpage.

Is the cost study complete, organized and clear?

Ideal Answer: YES. Cost study documentation provides the support for costs charged to sponsored agreements. It serves as a basis for any cost review conducted by outside parties. Consequently, the cost study needs to be presented in a manner which clearly shows or explains how the rates are calculated, how common costs are allocated, and the source of the data used. Supporting schedules and source documentation should remain filed with the final cost study. Please refer to FARS’ Recharge Centers webpage for additional information.

Is the cost study based on direct costs?

Ideal Answer: YES. Billing rates should include all direct costs of operating the recharge center. This includes expenses for personnel, materials, supplies, maintenance contracts, equipment depreciation and other operating expenses. Unallowable costs and other expenses unrelated to recharge center operations should be excluded in rate calculations for internal customers. Amounts anticipated for administrative subsidies should be factored in as a reduction or offset of total expenses before calculating the billing rate. Revenue should not be used as the basis for a rate calculation. Revenue will always correlate closely with the rate charged, even when actual costs are significantly higher or lower. Consequently, unless the actual revenue is equal to actual costs, the resulting rates could be significantly inaccurate. Please refer to FARS’ Recharge Centers webpage for additional information.

Do the rates calculated in the cost study agree with the official rate schedule?

Ideal Answer: YES. Calculated rates do not necessarily have to equal actual rates. However, the cost study should include notes to explain the reason for significant differences. The recharge center should be careful to avoid the appearance of or actual discriminatory pricing against Federal customers. One type of discriminatory pricing can occur if the recharge center subsidizes one product or service, used predominately by non-Federal users, and makes up the difference by charging a higher rate for a product or service used predominately by Federal users. Deliberate lower pricing for Federal customers is discriminatory against non-Federal customers, thus discriminatory pricing should not occur in any situation.

Unallowable, unrelated, administrative subsidies, and excess or deficit fund balances should not cause the rates calculated in the cost study to differ with the official rate schedule. When practicable, these items should be excluded (unallowable and unrelated) or offset (subsidies and fund balances) in the cost study before arriving at the final billing rate. Recharge centers should also avoid shortcuts by calculating rates only for major services, or calculating an average billing rate for a group of services that are billed at different rates. Please refer to FARS’ Recharge Centers webpage for additional information.

Are supporting schedules available for allocated costs in the cost study?

Ideal Answer: YES. Most recharge centers will have direct costs which cannot be reasonably assigned to a specific service or product. In such cases, the common costs are pooled together and allocated to services based on an acceptable and consistent methodology supported by FARS. The recharge center should ensure that supporting schedules or other documentation is prepared which describes the allocation methodology, identifies which costs are included in the pool, service units used (e.g. machine hours, billable hours, production runs, etc.), shows the allocation amounts and the service or products the costs are allocated to. Detailed records should support the service units totals. Please refer to FARS’ Recharge Centers webpage for additional information.

Are all costs included in the cost study?

Ideal Answer: YES. All costs recovered through the billing rates should be paid from the recharge center’s operating accounts. These costs should be net of any applicable credits such as rebates, refunds, trade-ins, and purchase discounts. Please  refer to FARS’ Recharge Centers webpage for additional information.

Does the recharge center allow discounts?

Ideal Answer: NO. Federal cost principles require that rates be developed in a consistent manner and applied uniformly to Federal and non-federal activities of the university. The intention is to avoid billing practices that would charge Federal users more than comparable non-federal users or vice-versa. Although discounts are not prohibited, by providing discounts, the University will trigger increased scrutiny during any audit to ensure it is not violating these cost principles.

Discounts are defined as any differential pricing practice which deviates from the standard billing rate. This may include discounts for volume, for use during off-peak hours, for users who provide subsidies to or purchase equipment for the recharge center, for users associated with the recharge center’s department, free service, etc. For sheer efficiency and reduced risk during an audit, it is recommended recharge centers charge customers a uniform rate at all times. If any differential pricing is given, the recharge center should be prepared to defend the practice by showing quantitatively that the recharge center’s costs are indeed less for the users receiving discounts. Other requirements include ensuring the discounts cannot be construed to discriminate against federal customers, are widely known, available to all users and disclosed to and approved by FARS. It is suggested any recharge center contemplating establishing a differential pricing practice to contact FARS to discuss the proposed practice. FARS can determine if the practice is defensible and, if so, what documentation should be prepared or retained to justify the practice. Please  refer to FARS’ Recharge Centers webpage for additional information.

Does the recharge center allow prepayment of services?

Ideal Answer: NO. Federal cost principles require that costs charged to Federal customers be based on when goods or services are actually provided. Recharge centers should refuse any internal customer requesting that the center bill an account for services not yet performed. Please refer to FARS’ Recharge Centers webpage for additional information.

Does the recharge center provide a significant amount of services to the private sector?

Ideal Answer: NO. State law, Regent’s policy, and University policy all restrict competition with the private sector. Because recharge center goods and services are subsidized and the University enjoys non-profit status, the University has a definite pricing advantage over a comparable private sector company. Consequently, to avoid allegations of competition from private sector companies, goods and services provided to the private sector should not be occurring. If they do, transactions with external customers should generally be isolated, infrequent, and rare.

The University establishes and subsidizes recharge centers solely for the benefit of University users. Significant business with external customers can trigger an unrelated business income tax. Consequently, external customers using the center should have a documented affiliation with the University or directly support the University’s mission. Please contact FARS to discuss whether an external customer qualifies as having a documented affiliation with the University. Please  refer to FARS’ Recharge Centers webpage for additional information.

Is capital equipment paid from the recharge center’s operating account?

Ideal Answer: NO. Capital equipment should be paid from the recharge center’s depreciation account. Federal cost principles require that recharge centers recover the cost of capital equipment through depreciation or use allowances. Consequently, cost principles will only allow charging depreciation expense to the center’s operating account over the equipment’s useful life, as opposed to charging the full cost of the equipment in the year acquired. Please refer to FARS’ Recharge Centers webpage for additional information.

Does the equipment depreciation schedule include equipment paid for from Federal sources?

Ideal Answer: NO. Depreciation cannot be charged to the recharge center’s operating account if the equipment was originally paid for with Federal funding. This would result in a double recovery of costs, once through depreciation and once through the original outlay by the Federal source. In situations where equipment is paid for with Federal and non-federal funds, the recharge center can recover those costs paid for with non-federal funds. Please  refer to FARS’ Recharge Centers webpage for additional information.

Is the recharge center’s depreciation (equipment) account used only for capital equipment?

Ideal Answer: YES. University policy restricts this fund for capital equipment purchases. The recharge center’s depreciation account is funded by monthly transfers from the center’s operating account in amounts equal to the depreciation recorded in the operating account. The purpose of these transfers is to provide replacement funding for the equipment being depreciated. If recharge centers use this funding to pay for other operating costs, the pool of funds in the depreciation account will be eroded and not be sufficient to purchase the replacement equipment when needed. Recharge centers lacking funding in their depreciation account for the purchase of new equipment must either identify other funding sources or request an equipment loan from FARS. Please  refer to FARS’ Recharge Centers webpage for additional information.

Sponsored Programs Administration

Are Principal Investigators (PI)/Project Directors (PD) and those responsible for sponsored programs administration familiar with Federal OMB Circulars A-21 and A-110?

Ideal Answer: Yes. It is very important that those responsible for sponsored programs administration are familiar with these regulations. OMB Circulars A-21 and A-110 are the federal regulations that govern sponsored programs for higher education. They detail requirements for allowable costs, effort reporting, and other requirements. These Circulars can be located at the Federal Office of Management and Budget website. Please see the Office of Sponsored Programs' (OSP) website for other sponsored program information.

Is each sponsored project's financial statement of account and grant and contract financial accounting summary reconciled monthly?

Ideal Answer: Yes. This is the responsibility of each PI/PD. It should be done by the PI/PD, or someone on their staff who is responsible for the administration of the project. This should be done monthly so discrepancies can be resolved in a timely manner. Please see the OSP website for additional sponsored program information.

Is the most recent, federally negotiated Facilities and Administrative (F&A) cost percentage being used in research proposals?

Ideal Answer: Yes. This rate can change every two to three years, so it is good to refer to the following webpage as it provides updates on the current F&A rate: UNI F&A Rate Agreement. Please see the OSP website for additional sponsored program information.

Is written approval obtained from federal sponsors prior to reducing effort by more than 25% of what was committed, or when the PI/PD are going to be absent from the project for more than 3 months?

Ideal Answer: Yes. The federal government requires that written approval is requested and granted prior to either of these situations. Please see the OSP website for additional sponsored program information.

Is non-faculty support staff effort certified by the PI/PD or direct supervisor?

Ideal Answer: Yes. The person certifying effort must have "first hand" knowledge of the effort expended. The PI/PD or direct supervisor should certify effort for non-faculty support staff. Additional effort reporting information can be located at OSP’s Effort Reporting webpage. Please see the OSP website for additional sponsored program information.

Is effort certification based on total University funded effort?

Ideal Answer: Yes. The definition of 100% effort is total University funded effort. This includes all effort required to complete the tasks of one's position, regardless of hours worked per week. Additional effort reporting information can be located at OSP’s Effort Reporting webpage. Please see the OSP website for additional sponsored program information.

Travel

Does the department head or project manager (or department head’s supervisor for the department head) approve each employee’s travel in advance of travel using the Travel Authorization form?

Ideal Answer: YES. Department head approval documented on an employee’s travel authorization form indicates the employee has been properly approved to travel on university business, entitled to reimbursement from the University for travel expenses, and provides documented proof for worker’s compensation, if necessary. Please refer to Office of Business Operations’ (OBO) Travel Guidelines for additional information.

Does the department direct traveling employee to OBO’s website to review travel guidelines in advance of travel?

Ideal Answer: YES. OBO’s Travel Guidelines provide information, restrictions, and recommendations for university employees travelling on university business that each university employee should be familiar with in advance of traveling.

Does the department advise employees that the meal limits are limits on spending, not a per diem?

Ideal Answer: YES. Travel regulations state that meal claims should reflect actual/reasonable expense not to exceed the maximum daily allowance. Please refer to OBO’s Travel Guidelines for additional information.