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Accounting procedures

ISRS Accounting procedures

Reimbursements

Avoid Overstating Revenue

Reimbursements from another fund or institution should be recorded as an expenditure reduction, not as revenue. Wherever possible, you should charge an expense directly to the appropriate fund, and eliminate the need for a reimbursement. For example, if payroll is divided equally between two funds then the State Colleges and Universities Personnel/Payroll System assignment distribution should be divided between the funds.

Whenever possible, you should reduce the appropriate object code in the fund receiving the reimbursement. For example, if the reimbursement is for supplies, then reduce the supply object code. In some cases, you cannot directly relate specific costs to the amount of the reimbursement. The reimbursement may be a percentage of payroll, purchase services, and supplies. Institutions must have a reasonable basis for the calculation of the reimbursement. In this case, you may reduce object code 7501 (Indirect Costs) in the fund receiving the reimbursement.

In a few cases, it is appropriate to recognize revenue from inter-fund activity. Some examples where it is appropriate to record revenue and expense are:

• An enterprise fund such as food services sells products to another department
• An academic program produces materials and sells them to other departments
• A customized training department provides a workshop which employees of the college attend

The following accounting entries should be used to record reimbursements:

Reimbursement of Direct Expense

• If both cost centers are in the same bank, enter an Expenditure Correction transaction on the AC0212UG screen.
• If the cost centers are in different banks, enter a Payment Voucher (PV) and General Receipt by Cost Center on the AR0009UG screen.

Fund being Charged
DR		3000		Supplies (for example)
	CR		8110	Cash

Fund Receiving Reimbursement
DR		8110		Cash
	CR		3000	Supplies (for example)

Administrative Cost Allowance and Indirect Cost Reimbursement

• Request the money from the Granting Agency (Federal, State, Private, etc), receipt the revenue into the grant cost centers using object codes 9401, 9402, etc.
• To receive grant indirect revenue enter a Payment Voucher (PV) to pay the grant indirect cost and General Receipt by Cost Center on the AR0009UG screen.

Fund paying Indirect Cost
DR		7501		* Grant Indirect Cost
	CR		8110	Cash

* Used to move earned admin allow or indirect cost from grant accounts to spending accounts.

Fund Receiving Reimbursement
DR		8110		Cash
	CR		7501	Grant Indirect Cost

The revenue and expense code amounts must equal.

Sale of Product to Another Fund

• If both cost centers are in the same local bank account enter an Expenditure Correction transaction on the AC0212UG screen.
• If the cost centers are in different bank accounts enter a Payment Voucher (PV) and General Receipt by Cost Center on the AR0009UG screen.
• If both cost centers are in the state treasury, enter a Payment Voucher (PV2 or PV3) and General Receipt by Cost Center with a State treasury flag of Y on the AR0009UG screen.

Fund being Charged
DR		1850		Contracted Food Service (e.g.)
	CR		8110	Cash

Fund Receiving Reimbursement
DR		8110		Cash
	CR		9337	Sale of Food (e.g.)

REFUNDS

Revenue refunds are treated as a reduction to revenue (contrary to SWA, where refunds were handled as expenditures). Refunds must be posted back to the original revenue code.

Expenditure refunds are treated as a reduction to expenditures. Expenditure refunds must be deposited using the original expenditure code. This includes prior year expenditure refunds.

If you have questions or comments please email us (accounting@so.mnscu.edu) or refer to the staff directory link at the top of this page for additional contact information.