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DEPARTMENT ADMINISTRATION: AN OVERVIEW
Agenda and Table of Contents for 11/11/05
Welcome Kathy Illian, Trainer, Financial Services ----------
Security and Training Update Kathy Illian, Trainer, Financial Services Page 2
Subcontracts Susan Harman, Subcontracts Specialist, OGC Page 9
Procurement Normandy Roden, Director, PSC Page 27
Internal Audit, Internal Controls Jean Stewart, Director, Internal Audit Page 28
Internal Service Centers Shaun McMullin, Manager, Finance Page 29
GAR, GIR, and PIE Terry Pew, Manager, Finance Page 54
Speedtype (Chartfield) Set-up Jeanne Paradeis, Manager, Finance Page 72
Facilities and Administrative Costs Kim Huber, Controller, UCDHSC Page 73
Speaker Contact Information Page 82
Evaluations Attendees -----------
Security and Training Update
Learning Objectives:
Understand the new access request forms for Finance and CIW Understand the new “Fiscal Code of Ethics” training requirement
Effective November 1, 2005, anyone seeking access to any of our financial systems – Finance and Procurement, Human Resources, Procurement Card, and/or Central Information Warehouse (CIW) -- will need to self-enroll in the Blackboard course, "Fiscal Code of Ethics Training" (see Blackboard Enrollment ); will need to complete the course --only once regardless of how many systems are to be accessed--; and will need to submit the certification as noted in the course prior to any access being granted.
For Finance, Human Resources, and CIW, acquiring access is a three-step process:1. With supervisor’s input, determine systems and access profiles needed2. Submit the appropriate forms:
o Finance and Procurement: http://www.cusys.edu/security/Form_Financial_System_Access.pdfo CIW: http://www.cu.edu/security/CIW_Request_Form.doco HR: http://www.cusys.edu/security/ps/HR_Access_Req.pdf
3. Take online and / or instructor-led training as required
To register for Finance and Procurement training:
For required instructor-led training: New operators will need to self-enroll in the instructor-led Finance and Procurement training. Fill out and
submit the form at http://www.uchsc.edu/finance/PS_Registration.htm to do so; training is held at both UCD and Fitzsimons monthly. (UCDHSC employees and affiliates are welcome to attend at either location).
For required online (Blackboard) training: New operators will be automatically enrolled in the Blackboard Financial and Procurement training shortly
(24-48 hours) after your Financial System Access Request Form has been submitted to the Financial System Access Coordinator.
New operators, or those who have not yet completed the “Fiscal Code of Ethics” course, will need to self-enroll in the Blackboard Fiscal Code of Ethics Training
Training For CIW access:
For required online (Blackboard) training: New operators, or those who have not yet completed the “Fiscal Code of Ethics” course, will need to self-
enroll in and complete the Blackboard “Fiscal Code of Ethics Training”. For instructions, see:http://www.cu.edu/policies/Fiscal/Fiscal-Code-of-Ethics_Training.pdf
Training For Human Resources access:
Follow the steps at: http://www.cu.edu/pbs/hrms/training/index.html New operators, or those who have not yet completed the “Fiscal Code of Ethics” course, will need to self-
enroll in and complete the Blackboard “Fiscal Code of Ethics Training”. For instructions, see:http://www.cu.edu/policies/Fiscal/Fiscal-Code-of-Ethics_Training.pdf
PLEASE NOTE: Procurement Card access and training is arranged through the Procurement Service Center:http://www.cu.edu/psc/purchasing/procurementcard/
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Subcontracts
Determine when a subcontract is needed Understand the overall processes and procedures related to subcontracts
The following documents can be viewed in its most current format at:http://www.uchsc.edu/ogc/admin/sub/sub_qa.pdfhttp://www.uchsc.edu/ogc/subawards.htm (see Word document)
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REQUEST FOR SUBRECIPIENT AGREEMENT Exhibit B
or Amendment to existing Subrecipient Agreement
COMPLETE ONE FORM FOR EACH SUBRECIPIENT
SECTION A 1. UCDHSC Principal Investigator:
Titles (i.e. MD, Professor, etc): School: Department/Division if applicable:
2. Sponsor:
3. Sponsor’s Award #:
4. Project Title:
5. Proposal Routing #:
6. HSC Project #: 2-5-
7. Speed Type #:
8. Expected period of Subrecipient’s Participation in this project (i.e., Project Period): to
9. Current BUDGET PERIOD of Subrecipient Agreement to
10. Was this Subrecipient proposed in the funding application? Yes or No? Please explain.
11. If not, have you subsequently obtained approval from the Sponsor for this Subrecipient? Yes or No? Please explain.
12. Is PHI (Protected Health Information under HIPAA) being provided from UCDHSC to the Subrecipient? Yes or No, or explain
13. Is PHI being provided from Subcontractor to UCDHSC? Yes or No, or explain
PLEASE ENTER ANY COMMENTS OR SPECIAL INSTRUCTIONS
SECTION B
Subrecipient’s Full Legal Name:
Subrecipient’s Principal Investigator: Person responsible for performing, or supervising, the work to be performed under this agreement.
Name and Degree: Title or Positions: Institution Name: Street Address: City, State & Zip: Phone: E-mail Address:
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Subrecipient’s Contractual/Legal Contact: Subrecipient’s Institutional Official, who will be signing the agreement and/or who should be notified (in addition to the PI) of any changes to the agreement.USUALLY NOT THE SAME PERSON AS ABOVE
Name and Degree: Title or Positions: Institution Name: Street Address: City, State & Zip: Phone:
SECTION C One-Year Budget Information(for the Current period – indicated in Section A-8)
DELETE ANY LINES THAT DO NOT APPLY
Personnel $ Or Salary $
Benefits $
Consultant Costs $ Supplies $ Travel $ Patient Care
Inpatient $ Outpatient $
Other Expenses $
Equipment $ ? prior approval requiredAlterations/Renovations $ ? prior approval required
USE THIS SECTION ONLY IF YOUR SUBRECIPIENT IS ALSO CONTRACTING A PORTION OF THE WORK TO A SUBRECIPIENT.
Consortium/Contractual $ ? prior approval required
Subrecipient Name Personnel $ Supplies $ Travel $ Patient Care $ Other Expenses $ Direct Costs $ F&A $ Total Costs $
Total Direct Costs $ F&A Costs @ % $ note any exclusions here (e.g., rent)
Total Costs $
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Regarding F&A: Enter the F&A rate (%) and amount applicable to this Subrecipient agreement. If it is 0, then enter 0. Use the Subrecipient’s Federally negotiated/approved F&A rate
(G&C may request documentation of Subrecipient’s rate and effective date.) If there is an F&A rate cap on the award, use the lower rate.
For NIH Grants Use the Subrecipient’s Federally negotiated/approved F&A rate
THAT WAS IN EFFECT AT THE BEGINNING OF THE COMPETITIVE CYCLE OF THE GRANT.
SECTION D –PLEASE COMPLETE ALL INFORMATION UCDHSC Department Information:
Name of Person Name of PI Who monitors the subrecipient? (If different from person monitoring the subrecipient)(Receives invoices & responsible for contactingGrants and Contracts when necessary)
Title or Positions: Title or Positions: Department/Division: Department/Division: Building Name: Building Name: Street Address/Room: Street Address/Room P. O. Box: P. O. Box: City, State, Zip: City, State, Zip: Phone: Phone: Campus Box: Campus Box: Email: Email: Fax : Fax :
SECTION EPROVIDE A STATEMENT OF WORK - THIS IS A KEY COMPONENT IN THE SUBRECIPIENT AGREEMENT
Brief Description (see notes below):Subrecipient will be responsible for:
Enter a brief description of what you are expecting from the Subrecipient and their PI. The Statement of Work should attempt to answer the following questions:
1. What is the purpose or objective(s) of the work to be performed by the subrecipient?
2. Provide an explanation of the work to be performed.
3. Provide a timetable or schedule of the work to be performed, if applicable.
4. Provide specification of how the work’s progress or results are measured.
5. Identify any deliverables, products, or expected outcomes.
If the work you are expecting is better suited to a lengthy, detailed Statement, provide a copy and we will include it as an Exhibit to be attached to the agreement (or amendment).
Procurement
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Learning Objectives:
Understand the PSC resources Learn about the Procurement Newsletter
The PSC home page and link to the newsletter are located at:http://www.cu.edu/psc/index.html
Internal Audit and Internal Controls
Learning Objectives:
Understand the mission of the Internal Audit department
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Understand internal controls and your role with them
The Internal Audit home page is located at:http://www.cusys.edu/audit/
Internal Service Centers
Learning Objectives:
Understand the definition and purpose of Internal Service Centers Understand the processes and policies involved with Internal Service Centers
The fiscal policy and related exhibits below are on the web in their most current form at:
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Exhibit B
HOW TO DO A COST STUDY
A cost study requires that the total costs involved with performing a service be identified and quantified. These costs are identified over a certain period of time such as a fiscal year and the volume of goods or services sold over that same time period are identified. The total identified costs are divided by the total volume of goods or services sold to determine the cost per occurrence.
Each Service Center will use the budget it develops for the next fiscal year as the basis for its cost study to set the rates for the next fiscal year. Most Service Centers will have one operating program and one renewal and replacement program, but offer multiple services. This program information will be helpful in identifying total costs, but will not provide everything that is needed to perform the cost study. Identifying time spent per service, supplies used per service, volume of activity, and statistics for allocating indirect costs are examples of information that will have to be accumulated outside of the accounting system. The estimated sales volume and the billing rates should be used to determine the budgeted revenue for the service center. If the Service Center provides several different significant services, the Service Center manager should consider creating separate programs for each activity.
Usually there are two types of costs that need to be included in your rate setting calculation - direct costs and indirect costs. Direct costs are costs that can be directly identify to the service or goods being provided. Examples of direct costs are salaries and benefits for those directly providing the service and direct supplies. Indirect costs are costs that cannot be directly identified to the service provided. Examples of indirect costs include administrative salaries and benefits, supplies and general administrative recharges and facility allocations.
Unless only one service is provided, both the direct and indirect costs will need to be identified to each of the different services. This will require determining the time spent on the different tasks for each person and identifying the supplies used on each activity. This may require an estimate. The indirect costs need to be allocated across the different services provided so that they are included in the final rates.
There are two primary methods of identifying the direct costs to each service:
1. The first method, which is called “specific identification,” involves identifying the average time spent by each person on each individual occurrence of each procedure as well as identifying the average cost of supplies and average equipment time. This will usually require keeping records for a sample of procedures and averaging the results. The time increments for labor are converted to dollars based on the hourly pay of the employees and the time increments for equipment are converted to dollars based on the annual depreciation and maintenance and repair costs of the equipment. Supply costs should be based on the cost of the most recent purchase. Depreciation information for equipment is available from the Space and Property Management section of Finance.
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2. The second method of identifying direct costs is called the “gross” method. With this method, costs are identified over a period of time (usually at least six months). It requires identifying percentages of time that employees spend with each type of procedure, the percentage of supplies used for each type of procedure and the percentage of time equipment is used. This method is normally used when there are not many different procedures and if people, supplies, and equipment can be easily identified to each type of procedure. The percentages are converted to dollars based on the total salaries and benefits of the individuals, the total dollars spent on supplies, and the total depreciation and maintenance of equipment.
There are three primary methods that can be used to identify indirect costs:
1. The first method is to use a percentage mark-up. This method is often used in re-sale operations such as a bookstore or pharmacy. The total identified indirect costs would be divided by the total identified direct costs for all tasks performed by the service center. This percentage would then be multiplied times the direct cost billing rate and the result added to the direct cost billing rate to derive a total rate.
2. The second method of allocating indirect costs is similar to the percentage mark-up but requires identifying the total direct costs for each service, derive a percentage relationship to total for each of the direct cost sub-totals, and apply these percentages to the total indirect costs. The results are then added to the total direct costs for each service to calculate a total billing rate.
3. The third method is to attempt to identify the indirect costs to each service being provided based on some allocation statistic such as square feet used or time spent. Indirect costs for each service would then be added to the direct costs to derive a total rate per service.
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Service Centers COST STUDY EXAMPLE
ABC Department
1. Project Annual Expenditures
Use the instructions found in the Budget Section (III.B) of this policy to create the operating plan for the Service Center for the next fiscal year.
Budget Summary for Next Fiscal Year FTE Budget
Salaries/Benefits (Account Codes 400001-439999) 3.0 $100,000Operating Expenses (Account Codes 450000-699999) 47,000Travel (Account Codes 700001-709999) 1,000Cost Allocations (Account Codes 960100-960200) 4,500Equipment Depreciation Transfer* (Account Code 997100) 2,000
Total Expenses 3.0 $154,500
*Periodic transfers will be made to a Renewal and Replacement program in the Plant Fund for future equipment acquisitions. These transfers will be based on actual depreciation calculations for existing equipment, and equipment purchased and put into use during the fiscal year for which the rates are being calculated.
2. Identify Unallowable Expenses (may require a separate program)
Less: Unallowable Expenses ( 300) Total Allowable Cost Study Expenses $ 154, 200
3. Allocate Expenditures of Services
The ABC Department provides three different laboratory tests, Test A, B and C.Identify direct expenses for each type of service provided.
Direct Expenses Test A Test B Test C Total
Salaries/Benefits FTE FTE FTE FTEJones, Mary .50 $20,000 .25 $10,000 .25 $10,000 1.00 $ 40,000Smith, John .43 15,000 .14 5,000 .43 15,000 1.00 35,000
Operating Expenses 0 22,000 0 8,000 0 14,000 0 44,000Equipment Depreciation 0 400 0 300 0 800 0 1,500
Total Direct Expenses .93 $57,400 .39 $23,300 .68 $39,800 2.00 $120,500
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4. Identify Total Indirect Expenditures
Indirect Expenses:Salaries/Benefits 25,000Operating Expenses 3,000Travel 1,000Cost Allocations 4,500Equipment Depreciation 500
Total Indirect Expenditures 34,000
5. Adjust Indirect Expenditures for Unallowables
Eliminate unallowable expenditures.
Less: Unallowable Expenses ( 300)Adjusted Indirect Expenses 33,700
6. Distribute Indirect Costs to Each Service
Divide the total allowable indirect expenses ($33,700) by the total direct expenses ($120,500) to establish an indirect/direct cost ratio. (This is method #2 from Exhibit B. Methods #1 or #3 explained in Exhibit B are also acceptable.)
Indirect/Direct Expense Ratio 27.97%
7. Apply Indirect Cost Ratio
Multiply the indirect/direct cost percentage times the direct costs for each type of procedure.
Test A Test B Test C Total
Indirect Expense per Test $16,053 $6,516 $11,131 $33,700
8. Combine Direct and Indirect Costs
Add the direct costs and indirect costs for each type of procedure.
Total Direct & Indirect Expenses at 6/30/XX $73,453 $29,816 $50,931 $154,200
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9. Adjust for Fund Balance
Adjust total direct and indirect expenses by the projected current year increase or decrease in the 60-day fund balance limit. In this example, fund balance is projected to increase by $10,000 at the end of this fiscal year. This means the current year rates generated $10,000 in excess revenue. As a result, the $10,000 needs to be subtracted from the total expenses for each procedure. This is done by allocating the $10,000 across the three procedures based on the percentage relationship of the identified expenses for each procedure.
Test A Test B Test C Total
% to Total 47.6% 19.3% 33.1%Projected Fund Balance(Increase) Decrease (4,760) (1,930) (3,310) (10,000)
Adjusted Total Expenses $68,693 $27,886 $47,621 $144,200
10. Estimate Sales Volume
Identify the volume of procedures projected to occur for the year.
Number of Procedures 1,000 750 800 2,550
11. Calculate Billing Rate
Divide the total adjusted expenses by the total projected volume.
Billing Rates for Next Fiscal Year $68.69 $37.18 $59.53
General Administrative Recharge (GAR), General Infrastructure Recharge (GIR), and Pooled Investment Earnings (PIE)
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Learning Objectives:
Understand how and why GIR and GAR are calculated and assessed Understand how and why PIE is calculated and distributed
These fiscal policies are on the web in their most current form at:http://www.ucdhsc.edu/admin/policies/
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Speedtype (Chartfield) Set-Up
Learning Objectives:
Understand the speedtype setup process/ paperwork Understand the program attributes determination process
Facilities and Administrative (F&A) Costs
Learning Objectives:
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Understand what F&A is and why it is assessed Understand the process of F&A assessment
The Finance and Administration Newsletter is available at:http://www.uchsc.edu/news/
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Speaker Contact Information
Kathy Illian Trainer, Financial Services [email protected]
Dave Tice Accountant, Finance [email protected]
Amy Gannon Director, Financial Compliance [email protected]
Eileen Teel Director, Student Employment [email protected]
Susan Harman Subcontracts Specialist, OGC [email protected]
Normandy Roden Director, PSC [email protected]
Jean Stewart Director, Internal Audit [email protected]
Shaun McMullin Manager, Finance [email protected]
Terry Pew Manager, Finance [email protected]
Jeanne Paradeis Manager, Finance [email protected]
Kim Huber Controller, UCDHSC [email protected]
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