| VOLUME: I |
POLICIES RELATED TO ACCOUNTING ADMINISTRATION |
| SUBJECT: |
Depositing of Revenue for the Sale of Goods and Services at the IU Foundation |
| SOURCE: |
Financial Management Services |
| DATE ISSUED: |
August 2002, Revised January 2004 |
| POLICY NO.: |
I - 460 |
| RATIONALE: |
To create guidelines for when funds generated through the sale of a good or service (sometimes coded as “other income”) can be deposited or transferred to the Indiana University Foundation (IUF) from Indiana University (IU).
The IUF was established to provide IU with services that include fundraising, money management and spending flexibility with gift dollars.
Funds received by IUF that do not relate to these core services jeopardize the foundation’s tax-exempt status.
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| POLICY: |
Payments made to IUF by IU can only be made when goods or services have been provided to the university by IUF. Therefore, revenues generated with university resources through the sale of goods or services cannot be deposited or transferred to IUF.
This includes program income generated through sponsored research.
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| PROCEDURES: |
Revenues generated using university resources through the sale of goods or services must be deposited in an IU account. Funds necessary for expenditures related to revenue generating activities that are unallowable expenditures by university policy may be transferred to the Foundation with documentation.
This transfer is allowable if revenues for the activity exceeded activity expenditures (according to Indiana University Financial Institutional Policy I-50).
The process for the documentation is as follows:
- An IU disbursement voucher (DV) must be processed and made out to IUF.
- The account used on the DV must be the same account receipted the related revenue generating activity.
- Copies of the receipts (of invoice) should be attached to the DV.
- In addition, attached to the DV should be the IUF check request, with the original receipts (or invoice) attached for the reimbursement
or payment of the expense.
- Campus administrative approval must be recorded on the DV in order for it to be processed by accounts payable.
This would be accomplished via ad hoc routing in the FIS. Campus approval is confirming that the payment taking place
is related to a revenue generating activity, that the expense is not allowable by the university, but appropriate
to the occasion and that enough revenue was earned to support the unallowable expense.
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| DEFINITIONS: |
University resources include use of IU facilities and equipment, faculty and staff time, and funds consumed for the revenue-generating project.
Unallowable expenditures are expenditures that through IU financial policy have been identified as unallowable with university resources. It is understood that most of these expenditures are legitimate business expenses, which is why reasonable unallowable expenditures related to the revenue generating activity can be covered out of the IUF with a transfer from the university.
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| CROSS REFERENCES: |
- I-450, Establishing and Generating Revenue Producing Activity
- http://www.fms.indiana.edu/cg/imp_notice/00-6.asp, Important Notice 00-6, Program Income
- http://www.fms.indiana.edu/cg/imp_notice/93-1.asp, Important Notice 93-1, Deposit of Funds on Contract and Grant Accounts
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| RESPONSIBLE ORGANIZATION: |
Financial Management Services |
