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Accounting & Transactions

This site provides the technical details on journal entries, accounting elements, UBIT, reserves, and annual transactions for SSAs.

More information about establishing, managing, and governing processes and policies for UCSD SSAs can be found on the main Sales and Service Activities page.

Billing

  • Cash handling and billing procedure for SSAs, shall be subject to the approval of Student Financial Solutions and BFS-GA.
  • Activities shall maintain records to substantiate Recharge and other billing transactions, including requisitions, purchase orders, or similar written verification of individual user requests for goods or services.
  • Activities shall provide users with a receipt or similar written confirmation for each sale of goods or services at the time the sale is made. In addition, recharge customers shall be provided a detailed monthly statement for each customer recharged.
  • Activities shall initiate Recharge or other billing transactions when goods and services are provided. Activities shall not initiate Recharge or other billing transactions in advance of providing goods and services. Progress Recharges or billings may be made for jobs in process.

For more information about billing transactions, please contact BFS-GA.

Service Agreements

  • A Service Agreement is a written legal agreement between the University and an external source containing terms and conditions under which goods or services are to be furnished by the University. Service agreements are normally issued by approved SSAs for ongoing, continuous goods/services.
  • SSAs with both internal and external sales are still considered to be a single operation and would be classified as either a SSA, Clearing Activity, Other-Income Producing Activity. Only operations with purely external sales are classified as Service Agreements by Non-SSA.

Accounting Elements

  • Each activity will have access to the SSA fund in the appropriate COA series by BFS-GA.  The fund is referred to as the “operating fund.” Operating fund is the accounting mechanism used to record operating costs, UC Recharges and income.
  • If there will be sales to non-UC customers, a revenue account code will be established. A revenue account code is also referred to as an “income account.” 
  • A new organization code will be established. 
  • A program code of xxx030 is generally used for operating expenses and xxx070 for cost of goods sold. 
  • A specific expenditure account will be established if departments will be recharged. 
  • An index code will be associated with the above COA elements, a.k.a. as IFOP = Index, Fund, Organization and Program codes. 
  • A rule class is generally established for a SSA as a mechanism to record Recharges. 
  • In addition to the operating fund, access to a Renewals and Replacement fund (76xxxx), if equipment is involved, and an equipment plant fund will be established, which is the operating fund with a 9 as the last character, e.g., 640009. 
  • If sales to non-UC users are involved, access to a Differential Income reserve fund (75xxxx) will also be established.

Annual Transactions

  1. Equipment Depreciation

Provisions/reserves for replacement are funded from enterprise operations by charging the operating fund and crediting the reserve account for Depreciation expense. The following are the financial entries to record Depreciation expense:

  • Debit (-): index, operating fund, organization, transfer account code 720500
  • Credit (+): index, R& R fund, organization, transfer account code 723000

Rule class FB08

  2. Differential Income

Effective fiscal year 2020/21, campus will assess SSAs the central administration's portion of differential income.

SSAs are allowed to accumulate funds in the OFC Differential Income Fund.

Each Vice Chancellor area may also require a minimum Differential Income portion to be remitted to the Vice Chancellor responsible for the activity. Consult your Vice Chancellor’s office for more information.

Prior to fiscal year 2020/21

Until the campus is able to provide an automated process to record Differential Income transfers, the department financial manager is responsible for recording the proper entries in the ledger. The entries must be recorded in the same fiscal year that the income is received. Failure to record the entries may result in notifying the department’s Vice Chancellor.

SSAs are allowed to accumulate funds in funds beginning with 75xxxx for Differential Income. Following are the financial entries to record Differential Income:

  • Debit (+): index, operating fund, organization, transfer account code 720702
  • Credit (-): RMGDIFI, reserve fund, organization, transfer account code 720702
  • Credit (-): index, reserve fund, organization, transfer account code 720702

Rule class FB08

UBIT

Unrelated business income is a type of income resulting from sales of goods or services to individuals or non-University entities. If sales are not substantially related to University educational or research purposes, proceeds from the sales are considered to be unrelated business income and are subject to Federal income tax reporting requirements. Example includes income sale of protein sequencing to the general public.

For more information on UBIT, see the UBIT section of the SSA Guidance or contact BFS-GA.

Reserves

  1. Equipment Reserves

An equipment R&R reserve fund is the accounting mechanism used to segregate equipment cost recovery funds from the operating fund. Reserves are accumulated to replace equipment to ensure that the facilities are operated on a continuous basis.

The funds may be used to replace or upgrade the inventorial and non-inventorial equipment in the activity but may not be used for operating costs of the activity or for the operating costs of any other SSA. R&R reserve funds are also used to record Depreciation. Expenditures for salaries, benefits and travel are not allowed. An equipment R&R reserve fund is not allowed to have a deficit balance. 

If equipment is to be used for an activity, the R&R fund is established once the activity is approved. The transfers to record the Depreciation expense begin when the equipment is put to use in the approved SSA. 

With Vice Chancellor approval, the funds can be used to purchase equipment for another self-supporting activity or equipment for other departmental activities.

  1. Differential Income Reserve

A Differential Income reserve fund is the accounting mechanism used to segregate and accumulate overhead cost recovery (Differential Income rate) from sales of goods or services to non-University individuals or entities. A Differential Income fund (75xxxx) may be established if it is expected that sales to outside users will be made. A Differential Income fund is not allowed to have a deficit balance.

As an example, if your activity is on campus and total revenue recorded in account 5xxxxx is $100,000 and the overhead factor is 16% to campus administration and 29% to departmental support:

The Differential Income to campus administration is (Total Revenue/1.45) x .16 or (100,000/1.45) x .16= $11,034.48

The Differential Income to departmental support is (Total Revenue/1.45) x .29 or (100,000/1.45) x .29= $20,000.00

Listed below in the tables are the standard Differential Income calculations. Consult your Vice Chancellor if an additional Vice Chancellor Differential Income overhead portion needs to be remitted.

FULL DIFFERENTIAL INCOME CALCULATION

 

Calculation of On-Campus Full Differential Income

 

Central Administration Portion

(Total Revenue/1.45) x .16

Departmental Support Portion

(Total Revenue/1.45) x .29

Calculation of Off-Campus Full Differential Income

 

Central Administration Portion

(Total Revenue/1.22) x .08

Departmental Support Portion

(Total Revenue/1.22) x .14

Calculation of Ship Use Full Differential Income

 

Central Administration Portion

(Total Revenue/1.18) x .06

Departmental Support Portion

(Total Revenue/1.18) x .12

MINIMUM DIFFERENTIAL INCOME CALCULATION*

 

Calculation of On-Campus Minimum Differential Income

 

Central Administration Portion

(Total Revenue/1.16) x .16

Departmental Support Portion

NA

Calculation of Off-Campus Minimum Differential Income

 

Central Administration Portion

(Total Revenue/1.08) x .08

Departmental Support Portion

NA

Calculation of Ship Use Minimum Differential Income

 

Central Administration Portion

(Total Revenue/1.06) x .06

Departmental Support Portion

NA

 

*Please note that the table on minimum Differential Income calculation lists only the minimum Differential Income that is required for central administration.  Each Vice Chancellor area may also require a minimum Differential Income portion to be remitted to the Vice Chancellor responsible for the activity.  Consult your Vice Chancellor’s office for more information.