TF-Q-1. How do you account for funds remaining after a fixed price contract is completed?
TF-A-1. Amounts received on fixed price contracts must pay for all direct costs associated with the contract including the reimbursement to other funds / budget codes for goods/services/personnel cost incurred by those funds / budget codes that are allocable to the contract. After all costs are settled, the remaining funds in the fixed price contract fund shall be moved from the Contract and Grant project (ledger 5) to a residual trust fund project (ledger 7). Expenditures from this residual trust fund must generally follow the same spending guidelines as those for State appropriated funds. Expenditures may also include funding of new faculty “start-up packages”, for expenses listed in the offer letter approved by the Dean's Office. Moving expenses paid from these funds must be in accordance with the University's POL 05.15.3 "Non-Salary and Deferred Compensation" policy.
TF-Q-2. How are workshops/conferences held by the University that are not part of a contract or gift activity accounted for?
TF-A-2. Workshops/conferences held by the University that are not part of a contract or gift activity must be accounted for in a State appropriated receipt project (lower level ledger 3). However, when acting in an agency capacity for another organization, the University would account for the activity in an agency project (ledger 9).
TF-Q-3. How can food be provided at receipt-supported workshops/conferences that are accounted for in the budget codes?
TF-A-3. Food can be provided at receipt-supported workshops/conferences that are accounted for in the budget codes if the event is planned, meets the State budget requirements for sponsoring an External Conference, and a registration fee is charged inclusive of the meals and other related costs. The food amounts should be charged to a special activity – extension instruction and public service trust fund project (upper level ledger 3) established exclusively for workshops/conferences food costs. Any amount remaining in the special activity project after the workshop/conference shall be deposited back to the State appropriated receipt project.
TF-Q-4. How do you clear out old trust funds with residual cash?
TF-A-4. Trust funds with unrestricted cash balances that have become inactive and for which the original trust fund purpose has been meet should be dispersed in accordance with the fund’s existing distribution requirements. For trust funds having no requirements on distributions, the appropriate Dean or Vice Chancellor shall determine the use of the residual balance. Expenditure of these residual funds is subject to the use requirements placed on the original funding. For example, residual amounts for old Sales and Service Trust Funds must follow the same spending guidelines as those for state appropriated funds.
TF-Q-5. What are Sales and Service Trust Funds?
TF-A-5. Sales and Service Trust Funds include Auxiliary and Related Trust Funds and Other Contract Operations Trust Funds. These Sales and Service Trust Funds follow the same spending guidelines as those for State appropriated funds except for “spending guideline” exceptions given to certain student auxiliary trust funds.
TF-Q-6. What type of activities can be accounted for as a trust fund?
TF-A-6. The University may authorize trust funds for the following activities:
- Endowment principal and income funds
- Debt proceeds, reserves and service funds
- Institutional Trust Funds including:
- Gifts, devises and bequests
- Federal contracts, grants and agreements
- Non-federal contracts, grants and agreements
- Extracurricular activities of students
- Activities supporting scholarship and student activity programs
- Self supporting auxiliary enterprises
- Fees for service of health care professionals
- Moneys received for disposition of real property
- Institutional forest and forest farmlands operations
- Centennial campus activities
- Special Funds including:
- Agency funds
- Intercollegiate Athletics
- F&A receipts
TF-Q-7. What are Auxiliary and Related Trust Funds?
TF-A-7. Auxiliary and Related Trust Funds include student auxiliaries, institutional auxiliaries, and service center operations. Student auxiliaries are business activities that support the needs of the student, such as housing, dining, the bookstore, and the student center. Institutional auxiliaries are internal sales and service activities that support the needs of the institution, such as central stores, telecommunications, the creamery, and parking. Service center operations are internal sales and service activities that support specific needs of research programs. Auxiliaries are self-supporting based on charges to the users.
TF-Q-8. How do you account for activities that do not meet the trust fund requirements?
TF-A-8. Activities that do not meet the trust fund requirements are accounted for as State appropriated receipts (lower level ledger 3). However, such activities must meet requirements of the Umstead Act.
TF-Q-9. What is the Umstead Act and how does it limit what activities the University can perform?
TF-A-9. The Umstead Act is a State Law that prohibits the State from engaging in business activities that are in competition with private enterprises. General Statute 66-58 “Sale of Merchandise or Services by Governmental Units” provides for this prohibition and allows for certain exceptions. See the section titled “Umstead Act” for activities allowed.
TF-Q-10. What are the program codes for Auxiliary and related trust funds?
TF-A-10. Auxiliary and related trust funds use the following program codes:
 Student Auxiliary Enterprises
- Campus Center (recorded in program code 202)
- Food Services (recorded in program code 203)
- Health Services (recorded in program code 204)
- Housing Services (recorded in program code 205)
- Recreational Services (recorded in program code 207)
- Student Stores (recorded in program code 208)
Institutional Auxiliary Enterprises
- Central Stores (recorded in program code 212)
- Creamery (recorded in program code 213)
- Printing and Duplicating (recorded in program code 214)
- Vehicle Registration (recorded in program code 216)
- Other Auxiliary Operations (recorded in program code 219)
- Self-Supporting Service Centers (recorded in program code 219)
TF-Q-11. What do you do when a trust fund that was previously established is determined (based on review and re-evaluation of its activity) to not meet the trust fund requirements but rather is an activity that should be accounted for as an appropriated receipt?
TF-A-11. You need to contact the Budget Office to establish the proper fund and begin using the new appropriated receipt fund for this activity. Moneys in the trust fund should be moved to the new state appropriated receipt fund unless the funds were from such activities that would meet the trust fund legislation requirements.
TF-Q-12. What is the difference between a state appropriated receipt and trust fund sales and service activity?
TF-A-12. Assuming that the sales and service operation is allowed by the Umstead Act, trust fund sales and service activities include those supported by either Auxiliary and Related Trust Funds or Other Contract Operations Trust Funds. Sales and service activities that are not self-supporting are considered state appropriated receipt activities.
TF-Q-13. What is meant by a self-supporting activity?
TF-A-13. A self-supporting activity means that the activity (1) pays for all its direct operating cost, (2) is not supported by a state subsidy, and (3) is able to continuously maintain a positive cash balance. Generally, the direct operating cost of an activity would include personal service costs, and depending on the activity, may include supplies and materials, service costs, and equipment costs. Direct operating costs benefiting a self-supporting trust fund activity and paid for with State funds must be promptly reimbursed to the state funds incurring the expense.
TF-Q-14. Are sales of videotapes by the departments to the general public considered an appropriated receipt activity?
TF-A-14. Sales of videotapes should go through the Office of Technology Transfer (OTT) as copyright intellectual property if the University owns the copyright. Copyright intellectual property revenues are considered royalty income to royalty trust funds and are not appropriated receipts. Sale of videotapes by the departments must be incidental to the operation of an instructional department or incidental to educational research to be an activity allowed by the Umstead Act. Revenue from the direct sale of non-registered copyright videotapes by the departments is considered a State appropriated receipt activity. The sale of non-registered copyright videotapes through a service contract similar to a licensing contract would be considered an Other Contract Operations Trust Fund activity.
TF-Q-15. How are patent royalties treated?
TF-A-15. OTT is responsible for the processing and recording of patent royalties. For more on patient royalties, go to the OTT web site http://www.ncsu.edu/ott/ .
TF-Q-16. How are University owned copyright royalties treated if distributed to the departments from OTT?
TF-A-16. Copyright royalties, if distributed to the departments from OTT, must be used to support research or educational programs of the department. If the creator assigns their share of the royalty to the department, the department must use the gift as intended by the creator and should maintain written documentation that will support the gift intentions of the creator.
TF-Q-17. Can Sales and Service Trust Funds use State funds to support their activities?
TF-A-17. No. Sales and Service Trust Funds are required to be self-supporting and any activity supported by State funds must be reimbursed.
TF-Q-18. What is “Program Income” and how is it accounted for?
TF-A-18. “Program Income” is money that is earned on an activity fully supported by a contract or grant and is accounted for as part of the contract and grant activity in ledger 5. It can also include money earned on activity fully supported by a gift program and is accounted for as part of the restricted gift activities in ledger 7.
TF-Q-19. Can Trust funds be established specifically for program income activity?
TF-A-19. Generally, program income should be reported in the trust fund being supported. Exceptions require approval from the Controller’s Office.
TF-Q-20. If an activity provides for testing that generates revenue and the people performing the testing are paid from a contract/grant, is this considered program income?
TF-A-20. Yes. Revenue that is generated by grant activity is program revenue to that grant. However, revenue earned by a service center that is established to provide testing for the benefit of the contract/grant is not considered program income as long as the service center expenses are not paid directly by the contract/grant.
TF-Q-21. Can self-supporting service centers use equipment purchased with Federal funds in its operations?
TF-A-21. Equipment purchased with Federal funds may be used when specifically authorized for this purpose by the Office of Contracts and Grants (C&G) for equipment purchased from ledger 5 projects, or by the Business Office of the College of Agriculture and Life Sciences (CALS) in consultation with the University Budget Office for equipment purchased from ledger 4 projects. However, depreciation on federal equipment must be removed from any billings to federal grants or federal pass through grants.
TF-Q-22. Can self-supporting service centers use equipment purchased with State funds in its operations?
TF-A-22. Equipment purchased with State funds from any university state budget code may be used when specifically authorized for this purpose by the University Budget Office. Depreciation of state equipment recovered through billings for services provided by a trust fund must be accounted for in a separate restricted fund for equipment replacement within the service center trust fund or as directed by the University Budget Office.
TF-Q-23. Can a service center be considered an appropriated receipt activity?
TF-A-23. A service center that is not self-supporting would be considered an appropriated receipt activity. User rates established for an appropriated receipt service center may include depreciation on equipment
TF-Q-24. Can a trust fund service center provide both internal and external service activities?
F-A-24. Yes. A trust fund service center may provide both internal and external service activities. However, when providing external services, the trust fund service center must enter into valid university contracts with terms and conditions related to the service. While the service center would have one trust fund (Project Reference Code) for these activities, different Project ID codes would be established to account for each unique purpose.
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