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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 account (ledger 5)
to a residual trust fund account (ledger 7). Expenditures from
this residual trust fund must follow the same spending guidelines
as those for state appropriated funds.
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 an
appropriated receipt account (lower level ledger 3). However,
when acting in an agency capacity for another organization, the
University would account for the activity in an agency account
(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 cost of the
food is included in the registration fee. The food amounts should
be charged to a special activity - extension instruction and public
service trust fund account (upper level ledger 3) established
exclusively for workshops/conferences food costs. Any amount
remaining in the special activity account after the workshop/conference
shall be deposited back to the appropriated receipt account.
TF-Q-4. How do you clear out old trust funds with residual cash?
TF-A-4. Trust funds that are 10 years or older without activity with
cash balances should be dispersed in accordance with the trust
fund's 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 and are they exempt from
State appropriation
rules and regulations?
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 principle 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
- Self supporting auxiliary
enterprises and activities supporting scholarship and student
activity programs
- 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
- Overhead Receipts
TF-Q-7. What are Auxiliary and Related Trust Funds?
TF-A-7. Auxiliary and Related Trust Funds include student
auxiliaries, institutional auxiliaries, service center operations,
and other self-supporting operations which support the campus/students.
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, graphics,
and parking. Service center operations are internal sales and
service activities that support specific needs of research programs.
Other self-supporting operations that support the campus/student
are activities that support specific needs of the departments,
employees or students. 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 appropriated receipts (lower level ledger
3) if the Umstead Act allows them.
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. For the University of North Carolina
System, the exceptions include:
- Utilities
and other services
operated by it
- Sale of articles
produced incident to the operation of instructional departments
- Sale of articles
incident to educational research
- Sale of articles
of merchandise incident to classroom work, meals, books
- Sale of articles
of merchandise not exceeding twenty-five cents in value when sold to members of the
educational staff or staff auxiliary to education or to duly
enrolled students or occasionally to immediate members of the
families of members of the educational staff or of duly enrolled students
- Sale of meals
or merchandise to persons attending meetings or conventions
as invited guests
- Operation
by the University of North Carolina of an inn or hotel and dining
and other facilities usually connected with a hotel or inn
- Operation
of the hospital
and Medical School of the University of North Carolina,
- Operation
of the Coliseum of North Carolina State University at Raleigh,
and the other schools and colleges for higher education maintained
or supported by the State
- Operation
of the Centennial
Campus of North Carolina State University at Raleigh, the Horace
Williams Campus of the University of North Carolina at Chapel
Hill, the Millennial Campus of a constituent institution of
the University of North Carolina
- Operation
of the comprehensive student health services or the comprehensive student infirmaries maintained
by the constituent institutions of the University of North Carolina
- Operation of gift shops, snack
bars, and food service facilities physically connected to any
of the University of North
Carolina's public exhibition spaces, including the North Carolina
Arboretum, provided that the resulting profits are used to support
the operation of the public exhibition space
- Sale of products of experiment
stations or test farms
- Sale of learned journals, works of art, books
or publications of the Department of Cultural Resources or other
agencies
- Operation
of endowment funds established for the purpose of producing
income for educational purposes
- Operation
by educational institutions of campus stores, the profits from
which are exclusively for awarding scholarships to defray the
expenses of students attending the institution; provided, that
the operation of the stores must be approved by the board of
trustees of the institution, and the merchandise sold is limited
to educational materials and supplies, gift items and miscellaneous
personal-use articles. Provided further that sales at campus
stores are limited to employees of the institution and members
of their immediate families, to duly enrolled students of the
campus at which a campus store is located and their immediate
families, to duly enrolled students of other campuses of the
University of North Carolina other than the campus at which
the campus store is located, to other campus stores and to other
persons who are on campus other than for the purpose of purchasing
merchandise from campus stores.
TF-Q-10. What are the program codes for auxiliary accounts?
TF-A-10. Auxiliary Enterprises use the following program codes:
Student Auxiliary Enterprises
o Campus Center (recorded in program code 202)
o Food Services (recorded in program code 203)
o Health Services (recorded in program code 204)
o Housing Services (recorded in program code 205)
o Recreational Services (recorded in program code 207)
o Student Stores (recorded in program code 208)
Institutional Auxiliary Enterprises
o Central Stores (recorded in program code 212)
o Creamery (recorded in program code 213)
o Printing and Duplicating (recorded in program code 214)
o Vehicle Registration (recorded in program code 216)
o Other Auxiliary Operations
(recorded in program code 219)
o 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, not to 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 appropriated receipt fund unless the funds where from
such activities that would meet the trust fund legislation requirements.
TF-Q-12. What is the difference between
an appropriated and non-appropriated sales and service activity?
TF-A-12. Assuming that the sales and service operation is allowed
by the Umstead Act, non-appropriated 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 appropriated
receipt activities. Such activities should be part of or the result
of a State funded program.
TF-Q-13. What is meant by self-supporting?
TF-A-13. A self-supporting activity is an operation that pays for
all its costs and is not supported by other operations. All costs
incurred by other funds for the benefit of the activity must be
reimbursed.
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 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 would be considered an
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. Royalties earned on patent intellectual property royalty income
are used first to pay the inventor's share (currently 40%) of
the royalty income. The remainder is used to support research
programs of the University, including investment in new intellectual
property and funding for the Office of Technology Transfer. OTT
is currently funded solely by receipts earned from licensing of
intellectual property.
TF-Q-16. How are University-owned copyright royalties treated if distributed
to the departments from the Office of Technology Transfer?
TF-A-16. Copyright royalties, if distributed to the departments from the
Office of Technology Transfer, 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. Can state owned equipment be used in rate computations
for establishing user rates for Sales and Service Trust Funds?
TF-A-18. No. Only equipment owned by the specific Sales and
Service Trust Fund can be used in computing the user rate. Sales
and Service Trust Funds must be self-supporting.
TF-Q-19. What is "Program Income" and how is it accounted for?
TF-A-19. "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-20. Can Trust funds be established specifically for program income
activity?
TF-A-20. No. Program income related to a contract/grant must be reported
in the supporting contract/grant trust fund in ledger 5. Program income related to a gift activity should be recorded
in the supporting gift trust fund in ledger 7.
TF-Q-21. 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-21. 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 service center expenses
are not paid directly by the contract/grant.
TF-Q-22. Can self-supporting service centers use equipment purchased
with State or Federal funds in its operations?
TF-A-22. Generally self-supporting service centers should only use equipment
that it owns either through purchase or donation. Equipment purchased
with Federal funds may not be used by the self-supporting service
center. Equipment purchased with State funds may be used only
when it does not limit, interfere, or minimize the State purpose use and the service
center's use is minimal.
TF-Q-23. Can a service center be considered an appropriated
receipt activity?
TF-A-23. Yes. A service center that is not self-supporting or not supported
by a contract/grant (program income) would be considered an appropriated
receipt activity. User rates established for an appropriated
receipt service center may include depreciation on equipment purchased
with State or overhead receipt funds.
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