Understanding New Recharge Billing Expense Process
Explore the details of implementing new recharge billing expense accounts, subsidizing GAEL and UCRP interest, and retiring Permbudg for recharge. Learn about meeting goals, new billing accounts, the deployment schedule, and action items with timelines to ensure a smooth transition. Make informed decisions to comply with the UCOP initiative and stay updated on the FY23 ledger requirements.
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Recharge Training: New recharge billing expense accounts Subsidizing GAEL and UCRP Interest Retiring Permbudg for recharge Herv Bruckert May 20th , 2022 1
Agenda A. Meeting Goals B. New recharge billing expense accounts C. Subsidizing GAEL and UCRP Interest D. Retiring Permbudg for recharge 2
A. Meeting goals Understand how and when to start using the new recharge billing accounts under the new common chart of accounts initiative driven by UCOP. Understand how and when to subsidize GAEL and UCRP interest. Understand how to retire the Permbudg for recharges. 3
B. New recharge billing expense accounts 1. The new UCOP common chart of accounts initiative is creating new recharge billing expenses accounts in the 59xxx accounts series. 2. Three types of transactions are driven by recharges: i. Debits recorded in the service center ledger to account for recharge operating costs such as salary, CBR, non compensation and other costs. (No change) ii. Credits recorded in the service center ledger to account for recharge income as a result of the service delivered. (No change - account 59000) iii. Debits recorded in the customer ledger to account for recharge billing expenses (New recharge billing expenses 59xxx accts) 4
B. New recharge billing expense accounts sample journal New recharge billing expense accounts and account 59000 need to net to zero. This will function like Operating Transfers who also net to zero. 7
B. Deployment 1. Effective July 1st 2022, all new recharge billing expense accounts need to be used in the FY23 ledger. 2. Old recharge billing expense accounts should no longer be used effective July 1st 2022. 3. BFS might no longer process recharge journals using recharge billing expenses accounts other than the new one. 8
B. Action items and associated time line 1. Review the current accounts used to charge customers and identify which new accounts to use instead starting in FY23. Direct your questions to the Controller s office and cc me (May June) Common chart of account website. 2. Update your billing system, if necessary, to account for the new recharge billing expense accounts to use effective July 1st. 3. Monitor your billing reports to ensure that only the new recharge billing expenses accounts have been used. 9
C. Subsidizing GAEL and UCRP Interest 1. Background: GAEL and UCRP interest are not allowed on federal funds. UCPath is configured to not charge those costs on federal funds. 2. Recharge centers who charge federal funds included in their FY22 recharge rates calculation a subsidy for GAEL and UCRP interest. 3. We now need to create the subsidy in the Actual ledger to align with the Budget. 10
C. How to calculate the subsidy The GAEL and UCRP interest subsidy does not need to be above the subsidy historically provided. Instead, the GAEL and UCRP interest subsidy should become a component of the subsidy provided. As an example, if a recharge center historically subsidized $100K of salary and wanted to maintain this overall subsidy level, the recharge center does not need to subsidize $100K of salary + the associated GAEL and UCRP interest. Instead, the service center should reduce the subsidy on salary and subsidize GAEL and UCRP interest in order for the total subsidy to be $100K. In essence we are not changing the amount of the subsidy in this case but we are changing the nature of the expenses subsidized. As a result, only service center providing zero subsidy should see a financial impact related to this new requirement. 11
C. How to calculate the subsidy 1. Pull a Calanswer or Smartview report using your recharge fund, deptId and the two accounts for GAEL (acct 57310) and UCRP interest (acct 53709). 2. Create a journal in the June period to subsidize the FY22 GAEL and UCRP interest, in other words: - credit the GAEL and UCRP interest accounts in the recharge fund and - debit the GAEL and UCRP interest accounts in the subsidy fund. 3. To control your work, refresh your smartview or Calanswer report after your journal posted and your amount for the two GAEL and UCRP interest account under the recharge fund should now be zero. 4. In the event you are not able to post the journal in the June FY22 ledger, you can do so in the July FY23 ledger. 12
C. Retire Permbudg for recharges 1. Many of you have probably already retired your Permbudg for recharge activity as part of the original Permbudg retirement process. 2. In the event you have not, please take advantage of the FY22 fiscal year end close to run a report to review your Permbudg for recharge fund and net them to zero by creating a Permbudg journal. I can approve your Permbudg journal if you email it to me. I can also upload your Permbudg csv file in the event you cannot. Guidance on the accounting treatment for the journal is provided in the training section at the bottom of the recharge website. 3. Our goal is to retire all Permbudg for recharge funds by the end of FY22. 13
