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Policies and Procedures

Finance & Administration

4-OP-D-1 OMNI Departments

   

Responsible Executive: Finance and Administration
Approving Official: Vice President for Finance & Administration
Effective Date: November 30, 2016
Last Revision Date: January 1, 2014

 

I. INTRODUCTION

A. This policy specifies guidelines and procedures for the establishment and management of departments in OMNI-Financials. 


B. DEFINITIONS

1. Authorized Signers: personnel granted the authority to approve transactions that impact a department’s budget or financial position

2. Auxiliary Operations: self-supporting entities that allow the University to provide essential goods and services to its departments, faculty, staff, students, and incidentally to the general public (interchangeable terms “auxiliary” and “auxiliary department” have the same meaning)

3. Auxiliary Service Board (ASB): the oversight policy board for auxiliary operations, responsible for auxiliary compliance with established laws, policies, and regulations

4. Budget Manager: a department’s official contact person for financial matters

5. Business Intelligence (BI): a web-based system that provides reporting from the human resources, financial, and student systems

6. Dean, Director, Department Head, or Chair (DDDHC): ultimately responsible for the fiscal management and soundness of a department

7. Department (DeptID): a six-digit identifier established to track financial activity by cost center, functional area, and/or line of business

8. Designated Operations: entities that administer funds collected or set aside for a specific purpose, including certain student fees (interchangeable term “designated department” has the same meaning)

9. Direct Support Organization (DSO): a legally separate not-for-profit corporation that operates exclusively to provide the University with supplemental resources (e.g., FSU Alumni Association, the FSU Foundation, Seminole Boosters)

10. External Users of Goods and Services (external users): faculty, staff, students, DSOs, other state agencies, and any other individuals or organizations that are not University departments, and therefore do not have a six-digit DeptID (interchangeable term “external customers” has the same meaning)

11. Fund Balance: the difference between a department’s assets and liabilities (excluding balances related to capital assets)

12. Hyperion: a web-based planning and budgeting system, includes the ALLFUND application (used to gather and review annual operating budget requests) and the SALARY application (used in the development and management of salary budgets)

13. Hyperion Budget Preparers: those granted access to the Hyperion ALLFUND application and related BI reports

14. Hyperion Salary Preparers: those granted access to the Hyperion SALARY application and related BI reports

15. Internal Users of Goods and Services (internal users): Education & General departments, auxiliaries, sponsored research projects, and any other University department that has a six-digit DeptID (interchangeable term “internal customers” has the same meaning)

16. Invalid Combinations: result from a transaction posted to an incompatible department-fund combination, such as an Education & General department used on an auxiliary fund

17. Office of Management and Budget (OMB): within the Executive Office of the President of the United States, establishes principles for determining costs applicable to federally sponsored contracts and grants

18. Online Management of Networked Information (OMNI): the University’s enterprise resource planning system, integrated software applications that support business functions

19. Organizational Structure: the OMNI Divisions, Schools, and Areas in which departments reside

20. Overhead Assessment (OHA): a means by which the University recoups a portion of the expenses borne by central offices (e.g., the Controller’s Office, Human Resources, Inspector General Services) in support of other activities

21. Rate Methodology: prepared by auxiliary operations to show a detailed and auditable structure of their billing rates, including estimated usage base and costs

22. Sponsored Research Administration (SRA): monitors compliance with fiscal and reporting requirements for contract and grant activities administered by the Office of Research

II. POLICY

A. GENERAL GUIDELINES & PROCEDURES

1. Establishing a New Department

a. In general, a new department may be established if the proposed activity:

i. clearly supports the University’s mission of instruction, research, and public service, and

ii. is ongoing. (Note: New departments may be established for a time-limited or non-recurring activity if required to track specific legislative allocations.)

b. If the above requirements are met, the Establish a New Department ID Form should be completed and submitted to the Budget Office. The Budget Office will notify departmental contacts once it has been established in OMNI.

2. Departmental Personnel Designations

a. Each department shall have one DDDHC and one Budget Manager. If staffing levels permit, in order to support strong internal controls, the DDDHC and Budget Manager should be separate individuals.

b. Departments may have up to six Authorized Signers, up to three Hyperion Budget Preparers, and up to three Hyperion Salary Preparers. (Note: Limitations related to the number of Hyperion licenses may impact the number of Hyperion users granted to each department.)

 3. Changes to an Existing Department

a. Once established, activities conducted on a department should be consistent with its original purpose. If departmental personnel would like to supplement or replace original activities, this may warrant an update to the department’s existing purpose or the establishment of a new department. Departmental personnel may contact the Budget Office for assistance in determining what course of action should be taken.

b. In general, in order to preserve the integrity of historical financial data in OMNI, existing departments may not be repurposed. (Note: With Budget Office approval, selected departments may be repurposed. This may include departments that were established but never used, or departments that were established to track financial activity related to student organizations that have had no financial activity for at least five years.)

c. If a department’s place in the organizational structure must change, this does not warrant the establishment of a new DeptID for the existing purpose. In these cases, the existing DeptID should be moved within the organizational structure without changing its six-digit identifier.

d. If changes are needed to an existing department’s purpose, organizational structure, and/or personnel designations, the Update Existing Department ID Form should be completed and submitted to the Budget Office. The Budget Office will notify departmental contacts once the requested changes have been made in OMNI.

4. Annual Operating Budgets

a. Each spring, the Budget Office will reach out to departmental contacts with details regarding the preparation and entry of annual operating budgets for the following fiscal year. These budgets shall be developed and submitted by the department’s Hyperion Budget Preparer(s) and Hyperion Salary Preparer(s).

b. Once approved and established in OMNI, annual operating budgets may be adjusted for a variety of reasons, including the reallocation of funds or changes to original projections. Please refer to the Departmental Guide to Budget Adjustments and the Overview of Budget Transfers for details on adjustments.

c. Departments with annual operating budgets booked in OMNI shall maintain a positive available balance in all expense budgetary accounts at all times. (Note: This does not apply to entities with no annual operating budgets or those with life-to-date budgets, such as sponsored research and capital projects.)

5. Fiscal Soundness

Unless otherwise approved, departments shall not spend more than the resources available to them, and shall maintain a positive fund balance at all times. (Note: This does not apply to sponsored research funds.)

6. Oversight by Central Offices

a. The Budget Office may request financial information from departments at any time. This may include explanations related to fund balance deficits, verification that a department’s purpose as originally stated has not changed, current auxiliary rate methodologies, or any other pertinent information.

b. The Controller’s Office may also request financial information from departments, including year-end cash on hand, accounts receivable, and inventory purchased for resale. Select auxiliaries will also be contacted annually as the Controller’s Office gathers information on unrelated business income, at which point the auxiliaries will be asked to provide a detailed breakdown of operating revenues by source.

c. Departments are subject to audit by the Office of Inspector General Services.

7. Invalid Combinations

It is the responsibility of the department’s Budget Manager to identify and correct any invalid combinations.

8. Discontinued Activities

a. Once established, departments are activated indefinitely. It is the responsibility of the department’s Budget Manager to monitor any activity on the department even after operations have ceased to ensure that no erroneous transactions are posted. For this reason, departmental personnel designations must be kept current.

b. Certain charges may post for several years after operations have ceased (e.g., insurance charges, terminal leave payouts, unemployment compensation, overhead assessments). Balances should be maintained, either on the department itself or on a related department, to cover these charges. Contact the Budget Office for assistance in determining what charges, if any, may post.

c. Any residual funds should be transferred to a related department. Contact the Budget Office for assistance in determining where the remaining funds should be transferred.

B. GUIDELINES & PROCEDURES – EDUCATION & GENERAL CARRYFORWARD DEPARTMENTS

Please refer to the Overview of Education & General Carryforward Balances.

C. GUIDELINES & PROCEDURES – AUXILIARY DEPARTMENTS

1. Establishing a New Auxiliary Operation

a. In addition to requirements outlined in section A.1.a., to be considered for approval as an auxiliary operation, a proposed activity must generate revenues exceeding $10,000 annually.

b. A new auxiliary will not be established when an existing entity is available to account for the good or service, or in cases where the activity should be administered by the Office of Research or a DSO.

c. If the above requirements are all met, in addition to the Establish a New Department ID Form, the Request to Establish an Auxiliary Operation Form (including a detailed rate methodology) should be completed and submitted to the Budget Office for review and approval by the Budget Office, the Office of the Provost, Sponsored Research Administration, and the Controller’s Office. Once the auxiliary request has been approved, the Budget Office will notify both the Auxiliary Service Board and the auxiliary’s departmental contacts, and operations may commence.

2. Auxiliary Billing Rates

a. Auxiliary operations should develop billing rates using a cost recovery methodology. Only expenses incurred by the auxiliary in performing approved activities should be included in the calculation. Costs funded by other budget entities (e.g., Education & General) should not be included. If an auxiliary is depreciating equipment already purchased, in some cases, the depreciation may be built in to the rate as a means to recover the equipment acquisition costs. Auxiliaries should contact the Budget Office and/or SRA for assistance with rate development when depreciation is a factor.

b. The OMB has identified certain costs that may not be charged to federally sponsored contracts and grants, directly or indirectly (including federal flow-thru funding). Auxiliaries should ensure that rates charged to federally sponsored contracts and grants do not include unallowable costs. Unallowable costs include, but are not limited to:

i. advertising or public relations designed solely to promote the University,

ii. alumni activities,

iii. bad debts,

iv. commencement or convocation,

v. contingency provisions,

vi. donations or contributions,

vii. entertainment,

viii. fines or penalties, and

ix. student activity costs.

For a detailed list of allowable and unallowable costs, see the appropriate OMB publication, or contact SRA.

c. Under no circumstances should an auxiliary realize revenues in excess of costs from a federally sponsored project.

d. Users of goods and services should be billed per an auxiliary’s established rate schedule (which may reflect separate billing rates for different goods and services, or for different users of goods and services). Rates billed to federally sponsored projects may be lower than rates billed to other internal users. External users may be billed different rates for the same good or service, but may never be billed less than internal users.

e. Auxiliary rate methodologies shall be updated as needed to reflect changes in costs or pricing policies. When changes are made, revised rate documents should be sent to the Budget Office. Auxiliary rate methodologies shall be reviewed by the appropriate central offices at least once every two years. The Budget Office will review and approve rate methodologies for all auxiliary operations. SRA will review and approve rate methodologies for all auxiliary operations doing business with federally sponsored projects. 

3. Supplemental Accounting Records and Financial Information

If an auxiliary operation provides more than one good or service, bills lower rates for federally sponsored projects than other internal users, and/or bills certain external users different rates than other external users, the auxiliary should keep detailed and auditable accounting records to differentiate between the revenues.

4. Auxiliary Classifications

a. Enterprise Auxiliaries

i. Mission: These departments exist to provide goods or services primarily to University students, faculty, and staff (external users). Examples include University housing, food services, and health centers.

ii. Revenues & Fund Balances: For the most part, these departments may realize revenues in excess of costs on both internal users and external users. (However, as mentioned above, under no circumstances should a department realize revenues in excess of costs from a federally sponsored project.) Fund balances should be maintained at a level consistent with each department’s mission and operating plan.

iii. OHA: These departments are charged the “full” OHA rate, which varies from year to year.

b. Sales and Services of Educational Activities

i. Mission: These departments exist to support instruction, research, and public service both within and outside the classroom, helping to demonstrate classroom or related educational techniques to University students, faculty, staff, or other external users. Any goods or services provided are incidental to the basic instructional or laboratory experience of the user. Examples include University theaters, science stockrooms, and continuing education.

ii. Revenues & Fund Balances: Billing rates charged to internal users should only recoup costs incurred, while billing rates charged to external users may generate revenues in excess of costs. In general, these departments may maintain an average month-end fund balance not to exceed 15% of annual operating expenditures. Where billing rates charged to external users generate revenues in excess of costs, balances may be higher. In these situations, departmental personnel should be prepared to present a spending plan for the excess. The spending plan may include the replacement of equipment, potential leave payouts for employees, or any other use of resources related to the department.

iii. OHA: These departments are charged an OHA rate of 0% of operating expenditures if at least 51% of their revenue is from internal users, or 1% of operating expenditures if at least 51% of their revenue is from external users.

c. Sales and Services of Non-Educational Activities

i. Mission: These departments exist to provide goods and services primarily to University departments (internal users), though they also provide goods and services to University students, faculty, and staff (external users). Examples include University information technology services, photo labs, and copy centers.

ii. Revenues & Fund Balances: Billing rates charged to internal users should only recoup costs incurred, while billing rates charged to external users may generate revenues in excess of costs. In general, these departments may maintain an average month-end fund balance not to exceed 15% of annual operating expenditures. Where billing rates charged to external users generate revenues in excess of costs, balances may be higher. In these situations, departmental personnel should be prepared to present a spending plan for the excess. The spending plan may include the replacement of equipment, potential leave payouts for employees, or any other use of resources related to the department.

iii. OHA: These departments are charged an OHA rate of 0% of operating expenditures if at least 51% of their revenue is from internal users, or 1% of operating expenditures if at least 51% of their revenue is from external users.

D. GUIDELINES & PROCEDURES – DESIGNATED DEPARTMENTS

1. Establishing a New Designated Operation

a. In addition to requirements outlined in section A.1.a. above, proposed designated department must administer revenues exceeding $10,000 annually. (Note: Student fee departments generating less than $10,000 annually are excluded from this requirement.

b. If the above requirements are all met, in addition to the Establish a New Department ID Form, the Request to Establish a Designated Operation Form should be completed and submitted to the Budget Office. Once the request has been approved, the Budget Office will notify departmental contacts, and operations may commence.

2. Designated Classifications

a. Sales and Services of Educational Activities

i. Mission: These departments exist to support instruction, research, and public service both within and outside the classroom, helping to demonstrate classroom or related educational techniques to University students, faculty, staff, or other external users. Any goods or services provided are incidental to the basic instructional or laboratory experience of the user. Examples include distance learning, Facilities & Equipment fees, and International Programs.

ii. Revenues & Fund Balances: Billing rates charged to internal users should only recoup costs incurred, while billing rates charged to external users may generate revenues in excess of costs. In general, these departments may maintain an average month-end fund balance not to exceed 15% of annual operating expenditures. Where billing rates charged to external users generate revenues in excess of costs, balances may be higher. In these situations, departmental personnel should be prepared to present a spending plan for the excess. The spending plan may include the replacement of equipment, potential leave payouts for employees, or any other use of resources related to the department.

iii. OHA: These departments are charged an OHA rate of 0% of operating expenditures if at least 51% of their revenue is from internal users, or 1% of operating expenditures if at least 51% of their revenue is from external users.

b. Sales and Services of Non-Educational Activities 

i. Mission: These departments exist to provide goods and services primarily to University departments (internal users), though they also provide goods and services to University students, faculty, and staff (external users). Examples include insurance recoveries, employee scholarships, and the web convenience fee.

ii. Revenues & Fund Balances: Billing rates charged to internal users should only recoup costs incurred, while billing rates charged to external users may generate revenues in excess of costs. In general, these departments may maintain an average month-end fund balance not to exceed 15% of annual operating expenditures. Where billing rates charged to external users generate revenues in excess of costs, balances may be higher. In these situations, departmental personnel should be prepared to present a spending plan for the excess. The spending plan may include the replacement of equipment, potential leave payouts for employees, or any other use of resources related to the department.

iii. OHA: These departments are charged an OHA rate of 0% of operating expenditures if at least 51% of their revenue is from internal users, or 1% of operating expenditures if at least 51% of their revenue is from external users.

c. Materials and Supplies Fees

i. Mission: Material and Supplies Fee revenue is used to purchase consumable supplies used in labs associated with student credit or non-credit courses.

ii. Revenues & Fund Balances: Material and Supplies Fee revenue should cover exactly the cost of consumable supplies used during the semester, so there should be no revenues in excess of costs. Revenues should come only from student fees that have been approved by the Florida State University Board of Trustees.

iii. OHA: These departments are charged an OHA rate of 0% of operating expenditures.

d. Other

i. Mission: These departments exist to furnish goods and services to the University community, but do not fit into any of the above classifications. They are maintained by the Budget Office and the Controller’s Office, and are managed by the ASB. Examples include overhead departments, ASB loans, and reserves.

ii. Revenues & Fund Balances: There are no billing rates for these departments. Fund balances should be maintained at a level consistent with each department’s mission and operating plan.

iii. OHA: These departments are charged varying OHA rates between 0% of operating expenditures and the “full” rate.

3. Overhead Departments

a. Overhead departments are allocated a portion of overhead assessment revenues for the purpose of funding positions or other initiatives approved by the Auxiliary Service Board.

b. Any unspent allocations remain with the departments and may be repurposed for related initiatives as approved by the Vice President for Finance and Administration or their designee. (For instance, unspent allocations for positions may be used to purchase equipment or supplies to support those positions.)

c. Related to positions funded on overhead departments, there may be increases to wages or benefits resulting from university-wide or legislative actions. In these cases, each department’s surplus will be used to fund the increase during the year it which it is implemented. If any department’s surplus is insufficient to cover the increase during the year in which it is implemented, any resulting deficit will be covered by the auxiliary reserve. In the year following implementation of any university-wide or legislative increases, each department’s allocation will be adjusted to cover the increases on a recurring basis going forward.

d. Before a department initiates increases to wages for merit, increased responsibilities, etc., use of overhead assessment revenues for the increase must be approved by the Vice President for Finance and Administration or their designee. If approved, increases will be treated as outlined above in section D.3.c.

III. LEGAL SUPPORT, JUSTIFICATION, AND REVIEW OF THIS POLICY

The Chief Budget Officer shall be responsible for the review of this policy.

Specific Authorities:

Florida Statutes § 1011.47 Department enterprises; contracts, grants, and donations

State University System of Florida Board of Governors Regulation 9.013 Department Operations

The National Association of College and University Business Officers (NACUBO) College and University Business Administration (6th edition, 2000)

NACUBO Financial Accounting and Reporting Manual

NACUBO Advisory Report 1999-2 Accounting and Reporting for Department, Department-Other, and Other Self-Supporting Activities (July 8, 1999)

Office of Management and Budget Circular A-21 Cost Principles for Educational Institutions (May 10, 2004)

Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (December 26, 2013)