Departmental Sales and Services (DSS)

Policy No: 
1.11
Type of Policy: 
Administrative
Review Date: 
January 2015
Policy Owner: 
Controller's Office
Contact Name: 
Carol Gibson
Contact Title: 
Controller
Contact Email: 
cgibson@gatech.edu
Reason for Policy: 

This policy addresses accounting requirements for departmental sales and services (DSS) charges and enables the Budget Office and Campus Departments to easily identify carry forward eligible funds. This policy also helps to ensure Institute and Board of Regents (BOR) policy requirements for Service Centers and Departmental Sales and Services funds, respectively, are met.

Policy Statement: 

Overview
Georgia Tech has accounting requirements related to departmental sales and services (DSS) funds and the ability to carry eligible funds forward in the next fiscal year. DSS accounting requires DSS project numbers to correctly point to a non-lapsing fund code which then allows campus units to carry forward eligible funds. Certain and requirements must be met by the department to carry forward funds. DSS accounting also requires specific revenue account codes to be used for Internal (includes GT Affiliates), External to GT and GT Affiliates and External Sponsored Projects. The ability to carry forward funds enables revenue centers to better manage their operations and plan ahead for future commitments. Department financial administrators/managers are solely responsible for managing carry forward funds for their unit.

Exclusions
Revenue received for continuing education courses offered by Georgia Tech Professional Education (GTPE) is excluded from this process.

Project ID’s
To ensure compliance with Board of Regents (BOR) and state audit requirements, DSS project ID’s are required to be established in the 14xxx fund code range for Departmental Sales and Services.

Fund Codes
Each Resident Instruction department with DSS activity will be assigned a fund code in the 142xx DSS fund code range. Georgia Tech Research Institute (GTRI) DSS activity will be assigned to fund code 14321 and Enterprise Innovation Institute (EI2) DSS activity will be assigned to fund code 14325. At year-end close, DSS projects meeting the carry forward requirements will be flagged and will not be included in the departmental year-end balance calculation. The remaining DSS projects will be used to determine the deficit or surplus balance for each DSS fund. Deficit balances in DSS funds for each entity at year end is required to be covered by the entity using General Operations funding.

Accounts
DSS accounts must clearly distinguish external DSS revenue from internal DSS revenue. This is accomplished by the use of specific accounts for DSS revenue transactions. DSS revenue is broken down into three categories;

  • Internal (includes GT Affiliates)
  • External to GT and GT Affiliates
  • External Sponsored Projects.

Internal DSS revenue is defined as income from sources internal to the Institute. DSS occurs when one campus department (service department) provides goods or services to another campus department (receiving department) and subsequently charges the receiving department for the goods or services. The service department books revenue to recognize income for the goods or services provided and the receiving department is charged an expense to recognize the cost of the goods or services received.

Transactions between Georgia Tech and its affiliated organizations are also considered Internal DSS. By definition, affiliated organizations are legally separate corporations that partner with Georgia Tech to fulfill its mission. Georgia Tech’s affiliated organizations are listed at http://larm.gatech.edu/affiliated-organizations.

All internal DSS revenue must be charged to revenue account 471900.

DSS revenue that is External to GT and GT Affiliates is defined as income from sources external to the Institute. All DSS revenue External to GT and GT Affiliates must be charged to account 452900. Examples of DSS revenue that falls into this category include:

  • General Public
  • Faculty/Staff/Students
  • Direct payments from Other Institutions/Agencies
  • Agency Funds
  • GTPE Revenue

DSS revenue from External Sponsored Projects is defined as income from sponsored projects where the funding source is external to the Institute and its affiliated organizations. All DSS revenue from External Sponsored Projects must be charged to account 452800. Examples of DSS revenue that falls into this category include

  • Federal Sponsored Projects (USAF, DOE, DOD, NASA, etc.)
  • State of Georgia Sponsored Projects
  • Local Sponsored Projects
  • Private Industry Sponsored Projects

Both internal and external revenue may be posted to a DSS project number, however the account must correctly reflect the type of revenue: Internal (account 471900), External to GT and GT Affiliates (account 452900) and External Sponsored Projects (452800).

Split Funded Transactions
When DSS transactions are charged to multiple funding sources, the revenue recognized by the service department should be split between DSS revenue accounts based on the percentage each funding source pays for the service. For example, if 25% of the purchase is funded by a Georgia Tech Foundation (GTF) project (DSS - Internal) and 75% of the purchase is funded by a National Aeronautics and Space Administration (NASA) Sponsored project (DSS - External Sponsored Project), 25% of the revenue recognized by the service center should be charged to account 471900 (Internal DSS) and 75% of the revenue recognized by the service center should be charged to account 452800 (External Sponsored Project).

Cost Share Funds
DSS transactions charged to Cost Share projects should be treated as Internal DSS and charged to account 471900.

Start Up Funds
DSS transactions charged to Start Up projects should be treated as Internal DSS and charged to account 471900.

Georgia Tech Professional Education (GTPE) Revenue Transfers
DSS revenue transferred to departments by GTPE should be treated as revenue External to GT and GT Affiliates and charged to account 452900. Since the original source of the revenue is “External to Georgia Tech and Georgia Tech Affiliates”, the revenue is considered external.

Georgia Tech Research Institute (GTRI) Funds
DSS transactions charged to non-sponsored GTRI funds should be treated as Internal DSS and charged to account 471900.

Enterprise Innovation Institute (EI2) Funds
DSS transactions charged to non-sponsored EI2 funds should be treated as Internal DSS and charged to account 471900.

Auxiliary Services Funds
DSS transactions charged to Auxiliary Services Funds should be treated as Internal DSS and charged to account 471900.

Student Activities Funds
DSS transactions charged to Student Activities funds should be treated as Internal DSS and charged to account 471900.

DSS Surplus Balances
Departmental Sales and Services are exempt from the state law concerning lapsing funds. Therefore, DSS surplus balances may be carried forward if certain requirements are met. The requirements per section 2.2.1 of the University System of Georgia’s Business Procedures Manual (BPM) are as follows:

  • The activity must generally be self-supporting.
  • The activity should not use State-Appropriated or other General Operations funds.
  • Revenue and associated expenses for each DSS activity should be readily identifiable; e.g., by class code, department, project indicator, etc.
  • At least 50% of the revenue source must be from external sources; e.g., student, faculty, staff, general public, grantors, other institutions/agencies, etc.
Source: http://www.usg.edu/business_procedures_manual/

Salaries and the accompanying fringe benefits associated with DSS activity should be charged to each DSS fund in proportion to the effort of employees providing the goods or services.

Service Centers
All salary and other expenses included in approved Service Center charge rates must be recorded to the appropriate DSS fund and project number. Due to the administrative requirements of managing centers of this type, there must be a clear business-case for establishing and renewing internal and external charge rates. The requisite business-case includes the following basic parameters:

  • Self-Supporting Revenues - Service center annual recoveries should typically be sufficient to fund the annual operating costs of the center. Operating costs include allocable salaries, fringe benefits, supplies, equipment maintenance, equipment replacement, and other facilities and administrative costs applicable to the center.
  • Local Administrative and Financial Support - The unit/department must be equipped to manage the additional accounting and reporting requirements of the Center. These activities include separate accounting for expenses and revenues (recoveries) and precise tracking of utilization for charge-out purposes.
  • College and Institute Level Approval – The “Service/Recharge Center Request & Approval Form” must be completed and approved by the appropriate School or Department Head and the appropriate College or Institute level officer prior to being submitted to Grants and Contracts Accounting for consideration. The form can be found on the Grants and Contracts website: http://www.grants.gatech.edu/admin_standard_blank_forms.php

Policies and procedures related to Georgia Tech “Resident Instruction” Service Centers are available in the Policy Library - Administrative Policy 3.14:
http://www.policylibrary.gatech.edu/cost-service-centers

As DSS funds, surplus balances for approved Service Centers may be carried forward in accordance with the requirements of BPM Section 2.2.1 (noted above). Surplus balances for Centers with less than 50% external revenue will be managed under existing procedures for requesting carry forward of year-end fund balances. Procedures and related forms are available on the Institute Budget Planning & Administration web-site: http://forms.budgets.gatech.edu/view.php?id=13450.

In order to qualify for carry forward approval, surplus balances for approved Service Centers with less than 50% external revenue must meet the following requirements:

  • The activity must be self-supporting.
  • The activity should not use State-Appropriated or other General Operations funds.
  • Revenue and associated expenses for each DSS activity should be readily identifiable; e.g., by class code, department, project indicator, etc.
  • Surplus revenues must be attributable to the Center’s cost of facilities (in whole or part) as defined by OMB Circular A-21 (2 CFR 220) and as supported by individual Service Center cost studies. Facilities costs include equipment depreciation and maintenance expenses.

The Office of Grants & Contracts Accounting will provide assistance as needed in confirming that the above requirements for service centers have been met.

Contact Information
For assistance with this policy, please see the contact information below:

Scope: 

This policy applies to all Georgia Tech staff, faculty, and researchers who generate revenue from departmental sales and services.

Policy Terms: 

Departmental Sales and Services (DSS)
Transactions generated from the sales of goods and services by one campus department to another campus departments or to entities outside of Georgia Tech.

Procedures: 

Sales and Services Procedures

Campus Departments
Campus departments will utilize the new chart of accounts structure (project ID and Account) for DSS funds to more easily identify DSS revenue and carry forward funds.

Campus Department Requests
Campus departments will make an online request to the Budget Office to carry forward eligible DSS funds in late June each year.

Campus Service Center Requests
Campus Service Centers will make an online request to the Budget Office to carry forward eligible DSS funds in late June each year. Service Center requests will be reviewed by Grants and Contracts Accounting prior to campus department notification.

Budget Office
The Budget Office will determine the carry forward amounts after year end close and communicate that information to campus departments.

Responsibilities: 

Campus Department
The campus department is responsible for following the guidelines in the policy as well as initiating requests to set up new DSS projects ID’s and requests to carry forward DSS funds at year end.

Budget Office
The Budget Office is responsible for setting up DSS project ID’s, processing carry forward fund requests at year end and working with campus units to ensure eligibly to carry forward DSS funds is met.

Controller’s Office
The Controller’s Office is responsible for working with campus units as it relates to DSS accounting and ensuring campus units understand the policy.

Enforcement: 

To report suspected instances of noncompliance with this policy, please visit Georgia Tech’s EthicsPoint, a secure and confidential reporting system, at: https://secure.ethicspoint.com/domain/media/en/gui/7508/index.html

Policy History: 
Revision DateAuthorDescription
12-3-2013Carol GibsonMinor revisions to verbiage
3-26-2014Carol GibsonUpdated document exclude GTPE revenue from this process. Minor revisions to verbiage. Updated Procedures section.

  

 

 

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