TABLE OF CONTENTS 100.00 Introduction and Purpose 200.00 Policy 300.00 Procedure 400.00 Internal Control Considerations 500.00 Effective date and Review 600.00 Exhibit A
The University's General Operations budget incurs expenses related to activities that derive income from outside sales, F&A cost recoveries, and other self-supporting activities. For example, central costs for payroll processing, accounts payable services, information technology, liability insurance, etc., are incurred which support such activities. To recover a portion of the costs deemed to benefit these outside activities, an administrative fee is charged to all designated funds. The fee is calculated based on a percentage of the designated funds' expenditures. Certain indexes have been granted exemptions, and certain account codes have also been exempted, from this fee.
The administrative fee percentage is reviewed, set, and communicated annually by the Vice President for Administration and Finance. Unless specifically exempted in writing by the Vice President for Administration and Finance in accordance with this policy, each expenditure in MSU-Bozeman's Designated fund group shall be charged the administrative fee.
A list of currently exempted indexes, funds and account codes is attached as Exhibit A.
Designated fund index expenditures are automatically assessed a charge equal to the annually determined percentage.
Requests for an exemption to this policy must be submitted to the Vice President for Administration and Finance. Such request must be in writing and signed by the Department Head requesting the exemption. Such requests must address the following:
- Source of funds in the affected account,
- Use of funds in the affected account,
- Whether the exemption is of a one-time nature (a specific purchase), at an account code level, or at a fund or index level
- Explanation as to why the fee is not deemed appropriate
Requests will be either approved or denied by the Vice President for Administration and Finance based on criteria including, but not limited to:
- The manner in which the exemption enhances the University's mission
- Financial impact on the University
- Consistency with past practices and decisions and current policy
- Sources and uses of funds in the relevant designated account
Retroactive exemptions are not permitted. Administrative fee charges will be discontinued from the date of the exemption on a prospective basis.
A periodic review of exempt accounts will be performed. If non-exempt expenditures have been mis-recorded, the current (%) administrative fee will be applied on a retroactive basis.
The policy is effective April 2, 2014, and shall be reviewed annually by the Vice President for Administration and Finance.