I. FIDUCIARY
RESPONSIBILITY
II. BUDGETARY
RESPONSIBILITIES
III. FINANCIAL PROCESSING
IV. FINANCIAL ADJUSTMENTS
V. REVIEW OF
LEDGERS AND PAYROLL REPORTS
VI. USDA FEDERAL
APPROPRIATED FUNDS
VII.
CONTRACTS AND GRANTS - (ALSO SEE SECTION 264)
VIII. RECORDS MANAGEMENT
APPENDIX Ia. Indexes to Accounting
Handbooks for Berkeley, Davis and Riverside Campuses
APPENDIX
Ib. Index to Accounting Handbook for Davis Campus
APPENDIX Ic. Index to
Accounting Handbook for Riverside Campus
APPENDIX II. Chapter III.
Financial Operations of the USDA Extension Service Administrative
Handbook
Financial processing for the Division of Agriculture and
Natural Resources (DANR) has been decentralized with
responsibility for accurate financial processing and
information being assumed by operating units. The accounting
for the various DANR operating units is done at the Berkeley
(J), Davis (L), and Riverside (N) campuses. All policies of
the funding agency and the University and procedures of the
appropriate campus accounting office must be followed. Since
these procedures vary from campus to campus, this document will
not address individual campus procedures for processing, but
will refer to various manuals for specific instructions and
will discuss specific DANR policies and procedures only when
they are more stringent than those administered by the campus.
If at any time the policies or procedures indicated here appear
to be in conflict with campus policies and procedures, please
notify the Director of the Director of Financial Services,
Controller & Business Services Director.
Financial training workshops to assist unit personnel in
carrying out their responsibilities are periodically available
on each campus and through the Division.
I. FIDUCIARY RESPONSIBILITY
A. Funds are provided to the University by various
federal, state, and local agencies and also by
private foundations, organizations, and individuals
for educational public service and research purposes.
Some of the funds are given for general use and some
for very specific purposes. It is the responsibility
of the University to assure that the funds are
expended in accordance with the rules of the sponsor
and for the purposes specified when funds are
provided to the University.
B. The primary responsibility for proper use of funds is
vested in the department head of each unit, or
principal investigator in the case of individual
contracts or grants. Accordingly, this person should
be, or make certain an appropriate staff member is
familiar with the financial policies and regulations
of the sponsor providing the funds. If this
responsibility has been delegated, the required
campus forms for delegating responsibility and
signature authority must be prepared. In addition,
other offices such as Accounting, Purchasing,
Internal Audit, etc., have a secondary responsibility
to assure University compliance with all applicable
policies, procedures, and regulations.
C. Failure to comply with all applicable policies,
procedures, and regulations may result in
disallowances and penalties for the University
department and/or the Division.
II. BUDGETARY RESPONSIBILITIES
A. Annual Budget Process - Basic Support
The purpose of the DANR workplan/budget proposal
process is to allocate available DANR resources to
address problems in current and emerging issues of
public concern while maintaining the core of DANR
disciplines, facilities, and subject matter
competencies. The DANR workplan/budget proposal
process is an opportunity for each Dean, Regional
Director, and Statewide Special Program/Project
Director to examine and evaluate his/her respective
unit's programs and activities in the context of DANR
program directions and priorities. One of the
outcomes of the process is to efficiently allocate
Division funds by identifying and exploiting
comparative advantage opportunities among the
campuses and regions in attaining the goals and
objectives of DANR.
Within this framework, the various Deans, Directors,
Associate Vice President and the Assistant Vice
President submit workplans/budget proposals to the
Vice President regarding the level of funding for
each of their units for the upcoming fiscal year.
Workplans/budget proposals are initially reviewed by
the Office of Program Information and Analysis (OPIA)
and the Office of Budget and Financial Services
(OBFS) analysis teams. Overall coordination of
analysis teams is the responsibility of the Assistant
Vice President--Administration and the Associate Vice
President--Programs. Upon concluding the initial
review and analysis of the workplans/budget
proposals, the Assistant Vice President--Administration
in consultation with the Office of the Vice President
and the Office of the Associate Vice President--
Programs, prepares a preliminary budget
document. This document, usually referred to as "the
Council of Deans and Directors (CODAD) Briefing
Book," is mailed to CODAD members.
The workplan/budget proposals are reviewed in the
context of DANR program directions and priorities.
At a CODAD meeting, Deans, Regional Directors, the
Associate Vice President--Programs, and the Assistant
Vice President--Administration make formal
presentations of their respective workplan/budget
proposals, including identifying and ranking in
priority order issues and academic position requests.
During the following month, members of the Office of
the DANR Vice President meet with the dean of each
campus, the director of each region, and with the
Associate Vice President--Programs to discuss the
workplan/budget proposal of their respective units in
the context of the CODAD review, DANR priorities, and
available resources. Budget allocation letters
reflecting the outcome of the review process and
these meetings are targeted for issuance in July.
The allocations may be both permanent and temporary.
B. Permanent Budget
The permanent budget refers to the approved annual
year-to-year continuing budget of each unit. It
provides the authorized funding level for staff and
support costs for the various units or departments.
Any authorized adjustments are expected to continue
unless conditions change.
C. Temporary Budget
Temporary budget allocations or adjustments are
effective only in the fiscal year in which they are
made. They do not establish a continuing commitment,
but do provide management with the necessary
flexibility to respond to situations that are unique
to a given fiscal year.
D. Budget Adjustments
Changes between sub-accounts and other adjustments to
the departmental annual budget may be initiated by
units through local and interlocation transfer of
funds (Form UFIN 1520 and 1520 I/C) and may be either
permanent or temporary. Information about different
levels of approvals required for the various types of
adjustments and instructions are provided in:
DANR OBFS - Directives
University of California - Planning and Budget
Manual
Berkeley - Accounting Handbook, Section D-1
Davis - Policy and Procedure Manual, Section 330-61
Riverside - Policy and Procedure Manual, Section
200-54
E. Staffing Lists
Periodically the campus accounting office issues
staffing lists which show authorized and filled
salary roll positions for academic (sub-budget 0) and
staff (sub-budget 1) personnel. The purpose is to
assist the departments and the University in
maintaining budgetary control. These are sent to
campus officers, certain regional offices, and OBFS
for review and corrective action if necessary.
F. Extramural Funds (Contracts, Grants, Donations, etc.)
These funds are generally considered temporary and
often are referred to as "non-budgeted" funds by
budget personnel. For these funds, the budgets are
established by the local accounting office based upon
the award document instructions. All budget
adjustments involving contracts and grants
administered by the Division must be approved by the
DANR Contracts and Grants Coordinator. See Section
VII.
III. FINANCIAL PROCESSING
A. The University is responsible and accountable for the
manner in which funds are used. Expenses should be
charged directly to the funds to which they pertain.
To support the propriety of the expense and maintain
the validity of certifications required, care must be
exercised to ensure that the expense is allowable
under the terms and conditions of the funding source.
Once ruled allowable, the costs should be classified
by the selection of the appropriate object codes
(generally assigned by the local accounting office).
Object codes are a refinement of the nature or object
of expenditure within the account/fund/sub.
Financial reports and statements are often prepared
from the summary of object codes. Therefore, it is
critical that each expense is classified properly.
B. The table on the next page indicates the main
reference sections for the applicable campus
accounting office policies. An index of the main
policy and procedure manuals for Berkeley, Davis, and
Riverside is shown in Appendix I. DANR follows the
applicable University and campus regulations for
disbursement of funds.
IV. FINANCIAL ADJUSTMENTS
A. It is University policy to charge expenses directly
to the account/fund to which they pertain. It is
recognized, however, that expenditure adjustments are
occasionally necessary to correct bookkeeping or
clerical errors in the original charges. It is also
recognized that closely related work may be supported
by more than one funding source and that in such
cases, an expenditure adjustment of costs from one
funding source to another may be proper. However,
departments should avoid frequent, tardy, and
unexplained (or inadequately explained) expenditure
adjustments, particularly where they involve
account/funds with significant cost overruns or
unexpended fund balances.
Conditions Under Which Expenditure Adjustments are
Appropriate
Once an expense entry has been entered in the
accounting system and recorded in an
account/fund/sub-account/object in the Distribution
of Payroll Expense Report or the General Ledger-
Expenditures, it is appropriate to make expenditure
adjustments in the following situations:
1. To correct an erroneous recording, such as
when the original source document(s) (e.g.,
invoice, payroll, purchase order) cited an
incorrect account/fund/sub-account/object.
2. To record a change in original decisions as
to the use of goods or services (e.g., a
case of beakers originally ordered for and
charged to a training program may be
subsequently transferred to a research
project). The request for an expenditure
adjustment, certifies that the original
charge is now invalidated and that the
second account/fund is the correct one to
charge.
3. To redistribute certain high numerical but
small individual and/or incidental charges,
such as copy machine rental and paper costs,
telephone charges, mailing charges, or
office supplies, that are billed to
departmental accounts/funds but a portion of
which may apply to other
activities/projects/funds under the
jurisdiction of a department. If this type
of expenditure adjustment is identifiable as
an entry on the General Ledger-Expenditures,
reference is required to the original
document(s). If not identifiable,
departments must maintain internal
records/logs of such usage to support the
adjustment.
B. Federal and University regulations require strict
documentation and justification for such transfers
and the criteria is set forth in the following campus
policy manuals:
Berkeley - Accounting Handbook, Section G
Davis - Policy and Procedure Manual, Section 330-63
Riverside - Policy and Procedure Manual, Section
200-50
The University has prepared specific forms to adjust
payroll (UPAY) and non-payroll (UFIN) entries. These
forms are available from the appropriate campus
source.
C. In addition, certain service departments such as the
campus storehouse provide goods and services to
campus departments and their costs are "recharged" to
the receiving department. Also, some departments
provide such services to their various projects or
accounts. Any department requiring the use of
recharge must obtain approval by the campus
administration. The billing may be done either via
an automated billing system or use of an
"Interdepartmental Order and/or Charge" form.
D. Adjustments can also be made by the campus accounting
office or DANR OBFS by use of a properly documented
financial journal.
V. REVIEW OF LEDGERS AND PAYROLL REPORTS
A. Ledgers
The monthly General Ledger-Expenditures should be
reviewed in a timely manner to ensure the accuracy of
transactions recorded. Monthly reports should be
provided to the principal investigators if
applicable. It is important that ledgers be reviewed
promptly and adjustments made immediately as
University policy requires any adjustments to be
reflected in the ledgers within 120 days of the
original charge.
B. Payroll
The monthly Distribution of Payroll Expense Report
should likewise be reviewed in a timely manner to
ensure the accuracy of transactions recorded.
Monthly reports should be provided to the principal
investigator if applicable Again, adjustments should
be made quickly so that they are reflected in the
ledgers within 120 days of the original charge.
C. Funding
Monthly reviews should be made regarding the current
and projected year-end status of each account/fund
source. Any overdrafts should be cleared promptly by
appropriate adjustments in expenditures or
appropriations.
D. Documentation
The monthly reviews indicated above should be
performed by someone other than the person initiating
the transactions and must be documented with the
signature and date of the person performing the
review.
VI. USDA FEDERAL APPROPRIATED FUNDS
A. General Information
United States Department of Agriculture federal funds
are allocated to state land-grant universities in
accordance with the provisions of various federal
acts and agency regulations. The federal fiscal year
is October 1 through September 30. Once the USDA
appropriation bill for a fiscal year is signed by the
President, each state is advised of the amount to
which it is entitled under the provisions of the
various acts. USDA regulations require certain
recipients to provide from non-federal funds, a
specific amount to offset or match the federal
allocations.
1. Offset funds are non-federal funds committed
to general support for programs in a related
discipline. As an example, offset for
Animal Health funds must be spent in general
support of Animal Health research. The
offset for Extension Service Smith-Lever
funds are to be spent in general support of
Cooperative Extension work. DANR more than
meets the offset requirements through it's
total expenditure of state funds in support
of both research and extension.
2. Matching funds are non-federal funds which
must be spent in support of a specified
project and must be uniquely identifiable.
These funds can be expended over the full
period of the project. The University of
California form UFIN 118, Cost Sharing
Contribution Report is used to document
matching expenditures for grants and special
projects. This report is certified by the
principal investigator and is filed with the
campus accounting office which has
responsibility for the grant or special
project fund. Documentation to substantiate
reported matching expenditures must be
maintained in the department.
B. Cooperative Extension Funds - Guidelines and
Reporting
1. The basic guidelines for allowable
expenditures and use of Extension Service
federal funds by DANR are contained in
Chapter III, Financial Operations of the
USDA Extension Service Administrative
Handbook. Departmental personnel should be
particularly familiar with Section J,
(Accounting Operations) and Section K (Use
of Federal and Offset Funds). See Appendix
II.
2. Annual Budget Report
The Cooperative Extension Work Budget Statement
budgets all formula funds appropriated under the
Smith-Lever Act and other formula funds authorized
under the USDA Extension Service letter of
authorization (such as Renewable Resources
Extension Act funds). The Budget Statement also
reports on state, county, non-tax and other
federal agency funds (such as Sea Grant) estimated
available for Extension work during the federal
fiscal year. Extension Service special project
funds are budgeted separately throughout the year,
during the proposal process, and are not included
in this budget of Extension formula funds.
The budget is prepared by OBFS on forms sent with
the Extension Service letter of authorization.
The letter is generally dated early November to
mid-December of the effected federal fiscal year.
The budget is due by the date specified in the
letter, approximately five weeks from the date on
the letter.
To prepare the Cooperative Extension Work Budget
Statement, OBFS requires the following reports
from the units:
a. Program Budgets - Federal Statewide Special
Programs/Projects: OBFS prepares and sends
a budget statement to each DANR program with
the new allocation and an estimate of carry
forward from the previous fiscal year. The
program office must provide a budget of
funds and personnel effort (FTE) by object
class. This budget should be consistent
with the Federal Plan of Work.
b. County Budgets: As mentioned in the DANR
Administrative Handbook, Section 205-IV.A.,
OBFS annually requests each county to
prepare a budget for county provided
support.
3. Annual Expenditure Report
The Extension Service Annual Financial Report
summarizes expenditures for all funds authorized
by the Extension Service including formula and
special project funds, as well as state, county,
non-tax and other federal agency funds.
Expenditures for all funds except county funds are
reported in accordance with the University ledger
through September 30 and may include valid
encumbrances and accruals chargeable to the
reported federal fiscal year. The report is due
approximately April 1 of each year.
To prepare the Annual Financial Report OBFS
requires the following reports from the units:
a. Adjustments or Accruals: OBFS requires
departments to submit and maintain
documentation for all necessary adjustments
and accruals to expenditures.
b. County Expenditures: As mentioned in the
DANR Administrative Handbook, Section
205-IV.B., OBFS annually requests each
county to prepare a report of actual
expenditures for county provided support.
c. Cost Sharing Contribution Reports (UFIN
118): Expenditures of non-federal matching
funds are reported for any Extension Service
project which required matching during the
federal fiscal year.
4. Non-Financial Reporting
Various non-financial (technical) reports are
prepared and submitted to the USDA throughout the
year by OPIA or the principal investigators.
These include the Federal Plan of Work, the Annual
(Accomplishment) Report, client contact reports,
periodic project status reports and other reports
as required by the Extension Service.
Technical reports may be reviewed during federal
audits, to ensure that federal reporting deadlines
and program requirements have been met.
Departments which submit technical reports
directly to the USDA are responsible for
maintaining documentation to prove that applicable
federal requirements have been met.
C. Cooperative State Research Service (CSRS) Formula
Funds - Guidelines and Reporting
1. The federal CSRS formula funds include Hatch
Act, Hatch Act - Regional Research,
McIntire-Stennis, and Public Law 95-113 --
AES-Animal Health and non-AES Animal Health.
There are individual USDA CSRS
administrative manuals for each of the fund
types which provide guidelines on allowable
expenditures and use of CSRS federal funds
by DANR. These administrative manuals are
available in the Dean's offices, OPIA, OBFS
and the campus accounting offices.
2. Annual Budget Report
The University is notified by the USDA of the
amount of formula funds appropriated. There is a
separate letter for each fund. For Hatch Act and
McIntire-Stennis this notification is sent to the
University mid-November to mid-December of the
affected fiscal year, while the Animal Health
letter is sent mid-January to early February of
the affected fiscal year.
No audited budget report is submitted for these
funds as a whole; rather funds are only allowed to
be spent on projects which have been approved by
the USDA via technical reports submitted by OPIA.
Funds are budgeted on the University ledgers for
approved projects using forms 30 which are
prepared by the departments and submitted to OPIA.
3. Annual Expenditure Report
A Financial Status Report (SF-269) is prepared by
OBFS. The due date is December 31, approximately
90 days following the end of the federal fiscal
year. This report includes total expenditures for
each formula fund authorized by CSRS, as well as
the required state offset funds.
4. Non-Financial Reporting
Various non-financial (technical) reports are
prepared and submitted to the USDA throughout the
year by OPIA or the principal investigators.
These include the USDA Research Work Unit/Project
Description - Research Resume (AD-416), the
Classification of Research (AD-417), the Research
Funds and Staff Support (AD-419), the Progress
Report (AD-421), and other reports as required by
the Cooperative State Research Service.
Technical reports may be reviewed during federal
audits, to ensure that federal reporting deadlines
and program requirements have been met.
Departments which submit technical reports
directly to the USDA are responsible for
maintaining documentation to prove that applicable
federal requirements have been met.
VII. CONTRACTS AND GRANTS - (ALSO SEE SECTION 264)
A. Contract and Grants Offices
University policy requires that all proposals for
funding of research, training, and public service
projects be submitted to the funding agency or
organization only by specifically authorized
individuals, similarly, contracts be executed and
grants be accepted only by specifically authorized
individuals. The Vice President has been delegated
responsibility for administering the DANR contracts
and grants program. This authority has been
redelegated to the Assistant Vice President--
Administration (AVP-A) and the Contracts and Grants
Coordinator.
Similar delegations of authority have been made to
campus contracts and grants officers for certain
projects, such as those under the Agricultural
Experiment Stations, which are administered by campus
personnel.
B. Proposals for Research and Training Projects
Proposals are considered potential legal and
financial commitments made by the University of
California to funding agencies. The legal corporate
name of the University is "The Regents of the
University of California," and all legal documents,
such as proposals, contracts, and grants, must be in
the corporate name. As such, proposals must be
reviewed and approved by appropriate Division and
University staff before a proposal may be submitted
on behalf of the University of California.
Guidelines for proposal preparation are shown in the
DANR Administrative Handbook Section 264 or in campus
sponsored research manuals.
C. Accounting for Research and Training Projects.
In addition to the general University rules relating
to the administration and disbursement of funds, the
federal government (and other sponsoring agencies)
have specific rules regarding allowable and
unallowable costs. For reference purposes, the
following source documents give further information:
DANR - Administrative Handbook, Section 264
Berkeley - Accounting Handbook, Section J
Davis - Policy and Procedure Manual, Section 330-31
Riverside - Policy and Procedure Manual, Sections
200-XX
USDA - Extension Service Administrative Handbook,
Chapter III, Section K (Appendix II)
VIII. RECORDS MANAGEMENT
A. The primary objectives of the Records Management
Program of the University are: to assure economy and
efficiency in the creation, organization,
maintenance, use, and retrieval of administrative
records; to promote sound records management
practices; to establish and monitor a program of
records disposition; to assure the protection of
vital records; to assure the preservation of records
of historical importance; and to assure compliance
with laws governing privacy of and access to records.
Detailed information relating to the retention,
disposition, and disclosure of information in such
records is covered in the following manuals:
DANR - Administrative Handbook, Section 402
Berkeley - Records Disposition Manual
Davis - Policy and Procedure Manual, Section 320
Riverside - Policy and Procedure Manual, Section
800
USDA - Extension Service Administrative Handbook,
Section J-17 (see Appendix II).
B. The director or manager of each department is
responsible for assigning one individual to monitor
the review, retention, and disposition of records in
accordance with University policy.
C. All records should be appraised in relation to their
purpose, period of usefulness, and value to a
department. Records that are retained should have
administrative, legal, fiscal, research, or
historical value.
1. Administrative Purpose
Records created for accomplishing departmental
responsibilities have administrative value as long
as they assist the office to perform current or
planned activities.
2. Legal Purpose
Records have legal value if they contain evidence
of legally enforceable rights or obligations of
the University, or constitute items to fulfill
legal requirements. Examples are records that
provide the basis for actions such as legal
decisions and opinions; documents representing
agreements such as leases, deeds, and licenses;
and records of action in particular cases such as
claim papers and legal dockets.
3. Fiscal Purpose
Records of fiscal value are those that pertain to
financial transactions such as budgets, ledgers,
payrolls, and vouchers. After records have served
their basic administrative function, they may
still have sufficient fiscal value to justify
their retention for a time to assist the office in
accounting for the expenditure of funds. For
audit and reference purposes, departments should
retain an approved copy of all financial documents
forwarded to the Campus Accounting Office.
4. Research, Historical, or Archival Purpose
Some records have enduring value to the University
because they reflect significant historical events
or document the history and development of an
office.
D. The length of retention for various records varies
with the type of record and the office of record and
the University's Records Disposition Schedules should
be followed. As a general rule, a retention period
for routine departmental financial documents of five
years after the end of the fiscal year or the end of
the contract or grant is usually sufficient (the
campus accounting office is the office of record for
most financial documents).
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