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Welcome to the electronic version of the Financial Management Manual (FMM) of Ivy Tech Community College of Indiana! If you need clarification of a section or wish to propose changes or additions to the FMM, please contact your region's Executive Director of Finance. The Executive Director of Finance may then submit proposed changes to the Director of Operations Fund Accounting for review by FMM committee.

SECTION A: Accounting

OVERVIEW - FUND ACCOUNTING
This chapter is intended to provide information on general College accounting practices. It is not intended to serve as an authoritative source of accounting policy.


The College issues financial statements in accord with Generally Accepted Accounting Principles (GAAP). Publications including the AICPA Audit Guide are routinely furnished to the Regional Business Office by the Office of the Assistant Treasurer. These publications provide the basis for College accounting policy. Questions on accounting for College financial activity may be directed to the Office of the Assistant Treasurer.


Fund accounting is a manner of organizing and managing the accounting by which resources are classified for financial accounting and reporting. This is in accordance with activities or objectives as specified by donors, regulations, restrictions, or limitations approved by sources outside theinstitution, or with directions issued by the State Board of Trustees.


A fund is a self-balancing group of accounts consisting of assets, liabilities, revenues, expenditures, and fund balance. Each fund is separated in the financial records of the College and is limited to a specific use. This separation ensures the integrity of the individual funds and provides the necessary fiscal control over each fund group.


A fund group may be divided into two types of funds, Restricted and Unrestricted. Restricted Funds are those funds that are provided by donors or external agencies for specific purposes, programs or departments. Unrestricted funds are those funds that the College has the flexibility to designate the use of, in its operation of the College.

Currently, Ivy Tech Community College of Indiana operates the following fund groups:

I. Current Funds
II. Loan Funds
III. Endowment and Similar Funds
IV. Plant Funds
V. Agency Funds

 

I. Current Funds


The current fund group accounts for those economic resources which are expendable for the purpose of performing the primary mission of the College and which are not restricted by external sources or designated by the State Board of Trustees for other than operating purposes. This fund group contains three basic sub groups. They are Unrestricted, Restricted and Auxiliary.

A. Unrestricted Current Funds


1. Operations Fund

The operations fund accounts for the general operation of the College in fulfilling its mission. The Operations Fund includes the following examples of assets, revenue, expenditures, liabilities, and the fund balance.


ASSETS - includes object classes of cash, investments, and accounts receivable.
REVENUE - includes object classes of tuition and fees, state appropriations, overhead recoveries and investment income.
EXPENDITURES - includes object classes of equipment, consumable supplies, salaries and wages, utilities, leases and employee compensation.
LIABILITIES - includes object classes of accounts payable and accrued expenses.
FUND BALANCE - includes object classes that are allocated and unallocated.

B. Restricted Current Funds


Restricted Current Funds are those available for financing operations, but which are limited in use by external agencies and other donors to specific purposes, programs, or functions.

1. Sponsored Program Funds (Reference: COPM 1.61 and FMM, Section L)

1) Federal
2) State
3) Local
4) Apprenticeship
5) Private Grants and Contracts

Sponsored Program Funds noted above relate to specific grants, contracts and agreements between the College and external "Public" governmental entities, or "Private" organizations or individuals funded for the particular restricted purpose specified. Each of these individual programs is categorized by fund, according to the governmental entity or type of private organization that has entered into the agreement with the College. Sponsored Program Funds have the following assets, revenues, expenditures, liabilities and fund balances:
ASSETS - includes object classes of cash and accounts receivable.
REVENUES - includes restricted current funds to the extent that such funds were expended for operating purposes.
EXPENDITURES - includes expenses incurred as determined by GAAP.
LIABILITIES - includes object classes of deferred credits accrued and/or assessed liabilities.
FUND BALANCE - Allocated

2. Financial Aid Funds (Reference: Section F)

Ivy Tech Community College of Indiana offers various federal, state, and local financial aid assistance to its student body. These programs are designed to assist those students with a financial need to attend Ivy Tech Commnity College of Indiana. While operating these programs, the College accepts a fiduciary responsibility to the granting agency. The College is responsible for administering these programs according to the granting agencies' regulations and sound management policies.

The financial aid programs are accounted for in the following restricted current funds.

1) Financial Aid Federal
This fund will account for the following federal financial aid programs:
  a) Campus based programs
           (1) College Work-Study
           (2) Supplemental Educational Opportunity Grant
  b) Entitlement Programs
           (1) Pell Grants
2) Financial Aid State
This fund will account for the following state financial aid programs:
  a) Higher Education Award
  b) Hoosier Scholarship
  c) Stafford Loan
  d) State Summer Work-Study Program
3) Financial Aid Other
This fund will account for any scholarship provided from a local agency or individual.

C. Auxiliary Enterprise Funds (Reference: Section K)


Auxiliary Enterprise Funds reflect financial data from activity conducted to provide a service either directly or indirectly to students, faculty or staff. An objective of the Auxiliary Enterprise Fund is to be self-supporting. After an auxiliary enterprise becomes self-supporting and excess revenue is generated, this excess can be used (with appropriate approvals) to supplement the regional operation of the College. Currently the Auxiliary Enterprise Fund group maintains the following sub-groups:
1. Auxiliary Enterprise Bookstore

Accounts for the bookstore operation of the College.
2. Auxiliary Enterprise Parking Maintenance and Acquisition

II. LOAN FUNDS


Loan Funds account for those resources that are available for loans to students, faculty and staff. Currently the only loan programs operated by the College are for the benefit of the students. As an example, Ivy Tech Community College of Indiana operates a College-wide program which has been provided by the Sears Foundation. Several Regional institutes operate other loan programs provided from gifts by local organizations and student governments.

III. ENDOWMENT and SIMILAR FUNDS


There are three types of endowment funds:

1) True Endowment
2) Term Endowment
3) Quasi Endowment

True endowment funds are funds with respect to which donors have stipulated that the principal of the gift is to remain intact and is to be invested for the purpose of generating current and future income for a specified purpose. Term endowment funds are like endowment funds, except that all or part of the principal may be utilized after a stated period of time or upon the occurrence of a certain event.

The College operates a Quasi Endowment Fund. A Quasi Endowment Fund represents funds established by the governing board to function like an Endowment Fund, but which can be terminated by the board at any time. Both income and principal are expendable.

Use of the word "Endowment" relates to disposition of the corpus (original principal) of the fund. Income earned from investment of the principal can be expended, and may be restricted or unrestricted depending upon the declarations of the donor.

IV. PLANT FUNDS


The Plant Fund group accounts for new construction, repair and rehabilitation of existing facilities, retirement of indebtedness, and the assets and liabilities of the College. The Plant Funds are divided into the following sub-groups:


1. Unexpended Plant Fund

This fund is used to account for the construction of new facilities.

2. Renewals and Replacements

This fund is used to account for repair and rehabilitation of existing facilities.


3. Retirement of Indebtedness

This fund is used to record the payment of both short-term and long-term debt obligations resulting from the financing for the construction of facilities or the acquisitions of major equipment.


4. Investment In Plant

The Investment-In-Plant is a self-balancing group of accounts and not a fund. The Investment-In-Plant group of accounts is used to record fixed assets and long-term liabilities of the College

V. AGENCY FUNDS


Agency Funds account for the resources held by the institution as custodian or fiscal agent for students, faculty organization, or governmental agencies. An Agency Fund consists of only assets and liabilities.


ASSETS - includes object classes of cash, receivables, and investments.
LIABILITIES - includes object classes of accounts payable.

Ivy Tech Community College of Indiana operates the following Agency Funds:
Sub Groups


1. Agency Fund Payroll

The payroll fund accounts for federal, state and county taxes, employee payroll deductions, and College benefit contributions not yet forwarded to the appropriate agency.


2. Agency Fund Student Activity (Reference COPM 7.3-14)

This fund is to account for student activities funded from the student activity fee and/or student government activities.

The College accounting system accepts the recording of revenue and expenditures within these accounts. This is designed to provide information only on additions and deductions to assets and liabilities. Business Directors should be cognizant that the activity will close to Fund Balance and the Fund Balance will be reclassified to the appropriate liability account.

INTERFUND TRANSFERS/ INTERFUND BORROWING

I. INTERFUND TRANSFERS

Interfund transfers are payment movements of amounts between fund groups to be used for the objectives of the fund group receiving the transfer. There are two types of transfers:

A. Mandatory Transfers

Mandatory transfers include transfers from Current Funds to other groups resulting from:

1. Binding legal agreements relating to the financing of the educational plant.

2. Grant agreements with agencies of the federal government and other governmental or private organizations to match gifts and grants to loan and other funds. Mandatory transfers may be required to be made from either unrestricted or restricted current funds.

B. Non-mandatory Transfers

Non-mandatory transfers include those transfers from the Current Fund group to other fund groups made at the discretion of the governing board, and also may include the retransfer of resources back to Current Funds. However, unrestricted amounts transferred from other fund groups back to the Current Fund group are not considered revenues of Current Funds.

II. INTERFUND BORROWING

Interfund borrowing is the movement of monies between fund groups; is temporary in nature, and there is a definite plan for repayment within a defined period of time. Borrowing of funds should be recorded as assets of the fund groups making the advances, and as liabilities of the fund groups receiving the advances.

III. FUND ADDITIONS and DEDUCTIONS

Fund addition and deduction transactions may be used to move dollars between funds within a fund group. A more formal definition of additions is funds received or made available, while deductions represent decreases in fund balance.

ACCRUAL ACCOUNTING

Ivy Tech Community College of Indiana reports its activities on an accrual basis of accounting. Accrual accounting represents the effects of transactions on the assets and liabilities in the period the event occurs, not when cash is received or paid. The accrual method is used to match expenditures and revenues within the operating cycle of the College (July 1 to June 30). The recording of accounts receivable and accrued liabilities using accrual accounting enables the College to measure its financial position at a given date.

ASSETS

Assets of the College represent those items that are determined by generally accepted accounting principles to be economic resources of the College. Assets are divided into two main categories:

I. Current Assets
II. Fixed Assets

I. CURRENT ASSETS

Current assets of the College represent those items that can be consumed or realized during the current operating cycle. The following represents the current assets of the College:

A. Cash

Funds available to meet the operating expenditures of the College.

B. Accounts Receivable

Revenue earned by the College but not yet collected. A Contra asset account may accompany an accounts receivable. The Contra asset account establishes an "Allowance for Uncollectible Accounts Receivable." The establishment of this account allows the accounts receivable to be reported on a more realistic basis.

C. Inventories

Current inventories represent those items that are used during the current operating cycle to continue current operations. Presently the only items that are inventoried are those retail items necessary to continue the Auxiliary Enterprises of the College.

D. Investments

Investing of excess short term cash for the purpose of generating additional revenue.

E. Prepaid Items

Expenditures for benefits not yet received

II. FIXED ASSETS

Fixed assets represent those items of the College that economic resources of the College were used to acquire. Fixed assets may be real or personal property. They can be acquired by purchase, (includes capital leases), gift, bequest, or produced by the College.

A. Real Property

1. Land

Represents the purchase price and additional cost such as legal fees, brokers' commissions, title fees, razing, and other costs directly related to the cost of acquiring the property. If the land is donated, then the fair market value at the time of donation represents its value to the College.

2. Land improvements

All improvements made to land such as paving, sidewalks, et al.

3. Buildings and Improvements

Represent the cost other than land and moveable equipment in the construction or purchasing of an existing facility. If the building is being constructed and being financed from a debt agreement, then the interest paid during the construction phase is capitalized with the building cost. If the building is donated, the same rule applies as with land. Additional items added to the cost of a building are:

a. Repair and Rehabilitation Projects

Represents those items that increase the value, efficiency, or usefulness of the facility and are capitalized when the project has a cost of at least $10,000.

4. Leasehold Improvements

Represent the improvements made to leased facilities of the College in preparing or remodeling for College use.

5. Mobile Units and Improvements

The cost of acquiring mobile units and/or remodeling of those units.

6. Construction-In-Progress

Includes all construction projects that are not completed by the fiscal year end.

B. Personal Property

Represents all equipment owned by the College either purchased, leased (capital), gift, bequest, or produced by the institution. Please reference Section N, Fixed Assests, for the capitalization policy. Equipment is subdivided into the following areas:

1. Instructional Equipment

All equipment used in the instruction of students, ranging from classroom furniture to lab equipment.

2. Office Furniture and Equipment

Furniture and equipment used in the administration of the College (desks to calculators).

3. Machinery and Vehicles

Includes non-instructional equipment and vehicles ranging from hand tools to cars.

4. Computer Equipment

Represents computer equipment such as mainframes, terminals, mini computers and data communications equipment.

5. Library

All books, tapes, periodicals costing over $10.

6. Construction in Progress - Movable Equipment

LIABILITIES

Liabilities represent obligations of the College arising from past events and are to be satisfied by paying cash, transferring of assets, or providing future services. A liability has technically occurred when it can be reasonably estimated and assured of happening. Liabilities are generally divided into two categories:

I. Current Liabilities
II. Long-Term Liabilities

I. CURRENT LIABILITIES

Current Liabilities are designated obligations that are to be liquidated during the current operating cycle and by using current assets. The College recognizes the following current liabilities:

A. Accounts Payable

Materials and supplies acquired for the delivering of services to the students, faculty, or staff of the College.

B. Salary, Wages, and Fringe Benefits

The accrual of salaries, wages and fringe benefits that have been earned in one period and paid in the next.

C. Deferred Revenue

Revenue that has been received, but is not yet earned.

D. Other Liabilities

The current position of long term debt that is to be liquidated within the current period.

II. LONG-TERM LIABILITIES

Long-term liabilities represent those items that are planned to be paid back over a period in excess of one year. Long-term liabilities of the College represent the principal amounts of Bond Indentures and Lease/Purchase agreements. (NOTE: Capital lease agreements should also be included under Long-Term Liabilities.)

REVENUE

Revenue represents the increase in assets provided from the delivering of services or other earning activities delivered by the College. Current sources of revenue of the College are:

A. Tuition and Fees

All tuition and fees assessed against students for the delivery of instruction to them.

B. Governmental Appropriations

Includes all unrestricted and restricted appropriations for the current operation of the College.

C. Governmental Grants and Contracts

Grants and contracts awarded by a governmental agency.

D. Private Gifts, Grants and Contracts

Non-governmental source for the purpose of a particular instruction or a select group of instruction.

E. Interest Income

Income earned from the short-term investments of the College.

F. Sales and Services

Goods and services provided to the students, faculty, or staff through the auxiliary enterprises of the College.

G. Overhead Recovery

A partial recovery of operating expenditures of the College which is generally provided through contractual agreements of the College.

H. Other Income

All other income that can not be classified into one of the above categories.

It must be remembered that generally any revenue earned by the College can and should be classified into one of the above categories.

EXPENDITURES

Expenditures represent the cost of goods and services used or acquired by the College in providing its services to the public. Current classifications of expenditures are:

A. Exempt (salaried)

Used to identify administrative salary staff.

B. Non-Exempt (hourly)

Identifies all hourly personnel.

C. Instructional Staff

Identifies instructors.

D. Staff Benefits

Identifies staff benefits provided by the College.

E. Supplies and Expenses

Identifies expenditures other than those listed here.

F. Utilities

Identifies utilities for owned or leased facilities operated by the College.

G. Leases

Identifies lease payments made by the College.

H. Travel

Identifies travel expenses of the College.

I. Cost of Goods Sold

Generally used in the bookstore to identify cost of items for resale.

J. Capital

Identifies all capital expenditures of the College.

K. Scholarships and Grants

Identifies financial aid passing through the College records.

When deciding on what major classification to use for a particular expenditure, the following two items must be considered:

1. Excessive detail object classification should be avoided since it tends to complicate the accounting procedure and is often of very little benefit in financial management.

2. The selection of the most appropriate classification should be based on an objective assessment of what the item is commonly described as, not what its purpose for a particular situation might be.

Expenditures may be defined as either a direct or indirect cost. Direct costs are those costs that may be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity; or that may be directly assigned to such activities relatively easily with a high degree of accuracy, and without an inordinate amount of accounting. These costs may include salaries, wages, benefits, services, materials, and equipment. It is not the nature of the goods or services that determine direct cost classification; rather, it is the identification with the sponsored work or final cost objective.

Indirect costs, in contrast with direct costs, are those that have been incurred for purposes common to a number or all of the specific projects, programs, or activities of an institution, but which cannot be identified and charged directly to such projects, programs, or activities relatively easily with a reasonable degree of accuracy and without an inordinate amount of accounting. Examples include such items as heating, lighting, air conditioning, and janitorial services of buildings; and administrative services such as accounting, purchasing, personnel, and library services.

Without indirect cost reimbursements, sponsored programs and auxiliary enterprise in colleges and universities would require institutional support of indirect services, to the detriment of other functions of the institutions.

FUND BALANCE

The fund balance of a particular fund represents the past accumulation of revenue minus expenditures plus any additional adjustments. A fund balance can either be unallocated or allocated. An unallocated fund balance represents those resources that are available without a future restriction as to their use. While in turn, an allocated fund balance is either restricted to a particular use by an external entity or designated as to a particular use by the governing board.

LEASES

Ivy Tech Community College of Indiana classifies its lease agreements in accordance with generally accepted accounting principles:

I. Capital Leases
II. Operating Leases

I. CAPITAL LEASES

A capital lease is recorded as an asset and as an obligation at an amount equal to the present value of the property being leased. Capital leases are determined by any one of the following criteria:

A. The lease transfers ownership of the property to the lessee by the end of the lease term.

B. The lease contains a bargain purchase option.

C. The terms of agreement are equal to 75% or more of the estimated useful life. (NOTE: If the lease falls within the remaining 25% of useful life, the above criteria is no longer valid.)

D. "The present value at the beginning of the lease term of the minimum lease payments, excluding that portion of the payments representing executory cost such as insurance, maintenance, and taxes to be paid by the Lessor, including any profit thereon, equals or exceeds 90% of the excess of the fair value of the leased property to the lessor at the inception of the Lease." (AICPA Professional Standards Volume 3, Section 4053.007)

When applying the above criteria to land and buildings the following should be applied:

1. If the lease falls under items A or B, the land and buildings should be capitalized separately.

2. If the lease falls under C or D and the fair value of the land is less than 25% of the total, then the land and building is considered as a single unit. If the value of the land is 25% or more, then the land and buildings are considered separately.

II. OPERATING LEASES

An operating lease is any lease that does not fall into any of the four criteria under capital leases. It is a lease agreement that the College has no intention of acquiring title to. The lease is not capitalized, but is treated as a recurring expenditure over the term of the lease.

LIBRARY EXPENSES

The Library cost center has been identified as the area in which to record all expenses for the operation of and services provided by the Library.

The following definitions are provided to properly classify, record, and report library expenses:

A. Library

Activities that support the collection, cataloging, storage, and distribution of published materials; activities that directly support the operations of a catalogued collection or otherwise classified collection. This includes activities providing audio visual services and other services that aid in the transmission of information in support of the College's instruction and public service programs.

The activities include the following:

1. Acquire materials
a. Determine acquisition policy.
b. Screen and evaluate available materials.
c. Obtain materials for the libraries.

2. Prepare materials
a. Prepare and maintain materials for general use and distribution.
b. Examples:
searching
cataloging
recording
shelving
binding
repair

3. Provide service to identify and access materials.
a. Provide services and aids to identify and locate documents or materials
b. Examples:
information desk
indexes
visual aids (posters, signs)
reference services

4. Distribute materials
a. The control and distribution of library materials
b. Examples:
circulation services
reserve services
loan and rental services

5. Participate in inter-institutional exchange and loan services.
a. The borrowing or lending materials to other libraries
b. Examples:
inter-library loan office
messenger services

6. Disseminate information/promote Library
a. Provide general information about the library and its activities to promote library use.
b. Examples:
publications
advertisements and exhibits
personal communication

The purchase of books by a department from its funds would not be classified in this category, even though a departmental "library" is produced. The appropriate program categories may be used in classifying activities when the library serves a single, specific, academic program or department.

B. Branch Library

Auxiliary unit of a central library unit, which is administered from a central unit, and which has all of the following:

a. separate quarters
b. a permanent basic collection of books
c. a permanent staff
d. a regular schedule for opening to the public

References: Higher Education Finance Manual (HEFM)
Program Classification Structure (PCS)
IPEDS Libraries Survey

AUTO REPAIR PROGRAMS

Automotive repair, as referred to in this section includes auto mechanics and body shop. This section is provided due to tax related and classification and reporting issues.

Automotive programs frequently involve hands-on instruction in mechanics and body shop. Students may elect to use their personal vehicles; however, the instruction may involve the use of vehicles owned by individuals other than Ivy Tech students. In all cases, the preferred practice for acquiring parts and supplies is for the vehicle owner to provide the required items. This is generally accomplished based upon estimates of parts and supply needs.

The practice of the vehicle owner providing parts and supplies is preferred to minimize problems with Indiana Gross Income Tax and Indiana Sales Tax. In addition, this practice provides for a uniform method of dealing with the acquisition of automotive program parts and supplies and does not require the Region to maintain an inventory of parts.

A second acceptable practice, which may be used if the preferred practice described above is programmatically impractical, permits College funds to be used to acquire necessary parts. The total expense including sales tax should be accounted for in a program specific accounts receivable account in the operations fund. Vehicle owners are required to pay amounts due as a condition of the return of their vehicle. If balances are in the Accounts Receivable account at fiscal year end, a schedule must be forwarded to the Assistant Assistant Treasurer listing (a) Vehicle Owner, (b) Date of Purchase of Parts, and (c) Total Amount Due. The total of this schedule must agree with the balance in the accounts receivable account.

Regions who want to use alternative methods to the two practices detailed above for acquiring and costing vehicle parts and supplies, must file a request annually with the College Vice President for Finance/Treasurer. The request will be reviewed to determine the appropriateness of the alternative method. The request will be filed for each fiscal year and, if approved, will be retained by the Executive Director of Finance for review by internal and external auditors.

FINANCIAL STATEMENTS

The Ivy Tech Community College of Indiana prepares and distributes an annual financial report. The report is prepared to meet internal needs, as well as to provide data for oversight bodies and for public distribution.
The annual financial report includes three basic statements: (1) Balance Sheet, (2) Statement of Changes in Fund Balance, and (3) Statement of Current Fund Revenues, Expenditures, and Other Changes. The Notes to Financial Statements are considered to be an integral part of the Statements. Additional schedules, statements, etc. are included in the report as supplemental information to assist the reader/user of the report. The College has elected to use the columnar report format for the basic statements.
For financial reporting purposes, funds with similar characteristics are combined into fund groups. The College has summarized funds for reporting purposes as:

Current Funds
1. Unrestricted
          a. Operations Fund
          b. Auxiliary Enterprise Bookstore
          c. Auxiliary Enterprise Parking Acquisition/Maintenance
2. Restricted 
          a. Sponsored Programs Federal
          b. Sponsored Programs State
          c. Sponsored Programs Local
          d. Sponsored Programs Apprentice
          e. Private Grants & Contracts
          f. Student Aid Federal
          g. Student Aid State
          h. Student Aid Other
3. Student Loan Fund
4. Endowment and Similar Funds
5. Plant Funds
          a. Plant Fund Unexpended
          b. Plant Fund Renewal and Replacement
          c. Plant Fund Retirement of Indebtedness
          d. Plant Fund Investment-In-Plant
6. Agency Funds
          a. Agency Fund Payroll
          b. Agency Fund Student Activity


The Balance Sheet is a statement of financial position at the end of the College fiscal year-June 30. Account balances for Assets, Liabilities, and Fund Balance are combined for each fund group as needed for fair presentation. Comparative data is presented for Prior Year.


The Statement of Changes in Fund Balance reports the change in the financial position for the reporting period for each fund group. All fund groups containing a fund balance are reported.

The Statement of Current Fund Revenues, Expenditures and Other Changes reports revenue detail by source, and expenditure detail by function for each fund group. Total Revenue and Total Expenditure data should concur with data reported in Statement of Changes in Fund Balance.

The Notes to Financial Statements should be considered to be an integral part of the financial statements. A disclosure summary of significant accounting policies is contained. The summary briefly describes the fund groups, together with a short narrative concerning activity within each fund group. Additional notes are contained as required for fair presentation. This may include, but is not limited to, investment valuation, valuation of Investment-in-Plant, basis of accrual accounting, significant change in accounting procedure(s), significant changes in fixed assets and/or long-term liabilities, as well as other material financial consideration. Correction of an error and/or adjustment of a material amount in previously issued financial statements may be disclosed in the financial statements or in the notes to the statements.

Supplemental schedules may include Statement of Allocated Fund Balance. The Statement provides detail of allocated fund balance(s) by fund group. The allocated totals by fund group should concur with reported allocated funds on the Balance Sheet.

Supplemental schedules on Auxiliary Enterprise Fund Bookstore are currently included. The purpose is to provide greater detail on an area of concern to management. Greater detail on one fund in a fund group may be included to provide additional focus on an activity currently receiving additional management analysis. In addition, graphs and/or charts may be included to provide alternative presentation of financial data.

Supporting schedules are included on debt service and lease purchase. The schedules may be detailed by project/location and summarized to report College commitment.

SECTION B: Budgeting

I. Legislative Budget Request


The College prepares a legislative budget request (currently on a biennial basis) as a plan of operation for the legislative funding period. This biennial budget request is the formal College financial document and plan which, after approval by the State Board of Trustees, is presented to the Commission for Higher Education, the State Budget Agency, and ultimately to the Indiana General Assembly. The end result of this request is the authorized budget legislation approved by the Indiana General Assembly. This legislation becomes the basis for our internal budget process.

The biennial budget document(s) is entitled "Legislative Request for Operating and Capital Funds." The College traditionally prepares separate capital and operating budget documents. However, the process for review and approval are similar.

The legislative budget document contains general narrative addressed to the mission and goals of the College. A general history and description of the College are included to assist readers in further understanding the budget request.

The legislative request for capital funding needs addresses new construction, land acquisition, facility repair and rehabilitation, and major equipment acquisition. An introductory summary statement provides information concerning each capital request which is prioritized according to College-wide goals and needs. Data by project is included with pertinent information concerning need, relationship to long-range (ten year) facility plans, other capital improvement projects, impact on space usage, expected contribution to educational services, and cost computations.
The legislative request for operating funds addresses the expenditure estimates by major object and functional categories along with estimated sources of income supporting the educational services of the College. Numerous schedules are prepared to provide expenditure and revenue data by different functions and object categories. The cost information study, financial report and current year budget are used to prepare the requested schedules.

The biennial budget format is dictated by instructions from the Indiana Commission for Higher Education. The format and presentation of data may be expected to vary to comply with their instructions, as well as to accommodate College management in formulating budget documentation to best present the needs and objectives of the College.

II. Internal Budget

A. Annual Internal Budget

The College Internal Budget is prepared on an annual basis. The Internal Budget is a planning document used to insure the optimum allocation of College resources for instructional programs and support services. The process reflects the consummated legislative budget request in regard to state appropriations and legislative intent relative to student fee increases and wage and salary adjustments.

Current budget development procedures utilize a modified base plus concept. Non-recurring expenditure budget adjustments (prior year carry forward, College-wide accounts, etc.) are excluded from the base year. Increases are provided for added cost arising from expansion, salaries and wages, employee benefits, utilities, leases, and supplies and equipment. Increases are also provided for program improvement or special areas of services which are consistent with the overall College plan considering the established goals and mission.

The budget build up, as well as the final budget composite, provides for expenditures by general object category. Current general expenditure object categories include salaries/wages, staff benefits, general supplies and expense, utilities, facility leases, and capital equipment.

Data are solicited from regional management on all relevant budget matters. This includes concurrence with approved personnel staffing schedules, fringe benefit programs, exchange of information concerning changes in unavoidable expenses, as well as plans for plant expansion and special program improvement needs. The data is reviewed to assure compliance with established internal goals and external legislative intent. The expenditure budget must not exceed the established revenue budget which incorporates revenue from student fees, state appropriations and miscellaneous sources. The appropriations amount is the result of legislative action, while forecasted fees are derived from prior year enrollment and the State Board of Trustees approved fee schedules. After the annual budget document is reviewed by College management, it is presented to the State Board of Trustees for approval.

After final approval the budget detail by location is accumulated by the regional business office and College Central Office staff for input to the College accounting records system. The budget detail for the new fiscal year is balanced/reconciled to the approved total budget. The new budget detail is reflected in the reports generated by the College accounting system for the month of July.

II. Internal Budget

B. Operational Fund Expenditure Budget -- General Instructions

1. General Guidelines and Instructions

a. Salaries and Wages -- The full-time salary budgets must agree by positions classification with the Compensation Analysis which lists individual positions by function including name, job class number, title and salary. The Compensation Analysis must be returned to the Budget Department with the new salaries.
The Budget Department staff will update this analysis and maintain it throughout the fiscal year. Any position changes to this analysis, which agree with the allocation table, must be processed by utilizing the Position Request form (PRF) procedure. Positions may be deleted in order to transfer salaried fringe dollars to the supplies and expense budget by processing a PRF.
Non-instructional part-time salaries must be in the original budget in the part-time salary category.

b. Fringe Benefits -- The recommended budget for fringe benefits must be utilized until a Position Request form is submitted to delete, add, or restructure positions.

c. Utilities, Facility Leases -- Utilities and facility leases have been budgeted based upon actual expenditures and the regional projections. The recommended budget for these categories must be utilized. Adjustments will be made to the budget during the fiscal year and at year-end to match actual expenditures in these budget categories.

d. Supplies and Expense and Other Leases -- A minimum recurring base level of expenditures must be determined for these expenditure categories. A comparison should be completed for actual expenditures for the past several years and exclude any "one-time" expenses. Do not under-budget recurring expenditure needs in the Supplies and Expense and Other Leases categories.

e. Maintenance Level Budget -- If the budget allocation does not meet the minimum level of operation as projected, then it must be indicated on the General Operational Fund Expenditure Budget form (Exhibit A) by showing 'Other' income to support the budget base. All regional budget category amounts will be reviewed to assure they have been prepared in accordance with the guidelines. Meetings will be held by the Central Office and regional staff during August to review any budget problems and to prepare any required plan of action.

f. Budget Adjustments -- All Budget Transfer Requests (BTR's) completed by Central Office will be made to specific accounts to assure budget integrity. The regional reserve account by subcode will only be used for enrollment adjustments and other adjustments not specifically identified with a project. This procedure will assure the budgetary funds are included in the proper accounts.

2. Salaries and Wages

Position allocation/budgeting control provides the College the ability to know, at any given time, the budgetary dollars committed to personnel services for filled and vacant full-time positions. Every full-time position is defined, approved and budgetary dollars allocated.

The three salary categories used are exempt (salaried), non-exempt (hourly), and instructional. Within these three categories an employee can either be full-time or temporary/part-time.

For non-instructional areas, all exempt and non-exempt, full-time employees' July 1 salary must be line-item budgeted in the account that they are paid from. Exempt and non-exempt, part-time temporary budgets may be entered as a line item or as a pooled (Automatic Budget Reallocation) relationship.

Instructional full-time budgets (include summer appointments) must be line-item budgeted in the account from which they are paid. Part-time/temporary instructional budgets may be pooled in instructional divisions. The original part-time instructional budgets should be at least the amount of the previous year, assuming a zero enrollment growth factor, unless documentation is provided. Adjustments may be made throughout the year for increases or decreases in enrollment growth.

The following method is used to determine the salary budget:

a. The Compensation Analysis is distributed by the Budget Department. It is verified by the regional staff and utilized to determine all approved, filled and vacant positions.

b. All positions not approved (allocation exceeded) are not included in the base.

c. Vacant or unfilled positions are budgeted based on the maximum hire-in rate of the current salary range for the job classification.

d. Any nine-month instructional staff member who has a summer extended contract is identified. The summer appointment amount is to be included in the full-time salary budget base.

e. Any restricted or auxiliary dollars supporting the salary and wages of approved positions should be deducted from the salary and wage base for the operations fund.

The full-time position/budget control base should include only the approved positions (filled and vacant) which are funded by the operations fund. This base should be the actual full-time salary and wage commitment of the College operations fund.

The original established full-time salary and wage base will change only as a result of an approved PRF being processed during the year. When the PRF is approved, a BTR will be processed by the Budgeting Department.

Any changes from the March 31 budget base must be explained and documented. Every position included in the salary budget data distributed with the budget allocation will be reconciled. The above procedure should provide the Region with more control over actual full-time salary and wage commitments. The adjusted salary and wage budget base should always approximate the actual salary and wage commitment.

3. Fringe Benefits

The fringe benefits base is determined based on actual filled positions and approved vacant positions. The recommended budget should be the original budget unless there is documentation indicating significant changes. If new positions are added or deleted during the year, or if a position is reclassified resulting in additional or decreased fringe benefits, a budget adjustment to the fringe benefits' category must be completed. This procedure is done as part of the PRF process. The fringe benefit budget is adjusted to match expenditures at fiscal year end.

4. General Supplies and Expenses

Several categories within the supplies and expense object category should be line-item budgeted. Following are the categories which must be line-item budgeted.

Subcodes

 

 Duplicating  Custodial Services
 Publicity  Custodial Services
 Telephone  Maintenance and Repair
 Postage  Supplies
 Fee Remission  Security Services
 Printing  Grounds Maintenance

All other categories may be pooled at the departmental level or line-item budgeted; the degree of budget detail is a regional option.

5. Utilities and Facility Leases

Utility and facility lease expenses may either be line-item budgeted, or a budget pool (Automatic Budget Reallocation) may be used. The amount requested and approved in the recommended budget buildup should be the amount utilized in the original budget. The utility budget will be adjusted to match expenditures at fiscal year end.

6. Fee Remission

The budget allocation includes the fee remission-staff benefit allocation for employee, employee/spouse, and dependents taking courses at Ivy Tech. The budget amount for staff fee remission should be included in the fringe benefit original budget base.

7. Special Allocations

During the fiscal year, budgetary adjustments are completed from College-wide budgetary accounts for special requests and any other justified extraordinary expenses. When approval is granted for an increase, a budget adjustment is processed by the Budget Department after communication with the regional business office regarding the use of proper accounts.

III. College-Wide Budget/Finance Accounts

Several budgetary expenditure and revenue accounts are established at the College-wide level and administered by Central Office staff. These accounts may be established to serve all locations for the following reasons:

1. The expenditures are for the benefit of the College and cannot be attributed to any specific location, i.e., insurance/risk programs.

2. There is no rational basis on which to establish original budgets by specific location.

3. The specific need for budgetary funds cannot be determined at the time the original budget is established.

The following College-wide accounts are being utilized:

A. Unemployment Compensation

Unemployment compensation expenditures are budgeted in a College-wide reserve account. At the end of September, December, March, and June an analysis is completed for actual expenditures by location. Budget Transfer Requests are processed to move budgetary funds from the College-wide reserve to the specific locations in the amount of actual expenditures.

As of year-end closing, the expenditures for unemployment compensation should equal the budget allocation.

B. Indirect Cost Recovery

During the year, indirect cost recovery accounts may be established in the operations fund for approved projects funded by outside agencies and reported in the Sponsored Program area. No original College-wide revenue budget is established for indirect cost recovery. However, each calendar quarter, a BTR is processed to increase the regional expenditure reserve account and the appropriate indirect cost recovery revenue accounts.

All adjustments are based on the amount of actual collections in the indirect cost recovery revenue accounts. At year-end closing the revenue budget should equal the actual collections in the indirect cost recovery accounts. Corresponding adjustments will be made to the expenditure budget.

C. Apprenticeship Support

At the beginning of each fiscal year a budgetary reserve is established for College-wide apprenticeship support. An expenditure account has been established at each location in the operations fund with the title of "Instructional Staff - Support Apprentice Programs." The Sponsored Program staff prepares an analysis of apprenticeship expenditures. Appropriate charges to the operations and apprenticeship fund is completed by a journal voucher:

DR. Instructional Staff - Operations support of Apprentice Program
CR. Revenue

A budget transfer will be processed to move budgetary allocations from the College-wide reserve to the regional expenditure accounts. The amount of the BTR's for the operations fund will match the accounting entry prepared by Sponsored Programs.

D. Enrollment Growth

Each academic semester as of the official count date, comparisons are made between the actual student fee assessments and the current year budget. If the actual student fee assessments (as adjusted by a collection factor) are either over or under the current year budgets, a budget adjustment is required.

The following budgetary entries are made if the adjustment is positive:

DR. Regional Student Fee Revenue
CR. Regional Expenditure Reserve Account

If the budgetary adjustment is negative, the following entries are processed:

DR. Regional Expenditure Reserve Accounts
CR. Regional Student Fee Revenue

An accounting entry to the expense allocation and estimated revenue accounts must be processed to match the net change reflected in the budget expense and revenue accounts. If enrollment growth dollars are allocated to Ivy Tech by the General Assembly as part of the legislative biennial budget, they are included in a College-wide account for enrollment growth. Distribution of the budgetary funds is determined on the basis of actual student fee assessments.

E. Plant Expansion

Plant expansion funds are requested from the State legislature for operating costs associated with opening new facilities. The operating costs may include utility expense, custodial/maintenance services, and lease or rental agreements. The funds are granted by specific facility and are included in the operating budget but are determined in conjunction with the capital budget.

The amount of plant expansion funds granted by the General Assembly is budgeted in a College-wide account. The funds are initially allocated by facility or location, but budgetary funds are transferred to the regional institutes only after approval by Central Office staff. Only the actual amount necessary to operate expanded facilities which are approved by Central Office staff will be funded.

F. Insurance

All insurance/risk programs other than employee fringe benefit plans are coordinated and administered by Central Office staff. Expenditures are not allocated to a specific location. All payments are processed against the Central Office insurance accounts for the College in total.

G. Contingency Reserve

A College-wide contingency budgetary reserve is established at the beginning of each fiscal year. The contingency budgetary funds may be transferred to a location for an emergency or specified need. The use of budgetary funds from the contingency reserve must be approved by the President.

H. Regional Reserves

College-wide regional reserves may be established for specified purposes, i.e., to fund special request, quality improvement, or program improvement. The funding of the regional reserves is accomplished by reallocation of budgetary resources.

IV. Budget Transfer Request

The Budget Transfer Request is used in adjusting, correcting, or entering budgetary data at the beginning and during the fiscal year. Expense budgetary funds are transferred from one account to another by debiting the account which receives the funds and crediting the account from which the funds are coming. The reverse is true in revenue accounts.
The section of the Budget Transfer Request titled "Reason for Transfer" must be completed for clarity, control and future audit reference.

A. Next Year's Original Budget

Next year's original budgets may be entered by the regional business office staff utilizing the `Next Year (029)' feature on Screen 010. This feature may be utilized until the new year file is opened for use. The next year budget data will automatically be transferred to the `original budget' in the new year.

B. Original Budget

Original budgets may be entered utilizing the `Original (020)' feature on Screen 010 by the Central Office staff only. Regional staff cannot utilize the original budget feature.

C. Transfers

Transfers may be processed by appropriate staff at all locations during the fiscal year for specified accounts. Transfers may be completed by utilizing the `transfer (022)' feature on Screen 010.

Salary and fringe benefits related to a deletion, addition, or restructure of a full-time position must be processed on a BTR through the Central Office Budgeting Department. A PRF will not be processed for a position unless a completed BTR is attached.

Utilities and facility lease budgetary accounts cannot be changed unless approved by the Central Office staff. All utility and facility lease BTR's will be initiated by Central Office budgeting staff if they are part of plant improvement or expansion.

Revenue budgets may only be entered by the Central Office budgeting staff since it has the effect of increasing the overall College budget.

V. Pooled Budget Accounts

Pooled accounts allow for budgetary funds to be established in one account from which many expenditure accounts may then draw against this account. When an expenditure occurs, the budgetary dollars will automatically draw down from the pooled account to cover the charge.

No expenditures should be processed against any pooled budget account.

VI. Position Budgeting

A. Definition

Every full-time classified position is approved by the Executive Vice President for Regional Operations. With the approval of the position, budgeting dollars are committed to the funding of the salary and accompanying staff benefits. Position budgeting provides the College the ability to know at any given time the budgeting dollars committed to personnel services for filled and vacant positions. Each location's position control list will reflect the existence of all approved positions.

B. Procedures

1. All restructuring or changes to existing full-time positions, or new full-time positions must be submitted on a PRF, which must be accompanied by a Budget Transfer Request form (M-36). When final approval has been completed, position allocations will be updated and the budget transfer will be processed by the Budget Department. The Region will be notified by Employee Relations of approval. New employees may be entered on the payroll system only after final approval of the new or restructured positions.

2. All requests for new positions or restructuring of existing positions funded by sponsored or restricted funds must also be processed on a PRF.

3. Part-Time/Temporary positions will not require a PRF. These types of positions have an allocation of 99.0. A Region may have as many part-time/temporary positions as needed as long as regional budgetary resources are available.

4. When a full-time position is to be eliminated, the first page of a PRF, the Verification of Available Funds form and a BTR must be processed. Such notification will allow for updating the position control list. Any long-term vacant position should be deleted from the position control list and budgetary funds should be de-obligated.

5. At the end of each month, a position control listing and full-time employee report is produced and distributed to each Executive Director of Finance, Director of Regional Employee Relations and appropriate Central Office staff for reconciliation.

Cross reference: COPM 14.22 Personnel Procedures

SECTION C: Tax Manual

I. 1099-MISC

The Internal Revenue Service requires a 1099-MISC form be issued to independent contractors, other individuals, LLCs, and unincorporated businesses that have received payments of $600 or more during the calendar year. Office of the President—Finance produces the 1099-MISC forms, and mails one copy to the vendor.  The second copy is submitted electronically to the Internal Revenue Service by January 31st.  The 1099-MISC forms are not required to be submitted to the State of Indiana unless it includes state or local withholdings.

A 1099-MISC form is not required to be issued to 501(c)(3) non-profit organizations, state agencies, S corporations, or C corporations unless the payment is for medical or legal services.  Payments for medical or legal services must be reported regardless of their federal tax classification.

The College is responsible for obtaining correct supplier information for 1099 reportable vendors including the supplier name, social security number/employer identification number, and type of organization. Failure to obtain correct supplier information may result in a penalty to the College. This information is collected on a W-9 form which must be completed for each vendor. Office of the President—Finance utilizes the Internal Revenue Service’s Taxpayer Identification Number (TIN) matching service to verify the name and SSN/EIN match the IRS’s records for 1099 reportable vendors.  If the federal tax classification indicates that an individual will be performing services for the College, the Independent Contractor form must also be completed and signed by the individual completing the form, the Human Resources department, and the regional Finance Office.  Completed forms should be returned with the W-9 to the Vendor Create listserv.  Please reference the Purchasing section of the Financial Management Manual for further instructions regarding the addition of vendors. If the individual does not meet the criteria stated on the Independent Contractor form, he/she should be considered an employee of the College, and payroll taxes will be withheld as appropriate.

The following are examples of non-employee compensation that are reportable on the 1099-MISC form:
• Payments to non-employees for services rendered including payments for fees, honoraria, and personal service contracts
• Payments to recipients other than real estate agents for the rental of property and equipment
• Royalty payments of $10 or more per year
• Medical and health service payments including payments to corporations
• Legal services including payments to corporations

Scholarship and fellowship payments are not reported on Form 1099-MISC; these are reported on the 1098-T form described in Section IV below.

In the fall, the IRS will send a CP2100A notice (B Notices) related to the Form 1099-MISC from the College’s file submission to the Office of the President—Finance department.  This list includes errors such as an incorrect social security number or employer identification number, missing social security number or employer identification number, or the social security number/employer identification number that does not match the name on file with the IRS.  Office of the President—Finance will send the required B Notice letter to the vendor and request an updated W-9 form by the date specified by the IRS. If the vendor fails to return an updated W-9 form by the date specified on the B Notice, the vendor will be terminated in Banner.  The vendor cannot be re-established until an updated W-9 is received. In the event it is a second B Notice for the vendor, the vendor is automatically terminated upon receipt of the CP2100A notice from the IRS and the second B notice letter is mailed.  The vendor cannot not re-established in Banner until the appropriate documentation as required by the IRS is received.

Board of Trustees Per Diem
Members of the College’s state Board of Trustees and statewide Workforce Alignment board attending board meetings are eligible for mileage reimbursement and a daily per diem amount.   The daily per diem amount is considered taxable income and must be reported by the board members on their tax returns.  The College will issue a 1099-MISC form if the total per diem amount received by the board member exceeds $600 for the year.  If the total per diem amount does not exceed $600, board members will each receive a letter from the College stating the amount of per diem received during the year.  Regional board members are eligible for travel reimbursement only.

II. Tax Implications for Nonresident Aliens

Independent Contractors
IRS Publication 515 and Federal Tax Forms 1042, 1042S, and 8233 discuss the federal income tax implications of contracting with an individual who is a citizen of another country and who has not been granted resident alien status by the U.S. Citizenship and Immigration Service.

Neither the College nor the Foundation will enter into a contract for services with a nonresident alien without the prior approval of the President.  If it is deemed in the best interest of the College to enter into such a contract, the contract must be between the College and the party who is providing the service.  The Foundation will not be party to the contract and will not make any direct payment for the services provided.  The College is responsible for paying the service provider and withholding and remitting income taxes to the extent required by federal and state law.  If the services to the College are to be funded in whole or part from a grant to the Ivy Tech Foundation, the Foundation will issue checks to the College to cover the appropriate amounts payable under the grant.

Contracts entered into for personal services include payments for professional services, including fees of an attorney, physician, or accountant made directly to the person performing the service.  In addition, it includes honoraria paid by the College to visiting lecturers and researchers.  Pay for certain personal services performed in the United States may be exempt from U.S. income tax if the person is a resident of one of the treaty countries, if the person is in the U.S. for a limited number of days, and if the person meets certain other criteria.  For many foreign independent contracts, the maximum number of days the person can reside in the U.S. is 183 days during the tax year.  Residents of Canada and Mexico can only be in the U.S. for no more than 183 days during the calendar year.

Unless the treaties specifically exempt the income earned while the foreign independent contractor is in the United States, Ivy Tech must generally withhold tax at the 30% rate.  This rule applies regardless of the worker’s place of residence, the place where the contract for service was made, or place of payment.  Ivy Tech must withhold at the statutory rate of 30% on all payments unless the nonresident alien enters into a withholding agreement or receives a final payment exemption.  The College is required to report the income paid to the independent contractor and the related withholding on Forms 1042-S and 1042-T.

Scholarship and Grant Reporting
At each region, the College has a designated school official.  The designated school official is responsible for collecting student information, such as the type of visa and program into which the student is enrolled.  Accounts of students receiving scholarships, grants or other third party payments are reviewed to determine if a 1042-S required. Once the student is determined to need a Form 1042-S filed on their behalf, there are five procedures that the College follows to ensure proper reporting and withholding.

1) Determine the amount of qualified and non-qualified scholarships, grants, and third party payments. Withholding is required on all payments from U.S. sources to nonresident alien students for non-qualified scholarships and grants.  The payment of a qualified scholarship to a nonresident alien is not reportable and not subject to nonresident alien withholding.  A qualified scholarship is defined as any amount paid to an individual as a scholarship or fellowship grant to the extent that the amount is used for tuition and fees required for enrollment at an educational institution and fees, books, supplies, and equipment required for courses of instruction at the education organization.
2) Third party payments, scholarships, and grants are applied first towards qualified tuition and fees required for enrollment at an educational institution and fees, books, supplies, and equipment required for courses of instruction.  Any amounts remaining are then applied to other materials and living expenses, including international insurance. Amounts that are not considered qualified scholarship expenses as outlined above are subject to withholding and must be reported on Form 1042-S.  If a student receives a scholarships that covers living expenses as well as tuition and incidental expenses, the amount for living expenses is taxable and subject to the appropriate withholding tax (14% for F and J visa students or 30% for all others) unless the student completed IRS Form W-8BEN to claim a treaty exemption. The amount included on Form 1042-S should not include amounts reported on Form W-2 or Form 1099.
3) Forms 1042-S must be filed by March 15 of each year and are filed by Office of the President—Finance. 
4) Office of the President—Finance also files Form 1042, Annual Withholding Tax Return for U.S. Source of Income of Foreign Persons, which is a summary of all Form 1042-S that have been filed during the year.  Form 1042-T, Annual Summary and Transmittal of Forms 1042-S, is also filed by Office of the President—Finance.  This form summarizes the number of Forms 1042-S that are sent to the IRS and total amount of gross income and U.S. Federal tax withheld on the forms. The forms are required to be submitted by March 15 unless IRS Form 2758, Application for Extension of Time to File Certain Excise, Income, Information, and Other Returns has been filed. IRS Form 2758 grants an extension of 30 days to file the forms with the Internal Revenue Service.  Copies of the 1042-S forms are mailed to the students by the March 15th deadline regardless of whether an extension was granted.
5) Deposit requirements exist for tax liability amounts that are due to the IRS.   The amount of tax that is required to be withheld determines the frequency of deposits.  If at the end of the calendar year, the total amount of undeposited taxes is less than $200, the taxes can be paid with Form 1042 or by depositing the entire amount by March 15 of the following calendar year.  If at the end of any month the total amount of undeposited taxes is more than $200 but less than $2,000, the taxes must be deposited within 15 days after the end of the month.  If at the end of any quarter-monthly period, the total amount of undeposited taxes is $2,000 or more, the taxes must be deposited within 3 business days after the end of the quarter-monthly period.  A quarter-monthly period ends on the 7th, 15th, 22nd, and last day of the month.  All funds must be deposited using the Electronic Federal Tax Payment System (EFTPS). Office of the President—Finance handles the depositing of withholdings.

Hiring Nonresident Alien Students for Employment
A student is defined as any individual who is temporarily in the U.S. on an F, J, M, or Q visa and substantially complies with the requirements of that visa.  Any person who meets these conditions for five calendar years, will not meet the requirement after the fifth year unless the person can establish to the satisfaction of the IRS that he/she does not intend to permanently reside in the U.S. and has substantially complied with the requirements of his/her nonimmigrant status.  The student must be granted permission to work, and must have his/her Form I-94, Arrival-Departure Record stamped. In order for the student to be in compliance with the visa status, the student must not work more than 20 hours per week while school is in session (the student may work full-time while on breaks), and on-campus employment must be performed on the College’s premises or at an off-campus location which is educationally affiliated with the school.

Any nonresident alien student who is enrolled and regularly attending classes may be exempt from social security and Medicare taxes on pay for services performed for that school.  If the student is a resident alien classification, pay would be subject to social security and Medicare taxes.

Prior to employment with the College, the student must file Form I-765, Application for Employment Authorization, with Form I-20 A-B/I-20 ID, Certificate of Eligibility of Nonimmigrant (F-1) Student Status.  The student will also be required to complete the New Hire Packet.  If the student is from a treaty country, the student should file Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual.

At the end of the year, Office of the President—Finance will file Form W-2 and Form 1042-S as appropriate for those receiving compensation from Ivy Tech.  Form W-2 reports income earned that is not covered by tax exemption.  Form 1042-S is used to report wages in which there was no tax withheld due to the claiming of a tax treaty or fellowship.  Forms 1042-S are mailed to student employees by March 15th.  Copies of Form 1042-S and the transmittal form, 1042-T, are also submitted to the IRS by March 15th.  Form W-2, if applicable, will be sent no later than January 31st.

Hiring Nonresident Employees (Non-Students)
Salaries, wages, or any other pay for personal services paid to nonresident alien employees are subject to graduated withholding in the same way as for U.S. citizens and residents if the wages are effectively connected with the conduct of a U.S. trade or business.  Any wages paid to a nonresident alien for services performed as an employee for an employer are generally exempt from the 30% withholding if the wages are subjected to graduated withholding.

Pay of professors and teachers who are residents of treaty countries is generally exempt from the U.S. income tax for two or three years if they temporarily visit the U.S. to teach or do research.  The exemption applies to pay earned by the visit professor or teacher during the applicable period.  For most of the treaty countries, the applicable period begins on the date of arrival in the U.S. for the purpose of teaching or engaging in research.

Wages paid to teachers, professors, and researchers are given a separate income code number because many tax treaties provide at least partial exemption from withholding and from U.S. tax.  Graduated withholding of income usually applies to all wages, salaries, and other pay for teaching or research paid by Ivy Tech.

A nonresident alien temporarily in the U.S. on an F-1, J-1, M-1, or Q-1 visa is not subject to social security and Medicare taxes on pay for services performed to carry out the purpose for which the alien was admitted to the U.S.  Social security and Medicare taxes should not be withheld or paid on this amount.  However, if an alien is considered a resident alien, that pay is subject to social security and Medicare taxes even though the alien is still one of the nonimmigrant statuses mentioned above.  This also applies to FUTA (unemployment) taxes paid by the employer. Alien teachers, researchers, and other alien employees temporarily present in the U.S. on a H-1a, H-1b, L-1, O-1, O-2, P-1, P-2, P-2, TC, TN, refugee, or asylee immigration status are fully liable for social security and Medicare taxes unless an exemption applies from one of the tax treaties.

III. Payroll and Related Taxes

Office of the President—Payroll handles federal, state, and local tax withholding for the College as well as the annual W-2 reporting.  The amount of federal tax withheld is determined based on the federal witholdings chart and the number of allowances the employee reports on their W-4, Employee’s Witholdings Allowance Certificate.   The amount of state and/or local tax withheld is based on the state and local witholdings chart and allowances as reported on the employee’s Indiana Form WH-4, Employee’s Witholding Exemption and County Status Certificate, Form MI-W4 for Michigan, Form K4 for Kentucky, or Form IT-4 for Ohio as appropriate.

W-2s are mailed to the employee’s address on file with the College no later than January 31st, and are also available on MyIvy.  Office of the President—Payroll submits the W-2 information to the Social Security Administration, state and local tax agencies by the January 31st deadline.

Employees Assigned a College Car
In the event that employees are permanently assigned a College vehicle with the ability to use the vehicle for personal use, the name of the person assigned the vehicle should be reported to Office of the President—Finance.  Fuel and maintenance reimbursements for the car may be taxable to the employee.  Office of the President—Finance will review all fuel reimbursements, maintenance, and gas card charges for the assigned vehicle, and will provide this information to Office of the President—Payroll for inclusion on the employee’s W-2 form as appropriate.

Moving Expenses
At the discretion of the President, an individual may receive reimbursement for expenses incurred in moving to accept a position at the College.  Alternatively, the College may pay a third party for expenses related to an individual’s move to accept a position at Ivy Tech.

In general, moving expenses are considered compensation and subject to taxation unless the reimbursement is considered qualified moving expense reimbursement.  In order to be deemed qualified moving expenses, a change of workplace must have occurred and the new workplace must be at least 50 miles farther away from their old home than their old workplace was.  Additionally, the employee must have worked full-time in the new workplace for at least 39 of the 52 weeks immediately after the move.

Transportation of household goods, lodging expenses while in route to the new location, and mileage are examples of items that may be reimbursed.  Mileage payments exceeding the federal allowable rate for moving, meals, temporary lodging beyond the time in route, and other expenses reimbursed by the College may be taxable to the employee.  Office of the President—Finance will identify moving expenses using the account codes in Banner, and provide this information to Office of the President—Payroll for inclusion on the employee’s W-2 form.

Educational Support--Fee Remission, Tuition Assistance, and Tuition Reimbursement
Under current Federal laws all or some portion of fee remission, tuition assistance, and tuition reimbursement benefits may be subject to taxation.

For an Ivy Tech employee applying for Ivy Tech fee remission for themselves at the undergraduate level, remission benefits are not taxable.  This is also true for the spouse of an Ivy Tech employee using the College’s fee remission benefits at the undergraduate level.  For a dependent child of an Ivy Tech employee, the benefit of fee remission at Ivy Tech is also non-taxable.

The College’s tuition assistance program is available to full-time, benefits-eligible faculty and staff pursuing a terminal degree or degree required as a condition of employment.  Faculty and staff in this program may be supported for up to twenty-four (24) hours per fiscal year, not to exceed nine (9) credit hours per semester provided the coursework is taken at an institution accredited by the federally recognized regional association.

Tuition reimbursement may also available to full-time, benefits-eligible faculty and staff who wish to enroll in college and university classes outside of Ivy Tech on an elective basis.  Participants in the reimbursement program may be supported for up to twelve (12) credit hours per fiscal year, provided budgetary funds are available and the course is taken at an institution accredited by the federally recognized regional association.  For a comprehensive list of requirements for participation in the tuition assistance and tuition reimbursement programs, please review the Educational Support section of the Full-Time Employee Handbook.

According to Section 127 of the IRS Code and IRS Publication 15-B, employee tuition assistance and tuition reimbursement for undergraduate, graduate or professional level courses may be taxable. If an employee receives more than $5,250 in tuition assistance or reimbursement per calendar year, the value of the assistance or reimbursement above $5,250 should be included as wages and reported in Box 1 of the employee’s W-2.

IV. 1098-T Forms

Ivy Tech is required to issue Form 1098-T, Tuition Statement, which reports qualified tuition expenses during the calendar year.  Qualified tuition is defined as tuition, fees, and course materials required for a student to be enrolled at or attend an eligible education institution.  Amounts paid for any course or education involving sports, games, or hobbies, unless related to the student’s degree program or charges for room, board, insurance, student health fees, transportation and other living expenses are not considered qualified tuition. The College reports the amount billed for qualified tuition and related expenses.

The form also reports scholarships or grants applied to the student’s account during the calendar year.  The form is informational only and may assist students in determining their ability to qualify for the education credit on their federal tax return. The 1098-T forms are generated by a third party processor with the assistance of the Cash Management department and are postmarked by January 31 to the student’s address on file with the College.  The third party processor submits the required file to the Internal Revenue Service. Students may also access their 1098-T forms through MyIvy and the third party processor’s website.

Copies of 1098-Ts for the current year and two years prior may be requested from the Cash Management department within Office of the President—Finance.  If a 1098-T needs to be corrected, the regional Business Office should contact the Cash Management department.

1098-Ts are not generally issued to high school or apprenticeship students unless requested by the student.  1098T-s are also not issued to Indiana College Network students. The student must have a social security number or taxpayer identification number provided to the College in Banner in order to receive a 1098-T. The College requires social security numbers for all new applications.  In the event a student did not receive a 1098-T due to not having a social security number on file with the College, the Cash Management Department at the College will issue a 1098-T for three prior years upon request of the student.

In the fall annually, the College may receive a list of students whose social security number is either missing from the 1098-T form or whose name and social security number on the 1098-T form did not match the records of the Internal Revenue Service (B Notice).  The list is reviewed by Office of the President—Finance and letters are sent to the students on the list to request an updated social security number and corrections are made as appropriate.

V. Gifts, Prizes, and Awards

College departments and recognized student organizations may conduct drawings or other games of chance to encourage attendance and participation in events. Prior to the drawing or game of chance, the College’s General Counsel’s office should be contacted to ensure the event and prize are in compliance with the regulations established by the Indiana Gaming Commission.

Indiana state law requires entities that conduct charity gaming and raffles to acquire a gaming license.  Indiana Code 7-32.2-2-26 defines a raffle as “the selling of tickets or chances to win a prize awarded through a random drawing.”  Raffles, bingo, poker, and other similar games are prohibited by the College unless determined by the College’s General Counsel to be approved.

The value of the prize awarded through a drawing or contest is considered taxable income to the recipient and may be reported to the federal and state revenue agencies as appropriate.  Prizes or gifts that include cash or cash equivalents, such as bookstore gift cards, or tangible items determined to not meet the IRS’s definition of de minimis, may also be considered taxable income to the recipient and reported to federal and state revenue agencies as appropriate.  Tangible items such as t-shirts or plaques are considered to be de minimis and not required to be reported. Cash or cash equivalents, such as gift cards, no matter the value, are never excludable as de minimis. Questions regarding whether an item meets the definition of de minimis or reporting of specific items should be directed to the Chief Accounting Operations Officer in Office of the President—Finance. Regional and Office of the President staff providing gifts, awards, or prizes should complete the Gifts, Prizes, and Awards Data Form and return to Office of the President—Finance within 10 days of distribution.  Payments to non-employees totaling $600 or more in a calendar year will be reported on Form 1099-MISC.

Prizes given by third parties directly to individuals are not reportable by the College.

Awards or gifts to employees, except for length of service, are taxable and must be reported to Payroll for inclusion on the W-2 form.  Awards to employees for length of service are not taxable if received after a minimum of five years, during a presentation, not cash or cash equivalent and no other awards were received in the most recent five years.  In order to ensure compliance with the IRS’s qualified plan award regulations, the average cost of all the length of service awards given by the College during the tax year must be $400 or less. Cash and cash equivalents, as stated above, are never considered de minimis and should not be purchased for use as a gift, prize, or an award to an employee.  Tangible gifts in excess of $100 for employees and not meeting the above stated definition of a service award are taxable and should be reported to Payroll for inclusion on the employee’s W-2.  Note, this applies when the award or gift is purchased by the College and does not include gifts paid by individuals personally without reimbursement from the College.

Cash awards given to students should be reviewed to determine if it is a scholarship or prize. In order to be considered a tax-free scholarship, the recipient must be a candidate for a degree at an educational institution that maintains regular faculty and curriculum and normally has a regularly enrolled body of students in attendance. The amounts are limited to the amount received to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the institution. Scholarships should be reported to Financial Aid for inclusion on the student’s record.

VI. Unrelated Business Income Tax

Ivy Tech is allowed an exemption from federal income taxes due to its classification as a political subdivision of the State of Indiana.  Income earned from engaging in activities that further the College’s mission and purpose is exempt from federal income taxation as this is related to College’s reason for the exemption.  Ivy Tech is not exempt from federal income taxation on activities that are regularly carried out and “not substantially related” to the exempt purpose of the College regardless of whether the income is used to support or carry out the charitable, educational, or other functions or operations that constitute the bases for the exempt status.  The following three criteria must be met in order to be considered an unrelated business:
(1) A trade or business (defined as activity conducted for the production of income from selling goods or performing services).
(2) Regularly carried on (that is not infrequent or sporadic or conducted for a short period or number of times during the year; not intermittent).
(3) Not substantially related to the organization’s exempt purpose.

Annually, the College must complete an Exempt Organization Business Income Tax Return (Form 990-T).   The Executive Director of Finance/Administration for each region should submit the Unrelated Business Income Tax questionnaire to the Chief Accounting Operations Officer annually.

There are certain exclusions from the above general rule.  Income from an activity that would normally be deemed unrelated and therefore subject to tax, is nontaxable where:

(1) Volunteer workforce.  Substantially all the work in carrying out the trade or business activity is performed for the College without compensation.  The College defines substantially all as 85%.
(2) Convenience of members.  The business is carried on primarily for the convenience of the College’s students, employees or officers.
(3) Sales of donated merchandise.  The selling of merchandise, substantially all of which was received as gifts or contributions to the College.
(4) It results from passive rental activities.

Office of the President—Finance ensures accurate, timely filing of College Federal, State, and Local income, excise and sales tax returns and payments. Annually, Office of the President—Finance files the Form 990-T, the exempt organization Business Income Tax Return.

VII. 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes

Form 1098-C must be completed for donations of a motor vehicle, boat or airplane with a value of $500 or more.  A separate form must be completed for each qualified vehicle. A qualified vehicle is defined by the IRS as any motor vehicle manufactured primarily for use on public streets, roads, and highways, a boat or an airplane.

The regional Finance Office is responsible for preparing copies of the Form 1098-C for items donated directly to the College, including listing the donee’s name, address, and telephone number, date of contribution, donee’s tax identification number (35-1180631), donor’s tax identification number, donor’s name, and donor’s address.  The odometer mileage, year, make, model and vehicle or other identification number should be completed as available.  Boxes 4-7 on Form 1098-C should be reviewed for applicability, and completed if necessary. Copies of the forms should be sent to Office of the President—Finance 30 days after the date of donation and no later than January 15th of the year following the donation. Form 1098-C should not be prepared for qualified vehicles that are donated to the Ivy Tech Foundation. Office of the President—Finance will complete the required submission to the Internal Revenue Service by the March 15th deadline.

VIII. Sales & Use Tax

Sales Tax on College Purchases
As a non-profit organization, the College is entitled to purchase goods and services, including meals and hotel rooms, exempt from tax if the goods, services, or meals are to further the non-profit’s exempt cause or to be sold during a fundraiser to raise money for the College’s exempt cause.  Goods, services, or meals for fundraisers are limited to 30 days within a calendar year.

When purchasing goods or services, including meals and hotel rooms, for a valid exempt function of the College, a completed sales tax exemption certificate, State of Indiana Form ST-105, should be presented to the vendor.  For vehicle or watercraft purchases, State of Indiana Form ST-108E, should be presented. Sellers may refuse to accept the certificate if the following criteria are not met:

• Purchase must be paid using College funds
• Must be billed directly to and paid by the College (not an employee of the College and subsequently reimbursed)
• Purchase must be for a valid exempt function of the College.

Signed Indiana sales tax exemption certificates are available by contacting Office of the President—Finance.
 
Sales tax laws differ by state. Regional Finance Offices should confirm the process for obtaining sales tax exemptions with the vendors which they are conducting business.  Requests to complete sales tax exemption certifications for other states should be sent to the Chief Accounting Operations Officer.

Sales Tax and Food and Beverage Tax on College Sales

Ivy Tech must collect and remit Indiana State Gross Retail Sales Tax from purchasers on sales of goods and tangible personal property, including IncludED materials, unless an exemption exists, or unless the purchaser presents a valid exemption certificate.

Additionally, the College is required to pay Food & Beverage tax at the rates specified by towns and counties through the Indiana Department of Revenue.
 
The Cash Management department within Office of the President—Finance calculates sales tax and food and beverage tax on a monthly basis, and submits payment to the State of Indiana. Sales tax is calculated at the Indiana state sales tax rate less a collection allowance of all accounts that indicate “taxable” in their titles.  Food and beverage tax is calculated according to the county food and beverage tax rates published by the Indiana Department of Revenue.  Therefore, all taxable revenue should be recorded to an account that uses “tax” or “taxable” in its title. Examples include the following account codes: 1071, 1602, 1605, 1606, 1610, 1710, 1720, 1721, 1726, 1736, 1807, 1831, and 1888.  Additionally, all taxable revenue should have a corresponding entry for sales tax collected posted to account code L008 or L009 for food & beverage tax for the same fund in which the taxable revenue was posted.

IX. Property Taxes

Properties owned by Ivy Tech are exempt from Indiana property tax. In accordance with guidelines from the Indiana Department of Local Government Finance provided to the College of January 19, 2010, each parcel of real estate owned by the College should be listed with the 610 (Exempt Property Owned by the State of Indiana) classification code.

Landlords who rent property to the College for its exempt purpose can qualify for an exemption from property tax. The owner of the property must file two copies of Form 136 with the assessor of the county in which the property is located.  The application must be filed annually or before April 1 of the assessment year and re-filed every even year.

 

SECTION D: Retention Of

I. Rationale

A. Ivy Tech Community College of Indiana is subject to the statutes of the State of Indiana concerning the preservation and destruction of all public financial records. The financial records of the College will be preserved and/or destroyed as required by Federal and State Regulations.

B. The Vice President/Treasurer or designee is responsible for maintaining the filing and record retention for the financial functions of the College. The Vice-President/Treasurer designates the Executive Director of Finance (EDF) to be responsible for maintaining the filing and record retention in each Region. The filing system will be so designed as to provide quick and adequate retrieval for use by the financial staff, internal and external audit staffs, or other authorized personnel. Retention schedules, disposal plans and relevant policies will be on file and available for external and internal audit.

C. Financial records will be retained according to the recommended Commission on Public Records retention schedule found in this section. Supporting documentation, including but not limited to, invoices, requisitions, bids, quotes, receipts, etc., must be retained according to the retention schedule specified with/for each financial document. Retain the documents in appropriate storage either as an original paper document, or in one of the authorized formats found in Chapter III, Definitions. In the event of conflicting retention requirements the longest period of time will prevail.

D. Maintain the financial records for the current and prior fiscal year on-site. Files or documents subject to retention may be kept off-site as long as adequate and reasonable security precautions are taken. Retention of specialty reports, like the FBM070 series, other ad hoc reports or spreadsheets, is at the discretion of the department receiving or creating the report. However, if specialty reports are used to support financial reports, retention is the responsibility of the individual filing the report and it must be maintained for audit purposes.

NOTE: If an audit has begun within the proposed retention period those records may not be destroyed until the audit is complete. The Treasure's Office is responsible for issuing the Notification of Audit Completion. Records will not be destroyed until receipt of this notification.

II. Applicable Regulations

State Commission of Public Records Guide for Preservation and Destruction of Public Records, Revision 1973;
Indiana Code 5-15-5.1-1 as amended;
Burns Indiana Statutes, Section 57-401 et seq;
State Board of Accounts;
Office of Management and Budget Circular A-110, revised 11/19/93, as amended 9/30/99.

III. Definitions

A. Public Financial Records. "Public records or Records" include records that have been recorded, copied, or reproduced by a photographic, photo static, miniature photographic, or optical imaging process that correctly, accurately and permanently copies, reproduces or forms a medium for copying or reproducing the original record on a film, compact disk (CD) or other durable material. The copy must be treated as an original.

The following list includes, but is not limited to, documents that are considered part of the public financial records of the College and are subject to the retention schedules:
1. Budget Transfer Requests (BTR).
2. Cash Receipt Vouchers.
3. Purchase Requisition/Check Requests.
4. Purchase Orders.
5. Invoice Vouchers.
6. Journal Entries (JE).
7. Statement of Accounts (FRS records).
8. Banking and Investments.
9. Payroll Records.

B. Electronic Records. Any record(s) created, maintained, altered or deleted in digitized format. Just like paper records, the same retention requirements apply to these formats. Security measures will be taken to protect these records from unauthorized alterations or deletion.

C. Computer Output Microfiche (COM). A process for copying and printing data onto microfilm from an electronic media found on a personal computer, mini or mainframe computer. The information is 'read' from a formatted magnetic media (tape) and transferred to microfiche by laser. This medium requires a separate microfiche reader or reader/printer machine. This medium prevents unauthorized alteration or deletions.

D. Compact Disk-Read Only Memory (CD-ROM). The process for transfer of information is the same as paragraph c. The information is processed in a tape format and transferred to a "read-only" computer disk. Information is retrieved using any appropriate CD system. This medium prevents unauthorized alteration or deletions.

E. Imaging. An optical imaging process that correctly and accurately copies, reproduces, or recreates the original record, document, paper or instrument. Indiana Code 5-15-1-1(a) as amended by Public Law 79 1995 allows for the use of an imaging system in the creation and storage of public records. Imaging systems will be designed to:

1. insure security of the information,
2. appropriate indexing for ease of retrieval and,
3. provides full documentation of the procedures for which documents will be imaged. The procedures will identify who in each Region and/or Central Office location is responsible for verifying the image is a true and accurate representation of the original document.
4. an imaged document must in a retrievable format that does not allow alteration or deletion.

IV. Disposal/Destruction

The preferred method of destruction for most records is recycling. However, Indiana Code 5-15-5.1-13 states that confidential records must be destroyed in such a manner that they cannot be "read, interpreted, or reconstructed". The preferred method of confidential record destruction is shredding.

A confidential record is defined as:

A. Any record(s) that contain personal identifying information. (e.g., employee or student name, address, or social security number); B. Document(s) of a legal nature; or C. Any internal document(s) determined by the holder to be of a confidential nature. All other records can be considered of an ordinary nature and may be appropriately recycled. No record will be destroyed until a period of at least three (3) years has passed from the time the record was originally filed. Federal or State program(s) retention requirements take precedence over the retention period defined in the schedule, or by this section. NOTE: If a document or record will be maintained/retained by an electronic, magnetic or photo imaging process, the duplicate paper copy can be destroyed. However, the integrity of the record must be maintained and the electronic media verified for accuracy, by a College representative, prior to the paper copy being appropriately destroyed. The NOTE above is amended by memorandum from Crocker Price, Vice President and General Counsel, dated April 26, 2001, sent to all College Officers, Chancellors and Campus Deans. The memorandum states: "I have recently received various questions and inquiries regarding the College's Document Imaging Project. One of the issues discussed has been the disposal of hard copy documents one the information has been imaged. It is the opinion of the General Counsel's Office that the original documents should not be destroyed at this time. "As the College forges ahead in the utilization of technology, it is important that all legal requirements be addressed. Once the imaging process has been properly reviewed and the College has obtained relative assurances that we are complying with all applicable laws and regulations, the imaged document will serve as the official record of the College. Until such time, however, the original hard copy documents should still be considered the official record of the College and should not be destroyed."

Appendices: Appendix A

The retention schedules for FRS, HRS, SIS and FFX records and reports are found in Appendix B, C, D, E and F.   Prior to the implementation of the FRS System the college computer processing was EPIC. Any EPIC documentation, files, records, or microfiche, prior to January 1, 1990 may be appropriately destroyed and/or recycled.   Historical records. Documentation of historical value to the college should be retained, in their original state. If they are stored off site all applicable records retention policies apply

Appendix B

FRS REPORT RETENTION SCHEDULE
 
LOCATION: CENTRAL OFFICE
 
Report  Report Name  Retention
 
DAILY REPORTS


FBD009  Daily Collector Report (FA)  2 months
FBD010  Daily Diagnostic Report  5 years
FBD011  Daily Bank Activity Report  2 months
FBD015  Daily Sort Merge  18 months
FBD016  Suspense Listing  2 months
FBD017  Daily Cash Receipts Listing  2 months
FBD018  Daily Cash Disbursements Listing  2 months
FBD019  Daily On-line Transcript  5 years
FBD043  Daily (GL) Summanry of Accounts Controls (Bank Account Balances)  1 week
FBI005  Table Load Report COA/GSE/ABR/FRS Table Maintenance  2 cycles
FBM097  Description Load Program  2 cycles
FBX008  Report Description File Update Diagnostic List  2 cycles
VBD009  Data Collector Report (AP)  2 months
VBD010  Daily File Maintenance Diagnostics  5 years
VBD020  FA Feed Report (Accounting Feed-Daily Cycle)  1 year
VBD029  Voucher Review Register (Daily Voucher Register/Voucher No. within batch)  2 months
VBD030  Daily Voucher Register  2 months
ZBA900-1  Data Collection Processing (FA)  2 months
ZBA900-2  Data Collection Processing (AP)  2 months
ZBA910  Automated D/C - Batch Delete  2 months
 
CHECK CYCLE REPORTS
 
VBC010  Check Cycle Extract  1 month
VBC025  Check Cycle Update  1 month
VBC030  Check Cycle Cash Disbursement Report  1 month
VBM092  Cash Requirements  3 days
 
WEEKLY REPORTS
 
FBM091  Report of Transactions  2 weeks
FBM100  OPT = Control  1 month
FBW022  Transactions Across Regions (listing of transactions posted to another Region's Account)  1 month
VBM093  Cash Requirements (Selection = Credit) / Outstanding Vouchers  4 weeks
 
MONTHLY REPORTS
 
FBM003  Month End Turnover Initialization  1 year
FBM004  Transaction File Purge  1 year
FBM006  Prior Year Accumulator Load  1 year
FBM009  Open Commitment Status  2 months
FBM015  Year-to-Date Transaction History Merge  1 year
FBM019  Cash Report (Option = CM) - By Bank  2 months
FBM040-1  Chart of Accounts List - By Location, By Ledger, By Account  1 month
FBM040-2  Chart of Accounts List - By Account Number  1 month
FBM040-3  Chart of Accounts List - By Account Purpose  1 month
FBM050  Report of History File Merge  1 year
FBM061(F)  Fund Group Summary GL & SL (by Fund)  1 year
FBM061(R)  Fund Group Summary GL & SL (by Region)  1 year
FBM070-03  Fee Remission  2 months
FBM070-04  Federal Workstudy  2 months
FBM070-05  Trial Balance  1 year
FBM070-06  Federal Workstudy Summary  2 months
FBM070-09  Sponsored Programs  1 year
FBM070-9A  Sponsored Programs  1 year
FBM070-9B  Sponsored Programs  1 year
FBM070-9C  Sponsored Programs  1 year
FBM070-11  Budget Reconciliation Report  1 year
FBM070-Y1  2-1-8-9 Subsidiary Ledger Report  1 year
FBM070-Y2  2-1-8-9 Subsidiary Ledger Report  1 year
FBM070-BA  Major Object Report - By Region  1 year
FBM070-BB  Base Budget Report  1 year
FBM070-BC  Regional Divisional Report  1 year
FBM070-BE  Revised Board Report - By Region  1 year
FBM070-BF  Supplies & Expense Report - By Region  1 year
FBM070-BG  New Year Budget Transition - By Region  1 year
FBM070-BJ  Major Object Report - By Site  1 year
FBM070-BK  Site Divisional Report  1 year
FBM070-BL  Revised Board Report - By Site  1 year
FBM070-BM  Supplies & Expense Report - By Site  1 year
FBM070-BN  New Year Budget Transition - By Site  1 year
FBM070-B1  Board Report - By Object  1 year
FBM070-B2  Board Report - By Function  1 year
FBM070-B3  Board Report for Revenue  1 year
FBM070-CP  Equipment Capitalization  1 year
FBM070-FF  Federal Funds Revenue / Expenditure  2 months
FBM070-FF  Federal Funds Revenue / Expenditure - By Region  2 months
FBM070-OF  Other Funds Revenue / Expenditure  2 months
FBM070-OF  Other Funds Revenue / Expenditure - By Region  2 months
FBM070-SF  State Funds Revenue / Expenditure  2 months
FBM070-SF  State Funds Revenue / Expenditure - By Region  2 months
FBM070-IG  1-8-2 General Ledger Report  1 year
FBM070-IS  1-8-2 Subsidiary Ledger Report  1 year
FBM092-2  Account Statement & Transaction GL/SL for
Ledger 4 & 8  1 year
FBM092-4  Account Statement & Transaction for
Ledger 4 & 8  1 year
FBM094-1  General Ledger - By Account Control  3 years
FBM095-1  Subsidiary Ledger Summary - By Fund  5 years
FBM095-4  Subsidiary Ledger Summary - By Location, By Fund  1 year
FBM100  Batch File (Option = Batch)  2 months
FBM100  Option = Control  2 months
VBD020  Account Feed Generator  2 months
VBM005  Vendor/Vouvher Purge Selection  1 year
VBM010  Month End Vendor/Voucher Purge  1 year
VBM020  Monthly Cash Disbursement (Check Sequence)  4 months
VBM020  Monthly Cash Disbursement (Name Sequence)  4 months
VBM093-1  Outstanding Vouchers (Select = All)  2 months
VBM093-3  Outstanding Vouchers (Select = All, Option = L)  2 months
VBM094  Outstanding Check Linsting Bank 32  1 month
VBM100  Batch File List  2 months
 
MONTHLY "FOCUS" REPORTS
 
FFM601  Budget Adjustments  1 year
FIM010  Subsidiary Ledger (End Date)  1 year
FIM015  General Ledger (End Date)  1 year
FIM020  Capital Equipment  1 year
FIM030  Reclass  1 year
FIM031  Totals  1 year
 
FINANCIAL REPORTS for "Fiscal Year-End Close"
(Reports dated June 30, 20XX)
 
VBM093  Outstanding Vouchers (Option L Credit Liability Account Number)  5 years
FBD016  Suspense Monitor (Regions)  until cleared
FBD043  Account Control Summary  1 week
FBI005  Table Load Report COA/GSE/ABR  2 cycles
FBM003  New Month Initialization  2 months
FBM009  Open Commitment Status  2 months
FBM015  Year-to-Date Merge  1 year
FBM019  Cash Report by Bank (Option = CM)  2 months
FBM040-1  Chart of Accounts - By Location  3 years
FBM040-2  Chart of Accounts - By Account Number  3 years
FBM040-3  Chart of Accounts - By Purpose Code  1 month
FBM040-4  Chart of Accounts - By Fund  1 month
FBM050  Report History Merge  1 year
FBM061(F)  Fund Group Summary (GL & SL) - By Ledger  18 months
FBM061(R)  Fund Group Summary - By Region  18 months
FBM070-BA  Regional Board Report  5 years
FBM070-BB  Base Budget Report  5 years
FBM070-BC  Regional Board Report  5 years
FBM070-BD  Regional Board Report  5 years
FBM070-BE  Regional Board Report  5 years
FBM070-BF  Regional Board Report  5 years
FBM070-BJ  Site Board Report  5 years
FBM070-BK  Site Board Report  5 years
FBM070-BM  Site Board Report  5 years
FBM070-BN  Site Board Report  5 years
FBM070-B1  Board Report - By Object  5 years
FBM070-B2  Board Report - By Function  5 years
FBM070-B3  Board Report for Revenue  5 years
FBM070-CP  Capital Equipment  5 years
FBM070-FF  Federal Funds Revenue / Expenditure  5 years
FBM070-OF  Other Funds Revenue / Expenditure  5 years
FBM070-LOF  Other Funds Revenue / Expenditure - Location  5 years
FBM070-SF  State Funds Revenue / Expenditure  5 years
FBM070-LSF  State Funds Revenue / Expenditure - Location  5 years
FBM070 IA-IN  IPEDS Report - Part A - F, L & N  5 years
FBM070-K3  Balance Sheet  5 years
FBM070-K4  Statement of Changes in Fund Balance  5 years
FBM070-K5  Statement of Current Fund Revenues, Expenditures and other Changes  5 years
FBM070-Y1  2-1-8-9 Subsidiary Ledger Report  5 years
FBM070-Y2  2-1-8-6 Subsidiary Ledger Report  5 years
FBM070-Y3  2-1-8-6 Subsidiary Ledger Report (Non-Current Funds)  5 years
FBM070-IG  1-8-2 General Ledger Report  5 years
FBM070-IS  1-8-2 General Subsidiary Report  5 years
FBM070-03  Fee Remission  5 years
FBM070-04  Federal Work-Study  5 years
FBM070-05  Trial Balance  5 years
FBM070-06  Federal Work-Study Summaru  5 years
FBM070-09  Sponsored Programs (Includes Options 9A, 9B, & (9C)  5 years from last year in program
FBM070-11  Budget Reconciliation Report  5 years
FBM090  Account Statement in Whole Dollars Reclassification (D, H, E, V, A, T)  18 months
FBM092-2  Account Statement & Transaction Inter-Leave - By Fund  5 years
FBM092-3  Account Statement & Transaction Inter-Leave - (SL) Fund 01, Central Office  5 years
FBM092-4  Account Statement & Transaction Inter-Leave  5 years
FBM094  General Ledger (Use Element FBA Element Store FG & FA) By Region/Fund/Account  5 years
FBM094-1  General Ledger - By Account Control  5 years
FBM095-1  Subsidiary Ledger Summary - By Fund  5 years
FBM095-3  Subsidiary Ledger Summary - By Region, By Fund  5 years
FBM095-4  Subsidiary Ledger Summary - By Location, By Fund  5 years
FBM097  Description Load Program  1 month
FBM100  Batch File List (Option - Batch)  2 months
FBR009  Open Commitment Status  2 cycles
FBX008  Report Description File List  5 years
FIA010  Expended Funds Account Range 441000-449999, By Purpose, By Sub-Code  5 years
FIA020  Expended Funds Account Range 100000-559999, By Purpose, By Sub-Code  5 years
FIA030  Current Funds Expended Account Range 100000-599999, By Purpose  5 years
FIA040  Current Funds Expended Account Range 100000-599999, By Fund  5 years
FIA045  Current Funds Expended (Selected Funds Only) By Purpose, By Fund  5 years
FIA050  Expended Funds Account Range 100000-599999, By Fund/Pur/Div/Dept/Subcode  5 years
FIA055  Expended Funds Account Range 100000-599999, By Fund/Pur/Dept/Subcode  5 years
FIA060  Expend Element Account Range 100000-599999 (Selected Departments)  5 years
   - By Fund, Purpose, Division, Department, Subcode  
FIA070  Expend Element Account Range 100000-599999 (Selected Departments)  5 years
   - By Fund, Purpose, Department, Subcode  
FIA075  Expend Element Account Range 100000-599999 (Selected Departments)  5 years
   - By Fund, Purpose, Department, Subcode  
FIM010  End Date  2 months
FIM015  End Date  2 months
FIM020  Capital Equipment  5 years
FIM030  Reclass  5 years
VBM005  Vendor/Voucher Purge Selection  1 year
VBM010  Month End Purge  1 year
VBM020  Monthly Cash Disbursement Register  3 months
VBM030  YTD Cash Disbursement Register (Alpha Order/Check Number Sequence)  6 years
VBM093-1  Outstanding Vouchers (Select = All)  2 months
VBM093-2  Outstanding Vouchers (Select = Credit)  2 months
VBM093-3  Outstanding Vouchers (Select = Liability)  2 years
VBM094  Outstanding Check Listing  6 years
VBR100  Batch File List  2 months
 
CALENDAR YEAR REPORTS
 
VBY100  1099 Exception Report  7 years
VBY110  1099 Form Create Report  7 years

Appendix C

HRS REPORT RETENTION SCHEDULE
 
LOCATION: CENTRAL OFFICE
 
Report  Report Name  Retention
 
EBA030  Job Class Master  2 Fiscal Years
EBA210  PASS  5 yrs after term
EBA216  PEF  5 yrs after term
EBA368  Check History Earnings  2 Fiscal Years
EBA520  Postion Control/Finance Acct Interface  1 Fiscal Year
EBC314  Dept Payroll Roster - All Others  5 years
EBC320  Analysis and Extract  5 years
EBC324  Payroll Calc Diagnostics  5 years
EBC326  Master File Update  5 years
EBC337  Check Number Update Diagnostics  5 years
EBC345  Payroll Register Summary  5 years
EBC362  Check History Update Void Report  10 years
EBC364  Void Check Update  10 years
EBC381  Check Reconciliation Audit Report  10 years
EBC410  Labor Distribution Extract  5 years
EBC422  Distribution Detail Audit  5 years
EBD160  File Maintenance History Register  5 years
EBD165  Batvh Balance & Edit Update  5 years
EBM280  TIAA/CREF Report  Indefinite
EBM376  Check Reconciliation Tape Report  5 years
EBM574  Employees by Postion for Fiscal Year  1 Fiscal Year
EBM578  Postions by Account  1 Fiscal Year
EBQ380  FICA Master List for Quarter  5 years
EBQ382  Quarterly 941-A FICA Report  5 years
EBY392  W-2 Form, W-2 Forms Print Diagnostic  5 years
EBY394  W-2 Tape Report Extract  5 years
EBY399  Federal & State Audit  5 years
EFC520  Data on Direct Deposit Tape  10 years
  
LOCATION: REGION
  
Report  Report Name  Retention
 
EBA030  Job Class Master  Reg Decision
EBA210  PASS  5 yrs after term
EBA216  PEF  5 yrs after term
EBA368  Check History Earnings  2 Fiscal Years
EBA520  Postion Control/Finance Acct Interface  Reg Decision
EBC310  Gross Calc Audit  2 Fiscal Years
EBC314  Dept Payroll Roster - All Others  Reg Decision
EBC314  Dept Payroll Roster - Assoc. Fac.  5 years
EBC320  Analysis and Extract  5 years
EBC324  Payroll Clac Diagnostics  5 years
EBC339  Check Distribution Register  Reg Decision
EBC340  Payroll Register  2 Fiscal Years
EBC345  Payroll Register Summary  5 years
EBC352  ETDB Register  2 Fiscal Years
EBC358  Lost Time Register  Reg Decision
EBC425  Labor Distribution Account Feed Audit  Reg Decision
EBC440  Labor Distribution By Account  Reg Decision
EBD160  File Maintenance History Register  5 years
EBM574  Employees by Postion for Fiscal Year  Reg Decision
EBM578  Postions by Account  Reg Decision

Appendix D

SIS REPORT RETENTION SCHEDULE
 
LOCATION: CENTRAL OFFICE
 
Report  Report Name  Retention
 
ABA110  Course Rate / Rate Table  1 month
BBA400  Automative Refunds  7 years
BBA400  Accounts Payable Manual Refunds  7 years
BBC220  Tuition Calculation Report  1 year
BBC320  Third Party Calculation Report  1 year
BBR330  Aged Receivable Report Year-end  5 years
BBR400  SIS/FRS Reconcilition Report  1 year
BBT380  Balance Forward / Purge Report  Not Retained
BBT390  Cumulative History File Report  Not Retained
SBA590  Student Award Distribution Detail  5 years
 
SIS "AP" FEED
 
VBD009  Data Collector Report (AP)  5 years
VBD010  Daily Diagnostic Report  5 years
VBD020  FA Feed Report (Account Feed-Daily Cycle)  5 years
VBD030  Daily Voucher Register  5 years
 
SIS "FA" FEED
 
FBD009  Data Collector Report  5 years
FBD010  Daily Diagnostic Report  5 years
FBD011  Indirect Updates to General Ledger  5 years
FBD015  Daily Sort/Merge  5 years
FBD016  Suspense Monitor  5 years
FBD017  Daily Cash Receipts Listing  5 years
FBD018  Daily Cash Disbursements Report  5 years
FBD019  Daily On-line Transcripts  5 years
FBD43  Daily Summary of Accounts Controls (GL)  7 years
FBM001  College Resource (P/R withholding P/R clearing account)  7 years
 
 
LOCATION: REGION
 
Report  Report Name  Retention
 
BBB290  Billing Summary Report  5 years
BBR330  Aged Receivables Report Year-end  5 years
RFA316  Prorata Refunds (after approval of FISAP)  5 years

Appendix E

FFX REPORT RETENTION SCHEDULE
 
LOCATION: CENTRAL OFFICE
Report  Report Name  Retention
 
DAILY REPORTS
 
TBD009  Transaction Builder (Applies to Masschange)  2 years
TBD065  Account Payable (AP) Asset Extract  2 years
TBD080  Asset Control Sheet  2 years
TBD090  Pending Asset Control List  2 years
ZBA900  Data Collector (Applies to Masschange)  2 months
 
WEEKLY REPORTS
 
TDB020  Accounting Feed  2 years
TBD025  Account Feed Reconciliation (Weekly Reconciliation by Account)  2 years
TBD030  Acquisition Report  2 years
TBD031  Acquisition Totals  2 years
TBD040  Disposal Report  1 cycle
TBD050  Transfer Activity List  1 cycle
TBD050T  Transfer Activity List - Between Instructional Sites - To/From  1 cycle
TBD090  Pending Asset Control List  2 years
 
MONTHLY REPORTS
 
TBD035  Tag Number Report  1 cycle
TBM011  Asset Snapshot (Blank Location)  2 years
TBM020  General Ledger Reconciliation (Central Office)  2 years
TBM021  General Ledger Reconciliation (Region)  2 years
TBM022  Summary - General Ledger Reconciliation (Reconcile FFX with FRS)  2 years
TBM091  Pending Asset Control List (Created Prior to the Current Month)  2 years
TFM015  Assets by Class-Remaining Life/Useful Life 999 Error Report  2 years
 
YEAR-END REPORTS
 
FBM094  General Ledger Summary - By Account Control  2 years
TBD025  Accounting Feed  2 years
TBD030  Acquisition Report  2 years
TBD040  Disposals  1 cycle
TBD050  Transfer Activity  1 cycle
TBD050T  Transfer Activity (To/From Only)  1 cycle
TBD090  Pending Asset Control List  1 cycle
TBM021  General Ledger Reconciliation  2 years
TBM200C  Depreciation Calculation (Current Year)  2 years
TBM200P  Depreciation Calculation (Prior Year)  2 years
TBM210  Recorded Depreciation  2 years
TBM400  Building Component Report  2 years
 
FFX FEED
 
FBD009-043  Profeed (Date Collector thru Bank Account Balances)  5 years
 
LOCATION: REGION
 
Report  Report Name  Retention
 
DAILY REPORTS
 
TBD009  Transaction Builder (Applies to Masschange)  2 years
TBD010  Daily Diagnostics  2 years
TBD065  Account Payable (AP) Asset Extract  2 years
TBD080  Asset Control Sheet  2 years
TBD090  Pending Asset Control List  2 years
ZBA900  Data Collector (Applies to Masschange)  2 months
 
WEEKLY REPORTS
 
TBD025  Account Feed Reconciliation (Weekly Reconciliation by Account)  2 years
TBD030  Acquisition Report  2 years
TBD031  Acquisition Totals  2 years
TBD040  Disposal Report  1 cycle
TBD050  Transfer Activity List  1 cycle
TBD050T  Transfer Activity List - Between Instructional Sites - To/From  1 cycle
TBD090  Pending Asset Control List  2 years
 
MONTHLY REPORTS
 
TBM021  General Ledger Reconciliation (Region)  2 years
TBM022  Summary - General Ledger Reconciliation (Reconcile FFX with FRS)  2 years
TBM091  Pending Asset Control List (Created Prior to the Current Month)  2 years
TBM100  Batch Table List  1 cycle
 
YEAR-END REPORTS
 
FBM094  General Ledger Summary - By Account Control  2 years
TBD025  Accounting Feed  2 years
TBD030  Acquisition Report  2 years
TBD040  Disposals  1 cycle
TBD050  Transfer Activity  1 cycle
TBD050T  Transfer Activity (To/From Only)  1 cycle
TBD090  Pending Asset Control List  1 cycle
TBM021  General Ledger Reconciliation  2 years
TBM200C  Depreciation Calculation (Current Year)  2 years
TBM200P  Depreciation Calculation (Prior Year)  2 years
TBM210  Recorded Depreciation  2 years

Appendix F

MICROFICHE RETENTION SCHEDULES
FRS/HRS/SIS/FFX MICROFICHE
 
LOCATION: CENTRAL OFFICE / REGION
 
Report  Report Name  Retention
 
FRS MONTHLY REPORTS
 
FBM019  Cash Report (Option - CM) - by Bank  5 years
FBM040-1  Chart of Accounts List - By Location, By Ledger, By Account  5 years
FBM040-2  Chart of Accounts List - By Account Number  5 years
FBM061(F)  Fund Group Summary GL & SL (by Fund)  5 years
FBM061(F)  Fund Group Summary GL & SL (by Region)  5 years
FBM092-1  Account Statement & Transaction GL/SL for Ledger 4 & 8 (by Location/Account)  5 years
FBM092-2  Account Statement & Transaction GL/SL for Ledger 4 & 8 (by Fund/Account Number)  5 years
FBM094-1  General Ledger - By Account Control  5 years
FBM095-1  Subsidiary Ledger Summary - By Fund  5 years
FBM095-3  Subsidiary Ledger Summary - By Region, By Fund  5 years
FBM095-4  Subsidiary Ledger Summary - By Location, By Fund  5 years
FBM070-BA  Major Object Report - By Region  5 years
FBM070-BC  Regional Divisional Report  5 years
FBM070-BE  Revised Board Report - By Region  5 years
FBM070-BF  Supplies & Expense Report - By Region  5 years
FBM070-BG  New Year Budget Transition - By Region  5 years
FBM070-BJ  Major Object Report - By Site  5 years
FBM070-BK  Site Divisional Report  5 years
FBM070-BL  Revised Board Report - By Site  5 years
FBM070-BM  Supplies & Expense Report - By Site  5 years
FBM070-BN  New Year Budget Transition - By Site  5 years
FBM070-B1  Board Report - By Object  5 years
FBM070-B2  Board Report - By Function  5 years
FBM070-B3  Board Report for Revenue  5 years
FBM070-FF  Federal Funds Revenue / Expenditure  5 years
FBM070-FF  Federal Funds Revenue / Expenditure - By Region  5 years
FBM070-OF  Other Funds Revenue / Expenditure  5 years
FBM070-OF  Other Funds Revenue / Expenditure - By Region  5 years
FBM070-SF  State Funds Revenue / Expenditure  5 years
FBM070-SF  State Funds Revenue / Expenditure - By Region  5 years
FBM070-1G  1-8-2 General Ledger Report  5 years
FBM070-1S  1-8-2 Subsidiary Ledger Report  5 years
FBM070-03  Fee Remission  5 years
FBM070-04  Federal Work-Study  5 years
FBM070-05  Trial Balance  5 years
FBM070-06  Federal Work-Study Summaru  5 years
FBM070-09  Sponsored Programs (Includes Options 9A, 9B, & (9C)  5 years
FBM070-9B  Sponsored Programs (Includes Options 9A, 9B, & (9C)  5 years
FBM070-Y1  2-1-8-9 Subsidiary Ledger Report  5 years
FBM070-Y2  2-1-8-6 Subsidiary Ledger Report  5 years
FBM070-Y3  2-1-8-6 Subsidiary Ledger Report  5 years
end of FRS Monthly Reports Microfiche Retention Schedule
MICROFICHE RETENTION SCHEDULES
FRS/HRS/SIS/FFX MICROFICHE
 
LOCATION: CENTRAL OFFICE / REGION
 
Report  Report Name  Retention
 
FRS QUARTERLY REPORTS
 
FBM091  Accumulated Transaction Register YTD-By Region  5 years
VBM030  Cash Disbursement Register YTD  5 years
 
FINANCIAL REPORTS FOR FISCAL YEAR-END CLOSE,
AS OF JUNE 30, 20--
 
FBM019  Cash Report (Option - CM) - by Bank  5 years
FBM040-1  Chart of Accounts List - By Location, By Ledger, By Account  5 years
FBM040-2  Chart of Accounts List - By Account Number  5 years
FBM061(F)  Fund Group Summary GL & SL (by Fund)  5 years
FBM061(F)  Fund Group Summary GL & SL (by Region)  5 years
FBM070-BA  Major Object Report - By Region  5 years
FBM070-BC  Regional Divisional Report  5 years
FBM070-BD  Regional Board Report  5 years
FBM070-BE  Revised Board Report - By Region  5 years
FBM070-BF  Supplies & Expense Report - By Region  5 years
FBM070-BJ  Major Object Report - By Site  5 years
FBM070-BK  Site Divisional Report  5 years
FBM070-BM  Supplies & Expense Report - By Site  5 years
FBM070-BN  New Year Budget Transition - By Site  5 years
FBM070-B1  Board Report - By Object  5 years
FBM070-B2  Board Report - By Function  5 years
FBM070-B3  Board Report for Revenue  5 years
FBM070-FF  Federal Funds Revenue / Expenditure  5 years
FBM070-FF  Federal Funds Revenue / Expenditure - By Region  5 years
FBM070-OF  Other Funds Revenue / Expenditure  5 years
FBM070-OF  Other Funds Revenue / Expenditure - By Region  5 years
FBM070-LOF  Other Funds Revenue / Expenditure - Location  5 years
FBM070-SF  State Funds Revenue / Expenditure  5 years
FBM070-SF  State Funds Revenue / Expenditure - By Region  5 years
FBM070-LSF  State Funds Revenue / Expenditure - Location  5 years
FBM070-Y1  2-1-8-9 Subsidiary Ledger Report  5 years
FBM070-Y2  2-1-8-6 Subsidiary Ledger Report  5 years
FBM070-Y3  2-1-8-6 Subsidiary Ledger Report  5 years
FBM070-1G  1-8-2 General Ledger Report  5 years
FBM070-1S  1-8-2 Subsidiary Ledger Report  5 years
FBM070-03  Fee Remission  5 years
FBM070-04  Federal Work-Study  5 years
FBM070-05  Trial Balance  5 years
FBM070-06  Federal Work-Study Summaru  5 years
FBM070-09  Sponsored Programs (Includes Options 9A, 9B, & (9C)  5 years
FBM091  Accumulated Transaction Register YTD-By Region  5 years
FBM091FG  Accumulated Transaction Register YTD-By Region, By Account College-wide  5 years
end of FRS Quarterly Year-End Close Reports Microfiche Retention Schedule
MICROFICHE RETENTION SCHEDULES
FRS/HRS/SIS/FFX MICROFICHE
 
LOCATION: CENTRAL OFFICE / REGION
 
Report  Report Name  Retention:
 
FRS QUARTERLY REPORTS
 
FBM092-1  Account Statement & Transaction GL/SL for Ledger 4 & 8 (by Location/Account)  5 years
FBM092-2  Account Statement & Transaction GL/SL for Ledger 4 & 8 (by Fund/Account Number)  5 years
FBM094-1  General Ledger - By Account Control  5 years
FBM095-1  Subsidiary Ledger Summary - By Fund  5 years
FBM095-3  Subsidiary Ledger Summary - By Region, By Fund  5 years
FBM095-4  Subsidiary Ledger Summary - By Location, By Fund  5 years
FIA010  Expended Funds Account Range 441000-449999, By Purpose, By Sub-Code  5 years
FIA020  Expended Funds Account Range 100000-559999, By Purpose, By Sub-Code  5 years
FIA030  Current Funds Expended Account Range 100000-599999, By Purpose  5 years
FIA040  Current Funds Expended Account Range 100000-599999, By Fund  5 years
FIA045  Current Funds Expended (Selected Funds Only) By Purpose, By Fund  5 years
FIA050  Expended Funds Account Range 100000-599999, By Fund/Pur/Div/Dept/Subcode  5 years
FIA055  Expended Funds Account Range 100000-599999, By Fund/Pur/Dept/Subcode  5 years
FIA060  Expend Element Account Range 100000-599999 (Selected Departments)  5 years
   - By Fund, Purpose, Division, Department, Subcode  
FIA070  Expend Element Account Range 100000-599999 (Selected Departments)  5 years
   - By Fund, Purpose, Department, Subcode  
FIA075  Expend Element Account Range 100000-599999 (Selected Departments)  5 years
   - By Fund, Purpose, Department, Subcode  
FIM020  Capital Equipment  5 years
FIM030  Reclass  5 years
VBM030  YTD Cash Disbursement Register (Alpha Order/Check Number Sequence)  5 years
VBM093-1  Outstanding Vouchers (Select = All)  5 years
VBM093-2  Outstanding Vouchers (Select = Credit)  5 years
VBM093-3  Outstanding Vouchers (Select = Liability)  5 years
end of FRS Quarterly Reports Microfiche Retention Schedule
MICROFICHE RETENTION SCHEDULES
FRS/HRS/SIS/FFX MICROFICHE
 
LOCATION: CENTRAL OFFICE / REGION
 
Report  Report Name  Retention:
 
HRS MICROFICHE
      
EBC310  Gross Calc Audit  5 years
EBC312  Payroll Comparison Report  5 years
EBC339  Check Distribution Register  5 years
EBC340  Payroll Register  5 years
EBC352  ETDB Register  5 years
EBC358  Lost Time Register  5 years
EBC425  Labor Distribution Account Feed Audit  5 years
EBC440  Labor Distribution By Account  5 years
EBQ380  FICA Master List for Quarter  5 years
EBY391  W-2 Master List  5 years
EBY399  Federal & State Audit  5 years
end of HRS Microfiche Retention Schedule
MICROFICHE RETENTION SCHEDULES
FRS/HRS/SIS/FFX MICROFICHE
 
LOCATION: CENTRAL OFFICE / REGION
 
Report  Report Name  Retention:
 
SIS MICROFICHE - Central Office
 
BBD100  Accounting Summary Report  5 years
BBR330  Aged Receivable Report Year-end  5 years
BBT380  Balance Forward / Purge Report  5 years
BBT390  Cumulative History File Report  5 years
SBA590  Student Award Distribution Detail  5 years
 
SIS MICROFICHE - Region
 
BBD100  Accounting Summary Report  5 years
BBR330  Aged Receivable Report Year-end  10 years
BBT380  Balance Forward / Purge Report  5 years
 
end of SIS Microfiche Retention Schedule
MICROFICHE RETENTION SCHEDULES
FRS/HRS/SIS/FFX MICROFICHE
 
LOCATION: CENTRAL OFFICE / REGION
 
Report  Report Name  Retention:
 
FFX MICROFICHE
 
MONTHLY CYCLE - Central Office /Region
TBM021  General Ledger Reconciliation (Region)  5 years
TBM022  Summary - General Ledger Reconciliation (Reconcile FFX with FRS)  5 years
 
FFX YEAR-END - Central Office
FBM094  General Ledger Summary - By Account Control  5 years
TBD025  Accounting Feed  5 years
TBD030  Acquisition Report  5 years
TBD040  Disposals  5 years
TBD050  Transfer Activity  5 years
TBD050T  Transfer Activity (To/From Only)  5 years
TBD090  Pending Asset Control List  5 years
TBM021  General Ledger Reconciliation  5 years
TBM200C  Depreciation Calculation (Current Year)  5 years
TBM200P  Depreciation Calculation (Prior Year)  5 years
TBM210  Recorded Depreciation  5 years
end of FFX Reports Microfiche Retention Schedule

SECTION E: BANK AUTHORIZATION


 

I. Introduction

 

The Region, with proper authorization, may establish various types of banking accounts for accomplishing certain regional business office functions. Central Office Finance, with proper authorization, also has the ability to establish banking accounts in order to complete necessary functions, such as payroll and accounts payable processing, and investment of College funds. These accounts, their set-up, and their usages are described in the body of this section. The general purpose of these accounts is to aid the College in the safe, efficient and effective handling of monies.

II. Types of Bank Accounts and Usage

A. Revolving Funds

1. Definition

Revolving funds are imprest funds established at an authorized amount to finance allowable disbursements that, in turn, are reimbursed, thereby ensuring a continuous flow of cash. Revolving funds may be established at each bank where the College has a depository account at the authorized funding levels as determined by the designated custodians. Revolving funds include any combination or all of the following - change fund and bank checking account. Each custodian has the authority to establish change funds to satisfy regional requirements. The custodian has the responsibility to supervise the operation of the revolving fund, to monitor expenditures for use in financing authorized costs, and to maintain the integrity of the fund at all times. Although the custodian may delegate actual day to day operation of the fund, the custodian retains full responsibility for its administration and supervision.

2. Authorization

Revolving fund accounts have been authorized for each regional institute. The financial officers authorized to approve payments from these accounts are the Chief Financial Officer, Chief Accounting Operations Officer, and Chancellor. In addition, the Chancellor, with the approval of the Chief Financial Officer, may authorize the Campus President and/or Executive Director of Finance/Administration, and/or other designee, responsibility to sign expenditure checks for the revolving fund account.

A change in the bank holding a College revolving account requires a resolution approved by the Regional Boad of Trustees.

3. Establishment

A regional institute's revolving fund account is to be established in the name of:

        Ivy Tech Community College of Indiana
        Revolving Fund - Region XX
        (Address of Regional Institute)

Bank statements, deposit tickets, and checks are under the control of the authorized revolving fund custodian. Assistance in establishing a revolving fund account should be directed to the Assistant Treasurer.  The dollar amount needed to establish and to maintain the revolving fund account must be approved by the Vice President for Finance/Treasurer.

4. Bank Signature Card

Evidence of signature approval will be made by the completion of a bank signature card with the signature of:

a. Chief Financial Officer - Required
b. Chancellor - Required
c. Chief Accounting Operations Officer - Optional
d. Campus President - Optional
e. Executive Director of Finance/Administration- Optional
f. Other designee – Optional

5. Maintenance

The custodian is responsible for maintaining the fund in a businesslike manner on an imprest system. The fund must be reconciled monthly to its authorized amount. A statement of Condition of Revolving Fund, as of the end of each fiscal quarter, is required to be filed with the Cash Management department in Central Office by the last working day of the month following the end of each fiscal quarter. Shortages/Overages in the account should be promptly investigated, with recommendations for corrective action included in the quarterly report.

6. Usage

There are various ways in which the revolving fund may be used: Change and local check issuance - each of these is discussed in detail in the following paragraphs:

a. Change Funds:

Designation letters should be prepared establishing the amount of the respective change funds and who is held responsible for maintaining them. These letters are to be signed by the revolving fund custodian, and retained for inspection by Internal Audit. Each change fund is limited to $250.00. Each regional business director, or designee, should periodically make an unannounced count of each change fund.

This usage involves cash held for the sole purpose of making change during registration, or the amount needed to start cash register operations each day.  Since change may be in large amounts, the custodian should take every precaution to ensure its safety, either by an adequate safe on the premises or use of a night depository drop box, or both. When no longer needed, the change should be deposited back to the revolving fund checking account and adequate documentation must be maintained to ensure proper accounting of funds consigned to other employees.

b. Bank Checking Account:

The bank checking account provides for the handling of local and minor disbursements up to $300. Disbursements are made from time to time as needed supported by proof of disbursement.

Receipts are to be obtained and detailed records are to be maintained by the custodian, so that proper entries can be made in the College accounting system.

Restrictions

1) Sales tax should not be included on purchases made through the revolving fund. The College is generally exempt from Indiana sales tax.
2) Personal funds or other non-College funds, including Ivy Tech Foundation funds, are NOT to be intermingled with the revolving fund.
3) All revenues are to be receipted and deposited on a Cash Receipts form and are never to be added to the revolving fund.
4) Disbursements cannot be made for:
i. Payments to individuals for wages or personal services performed.
ii. Cashing personal checks or third-party checks
iii. Reimbursement for employee tuition.
5) All change funds are to be kept in a locked cabinet or locked safe when not in use.
6) When possible one employee should not maintain more than one change fund.
7) Blank checks for the revolving fund should be adequately secured to prevent unauthorized use.
8) Pre signing of checks is not allowed due to the possibility of unauthorized completion of the checks.

7. Reimbursement

To replenish the revolving fund, the Region should submit a completed Revolving Fund Reimbursement Voucher and enter an invoice in Banner. Once approvals have been obtained, the funds are deposited into the region’s Revolving Fund through ACH. Funds shall be reimbursed at least once per month, and more often as needed.

The authorized amount should be limited to that required for operation for a week, plus the time needed for preparation, processing, and return of the reimbursement.

8. Non-Sufficient Fund Items and Miscellaneous Bank Debits and Credits

Regional revolving funds will be used for processing miscellaneous bank charges and non sufficient fund (NSF) checks. A regional revolving fund will be established at each bank where the College has a depository account.

Procedure

a. Debit and credit memos and miscellaneous items pertaining to the regional depository account(s) are to be processed through the regional revolving fund.  Charges invoiced by regional depository bank for deposit ticket printing, when appropriate, should be processed to the appropriate expenditure account as a routine function of the regional revolving fund.
b. The bank will be requested to automatically redeposit NSF checks when first returned. The bank will be requested to charge NSF checks, which fail to clear a second time, against the regional revolving fund.
c. The bank is to forward notices of NSF items (debit memo or returned item memo) together with the NSF check to the regional business office.
d. Appropriate documentation for reimbursement will be the bank debit memo and a copy of the student's account reflecting the entry to the Banner.
e. When monies are collected to honor an NSF item, such funds are to be recorded on Banner and deposited with other daily receipts.
f. The uncollected NSF checks are to be included on the Banner Accounts Receivable System and in the annual write-off request, if applicable. The criteria for write-off is comparable to any account.

9. Revolving Fund Shortage

Items created by differences in deposits (i.e., checks totaled incorrectly on bank deposit slips, etc.) should be charged to Over/Short. All cash overages or shortages must have the approval of either the Chancellor, Campus President, or Executive Director of Finance/Administration (EDF/EDA) before the reimbursement voucher is processed in the accounting system.

A copy of all cash over/shorts in excess of $25 must be sent to the Executive Director of the Internal Audit Department.

Documentation of any cash over/short in excess of $250 must be reported to the Chief Financial Officer or designee prior to processing the reimbursement request to charge the shortage against the Cash Over/Short expenditure account.

10. Audit

Revolving fund moneys, bank statement, and other pertinent information are to be made available, upon the request of the College Internal Audit Department, as necessary to make periodic audits of such funds to aid the custodian and College in proper handling.

 

B. Depository Funds/Depository Accounts

1. Definition

Depository funds are moneys, currency, checks, and credit card drafts temporarily placed with a banking institution as a general deposit subject to withdrawal in accordance with the terms of the deposit arrangement.

2. Authorization

College depository account(s) have been authorized at each of the regional institutes. Only the Chief Financial Officer and the Chief Accounting Operations Officer have signature authority for expenditures/transfers and for credit card arrangements from these accounts. This authorization is from resolution and motion of the State Board of Trustees appointing the College financial officers.

3. Establishment, Control, and Responsibility

The establishment, control, and responsibility of a College depository account is under the direction of Central Office Finance and is to be established in the name of:

Ivy Tech Commnity College of Indiana

Depository Funds - Region XXY

(Address of Regional Institute)

The XX characters represent the region number and the Y character represents the first letter of the city (town) in which the depository account is located, other than the city of the main location of the regional institute.

Bank statements and checks are under the control of the Chief Accounting Operations Officer, with deposit tickets furnished by the region.

4. Bank Signature Card

Evidence of authorization will be made by the completion of a bank signature card with the signature of the:

a. Chief Financial Officer

b. Chief Accounting Operations Officer

At the request of the Executive Director of Finance/Administration, the Chief Financial Officer and/or Chief Accounting Operations Officer can provide a letter to the bank to authorize the Executive Director of Finance/Administration or designee to complete limited functions associated with the account such as establishing users or resetting passwords in the bank’s online portal.

5. Usage

Depository accounts are a collection mechanism which provides concentration of the College collected funds from fee payments and contractual arrangements negotiated by the regions. Such arrangements provide for immediate safeguard of funds until such funds are transferred to the College's primary bank account. By statute, the College is required to make deposits within one business day of receipt.

6. Regional Depository Cash Transfers

Regional business office personnel are to initiate a cash transfer to the College's main account:

a. when the regional depository has more than $5,000 in deposits in the account; or
b. at a minimum of once per week on Thursday.

When possible, transfers should be aggregated into one daily transaction. A log is to be maintained for all deposits and transfers, with a copy forwarded to the Cash Management department at Central Office, at the end of each month. Transfers are to be made without regard to whether the Cash Receipts form has been completed or input in Banner. The Cash Receipts form should be prepared and input into the accounting system on a daily basis.

7. Returned Check Charge

A charge of $30 will be assessed for returned checks for each occurrence. Examples of returned checks include stop payment, no account, account closed, or non-sufficient funds.

The regional business office reserves the right to insist on cash, postal money order, or certified check for replacement of a returned check.

C. General Bank Account

1. Rationale

The College's general bank account serves as the primary account for all banking transactions. All deposits either direct or transferred from depository accounts are placed into the College's primary account. However, a single disbursement check can be charged to any number of separate funds through the use of proper account coding.

2. Authorization

By resolution and motion of the State Board of Trustees appointing the College financial officers, the Chief Financial Officer and Chief Accounting Operations Officer have signature authority for receipt and disbursement of College funds from this account.

3. Bank Signature Card

Evidence of authorization will be made by the completion of a bank signature card with the signature of the:

a. Chief Financial Officer

b. Chief Accounting Operations Officer

4. Usage

The primary function of the general bank account is to provide control on activities affecting the cash flow of the College. Through the control of cash receipts and disbursements, management has a greater potential for maximizing the pool of cash from which short-term investments are made.

D. Payroll Account

1. Rationale

The College's payroll account is a zero balance type of checking account which is used for disbursement control on employee payroll checks or ACH payments.

Each day as payroll checks are presented (cleared by bank) and ACH payments are made, a debit balance is accumulated. At the close of each day, a credit is automatically generated by the bank holding the payroll bank account equal to the day's debit, and applied to the payroll account bringing the balance back to zero, and a corresponding debit is applied to the primary bank account, the College's general account.

2. Authorization

By resolution and motion of the State Board of Trustees appointing the College financial officers, the Chief Financial Officer and Chief Accounting Operations Officer have signature authority for receipt and disbursement of College funds from this account.

3. Bank Signature Card

Evidence of authorization will be made by the completion of a bank signature card with the signature of the:

a. Chief Financial Officer

b. Chief Accounting Operations Officer

4. Usage

Such a banking arrangement, where one bank account draws on a second bank account for funds to cover only an amount needed for clearing items, allows:
a. The elimination of an excess balance,
b. Centralized cash in the primary bank account providing better management for short-term investments,
c. Extends disbursement flow,
d. Eliminates overdrafts, as well as the need to fund those accounts.

E. Vendor Account

1. Rationale

Similar to the College’s payroll account, the vendor account is a zero balance checking account which is used for disbursement control on accounts payable checks and ACH payments.

Each day as ACH payments are made and checks are presented (cleared by bank), a debit balance is accumulated. At the close of each day, a credit is automatically generated by the bank holding the vendor bank account equal to the day's debit, and applied to the vendor account bringing the balance back to zero, and a corresponding debit is applied to the College’s general bank account.

2. Authorization

By resolution and motion of the State Board of Trustees appointing the College financial officers, the College’s Chief Financial Officer and Chief Accounting Operations Officer have signature authority for receipt and disbursement of College funds from this account.

3. Bank Signature Card

Evidence of authorization will be made by the completion of a bank signature card with the signature of the:

a. Chief Financial Officer
b. Chief Accounting Operations Officer

4. Usage

The vendor bank account provides control on activities affecting the cash flow of the College. Through the control of cash disbursements and the once per day funding of the vendor account from the general account, management has a greater potential for maximizing the pool of cash from which short-term investments are made.

F. Tier 1 Account

1. Rationale

The purpose of the College’s Tier 1 bank account is to maximize interest earned while maintaining the balance of cash needed to meet the College’s operating needs throughout the year.

2. Authorization

By resolution and motion of the State Board of Trustees appointing the College financial officers, the College’s Chief Financial Officer and Chief Accounting Operations Officer have signature authority for receipt and disbursement of College funds from this account.

3. Bank Signature Card

Evidence of authorization will be made by the completion of a bank signature card with the signature of the:

a. Chief Financial Officer
b. Chief Accounting Operations Officer

4. Usage

The Tier 1 account is used to wire funds to or from the College’s general bank account. This allows the College to meet daily cash obligations while earning interest on the remaining funds not yet needed for operations.

G. Custodian Investment Accounts

1. Rationale

The purpose of the custodian investment account is to support the College’s long-term investment strategy.

2. Authorization

The College’s Investment Policy Statement as approved by the State Board of Trustees delegates authority to manage the custodian investment account to the Chief Financial Officer.

3. Bank Signature Card

Evidence of authorization will be made by the completion of a bank signature card with the signature of the:

a. Chief Financial Officer
b. Chief Accounting Operations Officer

4. Usage

The custodian investment account allows the College to allocate funds not immediately needed for daily operations into longer term investments in an effort to maximize interest earned, and as needed, funds from the custodian investment account may be used to satisfy an immediate cash need of the College. The custodian investment account also provides investment-related reporting, risk management, internal control, and compliance assistance to the College.

H. Accounts for Specific Functions

1. Rationale

Accounts may be opened for specific methods to collect or distribute payments, including but not limited to ACH payments, payment plans, international transactions, printing, property management and payments made to the College via credit card. Central Office Finance determines the types of credit cards the College will accept.

2. Authorization

Accounts for specific accounts receivable and regional functions may be established at the discretion of the Chief Financial Officer and Chief Accounting Operations Officer.

3. Bank Signature Card

Evidence of authorization will be made by the completion of a bank signature card with the signature of the:

a. Chief Financial Officer
b. Chief Accounting Operations Officer

Specific accounts deemed necessary for regional purposes may have additional signatories including but not limited to Chancellor or Executive Director of Finance/Administration as deemed appropriate by the Chief Financial Officer and Chief Accounting Operations Officer.
 
4. Usage

Regarding accounts established for accounts receivable functions, students submit payments to the College via ACH or credit card. The payments are received into the account based on type (payment plan, ACH, credit card, printing), and the funds are transferred to the College’s general bank account via account transfers.

At the discretion of Chief Financial Officer (or designee), accounts may be established for a variety of purposes. Usage of these accounts is dependent on the nature of the account and the specific purpose for which it was created.

I. Construction and Bond Custodian Accounts

1. Rationale

Accounts may be established for construction project funding, including bonds for such projects.

2. Authorization

Accounts may be established at the discretion of the Chief Financial Officer and Chief Accounting Operations Officer.

3. Bank Signature Card

Evidence of authorization will be made by the completion of a bank signature card with the signature of the:

a. Chief Financial Officer
b. Chief Accounting Operations Officer

4. Usage

Bond funding related to construction projects is maintained in the accounts. The College seeks reimbursement from the account for construction expenses related to the bond funded projects.

III. Bank Service Charges

It is College practice to minimize bank service charges.These charges may be invoiced to the College or, with the approval of the Executive Director of Finance/Administration, depository and revolving fund fees may be charged to the Region's revolving fund.  With the approval of the Chief Accounting Operations Officer, fees for Central Office accounts may be charged directly to the account.

IV. Unclaimed Property

A. Reporting of Unclaimed Property

1. Rationale

The College must report and remit unclaimed property to the appropriate state annually based on the last known address for the student, business or organization. In accordance with Indiana Code 32-34-1, all uncashed vendor and non-financial aid related student refund checks and credit balances on all account types with a last known address in Indiana that have reached 3 years or older as well as outstanding payroll checks over 1 year old by June 30th must be included with the College’s annual report and payment to the State of Indiana. Regions with outstanding checks and credit balances for students and entities in other states should contact the Cash Management department within Central Office Finance to determine the appropriate dormancy and reporting date for the property. The Return of Funds procedure should be followed for financial aid-related refund checks and credit balances.

2. Procedure

a. Annually prior to June 30 the Cash Management department will send a template to the regional Finance Office to complete. The completed spreadsheet should include the student or entity’s name, check date that generated the unclaimed property, amount, type of payment (e.g. check, credit card), C# or A#, and last known address. Credit balance reports regarding student accounts will be provided by Central Office to the regional Business Office to assist with completion of the template.

b. Revolving fund checks should also be reviewed by the region to determine if any checks older than 3 years have not been cashed. Revolving fund checks meeting the dormancy period should be included on the template provided by the Cash Management department. A non-reimbursable check should be written from the revolving fund to Ivy Tech Community College and sent to Central Office Finance for the total amount of the revolving fund checks that will be reported as unclaimed property.

c. A letter meeting the due diligence requirements of the statute will be mailed by Central Office Finance to the addresses included on the Unclaimed Property spreadsheet. Checks will be voided and payments reissued for responses received before the stated due date. The item(s) will then be removed from the unclaimed property report before it is submitted. All items for which a response is not received will be reported and remitted to the appropriate state’s unclaimed property division.

d. Persons holding checks, who inquire relative to cashing such items, issued prior to June 30, 2012, should be directed to Central Office Finance for assistance. Indiana vendors and students with checks issued after June 30, 2012 and who did not respond to the letter regarding reissue of payment by the deadline stated in the letter, must contact the Indiana Attorney General’s Office through IndianaUnclaimed.gov to initiate the claim process. Out of state vendors and students with checks issued after June 30, 2012, should be directed to the appropriate state’s unclaimed property division for assistance.

B. Undeliverable Checks

If a check is returned to a regional address, it should be forwarded to Central Office Finance within 7 days. For nondeliverable checks returned directly to Central Office, the Cash Management staff will notify the regional business office. The regional business office should then contact the student to obtain an updated mailing address.

If an updated mailing address is able to be obtained, the check will be sent by Central Office Finance to the updated address.

In the event the business office is not able to obtain an updated address for a check consisting of financial aid funds, the regional business office should work with financial aid staff to return the funds to the sponsor. Checks issued for non-financial aid purposes will be stored in Central Office Finance’s safe and reported in accordance with the unclaimed property dormancy requirements.

.

SECTION F: FINANCIAL AID

I. Overview

The Financial Aid Disbursement section is intended to provide information on the financial aid disbursement process responsibilities of the regional Business Offices.

In order for the Business Office personnel to perform their function effectively, it is necessary to provide an overview of the financial aid programs available at IVTC. Continuous and effective communication is vital between the regional Business Office and the Financial Aid Office staff to ensure proper disbursement and accounting are maintained for each student receiving financial aid.

 

II. Financial Aid Programs

The most common financial aid programs available at the College include:

Federal programs

1) Pell Grant Program

2) Supplemental Educational Opportunity Grant

3) Work-Study Program

4) Stafford Loan Program

5) Plus Loan Program

State programs

1) Higher Education Award

2) Nursing Scholarship

3) Hoosier Scholarship

Private monies include:

1) Lilly Endowment Educational Award

2) Foundation scholarships and loans

The College also provides assistance through the College Fee Remissions such as Statutory, Employee, and Discretionary Fee Remissions.

A brief description of several of the programs follows. For a complete description of each program's requirements, refer to your regional Financial Aid Office. Each area also provides College policy pertaining to the Business Office responsibilities regarding each program.

A. Federal Pell Grant Program

The Federal Pell Grant Program is intended to provide a basic level of assistance to which other forms of student aid can be added to enable needy students to pursue an education. This is the major financial aid program administered at the College. The actual disbursement of the monies for this program is made through the Student Information System (SIS) from the Financial Aid Management component. This process is described in detail later in this section.

This program is generally accounted for financially on a reimbursement basis. The College disburses the funds to students, then requests reimbursement from the federal Department of Education (ED). Certain requirements must be met for the College to receive reimbursement for each student. If those requirements are not met, the College does not receive reimbursement for that particular student. The deadline is September 30 of each year. The College must have satisfactorily submitted the information necessary to receive reimbursement by that deadline. If the College does not successfully receive reimbursement by the deadline, then reimbursement may not be made to the College. The funds paid that student may ultimately be charged to the Operations Fund at the Region.

The regional Financial Aid Office has the major responsibility in obtaining the reimbursement. Therefore, it is an advantage to monitor this reimbursement process especially as the deadline approaches each year. Contact the regional Financial Aid Manager for additional information regarding this process.

B. Federal Supplemental Educational Opportunity Grant (FSEOG)

The FSEOG program awards grants to students with financial need in order to help meet their cost of education. The funding is received in one (1) allocation to the College, and the College allocates these funds to participating regional campuses. The regional Financial Aid Office personnel determine the award made to the individual student.

C. Federal Work-Study Program (FWS)

The purpose of the Federal Work-Study Program (formerly College Work-Study) is to stimulate and promote the part-time employment of students who are enrolled as undergraduate students and who are in need of earnings from employment to pursue courses of study. The federal government and the College each provide a portion of the student's wage. The federal government provides one (1) allocation to the College. The College combines the federal allocation and the College portion and allocates the funds to the regional campuses. The regional Financial Aid Office determines the award given to the student.

1. Disbursement

FWS students are paid on the College's non-exempt (hourly) payroll schedule. The Human Resource System (HRS) is used to automatically charge the federal share and the College's share to the appropriate accounts. When a payroll check is issued to a FWS student, it should be disbursed to the student in the same manner as other payroll checks.

2. Off-Campus Work-Study Students

When the Financial Aid Office has made arrangements for a student to work for an off-campus agency, a signed agreement must be in the student's file. The Business Office will need to bill the off-campus agency for not less than the institutional share. The off-campus expenditures must be identified separately and recorded in the Operations Fund and Student Aid Federal Fund. When the off-campus billing is received, the funds should be deposited in the regional Overhead Recovery account, and not applied against the expenditure account. A Budget Transfer should then be prepared by the Region to cover that expenditure.

3. Overpayment

Any overpayment made to students must be returned to the Federal Work-Study Program. It is the responsibility of the student to repay any overpayment. An overpayment consists of hours not worked by the student, or an administrative error in the reporting of hours worked.

D. Federal Stafford Loan

The Federal Stafford Loan Program was authorized to make long-term, deferred payback, educational loans available to all eligible students.

The College is not a lender in the program. The Financial Aid Office's responsibilities among others are: (a) to furnish certain information to the lender, (b) default management, and (c) student file maintenance. The Business Office responsibility, since the loan check is sent to the College, is to release the disbursed funds to the student.

Stafford Loan checks are issued co-payable to the student and the College, and mailed to the College.

The Business Office may process a student's check only after eligibility verification is received from the Financial Aid Office.

Refer to the SIS Billing/Receivables Users Manual for specific details regarding processing Stafford Loan checks using the SIS system.

Custody of Stafford Loan checks must be retained by the Business Office until either deposited in the regional depository account to be credited to the student account or returned to the financial institution which originally disbursed the check. A Stafford Loan check log is required to be maintained to record the status of the check. When the check is initially received it is the Business Office's responsibility to notify the Financial Aid Department of its receipt.

The check log must be maintained identifying:

1) Student

2) Lender

3) Date check issued

4) Date check received

5) Stafford loan check number

6) Stafford loan check amount

7) Date returned to lender, if appropriate

8) Date school endorsed student loan check

Stafford Loan checks are to be processed through the SIS. The check, once approved for distribution, should be credited to the student's account. Any amount owed the College will automatically be deducted from the check. Then a refund, if any, will be issued to the student during the next refund cycle.

If a student requests that the College hold the funds, the College may do so. If this should happen, the funds should be placed in a liability account in the Student Aid Other Fund. The portion that the student uses for fees and other charges should be transferred each enrollment period. Upon the student's request, the balance of remaining funds, or part thereof, must be remitted to the student under the condition that the student is enrolled at a half-time status, or greater, at the time of remittance.

E. Federal PLUS Loan Program

The purpose of the Federal PLUS Loan Program is to provide non-subsidized deferred payback loan guarantees for parents of dependent students.

The policy on the processing of PLUS Loan checks is as follows:

1. When the Region receives a PLUS Loan check from the bank, the Business Office will retain custody of the check. A check log will be maintained with the same information required for a Stafford Loan check, as described previously within this section. In addition, the parent name needs to be included as payee.

2. The Business Office should notify the Financial Aid Office to verify eligibility of the student. If a student is not eligible, the check is to be returned to the lender. If the student is eligible, then the parent is to be notified to come to the Site and endorse the check. The Site may mail the check to the parent to be endorsed and returned to the Region, but only after the Financial Aid Office has determined that the student is eligible.

3. If the student owes fees and there is no other financial aid which covers the fees, then the parent should sign a statement allowing the Site to satisfy those fees owed by the student with the PLUS loan. Any remaining amount would be remitted to the parent. If the parent will not sign the statement, then the Site should hold the check and return it to the lender. The rationale for this is that the student will have to be withdrawn from the classes because fees are unsatisfied.

4. After the parent gives written permission to satisfy any fees owed the College by the student and the parent endorses the check, the Site will deposit the check into the revolving fund and write two checks; one to the College to satisfy the student charges not covered by other financial aid, and one to the parent for any remaining excess funds to be given promptly to the parent. The Region may mail the check to the parent.

F. Higher Education Award (HEA)

This program is designed to help provide an Indiana student with the means to meet his or her cost of education, and is only available to full-time students. The State grants are determined and adjusted by the State Student Assistance Commission of Indiana (SSACI).

The grants awarded under this program are for the fall and spring semesters; there are no summer awards. The grant may be used only for the general fee and student activity fees. If the semester grant is greater than the fees charged, that excess must not be remitted to the student. However, that excess amount may be applied to a succeeding semester.

G. Hoosier Scholarships

This program is a merit scholarship awarded to various high school students. The award is one (1) payment to the student in the fall term in the amount specified by SSACI.

H. Lilly Endowment Educational Award (LEEA)

This program is designed to help provide an Indiana student with the means to meet the cost of education, and is only available to full-time students. The monies are donated by the Lilly Foundation and are administered through SSACI.

The grants awarded under this program are for the fall and spring semesters. The grant may be used for the general fee, student activity fees, and bookstore charges. The excess may be remitted to the student.

I. Fee Remissions

Currently the College recognizes three (3) types of student fee remissions:

1) Statutory Fee Remission

2) Employee Fee Remission

3) Discretionary Fee Remission

The Statutory Fee Remission program may be used to pay for the College's general fee.

The Employee Fee Remission program may be used to pay for the College's general fee.

The Discretionary Fee Remission may be used to pay for the College's out-of-state tuition and general fee.

These fee remission programs cover fees only, and any excess awarded may not be remitted to the student, or used to satisfy uncollectible accounts receivable.

If the student is using the fee remission for payment of fees, the Financial Aid Office will provide the Business Office with the award amount(s) by either inputting the amounts in the SIS to feed to Screen 409 (most commonly used) or by use of the Financial Aid Notification form. Any changes in the awards should be communicated using the same methods as noted above.

 

III. Financial Aid Feed to SIS Billing/Receivables Component

The student's award package is created using the Financial Aid Management component of SIS. The student's financial aid package is fed to the B/R system via an automated feed (SBA590). Before the actual feed is run, two non-update SBA590 reports are run on different dates and routed to the regional Financial Aid Offices for their review. The non-update SBA590 report simulates the financial aid feed. The regional Financial Aid Departments use this report to verify the financial aid to be processed prior to the actual feed. After the actual feed is run, a SBA590 update report is run which generates the output for the feed. You should be aware each semester term of the dates scheduled for the update SBA590 feeds.

The SBA590 feed generates a credit posting to each student's B/R account. Any amount remaining in the student's account after all charges have been satisfied is paid by the regular refund process (refer to FMM, Section G, Revenue Collections, for details).

All checks received by the Region from this refund process should be analyzed by the Business Office personnel to determine what caused the refund. The refund could have been generated based solely on financial aid, or based solely on a general credit (dropped class, student payment...) or a combination of the two. If any financial aid has been credited to the student's account, the Business Office should notify the Financial Aid Office that the check has been received.

The Financial Aid Office is then responsible for determining if the financial aid credited was appropriate. If the check is related to any other general credit to the student account, the Business Office must determine the appropriateness of the check.

 

IV. Financial Aid Notification

The Financial Aid Notification form (Exhibit A) is used to communicate to the student the financial aid offered for the award period by the College's Financial Aid Office. Once the student accepts the aid offered, as evidenced by signing and returning the form to the Financial Aid Office, the accepted financial aid amounts are communicated to the Business Office and Bookstore via the Student Information System. The Business Office and Bookstore may then defer the payment of the student's tuition and fees based upon the accepted financial aid amounts.

In the event that a student's accepted award information changes, the Financial Aid Office must inform the Business Office of the change.

This form is also used as a means for the student to certify that the student is financially responsible if for any reason the financial aid award is revised. It also allows the College to utilize the aid to pay for any tuition, fees, bookstore charges and other obligations. The form also informs the student of his or her right to contact the Business Office if he or she wishes to make other arrangements for bookstore charges and/or other obligations.

 

V. Other Policies

A. Overpayment(s)

All overpayments of financial aid must be identified by the Financial Aid Office and collected by the Business Office. It is the responsibility and liability of the student to repay any overpayment. An overpayment may be collected by reducing the student's next term award. In addition, the College is also liable for an overpayment due to an administrative error. If an overpayment cannot be collected from the student, the College must repay those funds to the appropriate program. This amount will be charged to the Region's Operations Fund. If not at fault, the College must assist the Department of Education in collection of federally awarded monies.

B. Returned Checks

According to Federal regulations, any financial aid check(s) not claimed within fifteen calendar days after the end of the award year must be returned to the appropriate program. As a College policy, the Business Office should return any unclaimed check within thirty (30) days after receiving it from Central Office to the Central Office Financial Aid Accounting Department. A list must be provided of any unclaimed financial aid check(s) noting student name, identification number, and check amount before returning the check(s) to the Financial Aid Accounting Department.

C. Student Refund Checks - Voids and Stop Payments

Any student refund checks that include financial aid funds that need to be voided must have a financial aid void check form (Exhibit B) filled out. Send the completed form with the check marked "Void" to the Central Office Financial Aid Accounting Department.

Any student refund check which needs to have a stop payment placed on it must be phoned in to the Central Office Financial Aid Accounting Department. Please have the following information on hand: Region Number, Check Number, Check Date, Student ID, Requested by, Check Amount, Term/Subcode, and a reason for the Stop Payment.

A stop payment will not be placed on a check until five (5) days after issuance.

D. Prorata Refunds

As mandated by the federal government, prorata refunds will be provided to any student who is a Title IV financial aid recipient and attending Ivy Tech Community College of Indiana for the first time or a first-time transfer student. The student must have withdrawn completely from all classes enrolled before the sixty percent point in the enrollment period.

Refer to Section G, Revenue Collections for more detailed information.

SECTION G: REVENUE COLLECTION

Overview

Recording revenue activity involves the collection of currency, checks, warrants, or bank wires. Major sources of revenue for the College are state appropriations, federal and state grants, and student fees and charges. The emphasis in this Section will be directed toward student fees and charges. This Section is provided as an overview and to establish College-wide policy for revenue activity.

I. Student Tuition and Fees

Tuition and fees are assessed to assist in the funding of a student's cost of education. The tuition rate is established every two years by the State Board of Trustees. The miscellaneous and consumable fee rates are established annually. Each College location should have a copy of the most current State Board resolution. The type of fees assessed at the College include:

A. College-Wide Fees

1. General Fees

These fees are assessed to all students to assist in supporting the cost of providing a student's education.

a. In-State General Fees - This general fee rate is assessed in accordance with the State Board of Trustees resolution to all students who meet the College’s state residency requirements. Distance education tuition revenue is received at the originating region. The Central Office Finance Department produces a journal entry during the academic term which directs 20% of the tuition revenue to the student’s home campus..

b. Out-of-State General Fees - This general fee rate is assessed in accordance with the State Board of Trustees resolution to all students who do not meet the College’s requirements for state residency or the reciprocity agreement.

c. Out-of-State Online Fees - This general fee rate is assessed in accordance with the State Board of Trustees resolution to all students who are taking courses online and do not meet the College’s requirements for state residency or the reciprocity agreement.

d. American Honors - American Honors is a competitive, two year honors program designed to prepare students for transfer to a four year institution. This fee rate is determined by American Honors and the College. It is assessed to students by the College and subsequently remitted to American Honors.

e. Consumable Fees - Students enrolled in certain courses and programs may be charged a fee in addition to their tuition for supplies and other consumables as determined by the Consumable Fee Committee. In the case where the distance education student will use the materials/services provided under the consumable fee, this fee should be charged to the student. However, if the student will not use the materials/services provided under the consumable fee, the fee should not be charged to the student. Regional course builders add consumable fees in accordance with the approved list distributed by the Executive Director of Cash & Debt Management.

f. Technology Fees - Each student is assessed a per semester technology fee. The technology fee is designed to offset the costs of the College's technical infrastructure such as Blackboard and Campus Connect.

g. Online Course Fees - Students enrolled in online courses are assessed a per credit hour fee in addition to the tuition rate for online courses. Allocation of the regional portion of the distance education fee (60%) is to the student’s home campus. Allocation of the statewide support portion (40%) of the distance education fee is directed to the Center for Instructional Technology for statewide support and course development efforts.

h. IncludED - For IncludED courses, students receive access to the eText for the course and all course-related materials. Depending on the type of course, students may also receive a lab kit or other physical materials. Students are billed on a separate line for the IncludED materials.

i. Noncredit courses - Cost of noncredit courses are determined based on the Corporate College pricing sheet. Fees vary dependent upon client customizations.

j. Miscellaneous Student Fees - Fees charged for specific services such as Returned Check Fee, Course Test Out Fee, Transcript, IDs, etc. Refer to separate memo issued annually by Chief Financial Officer.

B. Assessing Fees

It is the responsibility of regional management to ensure that adequate internal controls are in effect over revenue activity.

Most tuition charges, and course and registration fees are calculated automatically when the student registers for a class. Infrequently, however, the business office may need to manually post entries to the system for charges, such as IncludED, books, adjustments, etc. As mentioned above, consumable fee charges are added by regional course builders in accordance with the approved consumable fee list.

C. Payment of Fees

Tuition and fees may be satisfied by cash, check, money order, bank credit/debit card, or third party payment plan. Student tuition and fees are due prior to the first day of the term. Payment for tuition using a credit or debit card should be made online, and a service fee will be assessed for the online credit and debit card tuition transactions. Payments of tuition, fees, and tests not paid online should be paid in the Business Office. Departments and individuals cannot accept payments for tuition, fees or tests. Tuition and fees that are to be billed to a third party, must be verified by a letter, contract, or other adequate documentation, and kept on file at the Region.

For corporate partners supporting their employees’ education through tuition reimbursement, the College offers the option of deferring tuition payments for both credit and non-credit courses. In order to participate in the Deferred Corporate Tuition Assistance program, the student and employer’s Human Resource department must complete a Deferred Corporate Tuition Assistance Request form each semester before the payment deadline. Payment for tuition is due 30 days after the last day of the course. Deferred tuition arrangements cover tuition only. The student is responsible for books, IncludED materials and consumable, technology and any additional fees, and payment for the fees must be submitted by the posted payment deadline. In the event a student does not submit payment to Ivy Tech, the Company is responsible for payment and will be billed. Balances not paid after 30 days may be considered delinquent, and costs incurred in the collection of a delinquent account, including collection and attorney fees, may be added to the balance. Any exceptions to payment responsibility as related to the Deferred Corporate Tuition Assistance program must be submitted to the Chief Accounting Operations Officer for approval prior to the start of the course.

The College currently offers payment plans through an outside, third party vendor. The vendor may assess a non-refundable fee for enrollment in a plan. Additional information regarding the availability of payment plans is available on Campus Connect.

Generally, students who have a prior term balance will not be allowed to register until that balance is satisfied. If a student who owes past financial obligations to the College enrolls in a course but a contract or third party has agreed to pay tuition for the current semester regardless of student completion, registering these students is appropriate. The Chancellor or their designee, (the designee for this case must be a member of the business office staff), may allow a student to register if the situation warrants. Exceptions are made on a case by case basis.

Students who register online through Campus Connect must acknowledge and agree to all policies regarding the payment of fees. Entering their user id, password, and clicking “I accept” is considered equivalent to the student's signature.

D. Cash Close Out and Reconciliation

Collections are to be reconciled daily by a cashier. In order to maintain the integrity of the audit trail, when cashiers change and are sharing a computer terminal, the current cashier must sign off the Banner system and the new cashier must sign on. The reconciling process involves balancing the actual collections received against the transactions recorded in Banner. Indiana Code 5-13-6-1 stipulates that daily deposits be made.

As an example of adequate backup documentation of a day's business collections, a typical batch should contain (or must be easily obtainable) Cash Receipts Form (CRF), validated deposit ticket, cashier's check-out screen print, manual receipts, cash register tape, and any other documentation deemed necessary to support the collection activity. The Executive Director of Finance/Administration is responsible for the appropriate separation of duties within this activity.

Collections (cash and checks) should be deposited in the Regional depository bank account without regard to either the completion of the reconciling process, or the creation of the CRF. Refer to Section E: Bank Authorization for more detailed information regarding depository account cash transfers.

E. Cash Registers

Any cash register used should provide, at a minimum, the following documentation:

1. The clerk receiving the funds

2. The source of revenue collection

3. The date of the transaction

4. Voided transactions

5. No-sale transactions

6. Total receipt by source (currency, coin, check, charge and other), grand total collected for day, and continuous grand total.

The Cash Management and Internal Audit Departments should be notified when a Region is intending to purchase a cash register.

F. Reconcilement of B/R Cash Clearing Account

The Region is required to reconcile monthly the B/R Cash Clearing Account. A copy of the reconcilement must be sent to the Cash & Debt Management Department at Central Office no later than seven days after the end of each month.

G. Cash Transfer Log

A copy of the cash transfer log (CTL) for depository account must be sent to the Cash & Debt Management Department at Central Office no later than seven days after the end of each month.:

H. Student Refunds

1. All tuition and fees assessed by the College, except for the Miscellaneous Student Fees described previously, shall be refunded under the following condition:

a. The College will refund or cancel obligations that relate specifically to the cancellation of a course by the College.

b. All refunds to students, except card transactions such as Visa, Mastercard or Discover, are to be refunded via the College’s outside vendor based on the option selected by the student. The card transactions should be refunded by issuing a credit to the student's Visa, Mastercard, or Discover account via the same processor as paid through.

c. The effective date for calculating the amount of fees to be refunded is the date the official drop is received. The refund amount is automatically calculated in the Banner system based on the date.

d. Tuition and fees to be refunded for dropping from courses will automatically apply toward assessment of additional courses in the same semester.

e. Students or parents, who feel that individual circumstances warrant an exception to the standard refund policy, may appeal to the appropriate personnel based on Regional procedures.

2. Banner processes student refunds based on the percentages noted below. Refunds are calculated on business days regardless of holidays. Technology fees, consumable fees, and tuition are refunded at the same rate noted below. Regardless of the day of the week that a course first meets, the refund period would begin on Monday of the first week of classes that a particular course meets.

3. Refund Schedule

Term Length Refund Schedule Refund Amount
16 Week 1st - 10th Day 100%
12-15 Week 1st - 8th Day 100%
10-11 Week 1st - 6th Day 100%
8-9 Week 1st - 4th Day 100%
4-7 Week 1st - 2nd Day 100%
Less Than 4 Weeks 1st Day 100%

After the dates specified in the above refund schedule, students are not eligible for any refund.

4. General Procedure

For an automatic refund to occur, a student account must have a credit balance in the account. On an exception basis, the Region will manually post a refund transaction to an account to generate a refund regardless of the student account balance.

The Region must ensure that a refund is rightfully due a student. If the refund is not due to the student, the business office must prevent the refund from processing or void the check in Banner and initiate the process to reverse the transaction. If a student is inadvertently refunded money not due, the student will be invoiced.

I. Tuition Waivers and Adjustments

There may be circumstances in which it is appropriate for the Region to waive tuition or other charges. These situations, however, should be rare and this practice should not be utilized on a regular basis. Examples of when a tuition waiver might be appropriate would include: student has a valid complaint about a class and requests a refund; in lieu of a cash refund after the normal refund period; and adjustments to tuition.

Tuition waivers must be approved in writing by the Chancellor. If deemed appropriate, the Chancellor may delegate this approval to the Executive Director of Finance/Administration, Director of Business Office or equivalent, or Campus President. In all cases the Region must complete a Tuition Waiver/Adjustment form.

When processing a tuition waiver, the initial charge being waived must always be posted to the student’s account. The tuition waiver is then to be posted utilizing the Regional tuition waiver detail code. The same procedure would apply if the amount of the fee is being reduced; the original fee should be posted to the account and the tuition waiver detail code utilized to reduce the charge. All tuition waiver entries posted to a student’s account must be reviewed and verified by an additional member of the Business Office staff.

Copies of the approved Tuition Waiver/Adjustment form must be filed with CRF associated with the day’s transactions for which the waiver was posted.

J. Financial Aid

Returned/Unclaimed Financial Aid Student Refund Checks or Electronic Funds Transfer (EFT)

Refunds to students resulting from excess federal financial aid must follow specific federal regulations when the check or EFT is returned or unclaimed. According to federal regulation, if a check is returned to the institution or an EFT is rejected, the institution may make additional attempts to disburse the funds, provided those attempts are made not later than 45 days after the funds were returned or rejected. No later than 240 days, the College must cease any additional disbursement attempts and return federal funds to the source. It should be noted that this policy only applies to refunds generated from excess federal aid. This policy does not apply to refunds from any other sources. The procedures related to this policy are outlined in the Standard Operating Procedure for returning funds.

K. Accounts Receivable Write-offs

The College annually reviews accounts receivables to determine if, in the opinion of management, it is reasonable to report these dollars as assets on the College Statement of Net Assets. Receivables in excess of one year are to be written-off unless there is a reasonable expectation of collection. The definition of a reasonable expectation of collection is that payments are currently being made at amounts that will eliminate the debt in a reasonable period of time.

Receivables in excess of one year old need not be scheduled as uncollectible if there a reasonable expectation the amounts will be collected. However, no receivable more than two years old will continue to be so classified without authorization from the Chief Financial Officer or designee.

The Region should submit a schedule of uncollectible accounts receivable for write-off to the Regional Board of Trustees for approval. This approval should take place no later than October of each year. The schedule should only include accounts outstanding longer than one year as of June 30 of each year. The scheduled write-off report is available to run in NewT and includes the name, type of obligation, date of obligation (semester), total due, and collection efforts, together with totals by Fund.

After obtaining Regional Board of Trustee approval through a resolution, the schedule and documentation of approval should be sent to the Chief Accounting Operations Officer by October 31 of each year. Any additional data which may be useful in understanding the reasons for bad debt write-offs should be included.

When the State Board of Trustees approves the write-offs, each Region will post the write-offs in Banner at the direction of the Chief Accounting Operations Officer. A reconciliation of any adjustments between the approved write-off and actual write-offs should be submitted to the Chief Accounting Operations Officer upon completion of the write-off process.

L. Fee Collected by a Collection Agency

In general, student tuition and fees not collected in ninety (90) days are determined to be delinquent and should be submitted to a collection agency, provided no alternative has been established with the student, such as a regularly scheduled payment. Regions have authority to make exceptions to this rule on a case-by-case basis.

Any account turned over to collection will be assessed a fee based upon the current contract with the collection agency. In all cases, any collections received from the collection agency must be posted to Banner in order to give proper credit to the student’s account.

M. Tax Intercept

Indiana Code 6-8.1-9.5 authorizes Ivy Tech to report debt to the Indiana Department of Revenue for possible offset from a future Indiana income tax refund due to students. The Department of Revenue garnishes State of Indiana income tax returns on behalf of Ivy Tech in order to pay the outstanding balance.

Students who feel the debt is not valid have the right to submit an appeal. The written appeal form and documentation must be received by the College within 30 days of the date of the student’s notification letter.

N. Student Bankruptcy

U.S. Bankruptcy Code Sec. 523

If the College receives notice, as a creditor, that a student has filed for bankruptcy, then:

1. Note in student's record and financial aid file that a bankruptcy petition is pending. In the interim, follow the procedures set forth in paragraph 2.

2. A general order of discharge does not discharge a student loan or a debt owed to the College as a result of a student’s financial aid and or student loan refund to the U.S. Department of Education, commonly referred to as R2T4. If the bankruptcy court specifically grants discharge of the student debt, by making a specific finding of undue hardship, then the Region should follow the steps described below (a.1) a.2) and b.), and forward a copy of each court order to the College General Counsel.

a. Make an entry in the student's records and financial aid file of the date of bankruptcy decree, and note that future efforts to collect the debt which violate federal law should not be made, such as:

1. Withholding transcripts or other acts designed to compel the debtor to pay the discharged debt (11 USC §524 a(2), and

2. The College is forbidden from discrimination against bankrupt persons solely on the basis of bankruptcy (11 USC §525).

b. Include the student debt on the next accounts receivable write-off report.

3. If the debt is not specifically discharged by court order, and the student has only received a general discharge order, and the debt to the College is the result of the student’s financial aid or student loan being refunded to the U.S. Department of Education (R2T4), the College may pursue collection of the debt against the student, including withholding grades, transcripts, diplomas, admission, etc. Another entry, as a follow-up to 3.a. above, should be made, noting that the debt is a valid one to be pursued. If a student is self-paying and the debt is discharged, the College can no longer pursue collection.

 

II. Cash Receipts - Other Receipt Items

A. Property and Materials

When College property or materials are sold, the monies received should be deposited in accordance with regular College policy. (See Section N, Fixed Assets, Chapter VI, Sale or Disposal of College property or materials for necessary approvals to be obtained.)

B. Other Receipt Items

Monies received for reasons other than those stated previously, are to be deposited in accordance with regular College policy.
 
Full identification of the source of the monies, including payer and check number, is to be included with the Cash Receipts Form. Documentation must be adequate to assure a clear audit trail is provided for classification and recording of miscellaneous revenue. This may be accomplished by recording additional detail on the documentation when needed for clarification and by review of the TZRMISC report not less frequently than monthly.

SECTION H: TRAVEL AUTHORIZATION

Becomes effective when a Region is live with the use of Chrome River Expense.

I. Introduction

This Section of the FMM contains policies and procedures for traveling and for claiming reimbursement for travel expenses incurred by any person who travels on business for the College.

The State of Indiana issues the basic travel regulations. The Indiana State Budget Agency writes these regulations from Acts of the State Legislature and from other State administrative rulings. The College modifies the regulations to meet the College's specific travel requirements. Various procedures for internal control purposes and for the administration of travel by the individual departments of the College are also included in these travel policies.

This Section applies to all business travel conducted on behalf of Ivy Tech Community College of Indiana. Travel expenses are reimbursed the same for College employees, students, and board members. Unless otherwise specified in a legally binding contract College contracts that provide for reimbursement of travel expenses will be consistent with the policies and regulations of the College.

The College travel policies attempt to provide reasonable reimbursement of expenses incurred by staff traveling on business, although in some cases, 100% reimbursement may not be made. The reimbursement must be within the rules and policies written by the College. Travel rules and policies apply to all travel on College business regardless of source of funds, e.g. general funds, agency funds, student government and student clubs, or other restricted funds. All persons seeking reimbursement should incur the lowest possible travel expense and should exercise care to avoid impropriety or the appearance of impropriety. Public funds should never be used for personal gain.

The College may recover any expense or allowance paid to any person or entity which was 1) erroneously paid for any reason or 2) paid because of illegality or fraud on the part of any person or entity or 3) paid under the mistaken belief, at the time payment was made, that such payment was in accordance with this policy or 4) paid in excess of Per Diem expenses per federal guidelines.

If a circumstance arises that is not specifically covered, either adopt the most conservative course consistent with the policies and procedures of the College or consult with the Office of the Chief Financial Officer, or designee.

The CFO or Chancellor may develop regional policies and procedures relating to travel by College employees and others who might travel on College business. Such policies and procedures must be consistent with those outlined in this Section and the reimbursement rates may not be changed.

The College utilizes Chrome River Expense which should be used to obtain required travel pre-approvals and request reimbursements for travel.  Chrome River automatically routes pre-approvals, expense reports, and advance requests to the appropriate approvers.

II. General Policy

A. Travel Approvals and Authorizations


Approvals should be obtained prior to the travel.

In-State travel:  Includes travel to Somerset, KY.  Requires prior approval of the employee’s supervisor.  Submission of a Pre-Approval in Chrome River is optional or subject to regional requirements.

Out-of-State Adjacent travel: Travel to adjacent states which is within a 60-mile radius from the employee’s assigned post, and which is necessary to perform customary job responsibilities: Requires written prior approval of the employee’s supervisor and the Chancellor or Senior Vice President or equivalent. A blanket approval from the Chancellor or Senior Vice President or equivalent is acceptable.  The blanket approval should state the employee’s name or a department name and position titles which are covered by the blanket approval. The blanket approval should be kept on file in the regional Business Office for audit purposes.  Submission of a Pre- Approval in Chrome River is optional or subject to regional requirements.

Foreign travel: Includes any travel outside the US. Requires prior approval from the employee’s supervisor, Chancellor (regional employees), respective Senior Vice President or equivalent (Central Office employees), Chief Financial Officer, & Chief Operating Officer. Approval for foreign travel must be obtained via a pre-approval submitted in Chrome River.

Out-of-State travel <=$5,000 (Regional staff): Includes all other out of state travel not noted above.  Requires prior approval from the employee’s supervisor & Chancellor.  Approval for out-of-state travel must be obtained via a pre-approval submitted in Chrome River.

Out-of-State travel >$5,000 (Regional staff): Includes all other out of state travel not noted above.  Requires prior approval from the employee’s supervisor, Chancellor, Chief Financial Officer, and Chief Operating Officer. Approval for out-of-state travel must be obtained via a pre-approval submitted in Chrome River.

Out-of-State travel (Central Office staff): Includes any out-of-state travel (excluding adjacent travel covered with a blanket approval & travel to Somerset, KY).  Requires prior approval from the employee’s supervisor, respective Senior Vice President or equivalent, Chief Financial Officer (CFO), & Chief Operating Officer (COO). Approval for out-of-state travel must be obtained via a pre-approval submitted in Chrome River.

B. Travel Status

1. An individual is in travel status from the time he or she leaves the post to the time of return. Occasionally an individual may take a trip that includes both personal time and business travel. Generally travel status should begin and end as if the personal travel had not occurred. The individual should exercise special care not to seek reimbursement for expenses that could be construed to be personal.

2. When an employee combines personal and business travel, documentation must be provided with the expense report to assure the College did not incur additional expenses. Documentation must establish the cost of the trip without the inclusion of personal travel. Reimbursement will be made at the lesser of the previously mentioned documentation or actual expenses incurred.

There are special circumstances involved with non-exempt employees while traveling for the College as it relates to payroll issues. Please contact your payroll office prior to approving travel for non-exempt employees.

Generally when departing from or returning to your home, on a regular work day, reduce the mileage claim by your normal commuting mileage. If your mileage to your destination is less than your normal commuting mileage then you should not claim any mileage reimbursement. An exception to this rule may apply when an individual departs or arrives home on an unscheduled workday. In this case, the individual should claim the actual mileage to/from home. This exception is not to be applied to travel to/from home and post. An example of the correct usage of this exception would be as follows: The employee's normal work schedule is Monday-Friday, 8:00 a.m. to 5:00 p.m. The employee departs Sunday at 10:00 a.m. the mileage from home to the airport is 20 miles, and the employee's normal commute is 10 miles. In this case the employee may claim the full mileage of 20 miles.

C. Travel Advances

Travel advances may be paid on an exception basis only upon approval from the Executive Director of Finance/Administration for a regional employee and the Executive Director of Budget Management approval for a Central Office employee. Travel advances will be paid by Direct Deposit only. The following stipulations apply:

1. A travel advance should be requested after the travel pre-approval is approved in Chrome River.  Chrome River will systematically apply the Fund and Account to be used on the advance. If the advance is approved, it will be paid through the Banner Accounts Payable module.

2.The request should be submitted within 10 days prior to the expected travel date.

3.The advance must be at least $100 and may not exceed 50% of the reimbursable estimated mileage, lodging, airfare, and Per Diem.

4. When completing the expense report in Chrome River, 100% of the travel expense should be reported. No adjustment should be made for the advance. The amount of the advance will be systematically recovered.  If no expenses are incurred or the allowable actual expenses are less than the advance, advance repayment must be made to the regional bursar or business office.  If necessary repayment may be realized through a payroll deduction(s).

5. Once the advance is paid, Chrome River will automatically apply any outstanding advance balance to any expense reports created subsequent to the payment until the balance is reduced to $0.

III. Reimbursements

A. Requests for Reimbursement

Expense Report

a. Reimbursement for travel expenses must be submitted in Chrome River via an Expense Report.

b. Each expense report must be submitted for reimbursement within sixty days after the completion of each trip. The College reserves the right to deny reimbursement if not received within this sixty-day period.

c. Each person requesting reimbursement for travel expenses must submit an expense report covering only his or her own expenses. The traveler may authorize a delegate in Chrome River to submit an expense report on their behalf. No reimbursement should be received by a person for the expenses paid by another person unless specifically authorized elsewhere within this travel section. Exceptions may be made by the EDF/Chancellor or designee for regional staff and the Chief Accounting Operations Officer for the Office of the President.

d. All amounts reported must be converted to United States currency. Chrome River will provide foreign exchange rates upon entry of the expense report. Differences between the system supplied rate and the requested rate which vary by more than 2%, must be explained. Proof of conversion rate(s) must be submitted for expenses paid in any other currency.

B. Travel Status

1. Per Diem

A person in travel status is entitled to a daily Per Diem allowance based on the “Local Meal Rate” as found on the Department of Defense Travel Management Office website (http://www.defensetravel.dod.mil/site/perdiemFiles.cfm) in the CONUS (Continental US) & OCONUS (Outside Continental US) rate files.

The Chrome River system will calculate the rate based on the destination and date entered in the itinerary.

The first and last day travel per diem will be paid in accordance with the Federal tables, which approximates the following for Over-Night travel.

 Over-Night travel (12 - 24 Hours)* Meal Breakouts
 Departure before 9:01AM (100%) 100% of Rate
 Departure between 9:01AM and 2:00PM (75%) 75% of Rate
 Departure between 2:01PM and 7:00PM (50%) 50% of Rate
 Departure 7:01PM or later  None
 Return between 12:01AM and 4:59AM  None
 Return between 5:00AM and 11:00AM (25%) 25% of Rate
 Return between 11:01AM and 4:59PM (50%) 50% of Rate
 Return between 5:00PM and 11:59PM (100%) 100% of Rate

*Documentation of overnight travel accommodations is required to pay Per Diem at the over-night travel rate.

If a person is in multiple locations on the same day while in travel status outside of Indiana, the per diem rate for the location employee slept or rested should be claimed. The same meal may not be claimed more than once.

Federal Travel Regulations 41 C.F.R.300-3.1 (2009), currently allow $5.00 per day as incidental expenses, fees and tips given to porters, baggage carriers, bellhops, hotel maids, stewards or stewardesses and others on ships, and hotel servants in foreign countries. Employees receiving Per Diem for domestic travel may request up to $5.00 per day as incidental expenses, if incurred, without providing a receipt.

Except as provided below, a person is not entitled to Per Diem allowance or lodging expense for overnight travel if travel takes the person fifty (50) miles or less from the post or the person's home, whichever is the lesser distance. A Senior Vice President (or equivalent) or Chancellor may authorize payment of Per Diem allowance and lodging by making a determination that it may be dangerous or undesirable for a person to travel because of any one of the following:

• unsafe highway/weather conditions

• unusual work assignment

• the employee's physical condition

One-Day Travel (more than a 50-mile radius from home or post)

If a person is in travel status a minimum of twelve consecutive hours all in one-day he or she may claim ½ of the daily Per Diem rate. All other travel policies apply. No exclusions for meals furnished need to be made because the traveler will receive a flat rate of half the Per Diem rate. Per IRS regulations, Per Diem paid for one- day travel is considered taxable income to the recipient.

One-Day travel is defined as travel that is

a.) at least 12 consecutive hours in travel status

b.) occurs within the same calendar day

c.) more than 50 miles from home or post

The request for reimbursement will be entered in Chrome River. Upon approval, payment will be made through the accounts payable system. Chrome River Analytics will be used to provide the necessary information to the Central Office payroll department regarding the taxable payment. The amount will be included in the employee’s W2 taxable wages.

2. Meals Furnished

a. If a person in travel status receives a meal without charge*, or as part of a registration fee paid by the College, State of Indiana, or the Ivy Tech Foundation, or provided by a vendor or potential vendor then the Per Diem allowance must be reduced as calculated by Chrome River, which will approximate the following table, regardless of the actual cost of the meal: (An exception to this is One-Day Travel as noted above.)

 Breakfast 25% of Daily allowable rate
 Brunch  25% of Daily allowable rate
 Lunch  25% of Daily allowable rate
 Dinner  50% of Daily allowable rate

b. If all meals are provided, simply make no claim for Per Diem. The College must not pay for a person's meal more than once.

*Meals furnished without charge does not apply to continental breakfast. A continental breakfast usually consists of cereal, juice, fruits, and pastries.

3. Lodging Furnished

If lodging is provided to a person in travel status at no cost to the person, a statement by the employee explaining that the person was in travel status, may be substituted as documentation to justify claiming the Per Diem allowance.

4. Board Members

All board members are entitled to reimbursement of allowable travel expenses at the same rate as employees. Additionally, a State Board member is entitled to a $50.00 stipend each day while attending an official board meeting. Alternatively, Workforce Alignment Board members are entitled to a $1,000 stipend for each quarterly board meeting. The stipend must be processed through Chrome River and is subject to 1099 reporting rules as detailed in Section J. III. N. 5. Vendor Payments of the FMM. State Trustees: IC 21-38-2-3  Regional Trustees:  IC 21-38-2-4

5. Non-Working Days or Extended Travel To Save Costs

The additional expenses associated with travel that is extended to save costs, such as a Saturday night stay, may be reimbursed when the cost of airfare would be less than the cost of airfare if the traveler had not extended the trip, and provided that those expenses were incurred in compliance with all other travel regulations. Such expenses, which include lodging, car rental, meals and incidental expenses, shall not exceed the amount the College would have paid if the traveler had not extended the trip. An employee must document the airfare as if the trip had not been extended, and turn this documentation in with the expense report.

C. Reimbursement of Lodging

1. An employee in travel status may claim lodging expenses not to exceed the single room occupancy charge including taxes.

2. If two (2) or more employees in travel status share a room, one person may pay the entire cost of the lodging and request reimbursement. The employees must note this fact on each employee's expense report. If one employee pays for a deposit, that employee may list the full amount of the deposit on the expense report.

3. An employee may not request reimbursement for lodging when the lodging was provided by a person who is not in the business of providing lodging.

4. Whenever possible, employees should stay in hotels that offer government rates.  Employees who prefer luxury accommodations should not request full reimbursement. Travelers and College management should pay special heed to the policies and procedures when selecting anything other than modest accommodations.

5. Generally, employees should pay for their lodging, and then request reimbursement. However, there are circumstances when it is in the best interest of the College to allow direct billings or prepayment of hotel charges for a group of employees. Any and all amenities which would result in additional charges are strictly prohibited. Further, prior to payment, the hotel must have been informed and in agreement that charges for amenities may not be billed to the college but instead will become the responsibility of the employee. In these cases, prior approval by the Executive Director of Budget Management (Central Office staff), or Chancellor or Executive Director of Finance / Administration (regional employees) is required.

6. Hotel receipts without a zero balance will be allowed in order for employees to be reimbursed for their hotel expense. The majority of hotels allow a quick checkout, charging the employee's credit card and later mailing the transaction. Whether this happens or not, it is the employee's responsibility to pay for the hotel stay.

D. Conference Expenses and Hotel Deposits

An employee in travel status may be reimbursed for the cost of registration fees associated with attendance at conferences. Only the employee's portion of the registration fee may be paid. Paragraph B-2 (Meals Furnished) applies when the registration fee covers the cost of meals. In some cases, conference hotels require a deposit in advance, instead of allowing the employee to hold the room with a credit card only. In these cases, the employee may be reimbursed for the total deposit. The Expense Report for reimbursement of the deposit may be requested in Chrome River prior to the completion of the travel if desired. The Expense Report for the remaining expenses may be submitted upon completion of the trip.

E. Reimbursement of Transportation

1. Motor Pool

If the travel of an employee will be by vehicle, State of Indiana Motor Pool vehicles may be used when available and practical.

2. Personal Automobile

a.The employee is free to choose any site for driving directions; however the mileage reimbursement will be based on Google Maps which is integrated with Chrome River.

For all full-time employees and all part-time non-instructional staff, a primary post or station must be designated by their supervisor in consultation with human resources.  This designation must be based on where the employee normally spends the majority of their work time. Generally when departing from or returning to your home, on a regularly scheduled work day, reduce the mileage claim by your normal commuting mileage to/from your primary post or station.  If your mileage to your destination is less than your normal commuting mileage then you should not claim any mileage reimbursement.

Examples: Employee’s post is the Indianapolis campus (downtown), they live in Franklin, IN (south of Indy), and their work schedule is Monday through Friday.
Mileage Table for Examples:

Description Mileage
Home to Post 25
Home to Chicago 204
Home to Madison 77
Post to Chicago 179
Post to Madison 102

Example 1. Departs from home to post, then to Chicago on a Monday, returns on a Tuesday and stops at post prior to returning home
Home to Post                                                                                      25 miles
Post to Chicago                                                                                  179 miles
Chicago to Post                                                                                  179 miles
Post to Home                                                                                      25 miles
Total                                                                                                    408 miles
Less: Round trip commuting mileage                                                  50 miles
Total to be claimed                                                                              358 miles

Example 2. Departs from home on a Sunday to Chicago, returns to home on a Tuesday
Home to Chicago                                                                                 204 miles
Chicago to Home                                                                                 204 miles
Total                                                                                                     408 miles
Less 1 day of commuting mileage as departure was on a Sunday      25 miles
Total claimed                                                                                        383 miles

Example 3. Departs from home on a Thursday to Madison, returns to home on the same day
Home to Madison                                                                                  77 miles
Madison to Home                                                                                  77 miles
Total                                                                                                      154 miles
Less round trip commuting mileage                                                      50 miles
Total claimed                                                                                        104 miles

Example 4. Departs from home to post, then to Madison, returns directly to home all on a Friday
Home to post                                                                                        25 miles
Post to Madison                                                                                   102 miles
Madison to home                                                                                  77 miles
Total                                                                                                     204 miles
Less round trip commuting mileage                                                     50 miles
Total claimed                                                                                       154 miles

If the miles traveled exceed the miles shown on Google Maps and the employee can show just cause for taking that route (i.e. road closed due to detour), the employee should be reimbursed for that extra mileage, provided documentation is included with the Expense Report.

b. If reported miles differ from the integrated Google Maps miles, an explanation must be entered on the expense report in Chrome River.

c. Additional official automobile travel within a city or town shall be listed separately from travel between cities or towns, and shall be itemized sufficiently to show the address (es) visited.

Example:
Visited 4100 East 38th Street
(8 miles NE Indianapolis).

Additional official travel outside a city or town shall be listed separately from travel between cities or towns, and shall be itemized sufficiently to show the address visited.

d. Personal automobile mileage will be based on the approved IRS rates. This rate will change with the same frequency that the IRS mileage rate changes. Revised IRS rates are normally issued annually, usually by January 1 of each year.

e. The mileage reimbursement shall not exceed airfare available thirty days before the departure date. Documentation supporting the costs of the airfare must be attached to the employee’s expense report. The College will not pay Per Diem for extra days taken to drive as opposed to flying. In essence, the total costs of driving cannot exceed the total costs that would have been incurred had the individual used a commercial air carrier. This same approach is to be applied for travel by rail, bus or other means. Exceptions to this policy may be approved by the employee's respective Senior Vice President (or equivalent), Chancellor, or EDF/EDA when economical and practical, and should be noted on the Pre-approval for out-of-state travel. When the employee traveling is a Senior Vice President (or equivalent) or a Chancellor and traveling outside the continental United States, the President or designee must approve exceptions to this policy.

3. Travel by Commercial Air Carrier

The coach or tourist class cost of travel by commercial air carrier will be reimbursed. Airfares carrying cancellation penalties should be used with extreme caution. The penalty fee up to 50% may be reimbursable only if legitimate College business or a personal emergency prohibits the employee from traveling.  Change fees must be pre-approved by the Chief Financial Officer and the Chief Operating Officer.

4. Travel by Non-commercial Carrier

The cost of travel by a non-commercial carrier is reimbursable only if the President's office has approved the use of such a carrier before the reservation is made.

5. Travel by Railroad or Bus

The cost of travel by railroad or bus may be reimbursed. No employee may be reimbursed for the cost of train or bus fare in excess of airfare available thirty days before the departure date. Pullman accommodations in excess of the cost of a roomette are not allowed. The travel time maximum of two full driving days per trip applies to train and bus travel.

6. Public Transportation

The cost of taxi and other public transportation between an employee's post or home and a terminal may be reimbursed. The cost of transportation between the terminal, the place of lodging and other places of College business while in travel status may be reimbursed. The employee must submit the detail of such trips with the expense report. The cost for transportation to and from restaurants or other forms of entertainment are considered to be personal expenses and will not be reimbursed.

The cost of parking at a terminal may be reimbursed at long-term rates. If the long-term parking lots are full, the College will pay for other parking arrangements such as parking lots away from the airport, which require shuttle services. This should only occur rarely, and the employee must attest to the lot being full. An employee in travel status may use a personal vehicle for transportation to a terminal instead of using public transportation, and may be reimbursed the cost of round-trip mileage between the post and the terminal. If traveling from home you must deduct your normal commuting mileage, unless it is on a non-scheduled work day The employee in travel status may receive reimbursement for a second round trip in lieu of receiving reimbursement for parking at the terminal. However, reimbursement for a second round trip may not exceed the cost of long-term parking fees for the travel status time period.

7. Car Rental

Any employee who may be expected to drive a College-owned vehicle or drive a rental vehicle for business purposes related to College must complete a Driver Authorization Form at least 10 days prior to driving. Details for completing this form are provided in Section I, IV, c, 2. Driver Authorization. This form and instructions can be obtained in the forms section of College’s Infonet under "Driver Authorization".

The College may not rent a vehicle designed to seat 15 persons or more, including the driver.

Students wishing to drive College-owned, rented, or leased vehicles must comply with the guidelines set forth in the student domestic travel policy, which may be found at https://www.ivytech.edu/files/student-domestic-travel.pdf. If a student wishes to transport other students to a College-sponsored event, they must sign a waiver form that can be obtained through the Executive Director of Employee Benefits. Any accident that may occur when a student transports other students to a College- sponsored event is not covered under the College's insurance. Liability would fall under the student's automobile policy. Students are allowed to drive designated driver's education vehicles when enrolled in the College's driver education course or drive time, only when accompanied by a certified driver education instructor. Automobile rental expense is reimbursable for out-of-state travel when it is efficient and cost effective, and when approved by the employee's respective Senior Vice President (or equivalent) or Chancellor or Executive Director of Finance / Administration. Approval from the President or designee is not required when a Senior Vice President (or equivalent) or Chancellor is the employee renting the automobile.

When an automobile is rented for a combination business/personal trip, extra care should be taken to ensure the College does not pay for rental costs outside of the business portion of the trip. There may be circumstances when a weekly rental rate is cheaper than the daily rate for the conference dates. When this occurs, the College will pay the weekly rate. This must be documented on the rental agreement and submitted at the time of reimbursement.

The employee may have the cost of the rental billed directly to the College if approved by the Executive Director of Budget Management (Central Office staff) or the Chancellor or Executive Director of Finance / Administration (regional employees). If the employee incurs the costs of rental, copies of the receipts for the car rental and fuel should be attached to the request for travel reimbursement. The employee will be reimbursed for the lesser of the car rental and fuel or the mileage calculated per section E-2 (Personal Automobile). The least expensive practical vehicle should be rented.

8. Long Distance Travel by Driving

Employees who choose to drive rather than fly long distances cannot be in travel status for more than a maximum of two full driving days per trip. The mileage reimbursement shall not exceed airfare available thirty days before the departure date. Exceptions to this policy may be approved by the employee's respective Senior Vice President (or equivalent) or Chancellor or Executive Director of Finance / Administration when economical and practical, and should be noted on the Chrome River pre-approval. When the employee traveling is a Senior Vice President (or equivalent) or a Chancellor, the President or designee must approve exceptions to this policy.

F. Travel Outside the Continental U.S.

In addition to the Per Diem allowance, an individual in travel status outside of the continental United States may be reimbursed for the reasonable expenses associated with the travel. Such expenses include the cost of:

• visas, passports and other travel documents
• photographs for travel documents
• inoculations
• currency exchange
• airport taxes

G. Requirement for Receipts

1. Except as provided below, a person requesting reimbursement of the actual cost for any item of expenditure must include a scanned receipt in the Chrome River module which is attached to the Expense Report. If a receipt for any item of expense has been lost or cannot be obtained, the following may be substituted and scanned and attached to the Expense Report in Chrome River:

a. Lodging - statement from provider or FAX or scanned copy of detailed receipt.

b. Airfare - documentation from the airline or travel agent.

c. Other - A Certificate of Missing Documentation form. The form is available in the business office or on the forms page of the College's Infonet. The certificate must be approved by the individual's supervisor.

H. Sales Tax

Exemption from sales tax is offered on the purchase of tangible personal property by non-profit organizations if:

1. The purchased item is used or consumed by the organization.

2. The item is used for the same purpose for which the organization is exempted from Indiana Income Tax.

3. Meals and lodging, furnished by an educational organization for the use of individuals, are not used or consumed by the organization itself and are not used for educational purposes, regardless of the fact that the individual may use them while employed by or is a guest of the educational organization; and therefore, are not exempt from sales tax.

4. Exception:  If the College pays a hotel within Indiana, it is billed directly, and it is for College business, the sales tax should be waived.  If the employee pays the bill and seeks reimbursement, sales tax is appropriate.

I. Parking Charges/Other Miscellaneous Charges

1. An employee in travel status may be reimbursed for the cost of parking, rideshare services, and cab fare (including cab fare tip) within the guidelines of Section E, Reimbursement of Transportation, of this travel policy. Receipts satisfying the requirement of Paragraph G, Requirements for Receipts, must be included with the request for reimbursement.

2. Reimbursement for parking at parking meters may be requested on an expense report to the extent of $8.00 per trip. Detail must be provided.

3. Reimbursement for public transportation for which a receipt is normally not given, i.e., city buses, subway or metro service , as well as tolls may be requested on the expense report to the extent of $15.00 per day without providing a receipt or Certificate of Missing Documentation.

4. If an employee is not receiving the technology stipend, reimbursement for cellular phone calls used for business purposes may be requested on an expense report without providing a Certificate of Missing Documentation. The employee does not have to be in travel status to be able to request cellular phone call reimbursement. The date of the call and the person called must be documented on the expense report.

5. For those employees that do not claim Per Diem, an exception would allow that employee to claim tips up to the amount they would have been allowed for Per Diem. Such examples would be tips for maids and hotel or airport porters.

6. Certain Airline fees in addition to the cost of the ticket may be reimbursed when required for airline travel (i.e. baggage fees).  Other fees which are normally considered more personal convenience in nature (i.e. seat assignment fees, Wi-Fi) are not to be reimbursed.  Exceptions may be approved by the Chancellor or Executive Director of Finance/Administration for a regional employee or Executive Director of Budget Management for a central office employee.

J. Instructional Travel (Applicable to Full-time Faculty, Adjuncts, Corporate College, & Administrative Staff)

One of the key elements in the decision of how to reimburse an instructor's travel expense is the establishment of the individuals designated station. In the majority of cases, the individual's station is the location at which the individual is contracted to teach. For example, the station of an adjunct faculty member, who is contracted to teach a course at a local high school, is the high school, not the region's main campus. For adjunct faculty this principle applies on a class-by-class basis regardless of the number of individual contracts. To expand upon the above example, assume that the individual was not only teaching a course at the local high school, but he/she was also teaching a course at the main campus. This individual would have two stations, each one based upon where the individual was contracted to work, and therefore would not receive travel reimbursement.

In making a determination to pay mileage reimbursement to adjunct faculty, the individual's assignments should be the basis, not the contract. It does not matter if the individual has two independent adjunct teaching assignments on one contract or on two separate contracts.

There may be instances however, where the college might reimburse a full-time instructor to drive to a location. If for example, an individual's overall employment with the college is based upon the individual traveling from their station to another location, then travel reimbursement may be appropriate. For example, if a full- time instructor, who is contracted to teach at the main campus, is given the assignment to also cover a course at a local high school as a part of their full-time contract, then travel reimbursement to the second location is appropriate.

In the case of administrative employees who are also teaching classes, the same principle would apply. If teaching the class is a part of the individual's administrative assignment, then the reimbursement of mileage is appropriate. However, if instructing the class is not a part of the individual's administrative assignment, travel expenses would not be reimbursed.

In cases where the college would not pay travel reimbursement, it would also be inappropriate to allow the individual to utilize a college-owned vehicle.

IV. College Sponsored Meetings

The College sponsors on campus and off campus meetings/activities for various reasons. The following paragraphs address food and drink and other allowable expenses for guests, advisory committees, employees, and students. This paragraph is not applicable to meal costs incurred during Workforce Alignment courses. These costs are considered a factored component of the total cost of the course. For additional information on this topic, see Travel Policies, Section H. III. B. 2. Meals Furnished.

Provision of food and drink at meetings/activities requires prior approval of a Senior Vice President (or equivalent), Chancellor, or President. Approval delegation may be made to the Executive Director of Finance / Administration. This delegation must be in writing and available for review. As a reminder, employees are prohibited from approving their own purchases.

Due to numerous state-wide meetings that are sponsored by the Office of the President and the Office of the Provost, meal approvals within those areas may be delegated to specific staff members. Approval authority may be delegated to one Vice Provost/Assistant Vice President level or higher staff person in each operational area (Human Resources, Finance, Financial Aid, Student Services, Facilities, Distance Education, IT, Institutional Research, Marketing).

A complete list of all individuals provided food and drink must be submitted with an itemized receipt of the expenditure for all payment requests. Signatures from attendees are not required; a list is appropriate. The list must be verified by an employee with knowledge of who attended the meeting. In all cases food purchases from College funds should be closely scrutinized and must be directly related to professional development initiatives or College meetings/activities where it is in the College's best interest to provide food and drink, as determined by the Vice-President, Chancellor, or Executive Director of Finance / Administration. Given the nature of some meetings/activities it may not be appropriate or feasible to obtain a complete list of individuals. Some examples include an open house or a centralized college-wide demonstration. In circumstances where it is not feasible to provide a list of attendees, documentation explaining this rationale should be submitted with the receipts.

Note: Alcohol/liquor may only be purchased for instructional use when required by the curriculum, whether credit or non-credit courses. Otherwise, college funds may not be used for alcoholic purchases.

Food and drink expenses per person may not exceed the current daily Per Diem amount for the meal provided. Total food and drink expenses per person per day may not exceed the current daily Per Diem amount. Tax, gratuities, and delivery/set up charges are not included in the above limits. State Board Meetings and Regional Board meetings are excluded from these limits for food and drink expenses. Exceptions must be approved by the Chief Financial Officer.

 

 Breakfast  33% of Daily allowable rate
 Lunch  50% of Daily allowable rate
 Dinner  50% of Daily allowable rate

 

A. Guests

The College may pay expenses of guests when in the best interest of the College to do so. All payments are to be for food and/or lodging only and must comply with College policy. (Note: Refer to Section VI, Moving Expenses, for approval and reimbursement of interview expenses)

B. Open Houses, Building Dedications, etc.

These types of events may be conducted to provide opportunities for the community to become more knowledgeable about Ivy Tech. Expenses for such events may be paid by the College with advance approval of the Senior Vice President (or equivalent), Chancellor, or the President. A copy of the statement of approval, a statement of the purpose of the function, and a list of itemized expenses with receipts must be attached to employee reimbursement payments.

C. Advisory Committees

Expenses for Advisory committee meetings may be reimbursed in accordance with rates in effect for mileage, lodging, and Per Diem. Employee and non-employee committee members will be reimbursed similarly under the provisions applicable to employees.

V. Board of Trustees State and Regional

Arrangements for lodging, rental of meeting places and meals for dinner meetings may be made for the Trustees. Billings to the College for such charges must include a list of the names of Board members who attended the meeting. Payments for group arrangements for lodging, meeting places, and meals in conjunction with these meetings should be made through a Purchase Requisition through the College's purchasing system. Requests for Per Diem or meal allowance must be reduced for the meal(s) provided by the College. The amount of the reduction should be in accordance with the Per Diem rate schedule.

Regarding all other travel for conferences or for visitation and consultation purposes, a member of the State Board or Regional Board of Trustees, in the performance of duties will be entitled to reimbursement for transportation, lodging, and Per Diem in accordance with employee travel policies.

VI. Moving Expenses

All pre-approvals and reimbursements for moving/relocation must be processed through the Chrome River module.  The Chrome River pre-approval should be used to receive approval by the President’s office. The Chrome River Expense Report should be used for reimbursement of moving expenses after the pre-approval is approved. The Expense Report should be submitted within 60 days of when the expense was incurred.  The Chrome River module will facilitate proper approvals for both the pre-approval and the expense report, and allow tracking for IRS reporting purposes.  Relocation, as used in this section, applies to change of official post of current employees as well as new hires.

A. New Employees

Employment of new personnel may necessitate the relocation of households either from within or outside of the State of Indiana. An incentive for the attraction of competent personnel may, in part, rest on the ability of the College to offer to pay a portion of the moving expenses for such personnel. However, payment of moving expenses is entirely discretionary and must be approved in advance by the President. The appropriate Senior Vice President (or equivalent) or Chancellor or their delegate will enter the pre-approval with estimated expenses into the Chrome River module. The estimated moving expenses must be justified as being in the best interest of the College, and not exclusively for the convenience of the individual employee. Upon approval of the pre-approval by the President, a new employee may be reimbursed for moving expenses at a rate of up to the lesser of ten percent (10%) of the starting salary or five thousand dollars ($5,000).

B. Change of Official Post

1. An employee required by his or her department to be reassigned from his or her present official post to a new official post, which necessitates the employee to move his or her home, will be allowed mileage for a one-way trip from the old official post to the new official post.  If the distance between posts is more than 50 miles, a moving allowance may be allowed. With the prior approval of the President, the employee may be reimbursed up to the lesser of ten percent (10%) of the starting salary or five thousand dollars ($5,000).

2. When the moving allowance is claimed, a lodging receipt or similar proof of travel to the new official post will be required. It shall be the duty of the employee's immediate supervisor or department head to secure sufficient information to be able to certify via a comment on the expense report or an attachment thereto which of the above-mentioned provisions apply. The department head or subordinate shall certify that the change of post was a necessary transfer. (This may be an exception to the 50-mile limit.)

C. Relocation Reimbursement

Relocation, as used in this section, applies to change of official post of current employees as well as new hires.

D. Interview Expenses

1. Requires approval from the employee's respective Senior Vice President (or equivalent) or Chancellor prior to incurring obligation.
The President or designee must grant the approval for any Senior Vice President (or equivalent) or Chancellor open position.
The approval should be obtained outside of Chrome River and scanned and attached to the expense report in Chrome River when reimbursement is submitted.
2. May be paid only to individuals seeking employment with the College.
3. The required qualifications for the position must be submitted with the request.
4. The allowable reimbursement is subject to the travel rules and policies of the College as applicable to employees in travel status, subject to the overall limitation of 1% of the maximum hire-in rate authorized for the position. Exceptions to the 1% limitation may be authorized by the President.
5. The Expense Report for reimbursement should be submitted within 60 days of the interview.

 

VII. Ivy Tech-Owned and Leased Vehicles

An accurate record of all travel, mileage, and expenses must be recorded daily for each vehicle, in accordance with procedures approved by the State Board of Accounts.All use of Ivy Tech owned or leased vehicles in the regions must be authorized by the Chief Financial Officer’s office and are then assigned to the custodian. The custodian is the regional Chancellor or Executive Director of Finance / Administration. The use of a vehicle must be strictly confined to travel necessary to conduct business of the College. (This does not include commuting.)

A. Permanent Assigned Vehicles

Any employee who may be expected to drive a College-owned vehicle or drive a rental vehicle for business purposes related to Ivy Tech Community College of Indiana must complete a Driver Authorization Form at least 10 days prior to driving. Details for completing this form are provided in Section I, IV, c, 2. Driver Authorization. This form can be obtained in the forms section of College’s Infonet under “Driver Authorization”.

Chancellors and others so designated by the President have two options available regarding a vehicle for transportation:

Option 1: The college would provide a vehicle such as a mid-sized sedan or a smaller SUV (vehicles on the state QPA list or comparable). Under this option, the College would pay for all gasoline purchases, insurance costs, as well as maintenance and repair expenses. Individuals would continue to be responsible for maintaining a record of business and personal travel. The use of this option requires the College to include the value of commuting and other personal use of the vehicle as taxable income on the employee's W-2. However in recognition of the fact that these employees are "on-the-job" even when commuting, a stipend would also be provided at the end of the year that is equivalent to the grossed up tax liability resulting from the personal use of the vehicle.

Option 1 Example:

Cost of Vehicle Purchased by College $ 22,000
Lease Value of Vehicle per IRS Schedule $ 6,100
Gas Purchases with College Gas Card $ 1,500
Total $ 7,600
Mileage record – 80% College Travel, 20% Commuting and Personal Travel.
Taxable Income added to W2 - $1,520.

Tax on $1,520:
Federal 0.2800
State 0.0340

County (Marion) 0.0165
FICA 0.0000
Medicare 0.0145
Total 0.3450 = $524

Gross up stipend provided in December = $801

Option 2: The College may provide a stipend.  If an individual drives his or her own vehicle throughout the year, an automobile allowance would be provided to the individual in an amount equal to the leased value of the mid-sized sedan or smaller SUV (vehicles on the state QPA list or comparable) plus an estimated amount for gas purchases. Under this option, the individual would be responsible for gasoline purchases and other vehicle costs. In addition, the College would not provide mileage reimbursement.

B. Temporary Assigned Vehicles

Each region should have an established procedure for requisition of use of Ivy Tech vehicles for temporary assignment. The documentation should at least include the

following information for approval.

1. Name of Driver
2. Destination of Trip. If more than one location is involved, so indicate.
3. The date and period of time the applicant wishes to use the state or Ivy Tech vehicle.
4. Purpose of trip. Must be official College business.
5. Authorized signatures.

SECTION I: INSURANCE

I. INTRODUCTION

The College manages its risks in four general ways: 1) by avoiding a possibly hazardous task or condition, 2) by modifying the risk to an acceptable level, 3) by transferring the risk to another party by means of a contract and/or insurance purchase, and 4) by retaining the risk after other treatment techniques have been considered.

This section of the Financial Management Manual explains the types of insurance policies the College purchases to address its Property and Liability exposures, the basic coverage each provides, and the proper manner to file a claim. Please read the below section carefully since this information can help you become more aware of the potential risks at your operating location and how they are managed. This summary is intended to provide a high-level overview. Individual claims are subject to the specific terms, conditions and exclusions contained in the appropriate insuring document(s).

Questions concerning potential or actual claims should be referred immediately to Central Office Risk Management at risk@ivytech.edu.

II. POLICIES AND COVERAGE

A. GENERAL LIABILITY


1. Named Insured

The policy should be consulted for a complete definition. The following is a brief excerpt:

Ivy Tech Community College of Indiana, Ivy Tech Foundation, Community Enterprises Incorporated, Community Enterprises Properties LLC, Ivy Tech Properties, and any past, present or future trustees, governing board of directors or officers while acting within the scope of their duties on behalf of the aforementioned entities.

Faculty, uncompensated volunteer workers, and students while serving in a supervised internship or while acting at the direction of, complying with the policies and procedures governing conduct at, or performing services primarily for or on behalf of, Ivy Tech, but only while acting within the scope of their duties or obligations in their respective capacities to Ivy Tech may also be considered Insureds.

2. Limits of Liability

$1,000,000 Each Occurrence
$3,000,000 Annual Aggregate
$1,000,000 Fire Legal Liability
$5,000 Medical Payment Expense, Per Person

See the Excess Liability policy for additional limits of insurance.

3. Deductible

The College is responsible for the first $150,000 of any claim. The region from which a claim arises is responsible for $10,000 of any claim.

4. Insuring Agreement

We will pay on behalf of the Insureds all Damages up to the Limit of Liability resulting from an Occurrence anywhere to which this insurance applies. In addition, we will pay certain supplemental amounts as Medical Payments Expense. The Policy is subject to a Deductible, if applicable.

For a full definition of terms included in the insuring agreement, consult the policy. For one, an Occurrence means: a. an accident during the Policy Period or the continuous, intermittent or repeated exposure to conditions that commence during the Policy Period that causes Bodily Injury or Property Damage neither expected nor intended by the Insured; or b. an event that first occurs during the Policy Period that causes Personal Injury or Advertising Injury. Sexual Molestation and Athletic Traumatic Brain Injury are considered under the definition of occurrence. Breach of contract is not an occurrence.

5. Coverage

The following is a brief description of the General Liability coverage:

BODILY INJURY Physical injury, sickness, disease, death or emotional distress sustained by a person and includes mental injury and shock.
PERSONAL INJURY Injury resulting from: a. false arrest, detention or imprisonment; b. malicious prosecution; c. wrongful entry into, or eviction of a person from, a room, dwelling or premises a person occupies; d. oral, written, video, or electronic publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services, or violates a person’s right of privacy (other than in any advertisement, publicity article, broadcast, telecast, or electronic or video publication that arises out of an Included Entity’s advertising of its goods, products or services); e. sexual harassment; or f. Clerical or Administrative Error.
PROPERTY DAMAGE Physical injury to or destruction of tangible property of others including loss of use if the loss of use results from the physical injury or destruction of the property, loss of use of tangible property of others that has not been physically injured or destroyed, and consequential damage or evacuation loss resulting from any actual or threatened physical injury or destruction of tangible property.
ADVERTISING INJURY Injury resulting from a: oral or written publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services; b. oral or written publication of material that violates a person’s right of privacy; c. misappropriation of advertising ideas or style of doing business; or d. infringement of trademark, title, copyright or slogan, in any advertisement, publicity article, broadcast, telecast, or electronic or video publication that arises out of an Included Entity’s advertising of its goods, products or services.

6. Exclusions

The policy contains a number of exclusions and exceptions to those exclusions. The more important exclusions under the College’s General Liability policy are described below.

The policy does not apply to:

1. Any obligation or liability of the College as an employer, including that under worker’s compensation, unemployment compensation, disability benefits law or any similar law. This risk is better covered under the Worker’s Compensation policy.

2. Wrongful Employment Practices. This risk is better covered under the Educator’s Legal Liability policy.

3. Any liability arising out of the administration of any employee benefit plan or any violation of the responsibilities, obligations or duties imposed by the ERISA or similar statute, except for clerical or administrative error with respect to a Covered Benefit Plan that occurs, and for a claim which is made, within certain named dates of the policy. This risk is better covered under the Fiduciary Liability policy.

4. Any liability arising out of the ownership, repair, maintenance, use or entrustment to others of any Automobile, except liability arising out of the repair or maintenance of automobiles by students or employees of the College as part of any curriculum-related instruction. The former liability risk is better covered under the Auto Liability policy.

5. Any liability arising out of rendering or failure to render any Professional Services. There are two narrow and notable exceptions specific to: 1) paid and supervised student interns; and 2) employed or contracted health personnel other than a physician or dentist, but only for services provided at facilities maintained by the College and principally for use by the College’s employees or students, or while at incidental locations that are not medical facilities in the event of a medical emergency. The College carries insurance specific to the activities of students and faculty in Human Services, Mortuary Science or Health Division programs. Please see details of the Licensed Professional Liability policy below.

6. Any property damage to property owned, occupied or rented by, or within the care, custody or control of any Insured. This is better covered under the Property policy.

7. Any liability related to or arising out of 1) Sexual Molestation when known to a Reporting Officer who failed to report it to proper authorities when under a legal duty to do so; or 2) any person who engaged in Sexual Molestation, sexual or physical assault, abuse or corporal punishment or who knew about any of these acts, and to have failed to report it to proper authorities when under a legal duty to do so. Indiana is a mandatory reporting state. Any person who has reason to believe a child is being abused or neglected shall make a report IMMEDIATELY. Call the Indiana Child Abuse & Neglect Hotline, available 24/7, at 800-800-5556.

8. Any liability arising out of, related to, or in any way involving asbestos or lead in any form.

9. Any liability arising out of the actual, alleged or threatened discharge, dispersal, release, seepage, migration, growth or escape of Pollutants. The exclusion does not apply under certain conditions.

10. Any emotional distress, mental injury or shock arising from the theft of a natural person’s identity information for which the College has a legal obligation to maintain confidentiality.

B. Educator’s Legal Liability

The College maintains insurance to cover Wrongful Acts specific to its actions as an institution of higher education. The following are Wrongful Acts that may be covered by the policy:

• Unlawful discrimination or violation of civil rights; sexual harassment; wrongful termination of employment;
• Failure to hire or promote, denial or removal of tenure; constructive discharge; breach of an individual employment contract;
• Failure to properly manage charitable trust services;
• Breach of fiduciary duty arising out of the management of an endowment;
• Peer review not arising out of the performance of medical services
• Unlawful discrimination in the terms and conditions of employment;
• Failure to grant due process; education malpractice or failure to educate, negligent instruction, failure to supervise, inadequate or negligent academic guidance or counseling, improper or inappropriate academic placement or discipline;
• Invasion of privacy or humiliation;
• Infringement of copyright, trademark or patent;
• Plagiarism or idea misappropriation; or
• Oral or written publication of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services, including any such publication to the Internet, in a book, newspaper or other publication of the College, or broadcast over, a radio, cable or television station owned or operation by the College.

C. Licensed Professional Liability Insurance

Licensed Professional Liability coverage is provided to all members of the faculty, instructors, adjuncts, teachers or other professionals who are designated or appointed by the College to instruct or supervise students in a Human Services, Mortuary Science or Health Division program, but only with respect to a Wrongful Act for which the instructor or supervisor is responsible. Enrolled students in those programs participating in any practicum, field work experience, clinical training or internship program under the supervision, direction or control of an aforementioned College designee are also covered.

The limits of liability are $1,000,000 for each claim and $3,000,000 in the annual aggregate. The coverage territory extends to anywhere in the world.

Coverage is excluded for services performed by physicians and medical residents, perfusionists, chiropractors, midwives, anesthetists, or other similar medical practitioners.

D. Automobile Insurance

The College maintains liability coverage for property damage and bodily injury as well as uninsured and underinsured motorist’s coverage on all of its owned, leased, hired, rented or borrowed vehicles when the driver is an approved driver on College business. The College carries physical damage coverage on all autos which are leased, hired, rented or borrowed, except for those leased, hired, rented or borrowed from an employee. Of owned vehicles, physical damage coverage applies only to those from the last five model years. Physical damage means collision with another object, including overturn, or any cause of loss other than collision, such as fire, theft, vandalism, hail, or flood. A physical damage deductible of $1,000 must first be met for coverage to apply. The region from which the claim arises is responsible for the deductible.

This policy does not cover:

1. Any obligation for which Ivy Tech may be held liable under any worker’s compensation law, disability benefits or unemployment compensation law or any similar law (better covered elsewhere); or

2. Employees’ personal vehicles. Primary coverage falls under the employee’s personal auto insurance policy. The College’s auto liability coverage may apply on an excess basis.

Rented Autos

Because rented autos are covered under the College’s policy, the rental car’s insurance option may be waived. Blanket, non-vehicle specific insurance ID cards are available in the regional business office and serve as proof of insurance for employees renting an auto. Employees should obtain an insurance ID card prior to obtaining their rental vehicle. This does not apply to rentals outside of the U.S. In such cases, the local insurance option should always be elected. The College’s policy would then be excess to any local auto policy.

The College’s auto policy covers “loss of use” on (rental vehicles) to the rental car company at a maximum of $20 per day up to a maximum of $600.00.
 

Driver Authorization

1. Any employee who may be expected to drive a College-owned vehicle or drive a rental vehicle for business purposes related to Ivy Tech Community College of Indiana must complete a Driver Authorization Form at least 30 days prior to driving. This form and instructions can be obtained in the forms section of Infonet under “Driver Authorization.” A list of approved drivers is kept on file by the region and is updated on a continuous basis since it is used for underwriting purposes. Driver information is checked at the initial request for approval as well as randomly on an as needed basis or as requested by the auto liability insurance carrier. Please contact your regional Human Resources department for information on driver approvals.

2. The College should not transport students unless it is absolutely necessary. Whenever it is necessary to transport students, students should only be transported by an authorized driver for the purpose of attending school activities in a College-owned, rented, or leased vehicle. The College may not rent a vehicle designed to seat 15 persons or more, including the driver. Faculty and staff should NEVER transport students in their personal vehicle because any accident that may happen does not fall under the College’s auto policy.

3. Students are generally not allowed to drive College-owned, rented, or leased vehicles unless they are authorized by the region AND are an approved driver. Students should not transport other students on behalf of the College in a personally-owned vehicle. A College-owned, rented, or leased vehicle must be used. Individual carpool arrangements can be made among students. Any accident that may occur when a student transports other students to a College-sponsored event in his/her own vehicle are generally not covered under the College’s insurance. Liability would fall under the student’s automobile policy.

E. Worker's Compensation

Worker’s Compensation protects employees in the event of injury, illness, or death caused by a work-related accident while on the job.  Injured workers are entitled to medical and wage loss benefits under Indiana’s Worker's Compensation Act.

The College supports returning employees to work as soon as possible through Temporary Modified Duty (TMD).

A full explanation of Worker’s Compensation and TMD is located in the employee handbook.

F. International Liability

The College maintains insurance to protect its liability arising from its participation in activities outside of the United States, its territories and possessions. The policy includes coverage for General Liability, Excess Automobile Liability and Foreign Voluntary Workers Compensation and Employers Liability. The College also purchases Group Travel Accident and Sickness coverage for all international travelers which is explained below.

G. Excess Liability Insurance

The College maintains insurance which provides coverage in excess of any underlying insurance. Underlying insurance means formal or informal risk instruments or transfer mechanisms; or risk transfer mechanisms that name the College as “additional insured.” Underlying coverage to which this policy applies includes: General Liability, Educators Legal Liability, Licensed Professional Liability, Automobile Liability, Worker’s Compensation/Employer’s Liability and International Liability.

The excess liability coverage limit is $25,000,000, and the underlying limit retention of $1,000,000 for each occurrence must be satisfied for this coverage to apply.

H. Property Insurance

The College maintains insurance against losses to the buildings and personal property it either owns or for which it is legally responsible. Many causes of loss are covered, including loss or damage resulting from burglary or theft. While a blanket limit of insurance applies to most buildings and business personal property, there are varying sub-limits for certain types of property and for certain causes of loss (e.g. flood and earthquake). A loss is generally valued at replacement cost, however, in some cases it may be at stated or actual cash value.

Property for which the College has an insurable interest is covered is as follows:

1. Buildings, including completed additions, fixtures, machinery and equipment permanently attached to the building, personal property owned by the College that is used to maintain or service the buildings, structures or grounds; and

2. Business Personal Property located in or on the buildings on College premises, including furniture and fixtures, machinery and equipment, stock, all other personal property owned by the College and used in its operations, use interest as a tenant in improvements and betterments which are made a part of the buildings or structures occupied or leased, and acquired or made at the College’s expense but for which the College is not permitted to remove; and

3. Personal Property of Others that is in the care, custody, or control of the College or for which the College has agreed in writing to insure prior to any loss or damage. This coverage is limited to $1,000,000 per occurrence. Coverage is not in place for personal items that are damaged or stolen from an employee or student while working or attending the College; and

4. The loss of Business Income and/or Rental Value sustained due to covered cause of loss; and

5. Boiler and Machinery from a sudden and accidental breakdown of a covered object, which includes boilers; fired or unfired pressure vessels subject to vacuum or internal pressure other than the static pressure of their contents; metal piping and its accessory equipment; refrigeration or air conditioning systems; other mechanical or electrical machines or apparatus used for the generation, transmission or utilization of mechanical or electrical power; and fiber optic cable.

6. Property in Transit up to a limit of $500,000 per occurrence; and

7. Fine Arts up to $1,000,000 per occurrence.

The College must meet the applicable deductible per occurrence, generally $100,000, before coverage applies. The region from which a claim arises is responsible for $10,000 of any claim.

You should notify Central Office Risk Management immediately of planned renovation, new construction, or acquisition of buildings or other property in order to receive full benefits of the coverage.

I. Builder’s Risk Insurance

It is necessary to obtain Builder’s Risk Insurance for new construction or a large remodeling project. The property policy is not well suited to address the risks inherent in construction projects. Since coverage varies with the project, please contact Central Office Risk Management.

J. Student Accident Insurance

For students registered in credit courses, the College provides no-fault accident insurance in a designated amount of $3,000 for injuries sustained while participating in a College course, a College-sponsored activity, on College premises or any premises designated by the College (i.e. clinical site). Club, intramural and recreational sports activities are excluded from coverage. This accident insurance is excess insurance, meaning all other valid and collectible medical insurance must be utilized prior to the consideration of this insurance. It is intended to fill in the gaps (pay for deductibles, co-pays or other eligible expenses) up to the accident policy limit. In the absence of other insurance, this insurance becomes primary. Coverage is provided at no cost to the student.

The activity must take place while participating in a College-sponsored activity, on College premises or any premises designated by the College (i.e. clinical site). It is the student’s responsibility to report injuries promptly to the instructor or to the Office of Student Affairs. If an injury requires evaluation and treatment from a medical professional, and you wish to utilize the Student Accident insurance policy, request the Student Accident Claim Reporting Paperwork from the Office of Student Affairs or obtain it from Infonet. It is not intended to replace insurance coverage students may already have. Students should review their own coverage. The master insurance policy issued to Ivy Tech is on file at the central administrative office. The description of the hazards insured, benefits and exclusions is controlled by the master policy. Students with questions may contact the regional Office of Student Affairs.

This policy covers usual, reasonable and customary medical expenses provided treatment begins within one hundred eighty (180) days from the date of the injury. Benefits are payable for one (1) year from the date of an injury, and care must be medically necessary. Once the maximum of $3,000 has been reached, the College’s general liability policy may consider additional expenses if there is negligence on the College’s part.

Students participating in a sports activity should sign a waiver available on Infonet (“Athletics and Intramural Waiver”) acknowledging they are aware that their participation is voluntary and not covered by Ivy Tech.

K. International Student Health Insurance

All full-time international students on a F-1, M-1 or J-1 visa, eligible dependents and OPT (Optional Practical Training) students are automatically enrolled in the College’s mandatory Student Health Insurance Plan for international students. Full-time status is defined as 12 credit hours per semester. Students attending on a less than full-time basis may be eligible if a reduced class load is approved by the International Student Advisor.  Students not attending classes at Ivy Tech in a given semester are NOT eligible for coverage under any circumstances.

Students with pre-arranged health insurance may request a waiver from the mandatory health insurance plan if they provide proof of comparable coverage and it meets certain minimum requirements. A student may apply for a waiver or obtain details about coverage, limitations and resources at www.gallagherstudent.com/ivytech. Questions should be directed to the Designated School Official (DSO) at the region or Central Office Risk Management.

The College does not offer a student health plan for domestic students. Those in need of coverage should be directed to the Health Insurance Marketplace, which can help students find health insurance coverage specific to their needs and budget through either the state or the U.S. Department of Health and Human Services for Medicaid or Medicare programs. Visit HealthCare.gov for more information, including an online application for health insurance coverage and contact information for local health plan assisters.

L. Fiduciary Liability Insurance

The College maintains coverage for Fiduciary Liability to cover those Insureds (the College, trustees, management committee members, Employee Benefit Plan committee members, and College employees) while acting in their capacity as a fiduciary of an Employee Benefit Plan or as a person performing administration of employee benefits.

M. Crime Insurance

The College maintains crime insurance to cover instances of Employee Theft, ERISA Fidelity, Forgery or Alteration, Counterfeit Money, Computer Fraud, or Funds Transfer Fraud.

N. Real Estate Bonds

Certain real estate licensing courses require approval from the Indiana Real Estate Commission. In turn, the Commission requires real estate bonds as a part of the application and renewal process.  Examples of courses requiring approval are the Real Estate Broker Pre-Licensing course and the Real Estate Sales Pre-Licensing course.  Copies of the renewal bonds or new bonds can be obtained by contacting Central Office Risk Management.

O. Cyber Liability

The College maintains Cyber Liability insurance to cover damages, claims, expenses and fines related to a breach of electronic data or computer network. An array of benefits and breach response services are included in the coverage.

P. Aviation

The College maintains Aircraft and Aviation Liability insurance to cover claims or suits that arise out of the ownership, maintenance, or use of aircraft, including injury to passengers inflight. The policy also provides physical damage coverage for College owned aircraft scheduled on the policy. Central Office Risk Management should be informed immediately upon any College department or program acquiring an aircraft.

Q. Unemployment Compensation Insurance

The College pays unemployment compensation benefits for those employees who were covered by the Employment Security Act IC 22-4-1-1.  Benefits awarded are on a reimbursable charge basis to the College in accordance with State requirements. Questions should be referred to the Executive Director of Human Resources.

III. CERTIFICATES OF INSURANCE

Affiliate sites and certain third parties doing business with the College require proof of financial responsibility in case of an accident.  Whenever third parties request “evidence of insurance” or “proof of insurance,” they are requesting a Certificate of Insurance.  Examples are car rental agencies, affiliate sites, and off-site locations that the College may be using for a conference or special event.  Under certain circumstances, the College should be asking for proof of insurance from outside vendors/businesses. Please refer the College’s Minimum Insurance Requirements for Contracts for more information.

When verification of insurance coverage is required, a Certificate of Insurance can be obtained by emailing the “Certificate of Insurance Request” form, found in Infonet, to the contacts listed on the form.  Certificates of Insurance are produced by Ivy Tech’s insurance broker, therefore, it is important that the request is sent to both the broker and to Central Office as instructed on the form.

IV. SPECIAL EVENTS ASSESSMENT AND REPORTING

The College strives to modify risks to an acceptable level and maintain proper insurance for liability that arises in the normal scope of our business. Because the College is active in the community and may desire to participate in ways not common to its ordinary operations, there are instances where special insurance may be necessary to cover liability of specific events. Therefore, we ask that the program organizer complete an Activity Risk Assessment (https://ivytech.qualtrics.com/SE/?SID=SV_8C93XKZM4yhPIXP) and notify Central Office Risk Management of events that fall outside of the College’s normal business operations in advance of the event date.

V. NOTICE OF AN OCURRENCE OR CLAIM

Becoming familiar with the following information will assist you when an accident or incident occurs at your region. It is very important to handle claims resulting from accidents or injuries in a professional and timely manner.  Delay in filing a claim will result in delayed payment and may increase costs to the College. Further, insurance policies have time limits on reporting claims, and untimely filing could lead to a denial of benefits.

Notice of a claim, or an incident that may give rise to a claim, should be made IMMEDIATELY to Central Office Risk Management by completing a claim reporting form, or where not available, in writing. Claim reporting forms with instructions specific to General Liability and Property Damage, Automobile Claims, Worker’s Compensation and Student Accident are available on Infonet, specifics of which are outlined below. The region is responsible for getting the correct paperwork to the College employee, student or visitor involved in an incident. And the region is responsible for forwarding the claim paperwork to Central Office Risk Management in order for it to be filed with the insurance company.

If there are questions regarding handling a claim, or if you suspect an incident may give rise to a claim, you should contact Central Office Risk Management immediately.

A. General Liability or Property claims should be reported immediately by completing the “General Liability/Property Incident Claim Form.”  Be sure to provide supporting documentation and full detail of injury or damages to persons and/or property.

1. General Liability claims, such as those involving injuries to visitors on College premises or student accidents for which the College is responsible, will be investigated and adjudicated by the liability insurer.

a. For damage to or theft of College property, if a loss is insurable, recovery is subject to the applicable deductible.

b. Where replacement or repair is necessary, the expenditure should come from the appropriate regional account. Insurance payments are generally based on replacement cost at the time of loss or damage. If the cost of replacement/repair will exceed the deductible, attach an estimate to replace/repair the property to the claim form. For claims under the deductible, replacement/repair expenses will come out of the regional budget and estimates do not need to be submitted.

c. After a claim has been properly filed, a claims adjuster will work directly with the regional contact listed on the claim form. If the claim exceeds the deductible, a check for the amount above the deductible will be sent directly to the region where the College contact directs payment. Reimbursement should be deposited in the account that the expenditure was made.

d. If the region decides not to replace or repair the covered property, payment will be based on the actual cash value at the time of the loss.

B. Worker’s Compensation

Any work-related injury should be immediately reported to the employee’s supervisor. The employee should complete the “Worker’s Comp Employee Form” and submit it to his/her supervisor and then to the regional Human Resources Administrator.

The regional Human Resource Administrator is responsible for submitting the “First Report of Injury” or “Workers Comp Employer Form” to the College’s Worker’s Compensation third party administrator with a copy to Central Office Risk Management.

The College is self-insured for the first $500,000 of each claim.

C. Student Accident

The College maintains this coverage as a service to its students for injuries incurred in curricular activities. Injuries involving a needle stick or exposure to blood borne or airborne pathogens are covered under this policy.

When a student is injured, the following is important to know:

1. The College should NEVER guarantee medical coverage for any student accident. The insurance company, not the College, adjudicates and pays claims.

2. Student accidents should be reported immediately to the student’s instructor or to the Office of Student Affairs.

3. The student must complete the “Student Accident Paperwork” and submit it to the regional gatekeeper.

4. The region should deliver completed paperwork to Central Office Risk Management as per the form instructions.

D. Automobile Claims

Whenever a College-owned, leased, or rented vehicle is involved in an accident, follow these steps:

1. Stop immediately but do not obstruct traffic.

2. Assist the injured, if anyone is injured.

3. Contact the local or state police immediately to file a police report so that the accident is documented. Even if the accident seems minor, injuries may not become apparent for a few days or weeks. If the police do not come to the scene, in some jurisdictions, you may go to the police department to file a report or make a report online.

4. Secure the names, phone numbers, and addresses of drivers, witnesses, or injured persons.

5. Obtain complete vehicle (year, make, model, license plate number) and insurance information (including the insurance company phone number) for all autos involved.

6. Take photographs of damage.

7. Don’t accept liability or claim settlements.

8. Complete an “Automobile Incident Report,” located in Infonet, and forward with supporting documentation to Central Office Risk Management as per the form instructions as soon as possible.

SECTION J: PURCHASING

I. Introduction

The purchasing of products or services must be executed in accordance with all applicable state and federal statutes in an efficient and business-like manner.  The following College procedures are to be followed by all College personnel conducting or executing purchasing activities. These procedures apply to all College funds.

Compliance is necessary to ensure that the applicable state and federal statutes are not violated.

As it relates to Section J: Purchasing, Executive Director of Finance (EDF) authorizations apply to the position in a region which serves the function of the EDF when the EDF position does not exist.

 

A. Conflict-of-Interest Policy

 

The College expects all employees to exercise good judgment and highest ethical standards in their private activities outside their employment if those activities can in any way affect the College.  In particular, every employee has an obligation to avoid any activity, agreement, business investment or interest, or other situation that could be construed either as in conflict with the College's interest or as an interference with the employee's duty to serve the College at all times to the best of the employee's ability.  To implement this principle and to establish guidelines, the following policy has been adopted.

1. Policy. It is the policy of the College that:

a. No employee shall have a direct or indirect interest in any business enterprise that has current or known prospective dealings with the College as supplier, customer, lessor, or lessee.

b. No, employee shall seek or receive, for personal or any other person’s gain, any payment, whether for services or otherwise, loan (except from a bank at a competitive rate), gift or discount of more than nominal value, or entertainment that goes beyond common courtesies usually associated with accepted business practice from any business enterprise that has current or known prospective dealings with the College as a supplier, customer, lessor, or lessee.

c. No employee shall, for personal or any other person's gain, deprive the College of any opportunity for benefit that could be construed as related to any existing or reasonably anticipated future activity of the College.

d. No employee shall, for personal or any other person's gain, make use of or disclose confidential financial information learned as a result of employment by the College.

e. No employee shall do any act that potentially could conflict with the principle that this policy is intended to implement.

2. Exceptions

Specific exceptions may be made by the President upon application in writing by the employee. Such exceptions shall be wholly discretionary and shall be adopted at such times and under such conditions as will serve the interests of the College.

3. Standards for Compliance

Since the fundamental duty of loyalty to the College is involved, the prohibitions of this policy should be construed broadly rather than narrowly.  A conflict of interest may be deemed to exist even though it does not result in financial loss to the College and irrespective of the motive of the employee involved.  Each employee has the personal responsibility of compliance with this policy.  In the event of any question as to whether a conflict of interest exists in a particular situation, you are encouraged to discuss the matter with the Office of the General Counsel to determine whether such a conflict in fact exists and, if so, how it may be resolved.  Many times what appears to be prohibited may, under certain circumstances, be sanctioned by disclosure and approval.  No set of principles can eliminate the need for human judgment.

4. Specific Practices not Permitted

a. College equipment, materials or supplies will not be purchased from College employees.

b. College students shall not be assigned on-the-job training activities at a site or business owned or operated by a College employee.

c. Service contracts will not be awarded to College employees or to businesses owned or  operated by College employees.

Employees should bring questions concerning the policies described in this Policy to the attention of appropriate supervisory personnel (such as a director or department head) who may, in turn, refer matters of policy interpretation to the appropriate administrator, i.e.  Vice President, Chancellor, etc.  If there is any question as to what action is necessary, advice from the College's Office of the General Counsel should be sought, especially in cases which involve non-routine matters which could have an effect on the over-all reputation of the College.  Examples include violations which (1) reflect on the integrity of management or financial records, or (2) result in a significant loss or penalty to the College, or (3) endanger life, health or safety.

 

B. Authorization of Contracts

 

Review by the Office of the General Counsel is required for all expenditure and revenue contracts of $25,000 and greater.   Contracts for expenditures may be authorized by the Chancellor or Vice President within the prescribed authorization levels. The President's signature is required if the contract is an expenditure level of $100,000 or greater and not previously delegated by the President. All contracts to be approved by the President or designee must be approved and signed by the respective Chancellor or Vice President prior to submission for signature.   Options to renew leases originally identified in a prior approved agreement may be signed by the respective Chancellor, provided the annual rent is within the Chancellor signiature authorization level. A copy of the signed lease renewal document must be forwarded to the Office of the President Facilities Planning Department.   "Cost plus" contracts are prohibited. Examples of such prohibited contracts include: a) a contract for equipment at supplier cost plus a stated mark-up percentage, and b) a contract for course development at a fixed labor rate and unfixed labor hours. In certain instances there may arise a need for ongoing consulting or other services where the amount of related labor is unknown. In such cases, contracts should clearly define scope of work, labor rate and a contract ‘not to exceed’ (NTE) value that relates to defined scope of work.   The following contracts, regardless of dollar value, must be forwarded to the appropriate Office of the President department for approval:   1. Operating and capital lease for land and/or buildings obligating the College for a period greater than two (2) years. This lease will be forwarded to the State Board of Trustees for approval.   Any initial lease greater than $150,000 per year needs State Board of Trustees approval before being forwarded for recommendation by the Commission for Higher Education and then approval by the State Budget Committee and Governor.   2. Leases for land and/or buildings that involve a request for additional College level funding in addition to the Region's normal annual facilities budget.   3. Purchase or lease-purchase agreements and other contracts for land and/or buildings. These agreements will be forwarded to the State Board of Trustees for approval.   4. Vehicle lease or purchase excluding non-recurring leases of less than thirty (30) days.   5. All governmental contracts including government pass-through funds.   6. Restricted fund contracts which are greater than $2,500 except for third-party direct reimbursement contracts such as employer tuition reimbursement. See Section L - Sponsored Programs.   7. All contracts for new capital plant improvements such as additions, alterations, repairs and rehabilitation to College-owned property, and all change orders increasing the amount of such contracts by ten percent (10%) or more. Change orders of less than 10% for capital projects may be approved by regional administration within their authorization limit of payment documents, following verbal notification to the Office of the President Facilities Planning Department. A copy of the signed change order should be forwarded to the Office of the President Facilities Planning Department.   Capital leases are contracts which effectively transfer ownership to the College at the end of the lease. If there is doubt as to whether a lease qualifies as a capital lease versus an operating lease (where ownership does not transfer), inquiries may be made to the Office of the Senior VP/ CFO.   Land and Buildings - Capital leases for land and buildings must be approved by the State Board of Trustees. A request for a capital lease of land and buildings should be forwarded to Office of the President Facilities Planning Department. Requests for authorization should be submitted on a Lease and Building Acquisition Request form.   Technology – Purchases for end-user technology equipment and infrastructure technology equipment will be made through the Office of Information Technology. Software licenses, maintenance and support purchases (new and renewal) will be made through the Office of Information Technology. Subscriptions will not be purchased through the Office of Information Technology.   Equipment - Capital leases must be initially routed through the Senior VP/CFO so proper notification can be made to include the equipment as a capital asset in the College Fixed Assets system and to assure compliance with IRS reporting requirements.   All documents requiring an authorizing signature for commitment of College funds must be signed in accordance with authority delegated by the State Board of Trustees or an officer of the College. The table below outlines the requirements for signature at certain specific levels.

 Approval Level  Authorization Level
 State Board of Trustees  Certain contracts only *
 Regional Board of Trustees  Established by regional by-laws
 President or designee  Up to $500,000 All contracts not delegated
 ** Chancellor or Vice President  Up to $99,999
 Campus President  Up to $49,999
 Executive Director of Finance  Up to $29,999

* The following contracts must be approved by the State Board of Trustees:

1. Lease for land and buildings obligating the College for longer than two (2) years.

2. All lease-purchase agreements and other contracts for land and buildings not delegated to the President.

3. All contracts over $500,000 unless previously approved through the allocation of funds by the Board.

**The Chancellor may delegate this authority to any of their direct report employees at an employment level E-3 or above at their region. However under no circumstances may a sole individual approve. Two separate individuals must approve at all times (for instance the EDF cannot be the requester and approver). This delegation must be in writing and available for review.

 

C. Authorization of Expenditures

 

All expenditures must be within approved budget allocations except for those specifically authorized by the State Board of Trustees.   Purchases must not be split in such a way as to place the dollar value of the expenditures into a lower authorization level so that they can be approved without review by a higher authorization level. Likewise, increases in encumbrances must be approved at the appropriate level based on the total commitment.   All documents requiring an authorizing signature for commitment of College funds must be signed in accordance with authority delegated by the State Board of Trustees or an officer of the College. The table below outlines the requirements for approval at certain expenditure levels.

 Approval Level  Authorization Amount
 State Board of Trustees  in excess of $500,000
 Senior Vice President/ CFO  up to $500,00 all contracts not delegated
 ** Chancellors or Vice Presidents  up to $99,999 all contracts not delegated
 Campus President  up to $49,999
 Executive Director of Finance  up to $29,999
 As delegated by Regional Management  up to $9,999

**The Chancellor may delegate this authority to any of their direct report employees at an employment level E-3 or above at their region. However under no circumstances may a sole individual approve. Two separate individuals must approve at all times (for instance the EDF cannot be the requester and approver). This delegation must be in writing and available for review.   Purchase requisitions are approved through the College’s e-procurement system. All approvals are completed at the requisition level. In cases where the dollar amount is $100,000 or greater, an additional “High Dollar” approval of the purchase is required by the Senior VP/CFO or designee. If the dollar amount is $500,000 or greater, the State Board of Trustees approval must be documented before the system approval is performed by the Senior VP/CFO or designee.   Delegation to Business Office staff to approve regional expenditures up to $9,999 must be approved by the Vice President, Chancellor, and Executive Director of Finance. In the rare instances where the Chancellor and Executive Director of Finance are unavailable to approve an expenditure due to unforeseen circumstances, e.g., illness, the region may maintain a written copy of the Chancellor’s delegation of authority down to the Business Office Manager level to approve regional expenditures up to $29,999. However, under no circumstances may a sole individual approve. This delegation must be in writing and available for review. See Refer to FMM, Section M, Financial Documents (Approval Authority Delegation) for further details.   Two approvals at the Executive Director of Finance level or above are required for purchases of $30,000 and greater. The final approval must be made in accordance with the expenditure level authorization.   All the approval level guidelines and requirements are built into the routing criteria for purchase requisitions and purchase orders in the College’s e-procurement system.

 

II. Purchasing Card Policies and Procedures

 

A. Introduction

The intent of this section is to provide clear, concise, and workable College Purchasing Card procedures for the conduct of College business. If a circumstance arises that is not specifically covered, either adopt the most conservative course consistent with the policies and procedures of the College or consult with the office of the Senior VP/CFO or designee. The Chancellor or Vice President may develop additional procedures relating to the use of the College purchasing card. Such procedures must be consistent with those outlined in this section.   It is important that all purchasing activity be documented in a manner that will satisfy the requirements of established College policies and procedures. Also, purchases of products and services for use in the operation of the College must clearly indicate the details involved in the purchasing transaction. This is necessary for the proper handling of College funds and subsequent review by internal and external auditors.   Use of the purchasing card does not replace any policies or procedures that apply to activities that are restricted by College policy. The issuance of the card to the cardholder constitutes authorization to use the card without obtaining prior approval required by other purchasing methods. Prior approval for food purchases is required as outlined in the FMM, Section H, Travel Policies and Procedures (College Sponsored Meetings).   The conduct of College business by employees who are authorized to make purchases representing the College is required to be in accordance with established procedures and ethical behavior including the conflict of interest policy. All purchases with the card must comply with the applicable procedures in the FMM, Employee Handbook, and any other published College sources related to the use of College assets and ethical conduct by College employees.
 

B. General Overview

Ivy Tech's Purchasing Card Program is designed to allow for the purchase of small dollar (items less than $3,000), non-capital items for use in the College operations. Purchases that exceed the $3,000 single transaction limit are to be processed through the requisition based process in the College’s e-procurement system.   Purchases must be made in the College’s e-procurement system whenever practical to take advantage of the contract and consortium pricing that is built into the system. Purchasing through the College’s e-procurement system is also preferred because the system is set up with appropriate internal controls (i.e. pre-approval requirements, etc.) and more accurate accounting.   The Ivy Tech Community College of Indiana Purchasing Card is a MasterCard. It is accepted by any merchant who currently accepts MasterCard.   The card is the property of Ivy Tech Community College of Indiana, is issued on the credit limit allowed the College, and is only to be used for College business. Purchasing cards are issued bearing the name of the College, the name of the cardholder, and the sales tax exempt number on the front of the card. The card is to be used only by the individual to whom the card is issued.   Employees of the College must be approved to be issued a card for use and will be required to sign a Purchasing Cardholder Agreement. New cards should only be created with the written approval of the College Purchasing Card Administrator within the office of the Senior VP/CFO. Purchasing cards should only be assigned to full-time employees. Vice Presidents and Chancellors are not eligible to be cardholders.   All designated cardholders and reviewers must attend a training session (on the purchasing card procedures) to be instructed to view transactions and obtain reports of card transactions. This training is conducted by staff in the office of the Executive Director of Finance (EDF) in the region, or staff in the office of the Senior VP/CFO in the Office of the President (Finance). The resources used for training are located on the bank website.   Violation of purchasing card procedures, such as unauthorized purchases, may result in termination of the cardholder privileges or other disciplinary actions as outlined in the Employee Handbook. The cardholder may be financially responsible for sales tax and unauthorized purchases.
 

C. Structure for Purchasing Card Program

The office of the Senior VP/CFO has approved a structure for the functioning of the College Purchasing Card program. The College Purchasing Card Administrator is an employee in the Finance Department at the Office of the President. The Executive Directors of Finance serve as the Regional Purchasing Card Administrators in each regional campus.   The EDF must be supported by one back up administrator from the regional Business Office staff. Neither the EDF nor the backup administrator can be cardholders. The designation of all College staff persons functioning in these roles must be in writing, and will be kept on file in the Office of the President in the Finance Department.   In accordance with the bank's requirement to have designated authorized signers on file to provide approvals when changes are needed for the College's program, there are three Office of the President Finance staff persons with this assigned responsibility. This includes the College Purchasing Card Administrator and two other Finance staff persons who serve as administrative support for the program. In addition, in the absence of the College Purchasing Card Administrator, these individuals handle daily inquiries from the bank regarding cards.
 

D. Card Controls

The card has several controls and safeguards. There is a specific single purchase limit and a 30-day monthly dollar limit for the card.
Another control is the Merchant Category Code (MCC). All businesses that accept the MasterCard for purchases are assigned a MCC that designates their line of business. Each card is created with a specific MCC group designation that restricts the use of the card for certain businesses. Certain MCC groups have been excluded from access by all College cardholders. An attempt to obtain card authorization approval for a non-approved MCC will result in the card being declined.
 

E. Operation of Purchasing Card Program

A. ISSUE OF PURCHASING CARDS   The following steps must be completed to obtain a purchasing card:   Step 1   At a minimum, the EDF and the individual's supervisor determine which employees will be issued the purchasing card to purchase items for the College operations. For Office of the President, the College Purchasing Card Administrator in the office of the Senior VP/CFO in the Finance Department and the individual's supervisor must approve. These approvals must be in writing, and on file.   Requests for a new card must be submitted to the Senior VP/CFO for written approval by his designee, the College Purchasing Card Administrator in the Finance Department, along with a signed Purchasing Cardholder Agreement.   Step 2   After approvals are confirmed, the new card information will be entered on the bank's website by Finance Department staff.   Step 3   The bank will mail new cards to the Regional Card Administrator at the region or Office of the President. Generally, the processing time is 7 to 10 days from the approval.   The Regional Purchasing Card Administrator at the region or Office of the President will review the card, confirm with information on the bank’s website and notify the Executive Director of Finance or the appropriate Office of the President department supervisor regarding the card distribution.   Step 4   The EDF or the College Purchasing Card Administrator will arrange for training in the use of the card and reports on card transactions using the bank's website as a resource for training. The cardholder must receive the purchasing card in person from the EDF or at the Office of the President, the College Purchasing card Administrator. The card must be signed on the back immediately when received.   Step 5   It is the responsibility of the employee to activate the card by calling the bank customer service number prior to use. The number is located on the back of the card.   B. PURCHASING CARD USE   The card may be used in person, by phone, fax, or Internet. The cardholder should be careful in giving out the purchasing card number. Many scams that are conducted by phone, mail, or Internet, require staff to be careful in exercising these options. If using the Internet, only a secured site should be used. As a general guideline, an order should never be placed when the company initiates the contact, such as telephone or Internet solicitation or advertisement.   Generally, the card limit for a single transaction is $1,000. However, depending on the size of the region, the number of sites within a region etc., the Vice President for Finance Senior VP/CFO or designee may authorize a limited number of cardholders to have single transaction cards limits of up to $2,999. Cards used for the Concur travel program may have limits up to $5,000 if approved by the Senior VP/CFO or designee. Further, there are limited exceptions for the use of the card for Student Life travel. See II. B. 2 g. below.   The single transaction limit is based on the total purchase price which includes shipping and handling charges. Cardholders are prohibited from splitting purchases into multiple transactions in order to avoid single transaction dollar limits.   A monthly limit is established based on the department budget availability. Reviewing card transactions on a regular basis is critical for budget control. Purchasing card transactions are not encumbered against departmental budgets. Due to the dollar transaction limit and frequency of feeds to Banner Finance, departments should have adequate tracking procedures to insure transactions do not exceed the budget. A purchase transaction for an amount greater than the standard single purchase transaction or the 30-day monthly limit will be declined at the point of sale.    Allowable Use includes, but is not limited to, the following items:   Instructional materials and supplies Lab supplies Office supplies Registration Fees (If it is for out of state travel, the travel request must have prior approval ) College membership dues and fees Subscriptions Equipment repair   The card is NOT TO BE USED for the following:   Personal use Computers and other high theft items that must be inventoried Foundation purchases or charitable contributions Restricted Merchant Category Codes (MCC): Financial (all type of transactions including cash advances) Airlines * Auto Rental * Hotels and Motels * Food and Beverage** Entertainment Transportation * Individual professional memberships (reference Employee Handbook) Payment of Personal Services (refer to FMM, Section E, Authorized Bank Accounts section in the FMM) Prescription drugs and controlled substances Radioactive materials Purchases requiring a contract Third party credit card processors, e.g. PAYPAL ***   *Exception: Unless specifically authorized by Chief Financial Officer   **Exception: The MCC (Merchant Category Codes) for Grocery Stores & Supermarkets and Caterers is available for assignment to specific cardholder cards to be used only for approved College sponsored activities and not for personal activities/meals.   ***Exception: Certain associations may require use of their third-party credit card processor (e.g. PayPal) for the payment of conference fees. These purchases may be made using the Purchasing Card, but must be made as a one-time customer to vendor payment transaction. These transactions are only allowed when the third party acts as a payment processor and when the puchaser is not required to setup or log in to an account with the third-party cedit card processor.   1. Resolving Disputes and Errors   Disputed transactions can occur due to the following:   Failure to receive item charged Altered charges Defective items Incorrect amounts Credits not processed Duplicate charges Fraudulent charges not made by the cardholder Fraud or misuse Sales tax charged   The cardholder should contact the vendor to resolve any questionable charges. If the matter cannot be resolved, notify the supervisor, EDF, or College Purchasing Card Administrator in the office of the Senior VP/CFO Office of the President, Finance Department.   The matter must be reported by phone to the bank's customer service number. The bank will immediately credit the account for the disputed amount while it completes its investigation of the matter. The cardholder will be notified of the resolution.   In the case of fraudulent charges or misuse, notify the office of the Regional Card Administrator in the region or the College Purchasing Card Administrator at Office of the President. In addition, if needed, other appropriate College procedures that fit the situation should be followed. This may involve reporting the matter to regional Security staff, Human Resources at the location, and the Office of the General Counsel which handles legal matters for the College.   2. Cardholder and Supervisor Responsibilities   It is the cardholder's responsibility to keep the purchasing card safe and secured; to obtain and retain appropriate documentation for purchases; to review card transactions regularly, and obtain supervisor's signature on the printed Statement of Account report signed by the cardholder and the immediate supervisor/card reviewer each month.   All regions and the Office of the President should follow a similar procedure for the preparation, collection, and review of Statements of Account. All cardholders must submit the signed and completed Statement of Account and associated documentation by the tenth of the following month to the appropriate office, either the office of the Senior VP/CFO or Office of the President, Finance Department or the Executive Director of Finance.   A complete packet consists of the monthly Statement of Account signed and dated by the cardholder and card reviewer/supervisor, and all supporting receipts, billing statements, packing slips, etc. Once collected these staff should review the monthly statement to assure that proper receipts and other back-up information and signatures are present.   The supervisor/card reviewer assigned to review and approve a Statement of Account must be an exempt level employee. It is the supervisor's responsibility to familiarize themselves with the purchasing policies of the College and to insure compliance with all purchasing card purchases.   All purchasing card documentation will be collected and maintained in the regional business offices and at the Office of the President, Finance Department. Refer to FMM, Section D, Retention of Records.   a. Review Purchasing Card Transactions   All transactions are available for viewing daily on the bank’s website. Most transactions are posted to the bank’s website within 24 to 72 hours after date of purchase. Card transactions are posted to Banner Finance on a regular basis.   Using Banner form FAAINVT, card administrators can reallocate a card transaction to different accounts within Banner, the College’s accounting system. Transactions may be reallocated by specifying either the dollar amount or percentage. Transactions that have already been posted to Banner Finance cannot be reallocated using the bank’s website.   b. Record Keeping   The cardholder is responsible for obtaining the Statement of Account, card receipts, cash register receipts, packing slips, etc. Once the monthly review is completed and signed off by the supervisor, the location where these records will be retained is determined by the region or the office of the Senior VP/CFO Office of the President, Finance Department. In the rare instance where a receipt is lost, the Certificate of Missing Documentation may be substituted for that receipt. Abuse of this form may result in the revocation of the purchasing card.   These transactions may be subject to internal or external audit. Receipts and proper documentation must substantiate each purchase. In addition, the cardholder and supervisor may be called upon to provide further clarification.   c. Receiving   Shipment must be directed to an Ivy Tech address or official station Cardholders should request their name to be listed on the package, along with the College name and address, to insure prompt handling Advance notice to the receiving department of expected deliveries may also be helpful.   The cardholder will be responsible for coordinating the return of damaged or unwanted items directly with the vendor.   d. Returns   The purchaser should always request returned items to be credited to the College card. If the vendor refuses to credit the card, the regional cardholder should contact the Executive Director of Finance. Office of the President cardholders should contact the College Purchasing Card Administrator or designated Finance Department staff. Another alternative is to report this matter to the bank's customer service number requesting the card account be credited for the disputed amount.   e. Sales Tax   Ivy Tech Community College of Indiana has an institutional sales tax exemption for the payment of state taxes. Sales tax should not be paid for either in-state or out-of-state purchases made with the purchasing card, except for food purchases for College employees or guests at College approved functions and lodging. The College's tax exempt number is shown on the front of the purchasing card. The cardholder is to indicate the College's institutional tax-exempt status at the time of purchase. If the vendor/supplier requires a paper tax exemption certificate, in addition to the number shown on the card, this can be obtained from the regional business office or the office of Senior VP/CFO.   If sales tax is inappropriately charged, it is the cardholder's responsibility to resolve this issue up to and including personal reimbursement.   While the College's tax exempt status is generally recognized by most merchants, some vendors may request a copy of the tax exemption certificate. A copy of this certificate can be obtained by contacting the Executive Director of Finance, the Director of the Business Office, or the College Purchasing Card Administrator in the office of Senior VP/CFO Office of the President, Finance Department, depending on the location of the cardholder.   f. Purchases within the College   Expenses resulting from transfers between campuses should continue to be processed by journal entry. The purchasing card will not be used for purchases between College departments or regions, or other auxiliary services operated by the College.   g. Student Travel (Effective March 1, 2014)   Under certain circumstances, the use of a purchasing card may be authorized for student travel.   Student Life Directors or designee may be issued a purchasing card that on occasion may be utilized for travel expenses when traveling with students on a College authorized student life trip. Each region may issue a purchasing card to their Student Life Director or designee. If needed, the region may reassign an existing purchasing card to the Student Life Director or designee or may issue a new card within the region’s specified allotment. If the region has already used their allotment a request for an additional card may be made to the Senior Vice President/Chief Financial Officer (CFO) and General Counsel. These purchasing cards must follow all of the current guidelines for all purchasing cards with the following additional requirements.   The purchasing card should be used only when other arrangements are unsuccessful, e.g., the hotel will not directly bill the region. Airfare would generally not be charged on the purchasing card as the region has other alternatives for payment in advance.   Approval of the student life trip must be secured prior to requesting the use of the purchasing card for travel related expenses.    Once the trip has been approved, the region must complete the Request for Major Student Travel form.  The form authorizes increasing the purchasing limits of the card up to the Executive Director of Finance’s expenditure authority.   Any requests over that amount must be approved by the Senior Vice President/CFO and General Counsel or designee.    The increased purchasing limits will be returned to the normal levels after the completion of the travel.  The completed form must be submitted at least one week prior to the date of the travel.   It is the responsibility of the cardholder to obtain all necessary purchasing card transaction paperwork (receipts, confirmations, etc.) to substantiate the expenditures from the above mentioned travel. The Business Office will review the card transactions in accordance with the FMM policies, appropriate paperwork is provided and to assure there are no duplicate expenditures. Personal expenses are not to be charged to the card. If personal expenses are charged to the purchasing card, they are required to be repaid by the cardholder. Further, the cardholder may lose access to the card if used inappropriately.   3. Changes in Card Status   If any card information needs to be revised after the original card is issued, written authorization must be forwarded to the Executive Director of Finance or the College Purchasing Card Administrator in the office of Senior VP/CFO in the Office of the President, Finance Department. Revisions may include changes in the 30 day cycle limit or changes in the cardholder's personal information.   a. Lost or Stolen Cards   Report all lost or stolen card information immediately to the financial institution at the number listed on the bank’s website on the Internet. As soon as possible during working hours, notify the office of the Executive Director of Finance or the College Purchasing Card Administrator at the office of Senior VP/CFO in the Office of the President. If you are certain that the card has been stolen at work, you should also notify the campus Security staff and/or Human Resources department. The College is responsible for all purchases regardless of dollar value until the card is reported to the financial institution.   b. Closing a Card   The purchasing card should be closed for the following reasons:   The cardholder accepts a position at another College location, terminates employment with the College, is deceased, or the card is revoked by the supervisor, office of the Regional Card Administrator, or office of the Senior VP/CFO.   After entering the card closing information on the bank's website, the Executive Director of Finance or the College Purchasing Card Administrator in the office of the Senior VP/CFO in the Office of the President, Finance Department will destroy the card.   c. Reissued Cards   Cards are valid for a two year period. Reissued College cards will be mailed automatically by the bank to the College Purchasing Card Administrator in the office of Senior VP/CFO in the Office of the President, Finance Department prior to the expiration date of cards currently in use. The cards to be distributed will be confirmed and mailed to the Executive Director of Finance for distribution and/or arrangement made for pickup of cards by Office of the President staff. Reissued cards must be personally picked up by the cardholder. Employees receiving reissued cards are required to sign for the cards on a listing of all reissued cards for that location or complete a new Purchasing Cardholder Agreement. Before the cardholder can be issued the new card, they must surrender the expired card. The Executive Director of Finance or the College Purchasing Card Administrator in the office of Senior VP/CFO in the Office of the President, Finance Department will destroy the expired card.   4. Changes in Employment Status   a. Transferring to another Department   The purchasing card is linked to the department's account (FOAP). A change in the employee status to another department must be reported to the Office of the Executive Director of Finance or the College Purchasing Card Administrator in the Office of the President, Finance Department.   b. Termination of Employment   All cards are to be turned in to the College prior to the point of termination. The card may be turned into the Human Resources Department at the time of the exit interview, the supervisor, the Executive Director of Finance, or the College Purchasing Card Administrator in the office of Senior VP/CFO in the Office of the President, Finance Department.
 

F. Glossary of Purchasing Card Term

Card Reviewer: The card reviewer is the supervisor or the person designated at the supervisory level of management in the specific office/ location.

Cycle Limit: The dollar amount that can be transacted on a card during the 30 day period of the designated time period. The College 30 day cycle begins the 28th of each month.

Merchant Category Code: The MCC code is a four digit code assigned to an industry or business(for example Retail Stores, Utilities, Repair Services) for identification by the merchant's (vendor/supplier) bank. It is used by all credit card companies. The codes are determined by the credit card companies.

Non-Capital: The designation that applies to all items, such as supplies, minor equipment, books not part of library collections, etc., that are excluded from the dollar threshold at which items are capitalized as an asset in the accounting records of the College for inventory control and other purposes.

Purchasing Cardholder Agreement: The form that contains the general terms and conditions for use of the College Purchasing Card requiring the signature of the cardholder.

The bank's website is the online solution offered by JP Morgan Chase to identify and capture detailed information, by cardholder, on purchases made using the purchasing card. The information is made available on the internet site.

Single Transaction Limit: The single purchase dollar amount limit allowed the cardholder for a specific transaction.
 

III. The Purchasing Process

A. Identify Need

Faculty or staff may identify a need for products or services necessary for effective operation of instructional programs or support services. The Business Office staff will likely be consulted during the assessment of the need and the evaluation of alternative types of items which may meet the requirements; products such as equipment, supplies, etc., or services such as rental of facilities, printing, advertising, etc.

B. Develop Product Specification/Request for Proposal

The preparation of proper product technical specifications or service specifications is one of the most important and most difficult functions in the purchasing process. Specifications should describe what is required or desired, and thus become the communication media between buyer and seller to provide a common basis for securing bids.

Specifications must describe the kind and quantity of the materials needed, avoiding restrictive specifications that might unduly limit competition. If brand specifications are used, the specifications must include a statement that competitive bids of equivalent and quality level will be acceptable and that no restrictions or limitations are intended by use of a specific brand name.

Requests for proposals should be solicited from service providers for any services for which a pricing agreement may be financially beneficial to the College. These services may be bid for a period up to three years. Requests to bid contracts for periods in excess of three years must be approved by the Senior VP/CFO.

 

C. Identify Potential Suppliers

Once an assessment has been completed, specifications developed, and a decision made about the best product or service that will meet the need, then initiate the process of identifying potential suppliers vendors or service providers. The known pool of suppliers of products/services with whom the College has established relationships may indicate which vendors or service providers can be contacted. In other cases, the larger market of suppliers may need to be searched if the supply of local vendors is limited, the need exists for new suppliers, or the market has changed due to new suppliers entering and existing suppliers leaving the market. Some of the means for identifying suppliers may be the solicitation of quotes, bids, and proposals.

D. Solicit Quotes, Bids, Proposals

Good business practices must be used and ethical standards followed when soliciting quotes, bids, and proposals from potential suppliers. Special attention should be given to situations where the available vendors providing the product or services are limited, in order not to limit the competitive process.

The College encourages special efforts to contact small, handicapped, minority, and women-owned businesses when soliciting quotes, bids, and request for proposals. Establishing communications with these vendors can lead to identifying new sources of product and service providers who can meet the needs of the College. The vendor base should be representative of all suppliers of products and services in the communities that the College serves.

You are encouraged to utilize the following resources to help ensure that the solicitation respondent list is representative of the diversity in the communities that the College serves:

a)   Indiana Department of Administration Department Minority and Women's Business Enterprises Division website (http://www.in.gov/idoa/2352.htm) and listing of certified business enterprises

b)   City of Indianapolis Department of Minority and Women Business Development website (http://www.in.gov/idoa/2352.htm) and listing of certified business enterprises

c)   Indiana Minority Supplier Development Council (IMSDC) website (http://www.midstatesmsdc.org).

d)   I.T. Business Corporation - The College has engaged I.T. Business Corporation to expand the universe of potentially responsive minority and women-owned businesses (MWBEs) available to the College and to help the College develop improved MWBE supplier relationships.  Contact information is provided below:

I.T. Business Corporation

238 South Meridian Street

Indianapolis, Indiana  46225

317-295-8346

The following outline is to be used as a guide for securing quotes, bids, and proposals.

1. Purchases of up to $200,000

When the value of a single good or the total value of multiple goods is $25,000 and greater, solicitations must include the Supplier Diversity Information form and the Non-Collusive Certificate form available on the forms section of the Infonet on Campus Connect.

Written quotes, bids or proposals must be solicited from at least three (3) bidders when:

a. The value of a single item or the total value of multiple items is $25,000 and greater or

b. The item for which quotes, bids or proposals being solicited is categorized as *professional and expert service or construction, alteration, or repair of facilities (regardless of dollar value).

A request for quote, request for bid, or request for proposal must be mailed or emailed to each bidder not less than ten (10) days before the time fixed for receiving quotes, bids or proposals.

These quotes or bids received must be attached to the College’s e-procurement system requisition and include vendor name, amount, and date received. When the best quote or bid is not the lowest, documentation justifying the best quote or bid must be attached to the College’s e-procurement system requisition.

For professional and expert services or construction, alteration, or repair of buildings or facilities, each bidder shall submit under oath** as part of the quote, bid or proposal a statement of:

a. The bidders professional experience;

b. The bidders proposed plan for performing the work;

c. The equipment and personnel available for the performance of the work;

d. The bidders current financial status;

e. The bidder’s best estimate of the cost of each item of work to be performed including a breakdown of all labor and materials required to complete the work; and

f. If a trust, the name of each beneficiary of the trust and settler empowered to revoke or modify the trust.

After the bids have been submitted, the College may only contract with the lowest and best bidder using terms and conditions that will accomplish the work at the lowest possible cost to the College.

*For the purpose of this policy, the FMM interprets professional and expert service as service which requires a high level of knowledge and expertise, (i.e., medical doctors, lawyers, certified public accountants, architects, etc). Skilled labor such as plumbers, electricians, etc. are considered craftsman and therefore services provided under this definition are not subject to the requirements in item b above.

A distinction between repairs and maintenance is provided as guidance for application of the policy. Maintenance is defined as activities which keep the buildings in good condition. Repairs are those made to existing systems where such repairs do not add to the capital value of the building. Examples of maintenance include carpet or other systems replacements, elevator maintenance, grounds maintenance, inspections, etc.

Alterations are defined as changes to the building structure which change the structural components of the building. Interior changes that are not structural in nature are not considered alterations under this policy.

Buildings or facilities are interpreted as permanent structure such as load bearing walls and roofs. Therefore, when work is performed on a permanent structure, the criteria in item b. above must be followed.

**For the purpose of this policy, the “under oath” requirement is met when the bidder includes in the bid package, a completed and signed Non-Collusive Certificate form.

2. Purchases of $200,000 and greater

For purchases in this category: Quotes, bids and proposals must be recorded on a recap sheet by item by supplier along with the date and time that the response was received. The responses and recap must be reviewed by at least two management level representatives from at least two different functions within the College, including Finance, and the representatives must print and sign their names on the recap sheet attesting to the review. The recap sheet and the quotes, bids or proposals must be retained in conformance with College record retention requirements.

Quote, bid or proposal solicitations should proceed as described with the following additional requirements:

a. Performance bonds (a percentage of total bids) are recommended to be included in the solicitation instructions only in cases where the scope of product or service is complex, where supplier failure to perform will adversely impact College operations, or where performance bonds are routinely stipulated as a requirement by customers for such a product or service. If a performance bond is requested, the solicitation shall ask respondents to document the implicit cost of the bond in their quote, bid or proposal.

b. Solicitations for purchases of $200,000 and greater be preceded by development of target costs.  Target costs are to be used in the conduct of quote, bid and proposal review and evaluation as discussed in FMM, Section J, Purchasing (The Purchasing Process G. Conuct Quote, Bid, Proposal Review and Evaluation. III, G. Purchasing. Target costs must be aggressive, documented and based, at minimum, on one of the following:

i. Breakdown of general industry pricing into key components which could include:

1. Cost of goods sold (COGS) expense

2. Selling, general and administrative (SG&A) expense

3. Operating profit (price minus COGS and SG&A)

ii. Market analysis and benchmarking, which could include:

1. Level of competition among qualified suppliers

2. Historical view of market – price trends, price elasticity

3. College’s purchase history – pricing and related volume across College

4. Determination of market leading (i.e., best) pricing and terms enjoyed by customers for products or services similar or same as in solicitation

c. Solicitations for purchases of $200,000 and greater must be submitted electronically to the College’s Chief Procurement Officer or designee’s  review at least two weeks prior to  publication of solicitation and include the following:

i. Request for Quote, Request for Bid or Request for Proposal document

ii. Bidders list including diversity status identifier and how status was determined

iii. Target cost(s) and basis for determination

iv. Name and email address of person who conducted legal review

The Chief Procurement Officer or designee’s approval of a solicitation document is required to attest to the review of target costs established based on the standards set forth in FMM, Secton J, Purchasing (The Purchasing Process - Solicit Quotes, Bids, Proposals, Paragraph 2.b.

3. Purchases in excess of $500,000

State Board of Trustees approval of resolution required for purchases in excess of $500,000.

 

E. Exceptions

1. Emergencies such as damage, including mechanical failure, to equipment or buildings which endanger health, welfare of employees, students, or the public, or that which may seriously hamper necessary College operations are to be approved in accordance with the authorization levels. If those authorizations are not possible in the circumstances, obtain authorization at the highest available level. A memorandum explaining, in detail, the circumstances surrounding the emergency and the determination to limit quotes or bids must be retained with the purchase order.

2. Special purchase arrangements, such as auctions, sales, etc. must have prior approval by the Executive Director of Finance. This approval is limited to the Executive Director of Finance authorized expenditure level. Activity above this level is subject to necessary approvals at a higher authorization level.

a. Auctions

Authority to purchase at auctions must have prior written approval of the Executive Director of Finance. The written request must indicate the items to be purchased, the maximum dollar limit for the auction purchases, and the dollar advantage of purchasing at auction as compared to purchasing the items by other methods.

b. Other Sales

Special purchase arrangements such as private sales must have prior written approval of the Executive Director of Finance. The items to be purchased, the maximum dollar limit, and the advantage in using this method of purchasing should be clearly detailed.

3. When it is either not practical or advantageous to the College to procure specified types of products or services by competitive bidding. This may include but is not limited to rental of facilities, legal services, and consultants. Prior written approval of the Vice President for Finance/Treasurer is required.

All purchases must be made with such competition as is practical under the circumstances.

4. For regional operations, in the event a product or service is available from only one source, in an amount less than $75,000, a written justification must be forwarded to the Executive Director of Finance, and in addition, either the Executive Dean or Vice President/Chancellor for approval. All sole source bid exception requests for $75,000 or more must be forwarded to the Vice President for Finance/Treasurer or designee for approval. (Paragraph amended-effective 8/1/2008)

5. For Central Office operations, in the event a product or service is available from only one source, a written justification must be forwarded to the Vice President for Finance/Treasurer or designee for approval.

F. Information Released to Vendors

1. Guiding Principles

Ivy Tech is a public entity and is subject to the state’s Access to Public Records Act at IC 5-14-3..

The public has a limited right to know that the College conducts public business properly, and the College needs to reinforce the perception that business is conducted properly.

2. Before the bidding process is complete.

Vendors do not have the right to information such as competing vendors' names, items, prices, terms or copies of bids prior to the completion of the bidding process.

3. After the bidding process is complete.

Any request for information by a losing vendor should be treated as a public records request under state law and should be immediately referred to the Office of the General Counsel for advice in how to respond.

 

G. Conduct Quote, Bid, Proposal Review and Evaluation

Faculty and staff may be designated to be present at the bid opening, vendor presentation, to participate in the review and assessment of quotes, bids, proposals, as well as be involved in negotiations when needed. Contact the Office of the President, Procurement Office or the Office of the General Counsel at any point in the purchasing process, if situations indicate the need.

H. Prepare Purchase Requisition/Check Voucher for Approval

The College’s e-procurement system purchase requisition should be prepared by the requisitioner.

The purchase requisition is required to be completed to obtain approval for all purchases before a purchase is made, and before a purchase order is issued. Orders should not be placed with the suppliers until the purchase requisition is completely approved in the College’s e-procurement system. Documentation supporting the purchase should be attached to the College’s e-procurement system requisition.

a. System Access

Requisitioners need to have access to the College’s e-procurement system and the appropriate access to their accounting codes (FOAPs) in Banner. A Banner Finance/College’s e-procurement system access request form must be completed and submitted to the Office of Information Technology - Information Security.

b. Electronic Approvals

Purchase requisitions should be originated in the College’s e-procurement system. In some instances, the paper Purchase Requisition/Check Voucher form may need to be used. The paper form may be used in situations such as (the following is not to be an exclusive list): 1. The College’s e-procurement system is unavailable, 2. The supplier in question cannot be added to the College’s e-procurement system, 3. In situations where the paper form is used for the sole purpose of obtaining an approval signature that is unavailable in the College’s e-procurement system, the paper form should be submitted as backup documentation to the College’s e-procurement system requisition.

Approval of purchase requisitions in the College’s e-procurement system is done online. By approving a document in the system, the approver assumes the same responsibility for the transaction as they would by signing their name.

Approval queues are maintained in the system according to the signing authorities outlined in FMM, Section J, Purchasing (Authorization of Expenditures. FMM J.I.C. The College’s e-procurement system is designed so that each initiating department must approve a requisition before it is routed to the Finance Department for review/approval. For any given transaction, the requisitioner and the final departmental approver cannot be the same person. The departmental approvers were established by the EDF or by the supervisor in the Office of the President. Changes to the departmental queues can be requested via email to the E-Procurement System Administrator or Finance System Administrator, and requests must be from the EDF or Business Office Director or by the supervisor in the Office of the President.

 

I. Issue Purchase Order

Rationale

A purchase order is a document authorizing a vendor to deliver described merchandise, materials, or services at a specified price. Upon acceptance by a vendor, a purchase order becomes a contract. A purchase order is used to encumber (set aside) necessary funds to cover an anticipated expenditure. All lease purchases, service and rental agreements, construction contracts, professional services, and other financial commitments (excluding faculty agreements) should be attached to and encumbered by a purchase order.

Exemption from sales tax is offered on the purchase of tangible personal property by nonprofit organizations if:

a. The purchased item is used or consumed by the organization.

b. The item is used for the same purpose for which the organization is exempt from the tax.

Meals and lodging provided for individuals are not exempt from sales tax.

1. Terms and Conditions

Terms and conditions applicable to governmental contracts with federal funds of $2,500 or more and terms and conditions explaining the College's status as an Equal Opportunity Affirmative Action Institution for purchase orders of $2,500 or more, are located at: http://www.ivytech.edu/about/po-terms-conditions.html
The College’s e-procurement system purchase order documents provide the above link at the bottom of the last page.

2. Revolving Fund Purchases

A revolving fund check may be issued for minor purchases up to $300. Exceptions up to $300 for unusual circumstances may be made only upon approval by the Executive Director of Finance.

3. Prepayments for Products and Services

General prepayment for goods and/or services is strongly discouraged by the College. However, prepayments may be made in advance, without seeking approval for the following items: catalog orders, subscriptions, membership dues, conference fees, maintenance contracts, deposits less than $3,000 and insurance premiums. Prepayments are not allowed for personal services including personal services by contract. Approval for any prepayment reason not listed above shall be governed by the following:

a. Prepayments below $3,000

All prepayments for products and services below $3,000 must have prior approval of the Executive Director of Finance

b. Prepayments $3,000 and above

All prepayments for products and services above $3,000 must have prior approval of the Senior VP/CFO or designee.

J. Purchase Order Documentation

The College’s preferred method for purchase order generation is the College’s e-procurement system and all purchase order documents are linked to their accompanying purchase requisition. Documentation of approvals is recorded in the system and is available for review at any time.

1. Purchases up to $200,000

Supporting documentation for the purchase order should be attached in the internal or external notes section of the College’s e-procurement system requisition. Purchase orders up to $200,000 require the following:

a. Approval as required in the expenditure and contract authorization table (will be documented in the College’s e-procurement system history)

b. Detailed product specifications, Request for Quotation*, or Request for Proposal*, whichever applies.

c. Summary of all quotes or bids received from vendors in grid or matrix format.*

d. Vendor quotes, proposal or bids*.

e. Contract (if applicable) signed by College representatives and other parties.

f. Written justification providing all details if the lowest vendor quote or bid is not recommended, if quotes or bids are not practical or advantageous, if vendor is the only source, or other similar circumstances apply.*

NOTE:* More than one quote is not needed if the value of a single good or the total value of multiple goods is less than $25,000 unless the expenditure is for professional and expert services or construction, alteration or repair of buildings or facilities.

2. Purchases $200,000 and greater

The following are required to be attached to the College’s e-procurement system requisition/purchase order before approval will be granted:

a. Approval of the Vice President or designee (will be documented in the College’s e-procurement system history).

b. Request for Quotation form, detailed product specifications, or request for proposal, whichever applies.

c. Summary of all bids received from vendors in grid or matrix format.

d. RFP and RFQ Response

e. Contract (if applicable) signed by College representatives and other parties.

f. Written justification providing all details if the lowest vendor bid is not recommended, if bidding is not practical or advantageous, if vendor is the only source, or other similar circumstances apply.

3. Purchases in excess of $500,000

The following is required for purchases above $500,000:

State Board of Trustee’s approval or recommendation (regional purchase requests).

 

K. Blanket Purchase Orders

Rationale

Standing purchase orders are issued for repetitive type purchases such as utilities expense, leases, service contracts, and operating supplies. The advantages are the estimated total expenditure is encumbered and additional purchase order approvals are not required.

Procedure

1. All normal bidding procedures apply, or an explanation of vendor selection must be attached to the Purchase Order form.

2. Terms are negotiated, a dollar amount limit is established, and an order is issued for a definite period - usually one fiscal year.

3. Standing orders issued for utility costs, service agreements and maintenance agreements should be processed on a regular basis according to the terms of the agreement(usually monthly). Requisitions are not required for each payment period. Original authorization, i.e. Vice President or Chancellor, Regional Board, etc., is sufficient.

4. Standing orders issued for operating supplies require additional documentation. When supplies are needed immediately from standing orders, authorization should be obtained from, at minimum, a department approver. Departments needing materials covered under a standing purchase order must authorize the pick-up and confirm delivery. Please note that certain vendors may require written authorization before releasing goods to College employees. Authorization should come from the department approver stating dollar limits for that particular order and/or the standing Purchase Order number.

5. Standing purchase orders should be generated using the Standard order type in the College’s e-procurement system and noting Standing Order in the external notes or product description of the requisition.

6. It must be understood by all parties that all materials received are to be billed to the Business Office. This should be the “bill to” address listed on the College’s e-procurement system purchase order.

7. Partial payments pertaining to standing orders will be processed in Banner according to the normal invoice processing procedures. The balance of the unexpended original purchase order must be monitored to ensure the expenditures do not exceed the original encumbrance.

L. Capital Equipment Purchases

See Section N: Fixed Assets, for further details on capital equipment purchases.

M. Vehicle Purchases

1. Ivy Tech-Owned Vehicles (Effective January 1, 2011)

Procurement of all College-owned vehicles requires advance approval of the Senior VP/CFO in the President's Office. This applies both to vehicles to be purchased and to be leased. Refer to FMM, Section H, Travel Policies and Procedures (Ivy Tech Owned and Leased Vehicles). Reference: Travel Authorization, Section H: State-Owned/Ivy Tech Vehicles.

The owner of a vehicle is defined as:

"A person who holds legal title of a motor vehicle, or any person renting or leasing a vehicle, and having exclusive use for a period longer than thirty (30) days."

The Bureau of Motor Vehicles permits leased vehicles to be registered by the Lessor or the Lessee. All vehicles owned or leased for periods longer than thirty (30) days will be registered by Ivy Tech. The registering of the vehicle in the name of the College permits the College, as the owner or lessee, to properly claim an exemption from State sales tax and excise tax.

All Ivy Tech owned and leased vehicles will have Ivy Tech specialty plates that are available for passenger cars, trucks up to 11,000 pounds, motorcycles, and recreational vehicles. These plates are available through the Indianapolis Bureau of Motor Vehicles location and must be renewed each year. All other vehicles will require the state owned license plate. For required documents and contact information, see the BMV to obtain municipal (state owned) plates. The registration and plating is coordinated by the regional Executive Director of Finance. Once the plates are obtained, a request for reimbursement of $25 per plate should be sent to the Executive Director of Administration and Operations of the Ivy Tech Foundation. The EDF should submit a copy of the registration receipts to the foundation with the Foundation’s Request for Payment form, referencing account number 00 01 80 0939 4310.

Request for insurance on the vehicle should be submitted to Assistant Director of Benefits and Risk Management in email format. The request should include the following information:

• Vehicle Make, Model, and Year

• VIN

• Copy of registration form

• Effective date of insurance coverage

• Purchase price of vehicle

• If the vehicle is leased, also include the name and address of the leasing company and amount of monthly leasing payments.

Insurance card should be retained in the glove box of the vehicle the card specifies. Please refer to FMM, Section I, Insurance (Policies and Coverage-Vehicle Insurance).

Procurement of vehicles must be done using the Vehicle order type in the College’s e-procurement system and adhere to purchasing procedures and authorization approval levels.

2. Use of Vehicles

All use of Ivy Tech-owned or leased vehicles must be authorized in accordance with FMM, Section H, Travel Policies and Procedures ( Ivy Tech Owned and Leased Vehicles. Any employee who may be expected to drive Ivy Tech owned or leased vehicles must be an authorized driver under the College’s insurance. Approval may be obtained by completing the Driver Authorization Form at least 30 days prior to driving.

3. Vehicle Expenses for State or College-Owned Vehicles

The College/Region is responsible for payment of gasoline, oil, repair and maintenance in the operation of its vehicles. The College does have college-wide gas card which allos for gasoline, oil, etc. purchases. For more information on gas credit card purchases, contact the Chief Accounting Operations Officer. Arrangements for tax exempt credit accounts should be made with appropriate oil companies by each regional institute.

4. Exceptions

Special exceptions may be granted by the President or the Senior VP/CFO.

N. Other Purchasing Considerations

1. Follow-up on Purchase Orders

a. A follow-up system should be in place to check on open purchase orders on a monthly basis using FPIOPOF (Open Purchase Orders by FOAPAL) in Banner or the Discoverer Open Encumbrance report.

b. If an item has been on back order for 60 days or longer, it may be to the College's advantage to cancel the purchase of backordered items and make payment on those items the College has received. Vendors should be informed of cancellation and that reordering may take place on a later date.

2. Checklist for Properly Receiving Merchandise

a. Unpack goods no later than forty-eight (48) hours after receipt. When possible, unpack goods in the presence of the carrier. Save the packing materials if there is damage.

b. If merchandise is to be returned, wait for a return authorization from the vendor.

c. Have driver note discernible damage on both your copy and the driver's copy of the delivery ticket.

d. Report concealed damage to the carrier within fifteen (15) days of delivery date.

e. Request carrier to send their inspector to report on concealed damage, and obtain a copy of the damage report.

f. Send one copy of the inspection report to the vendor.

g. File a claim for either discernible or concealed damage within fifteen (15) days of delivery date.

h. When wrong merchandise is received, contact the vendor and wait for the vendor's return authorization.

i. All shipments received should be counted, and overages and shortages noted on all copies of the delivery ticket. Contact the carrier and the vendor within fifteen (15) days of delivery.

3. Cancellation of Purchase Order

Cancellation of an executed purchase order must be made by the College location initiating the purchase order.

The cancellation of the purchase order in The College’s e-procurement system can be performed by the regional Compliance approver or the E-Procurement System Administrator. The purchase order will also need to be cancelled in Banner on FPAPDEL (Purchase/Blanket Order Cancel). The cancellation in Banner will liquidate the encumbrance.

4. Sales, Trade-ins of Fixed Assets

See FMM, Section N, Fixed Assets for further details on sales or trade-ins of College property.

5. Vendor Payments

a. Invoices

An original invoice should be submitted in all cases. However, if necessary fax copies, scanned copies and photocopies are permissible. As a last resort the Certificate of Missing Documentation may be used. Reference FMM, Section M, Financial Documents.

b. Credit Memos

Credit memos are issued by a vendor to Ivy Tech for returned merchandise or adjustments on merchandise delivered as damaged or short. Credit memos are processed in order to decrease the amount owed the vendor.

Special attention should be given to credit memos that are "open" in Banner and have a date more than one year old. The Business Office should communicate, at least on a quarterly basis, with companies to resolve aged credit memos. There is a concern that the College's accounting records may be unfavorably impacted if these items remain "open" and continue to age. If it is determined that a refund cannot be obtained, the placing of an order may be considered in order to use the credit. This may be preferable to losing the credit. (Refer to FMM, Section M, Financial Documents for further details.

c. Material Variance between Invoice and Purchase Order Amount

A material variance occurs when the invoice amount exceeds the purchase order amount by a material amount. A material amount is defined as the lesser of 20% of the original purchase order amount, or $1,000.

The purchase order must be approved at the appropriate authorization level corresponding to the total invoiced amount for the order. If a material variance occurs, the invoice will require a tolerance override by the EDF in order to process the invoice.

A change order should be generated in the College’s e-procurement system to document the approval of the increased amount. The College’s e-procurement system change order type should be used for the total amount (original PO amount + any increase), and the original PO number should be documented in the notes of the requisition. Change orders are only required when the material variance is due to the invoiced amount exceeding the purchase order amount.

d. Payments to Non-employees for Services Provided to the College

The College is required to prepare an Internal Revenue Service (IRS) Form 1099 at the end of each calendar year for individuals, corporations or partnerships who receive payments for certain types of services rendered the College. The IRS regulation is applicable to all businesses including not-for-profit institutions.

The vendors receiving payment for personal services are coded in the 1099 field appearing in the accounting system. This enables the information to be accumulated for 1099 reporting purposes.

New suppliers can be set up in Banner and the College’s e-procurement system by the Business Office obtaining the new supplier information and providing to Financial Documents.

The IRS Form W-9, also called "Payer's Request for Taxpayer Identification Number", must be completed and signed by the 1099 vendor and sent to the Financial Documents Department. IRS Form W-9 certifies the vendor's Social Security Number or Employer identification Number, whichever is currently being used. The Finance office must submit the new supplier request, W-9 form and ACH authorization form via email to vendor create@lists.ivytech.edu. The forms should be password protected.

Issuance of Form 1099

In January, a report of 1099 vendors and amounts paid is sent by the Financial Documents Department to the regional Business Offices for review. Once verification is received, the forms are issued.

6. Memberships

The College will not pay for personal memberships in professional organizations; however, the College will pay for organizational memberships. Exceptions to this policy may be made in the following circumstances and at the discretion of the College. All exceptions must be approved in writing by the Executive Director of Finance or the Senior VP/CFO, and available for review.

a. If a professional organization does not provide for an organizational membership, the college may pay for the individual membership. Documentation must be on file to support that College membership was not available.

b. If an individual membership is less expensive than an organizational membership, the College may pay for the individual membership. This exception would apply in a unique situation where only one person needs the membership, and it is cheaper than an organizational membership.

Given that the College pays for many organizational-wide memberships, the Region and offices at the Central location are encouraged to determine if the College already holds a valid membership prior to incurring additional membership expenses.

V. Capital Projects

DELETED 08/01/2009

VI. Other Financial Considerations

A. Technology Stipend

I. Basis For Stipend

Electronic Access and Electronic devices have become commonplace, are readily available, and are convenient to use for College business. The use of cellular phone and other electronic access devices for business purposes can be expensive and the decision to incur such business expenses must be evaluated from a cost/benefit perspective. Departments must consider other viable options such as landline phones, pre-paid phones, pagers or other less expensive devices and or access tools.

Electronic access devices could include cellular devices with cellular access plans for connection, such as cell phones and smartphones.

A College business purpose for having an electronic access device is one where:

• The employee is responsible in emergency matters where they must be available 100% of the identified business period or,

•The use of other less expensive communication devices does not serve as a viable alternative to the business purpose or,

•The employee’s job effectiveness will show a significant increase through the use of a cell phone or electronic access/device. For example, the employee is required to travel extensively as a part of their job responsibilities.

•The identified business period is the time that the employee must be accessible by the institution.

College employees required to use electronic access and electronic devices for business purposes will obtain personal access plans and will be compensated by the College via a stipend. This must be for business purposes that cannot be accommodated with other less expensive communication devices and/or access. The technology stipend is not a supplement to an employee’s salary.

Exclusions from this policy include college owned electronic access devices which are shared among employees only while on campus or their designated station, and while on duty. The shared devices do not leave the campus or the station. An example would be a cell phone shared by security personnel while on duty. These devices would be purchased by and remain the property of the College. The plan would also be paid for by the College.

Stipends can be issued for the following purposes:

Establishment and/or on-going monthly expenses of the personal plan with a vendor including the purchase of the electronic access device(s), purchase of any accessories for the device (headsets, cases, protectors), and any additional expenses which may be incurred to have the electronic device.

Because the primary purpose of having electronic communications and access is to maintain accessibility, by accepting a technology stipend, the individual agrees to maintain the electronic access device in their possession and in an “on” status during business periods or during times when the individual is in an “on call” status. It is recognized there are times when it is inappropriate for a cellular device to be on (during business meetings). Individuals should consult with their direct supervisors regarding this issue.

As these devices are the property of the individual, devices lost or damaged are the responsibility of the employee to replace.  These personal electronic devices and plans will be available for personal, as well as, the business purposes outlined in this policy. Therefore, the College reimbursement is not intended to cover the entire cost of these plans.

Stipend:

Monthly service reimbursement rates:

 Technology Stipend (07/01/17 to 06/30/18)  $100/ month
 Technology Stipen (07/01/18 and beyond)  $90/ month

The above rates are effective for all employees July 1, 2017.  These rates more closely align with recent changes in the cellular industry’s fee structure.

During the annual reviews of the technology stipend, a review of the continuation of the technology stipend is to occur with the employee’s supervisor.

Individuals who do not obtain a technology stipend for electronic communications (because their usage is intermittent) may continue to be reimbursed for business cellular usage on a per-call basis as outlined in the Travel section of the FMM, (III. Reimbursements, section I. Parking Charges/Other Miscellaneous Charges). Individuals with technology stipends are prohibited from also receiving per-call reimbursements.

II. Reviews, Approvals and Documentation

Initial technology stipends must be approved on the Technology Stipend Form (TSF) and must be approved by the Executive Director of Finance (EDF) and Chancellor or Vice President of the area. Justification should be noted on the TSF. Approval should occur after a review of the business purpose.

Technology stipends are a W-2 taxable benefit to the employee. The TSF will require a signature of the employee acknowledging the W-2 taxability of the benefit. Base salaries will not be adjusted to accommodate stipend disbursement. Extra pay is the only process that can be used for this purpose. The extra pay is not benefits eligible.  This form should be on file in the Human Resources department. A copy must be maintained in the regional payroll office.

Signatures by the offices of campus Human Resources and/or the Payroll Office on the
Technology Stipend Form are an acknowledgement of W-2 taxability only and not intended to imply approval of the stipend. Full accountability for the appropriateness and reasonableness in amount of the stipend for the devices and services covered in this policy are the responsibility of the approving department head, the EDF/EDA and ultimately the Chancellor or Vice President of the area.

Equipment

No additional reimbursement above the technology stipend is permitted for equipment and accessories.  As outlined above, the technology stipend is designed to provide funding for a portion of the costs of an individual to maintain a functioning electronic access service to meet workplace demands when away from their primary post or workstations.

Employees are expected to purchase the requisite accessories to support the safe and legal operation of their technology devices.  Further, employees are required to be aware of and compliant with any federal, state or local rules/laws regarding the safe usage of cellular devices.

Annual Service Review

An annual review by the employee’s supervisor to ensure that a business purpose continues to exist and that the amount is still appropriate in order to accomplish the job must be performed. This may be done via email rather than completing another TSF.

Verification of services obtained is the responsibility of the supervisor.

Termination of the additional pay is required if the business purpose no longer exists. This should be done via a TSF. Documentation must be retained in the payroll office.
Individuals are not required to submit billing statements from their electronic access provider.

III. Contracts and Grants Accounts

On grant funds for the additional pay to be considered an allocable expense the use of the cell phone or electronic access/device should be fully devoted to the project, necessary for the project, and included in the approved budget. In cases where it is not in the approved budget, not fully devoted to the project or not necessary for the successful implementation of the project, the expense will not be allowable unless approved by Central Office Sponsored Program Accounting, which will typically require sponsor prior approval.

 

C. Charitable Contributions

Expenditures to support not-for-profit or charitable organizations are only allowed as long as there is documentation attached to the payment request showing the benefit to the College. As an example, the College may benefit from purchasing tickets/tables at a charitable event because of the opportunity to interact with community leaders, as well as receiving marketing benefits. This documentation should be written in such a way as to clearly explain the business benefit of the College’s participation. Donations to a not-for-profit or charitable organization are prohibited.

Student government associations and College clubs may use funds derived from student fees to make donations to the College's institutionally related foundation (Ivy Tech Foundation) if the donations are for student financial aid or the purchase of equipment or technology as part of an approved capital campaign to benefit a particular campus or administrative Region of the College. Consistent with the Foundation's longstanding policy, the Foundation will not levy any administrative fees or overhead charges against these donations. Additionally, the Foundation will report on the usage of these particular donations at the request of the College.

SECTION K: AUXILIARY ENTERPRISE

I. AUXILIARY ACTIVITIES - GENERAL

Auxiliary activities provide facilities or services directly or indirectly to students, faculty, or staff. Proper management of the auxiliary activities is important to assure the activities are providing the desired support service and the financial impact falls within acceptable guidelines, as determined by College management.

It is the policy of the College that separate accounting be kept for all fees or charges collected from bookstore operations, parking, or other activity which derives its financial support primarily from the users; and that expenditures of such funds shall be made solely to support activities or operations which directly benefit such users. Such accounting is essential for internal use to ascertain the degree of self-support attained and to provide the basis for exercise of controls. The monthly accounting detail provided through the segregation of these activities is the basis for financial analysis of the auxiliary activities.
 

II. Bookstore

Rationale

The bookstore, an auxiliary enterprise of the College, furnishes a service directly to students. This service is an essential element in support of the College mission, and conceptually, should be regarded as self-supporting. The major portion of a bookstore's activity is devoted to making available books, materials, and supplies which students are required to purchase in connection with their course work. Each regional institute will make provisions to have available for purchase, by its students, the necessary texts, workbooks, and supplies in sufficient quantity so that the student's ability to progress in class is not impaired through lack of such materials.
 

A. Administration

The Director/Regional Business Affairs is responsible for the management of the College bookstore and is accountable to the Vice President of Finance and Treasurer for the bookstore's fiscal operations. Cost accounting methods are to be used to evaluate and analyze income and expense elements of the operations.

The bookstore operations are to be supported by schedules of revenue and expenditure. Such schedules are essential for internal use to ascertain the degree of self-support attained and to provide the basis for exercise of controls. Financial statements are to be based on the accrual method of accounting. The basic instruments of financial reporting for the College bookstores will be College and regional balance sheets and College and regional statements of income. The Central Office staff will issue semiannual and fiscal year-end statements pertaining to the College bookstores.

The bookstores are expected to pay their share of general overhead expenses, as well as all direct operating expenses, and are expected to provide adequate working capital to be self-supporting. The College will not complete the fiscal year end closing process until all College owned bookstores have been charged adequate overhead expenses. This overhead charge will be calculated using the annual survey published by the National Association of College Stores. This calculation and the resulting journal entry charging the bookstores and crediting the operations fund will be prepared and processed by central office staff. This does not apply in cases where the bookstore is not located on campus and pays all expenses directly.

B. Cash Deficits

Regional institutes having a cash deficit at any fiscal year end, as listed on the June 30 College accounting system FBM092 Report for the Bookstore Fund, will have such deficit applied toward their Operations Fund fiscal year operating reserve.

The cash balance may be monitored daily by using the College accounting system on-line Screen 18, referencing Claim on Cash, `YTD', and monthly by using report FBM092.
 

C. Operating Surplus

Regional institutes having cash balances in excess of funding requirements for inventories and receivables may use such reserve to supplement the regional operations with the approval of the Vice President of Finance and Treasurer.
 

D. Funding of Accounts Receivable and Inventory

It is expected that the bookstores will provide adequate cash to finance trade accounts receivable and inventories, in addition to covering all direct operations expenses and their share of indirect costs.

Operating expenses include personnel salaries, wages, employee benefits, and payroll taxes. Only management and staff having involvement should be charged to operating expenses. Supplies consumed and equipment and furniture assigned to the bookstores are to be included as direct operating expense. Overhead expenses include lease or space rental, utility charges for heat, light, telephone, etc., and the cost of occupancy-related services such as janitorial, maintenance, and repair services furnished by the College. Overhead expense attributes should be made on the basis of square feet occupied by the bookstore operation, and should be charged quarterly.
 
Procedures/Guidelines

E. Budgets

Budgets should be developed that set financial goals for the bookstore operations. Prior year's level of activity, adjusted by an enrollment growth or decline factor and profit margin, would be a good foundation for current year budgeted activities. Budgets are to be entered into the College accounting system by the regional business office by August 31 of the current fiscal year. Budgets will be reviewed by the Central Office staff during the preparation of semiannual statements of income and net worth. However, bookstore operations should be monitored by the Region.
 

F. Ordering/Purchasing

The involvement and cooperation of the faculty, Director of Instruction, and Director of Student Services in monitoring textbook orders are essential for having required course materials on hand by the start of classes.

The instructional divisions must monitor and approve changes in textbooks used (including requested changes in editions) and requests for new texts not previously ordered. All texts of a current edition should be sold or returned to its publisher when ordering texts of a newer edition. The instructional divisions must be responsible for having faculty submitting orders a minimum of five (5) weeks prior to the start of classes. Review of requests should be in conjunction with Student Services so that adequate quantities are ordered based upon enrollment projections. Purchase order quantities should be calculated based upon orders submitted less quantity on hand. In addition, it is recommended records be maintained which detail the number of textbooks ordered, the number of textbooks used and returned, by division, in order to have a basis for informed decisions concerning the future purchase of textbooks.

All textbook orders are to be documented by a purchase order for confirmation of goods ordered, inventory control, encumbrance of funds, and expediting payment.

Although vendors may allow telephone orders and may request no written confirmation of telephone orders due to possibility of duplicate shipments, a purchase order is required to encumber funds and expedite payment. Under such circumstances where vendor requests no written confirmation, the vendor (white) copy of the purchase order should be retained by the bookstore with notation on the document copy that the order was placed by phone with no confirmation requested. Procedures for payment of bills, purchase order document, receiving report, check request document, and revolving fund should be followed for processing of documents.

Purchases under $250 may be made through the use of a Check Voucher in accordance with normal College operating procedures.

Used Book Purchase/Sales Operation

A regional institute may utilize a used book purchase/sales operation whenever feasible. It is encouraged to work with used book wholesalers in purchasing texts from students for resale and in purchasing used books for the student at a reduced cost to the College and students.
 

G. Pricing/Markup

Selling prices and operating costs must be monitored carefully to ensure that the bookstore meets its budgetary objectives. The income realized by a bookstore is predominantly from the sale of books, supplemented by the sale of supplies and other goods.

The College recognizes that variations occur from Region to Region on bookstore expenses: mix of books, supplies, and other items; and markup and gross margin. However, in order to assure that the College is providing the students textbooks at the least possible cost, a maximum markup percentage of 40 percent has been established for new textbooks. Any exceptions to this must be approved annually by the Vice President of Finance and Treasurer. Freight may be included as an add-on cost to determine the final selling price of the textbooks.

In order to generate a valuation system that is consistent throughout the College, the following pricing method should be utilized.

If the maximum markup (for new textbooks) of 40 percent is desired, the product cost is multiplied by 1.40.
EXAMPLE:

 Textbook Cost  $10.00
 Markup Multipler  $1.40
 Selling Price  $14.00

 

 

 

If the markup desired is 35 percent, then 1.35 would be the multiplier; if 30 percent is desired, then 1.30 would be the multiplier, and etc.

It is at this point, after the multiplier is used, that unit freight cost is added. Including freight prior to using the multiplier results in freight costs being marked up, as well as the book. Unit freight cost is derived by dividing freight costs for a shipment by the number of books received from that shipment.
EXAMPLE:

 

 Freight Costs  $10.00
 Number of books received  100
 Selling Price  $0.10

 

In order to generate an inventory valuation system, the following pricing method may be utilized. This method should provide adequate revenue which will generate working capital to finance inventories and accounts receivables, and which will cover operating and overhead expenses. Calculations should be based on prior fiscal year data:

 

 Operating Costs:  
   Salaries and Wages
   Employee Benefits
   Payroll Taxes
 Overhead Costs:  
   Space Cost
   Utilities
   Other
 Profit Margin (Percent of Sales)  

Cost Plus Markup Method

Example of 40 percent markup: Markup is the amount added to an established price for the purpose of determining a new and higher selling price; the percentage of markup is based on the previously established price.

 

 Product Cost  $10.00
 40% Markup  $4.00
 Selling Price  $14.00


 

H. Inventory

Approximately three weeks after the start of a semester, an inventory count of textbooks on hand should be taken to assist the ordering process for the following semester. A semiannual financial inventory must be provided to the Central Office staff on dates specified by the Central Office staff. It is recommended that at least one week prior to the semiannual financial inventory, the bookstore personnel arrange the inventory in a logical manner in order to facilitate the semiannual count. In addition, it is recommended the attached inventory count form be used to facilitate this count. Also, it is recommended the bookstore close during the time of the semiannual inventory in order to have a more accurate count. The actual procedures of performing the count is a regional decision; however, it is suggested that one or more people perform the count and another person verify the count on a test basis. The inventories should be classified into the following categories:

1. Books

2. Supplies

3. Other

The illustration (on page K-7) may be used for the inventory. Please note the form has a column headed "Obsolete". This is to be marked "Yes" or "No" for all items listed in the inventory. Obsolete for textbooks is defined to mean the publisher will not accept returns and the books are not usable for current or planned courses. Obsolete for supplies and other goods is defined as items which are not returnable and are not considered to be salable at a price equivalent to cost or above.
 

I. Inventory Valuation

The following method is to be used by the regional bookstores to value their inventories for financial statement purposes.

The latest price paid for the item is to be applied to all items on hand. This should approximate the first in, first out (FIFO) method of inventory valuation. This is being done to provide for a consistent inventory valuation method for the College's financial statements.

According to the Generally Accepted Accounting Principles, freight costs should also be allocated to the ending inventory. The Region may use actual freight cost or develop an average freight cost per book and apply the average cost to the entire ending inventory. This average must be reviewed and updated at least annually to reflect increased costs.

EXAMPLE

 

INVOICE DATE  DESCRIPTION AMOUNT PAID
 03/01/89  Accounting Principles I  $20/ Book
 06/01/89  Accounting Principles  $22/ Book

 


Regional Average Freight Cost $ 0.35/Book
 
Inventory Count as of 06/30/89:

100 Accounting PrinciplesI Books

100 * $ 22 = $2,200 
100 * $0.35= $ 35

Total Cost $ 2,235

Returns/Credit (Publishers)

The inventory of textbooks, taken approximately three weeks after the start of a semester, should reflect publisher, title, and quantity on hand. The Director/Regional Business Affairs should review this list in identifying texts that will not be used for the following semester. All in?stock books not to be used within the succeeding two semesters are to be returned to the vendor for credit. When returning unsold textbooks, publisher guidelines for returns and due dates must be adhered to closely.

The bookstore must project if a credit memo may be applied within the following semester. If applicable, the credit memo should be entered in the College accounting system and utilized against future purchases. Where additional purchases applicable toward a credit memo are not anticipated within four months and the publisher is infrequently contacted, the bookstore should return the credit memo with a request for a check refund.

A report (VBM093CRED) is generated on a weekly basis. This report should be reviewed when vendors inquire about payment of invoices. Vendors who are in credit status College-wide should be informed that credit memos are applied College-wide, and that checks are written when amounts owed exceed allowable credits.

The regional business director may process vouchers to exclude College-wide credits on an exception basis. This should occur only after communication with the vendor has failed to resolve the issue and the vendor's services/products are necessary.

Bookstore Inventory Tag
 

IVY TECH STATE COLLEGE

BOOKSTORE INVENTORY TAG

Region_______________ TAG #________
Location _____________
Total Count ___________
TYPE
Book _______________ Normal__________
Supplies _____________ Obsolete _________
Other _______________

COUNTED BY:_________________________
VERIFIED BY:_________________________

COMMENTS ________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
 

J. Refunds

Book refunds may be made from available cash on hand or revolving fund. Book refunds may be granted in compliance with these established conditions.

1. Books may be returned for a refund within the first two weeks from the beginning of the semester.

2. Original cash register receipt or bookstore receipt must accompany returned books.

3. Books being returned cannot be written on, or in, unless the regional institutes have a used book purchase/sales operation. Usually, books returned are either resold as new books or returned to the publisher as unused copies.

4. All cash refunds must be documented with a bookstore receipt, signed by the student indicating receipt of cash, and signed by the employee making the refund. Books refunded are to be identified on the receipt.

5. Sales of supplies are final. No refunds are to be granted on consumable items.

6. Full refunds will be issued where class(es) have been canceled by administrative action.

7. The bookstore's refund policy should be posted in a location easily available to students.

 

K. Accounts Receivable

It is the responsibility of each regional institute's business office to manage bookstore accounts receivable to the best interest of the College. Bookstore receivables are to be collected or written off in the same manner as Operations Fund receivables.

L. Sales

Sales for the bookstore involve the exchange of merchandise for money. The bookstore manager should be concerned with two types of sales:

1. Nontaxable Sales

Sales made to a tax exempt federal or state agency, institution, or charitable organization are nontaxable sales. This type of sale must be billed directly to that agency, and that agency must provide the appropriate tax exemption number. The Region must keep this number on file. A few examples of tax exempt agencies are:

a. Vocational Rehabilitation

b. Job Training Partnership Act

2. Taxable Sales

Taxable sales are all other sales not covered under Item 1, regardless if they are to students, faculty, or staff.

3. Institutional Sales

Sales to administrative and instructional departments are classified as nontaxable revenue and expenditures. Such transactions are considered revenue to the bookstore and should be journalized. An example journal entry follows:

 

 REGION DESCRIPTION  DEBIT  CREDIT
 xx  Operations Fund - S & E - Books  $xx.xx  
 xx  Aux. Ent. Bkstr. - Nontax. Rev. - Books    $xx.xx
   Total  $xx.xx  $xx.xx

 

III. PARKING ACQUISITION and MAINTENANCE

Rationale

To the extent possible, each regional institute will maintain off-street parking for students and staff. Parking and parking regulations should conform to all applicable municipal codes and ordinances, or the Region shall obtain any necessary variances required by the local situation.

The parking acquisition and maintenance fund is an auxiliary enterprise of the College. This fund furnishes an indirect service to the faculty, staff, and students, in that it is to be used for the acquisition, expansion, improvement, and maintenance of College parking facilities.

A. Administration

Funding is to be primarily received from a designated portion of the Building Facilities Fee. College-wide monies will be provided and allocated to projects according to a priority listing established by the property management area. Individual accounts for approved projects will be established by the Central Office staff. All applicable State Statutes and College policies and procedures are in effect for the administration of this fund. Classification of expenditures are:

1. Capital - Purchases of land, land improvements, and capital equipment ($l0,000 and more)

2. Supply and Expense - Maintenance expenditures of under $10,000 (i.e. sealing)

L SPONSORED PROGRAMS

I. Overview

Authority to execute or to delegate authority to execute contracts and written agreements is held by the President of Ivy Tech Community College, with the exception of those contracts which require Board of Trustee or other outlined approval. Grants and contracts for restricted purposes usually involve a formal written agreement and unless so designated require the signature of the President or a designee (Reference FMM Section J.I.B for more detail on signature delegation for contracts).

The types of grants, contracts, and agreements include those for which organizations external to the College have resources that can be made available to support the instructional, research, or public service function of the College. These programs are established in restricted College accounts and are designated as "Sponsored Programs."

These funds are expendable for operating purposes, but restricted by donors or other outside agencies as to the specific purpose for which they may be expended. The distinction between the balances of externally restricted and internally designated, but otherwise unrestricted funds, must be maintained in the accounts and disclosed in the financial reports. The circumstances and evidence relative to restrictions may not be clear and may require advice of General Counsel, management and independent auditor judgment, insight, and discretion. Technical and administrative responsibilities assumed by the College in relation to sponsored programs are complex. Acceptance of funds for these programs is accompanied by a requirement of strict accountability. In addition to the agency/sponsor requirements, college staff working with grants must be cognizant of the many areas of the college a grant will interact with. Relevant departments and offices should be kept apprised and consulted with as grant proposals are developed and sponsored programs implemented.

Sponsored programs will be established via signed contracts, grants, cooperative agreements, or memorandums of understanding. These projects may be sponsored by governmental (federal, state, or local government entities) or non-governmental entities (foundations, corporations, and other agencies).

Sponsored program funds relate to the specific grants, contracts and agreements between the College and external "Public" governmental entities, or "Private" organizations or individuals funded for the particular restricted purpose specified. Each of these individual programs is categorized by fund, according to the governmental entity or type of private organization that has entered into the agreement with the College.

It is important to note the primary differences between a grant and a gift. A gift represents a 'contribution' which is voluntary and non-reciprocal. A gift generally contains no reporting requirements, and is for an unspecified period of time. Grants on the other hand are a payment for proportionate value, typically for a specified time period with both expenditure limitations and reporting requirements.
 

II. Roles and Responsibilities

A. Grants Office     1. Grants Office - Pre-award   The GO is responsible for the final review and submission of a grant proposal to a sponsor. They are also available to PD's (Project Director) and EDF/EDA (Executive Director of Finance / Administration) during the grant proposal development process to assist in any phase of the grant proposal preparation process. As needed, the GO provides training on pre-award processes such as budgeting.

2. Grants Office - Post - award

The GO jointly maintains responsibility for management of an active grant in partnership with the PD, the EDF/EDA, and SPA (Sponsored Program Accounting). When negotiations about modifications need to occur with the sponsoring agency, the GO is the primary contact in facilitating the request. The GO will participate in preparation of the financial documents, the narrative request and facilitate final submission to the sponsor. It is of vital importance that all parties (SPA, EDF/EDA, PD) are kept apprised of any events surrounding these modification requests. The Grants Office is also responsible for partnering with PD's and EDF/EDA's to ensure grants are being effectively managed. The GO will participate actively with PD's and EDF/EDA staff with proactive account management to ensure grants are being spent and PD's are receiving the needed support to ensure the success of the Sponsored Project.

B.  Sponsored Program Accounting (SPA)

1. Pre-Award

The Sponsored Program Accounting office is not directly involved in pre-award activities but is available as a resource in any capacity during the pre-award stage. Consultations with the GO on budget issues, federal policies or participation in grant proposal preparation are available from the Sponsored Program Accounting office on an as-needed basis.

2 Post-Award

SPA becomes more involved in a grant as soon as it is awarded to the college. Once a grant is awarded to Ivy Tech, and signed copies of the agreement and a fund request form are forwarded to SPA, the work of preparing the grant account begins. It is imperative that the grant is set-up to be in compliance with both the agreement and governmental guidance. Within Banner, SPA ensures the sponsor is established, enters the grant and budget information and ensures time certifications will be generated when needed. Cost-Sharing information and Indirect Cost protocol are also established at grant inception, allowing all funds within the grant to share common characteristics.

SPA is ultimately responsible for the fiscal reporting and billing for most Federal and State projects. Most have quarterly fiscal reporting and generally these reports are submitted by SPA separately from the programmatic report submitted by the PD. SPA is also responsible for account closeout and for working with auditors in audits of sponsored accounts.

SPA is responsible for providing access to tools and training to help EDF/EDA staff and PD's manage their grants in compliance with Ivy Tech Policies, Federal policies and all other guidelines. Training will be provided not less than annually updating staff in both project related roles and fiscal roles of their responsibilities in managing their grants effectively and within legal boundaries.

C. Business Office

1. Business Office (EDF/EDA) & Project Director (PD) - Pre-award

EDF/EDA's and PD's are responsible for oversight of the preparation of the grant proposal packet, including a budget which fully costs out the grant proposal and acquisition of the signature(s) on the Grant Proposal Preparation Form (GPPF) from their Chancellor or designee, PD and EDF/EDA or designee. PD's and EDF/EDA should never submit proposals directly to agencies; this responsibility lies with the GO. PD's must be thorough as they examine grant proposal opportunities and evaluate the impact such a proposal may have on other areas of the college; examples of such areas include Academic Affairs, Information Technology, Student Affairs and Facilities.

2. Post-award

EDF/EDA's and PD's accept a great deal of responsibility when they accept a grant from a sponsor. It is the responsibility of the EDF/EDA and PD to manage the fiscal and programmatic operations of an active grant. Specifically, the PD is responsible for submission of program reports, jointly managing the fiscal condition of the grant with the guidance of the EDF/EDA office, and providing evidence of expense allocability to a grant. The Office of the EDF/EDA is responsible for ensuring that the expenditures being incurred are reasonable, have evidence of allocability and are allowable to the project. The Office of the EDF/EDA is available to assist/partner with the PD in preparation of any project revisions (project extensions, budget modifications, personnel modifications, etc.). Submission of such modifications would be facilitated through the GO, but it is imperative that communication between the PD, the EDF/EDA, SPA and the GO be managed effectively.
 

 

III. Key Terms

A.  Facilities and Administrative Costs (Indirect Costs)

Facilities and Administrative costs (F&A or IDC {Indirect Cost}) are allowable charges against grant funds for reimbursement of the College operating costs it incurs in connection with the operation of a grant. As defined by OMB Circular A-21, these costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. They may include administrative and/or clerical salaries, utilities costs, office supplies, computer service, photocopies, telephone tolls etc. The College uses a negotiated F&A rate approved by the Department of Health and Human Services. The off-campus rate should only be used when more than 50% of the project is performed off campus (campus equals any building owned/operated by Ivy Tech Community College of Indiana).

B.  Cost Sharing

Cost-Sharing commitment based on percentage of effort obligation(s). Such commitments are not restricted to a certain dollar amount but instead a percent of effort for a position over the stated period of time.

C. Dollar Amount Cost-Sharing

This cost-sharing commitment is reflective of a need to spend a certain dollar amount in support of the project. Typically, expenses are not line-item restrictive; however sponsor regulations/guidelines would predicate any interpretation otherwise. As an example, if only 80% of the grant expended, typically the required cost-sharing amount would also be proportionally reduced.

D. Memo-Match Cost-Sharing

Memo-Match commitment is that which cannot be accounted for in the accounting system. Typically it may include vendor or subcontractor commitments, equipment usage, space or other tangible items. These will be certified via a Memorandum by the Project Director.

E. Auditable Cost-Sharing

Auditable cost-sharing is that which is verifiable from institutional accounting records or as a condition of the award. Auditable cost-sharing may include third-party or in-kind contributions which would be documented via alternate means which would include project director certification.

F. Non-Auditable Cost-Sharing

Non-Auditable cost-sharing is a written means of showing institutional commitment to a project in a grant proposal without imposing an institutional burden of making that cost-sharing auditable. Generally speaking this can be done by writing in broad terms and leaving out specific percentages, figures and amounts.

G. Effort Reporting

Any employee who receives compensation for personnel services, either in full, or partially from a grant, contract or agreement directly or indirectly funded (federal pass through) by the federal government must have his/her effort certified on a 'Time and Effort Cert Report.' This includes employees receiving compensation for personal services which are funded as cost-sharing on a directly or indirectly funded federal project.

Compensation for personnel services covers all amounts paid currently or accrued by the institution for services of employees rendered during the period of performance under sponsored agreements. Such amounts include salaries, wages, and fringe benefits. These costs are allowable to the extent that the total compensation to individual employees conforms to the established policies of the institution, consistently applied, and provided that the charges are for work performed directly on sponsored agreements and for other work allocable as indirect costs are determined and supported, or for maintenance of effort purposes.

H. Prior Approval

Prior Approval is functionally defined as the written permission of an authorized official (typically sponsor/agency) prior to the incidence of an action on a grant that would result in a need for amendment to an existing grant/contract. Common examples include; extension of project period, budget modification, purchase of non-budgeted capital equipment.

I. Unlike Circumstances

An unlike circumstances occurs when it is appropriate to incur an expense which is not typically allowable on a grant as a direct expense. This could include expenses which are typically considered indirect expenses or those which are typically disallowed on federal projects.
 

IV. Pre-Award

A.  Grant Proposal Background

Grant Proposal format is generally dictated by the agency solicitation for a grant proposal. These solicitations will typically include all the information needed in the grant proposal, including formats for budgets, timelines and narrative. Most funding agencies will have guidelines for submission, regardless of the presence of a formal solicitation; the GO and the EDF/EDA are available to assist in the assembly of all grant proposals to help ensure compliance with sponsor specific regulations. Many agencies have strict policies regarding length, font-size or dollar amount. Failure to adhere to these specifics could quickly eliminate a grant proposal from competitive review.

B.  Grant Proposal Budget Development

The initiator of a grant proposal and the site/regional business office are responsible for developing a grant proposal budget in coordination with the Grants Office. All parties share the responsibility of reviewing the funding agency guidelines to determine allowable costs and ensure they are both sufficiently budgeted in the required categories. The process will help to assure the grant or contract's accountability requirements are addressed, as well as facilitate required project reporting.

The budget should be clear, precise and realistic in relation to the grant proposal's narrative. Grant proposals need to include a detailed budget page noting expenses by Banner account codes. When preparing budgets, reference Banner account codes which you may obtain from your EDF/EDA, the GO or SPA. Fringe Benefits should be budgeted following the fringe benefit budgeting guidelines provided by the GO, unless the GO has approved an alternative budgeting methodology. It is the responsibility of the GO to provide training on preparing a budget for a sponsored project.

Cost-Sharing

In today's competitive grant marketplace it is common for sponsors to require matching funds for a grant proposal. This could be in the form of institutional match, in-kind contributions, or other non-federal sponsored resources. Each of these commitments, once agreed to in a sponsored award, require tracking to ensure accountability of the commitment. Unless there is verbiage from the sponsor that indicates such cost-sharing/matching funds are highly encouraged or required, it is the expectation that commitments made in grant proposals will be written to be non-auditable. Inclusion of auditable cost-sharing absent a sponsor mandate requires the approval of the Director of the Grants Office and the Director of Sponsored Program Accounting.
It is imperative that grant proposals are routed through the Grants Office to help ensure auditable cost-sharing is not included unless necessary or approved. Assistance in modifying cost-sharing to be non-auditable can be obtained from the GO and SPA.

Facilities and Administrative Costs

The College uses a negotiated F&A rate approved by the Department of Health and Human Services. The predominate portion of projects/grants should utilize the on campus rate; 43% of salaries and wages excluding fringe benefits. The off-campus rate is 22% of salaries and wages excluding fringe benefits. The off-campus rate should only be used when more than 50% of the project is performed off campus (campus equals any building owned/operated by Ivy Tech Community College of Indiana). Budgeting and collection of Facilities and Administrative Costs (Indirect Costs{F&A/IDC}) at the maximum allowable amount is required for all sponsored projects.

Specific sponsors and agencies may have published/written guidelines that dictate modified F&A rates/policies. These written exceptions are generally acceptable to be used; formal documentation should be included in the grant proposal packet. If a region/project director wishes to waive the collection of all or a portion of F&A/IDC costs, approval must be secured from the Vice President of Finance/Treasury.

Facilities and Administrative (F&A/IDC) cost recovery will be divided between regions and central office at a ratio agreed to at time of award or grant proposal.

C.  Submission and Processing of Grant Proposals

1. Required Approvals

All grant proposals require the Chancellor's and the President or designee's signature. These signatures will be captured on the Grant Proposal Processing Form (GPPF) which is a paper record of the grant proposal information.

2. What to Submit

The complete grant proposal must be submitted (electronic or hard-copy) to the Grants Office at least two weeks prior to the due date to the sponsor. Exceptions to this policy must be approved by the Grants Office. In addition, a copy of the funding source's regulations, guidelines, the Grant Proposal Processing Form and any other relevant information also need to be either e-mailed or sent to the Grants Office for review.

3. Collaborative Review

The GO, the PD and the EDF/EDA are all responsible for reviewing the grant proposal collaboratively after submission to the GO. All parties should remain in communication to resolve discrepancies, evaluate concerns and ensure timely submission of the grant proposal.

The Grants Office will complete forms such as assurance forms, certification regarding lobbying, debarment, drug-free workplace certification, non-collusion affidavit, etc. The Grant Proposal Preparation Form and/or the internal sponsored required form (e.g. SF424) will include a line for the President's signature. The Grants Office will acquire the necessary signature(s) beyond those obtained in the region(s).

4. Entry into Banner Pre-award

The GO will be responsible for entry of the grant proposal into Pre-Award Banner. This will be done in the FRAPROP form in Banner. The status of the grant proposal should also be updated by the GO, allowing up-to-date information about grant proposals in process, submitted and awarded. Maintenance of the submissions in Banner will constitute the official record of grant proposal processing and submissions.

5. Submission to sponsor

Grant proposals that meet the guidelines of the College, the Ivy Tech Foundation, and the funding source will be forwarded to the President for signature and the Executive Director of Finance and Administrative Operations for the Ivy Tech Foundation if needed as determined by the GO. Upon completion, the Grants Office will submit the grant proposal to the funding source unless directed otherwise by the region or funder.
 

V. Post-Award

A. Overview

Sponsored program accounts include projects funded by federal, state and local governments, industry, foundations, societies, universities, and Ivy Tech Foundation funds managed by Sponsored Program Accounting (SPA). These accounts are restricted in nature and generally require a fiscal and/or programmatic report be submitted on some regular interval (quarterly). In order to account accurately for sponsored projects individually, each contract or grant is accounted for in a unique fund/grant. The purpose of the individual accounting is to fulfill our requirements as stewards of these funds, being able to ensure funds are spent in accordance with college and sponsor guidelines and being able to provide comprehensive accounting for all aspects of a sponsored agreement.

Management of a sponsored account is a joint task between the regions and the Office of the President. The process begins when a region (typically) is notified of an award. An agreement/contract is signed by the appropriate party and the region notifies SPA of the grant via a Sponsored Program Fund Request Form SPA will then establish a Grant in the Banner system and any related funds, including cost-share funds. SPA will notify the PD, EDF/EDA and GO of the new accounts and include a copy of the new Grant Award Notification (GAN -form HYPERLINK), indicating basic grant details such as invoicing detail, and grant type.

Once a grant and related funds are established, PD's and EDF/EDA's take over primary responsibility for managing the grant in line with sponsor and college policies. Expenditures must be in line with policy and EDF/EDA staff must keep back up documentation in the account file. Depending on the specifications laid out on the GAN, regions or central office staff will report fiscally on the project to the sponsor in their stated format. PD's will prepare and submit programmatic reports and copy the EDF/EDA on submissions. It is the expectation that these reports be shared with both SPA and the GO.

During the life of a project, accounts should be managed with a proactive sense of accountability. At least monthly, accounts should be analyzed to discover any auditing issues or concerns. Such items may include; accounts expiring soon, accounts in overdraft, accounts with no expenses, questionable transactions and expired accounts with balances or activity. As the grant closeout approaches, all parties should be in communication to ensure deadlines are being met and no modifications will be needed.

Grant closeout is typically 90 days after a project has expired, but some sponsors require close out in as little as 30 days. Failure to have expenses posted (and received) could result in disallowance of those expenditures. The closeout procedure is typically managed by SPA but will require participation of all involved parties. Upon completion and closeout of a sponsored project, documents should be retained in line with the document management guidelines outlined in this section E.4.h.

B.  Account Management

1. Managing a Grant

Account Management is the binding concept in effective grant management. It consists of steps related to Account Maintenance, Transaction Management, Document Management, Cash Management and Closeout Management.

2. Signatures

The Grant agreement should be signed under the same delegation as non sponsored agreements. The President or his designees are required to sign agreements greater than $15,000. Contracts less than $15,000 can be signed by Regional Chancellors or their designees. Signed original contracts should be sent to SPA for filing in the central project file. Documentation of the designees must be maintained and kept up to date in the office of the EDF/EDA. More detailed information on contractual signature delegation can be located in Section J of the FMM.

C.  Account Maintenance - Establishing a New Grant

1. Establishing a New Grant

The PD and EDF/EDA will typically receive a signed copy of the agreement with the sponsoring agency. Ideally, this signed agreement is the result of a grant proposal which was submitted via the GO. The signed agreement should be utilized to complete the sponsored program fund request form by the EDF/EDA or their designee. This form will provide SPA the summary details they will need to establish the Grant in Banner. In conjunction with the signed agreement, and a budget matching the award, little else is needed to get a new grant established and ready to be used. If the budget in the award is modified from the grant proposal or a detailed budget was not included, the EDF/EDA, PD and GO should work together to develop a detailed budget by Banner Acct code.
Sponsored Program Fund Request Form (SPFRF)

The Sponsored Program Fund Request Form should be completed by the EDF/EDA or their designee. Details on the SPFRF will be maintained in Banner, so it is important that careful attention to detail is maintained on this form. Please include the Org Code and Program Code on your form. The Form should be filled out as completely as possible. If you have questions on completing the form, please contact SPA for assistance.
In many cases, multiple funds will be needed for any specific grant. It is not necessary to complete a separate SPFRF for each fund, but it is mandatory that an attachment be included with the detail of all funds needed (Name, Purpose, Org Code [if different])

Grant Establishment in Banner

Once SPA receives the SPFRF, the budget, and the signed agreement, they will enter the relevant grant information in FRAGRANT (Banner) and derive all of the related funds. It is the expectation that SPA will get grants established for usage within two business days of receipt of the appropriate materials. Grant proposals submitted through the GO can be changed into grants, bringing relevant information along with it into the Research Accounting module of Banner, reducing the timeline for grant establishment.

The start and end date must coincide with the agreement for which the grant is being established. The Termination Date drives the deadline for all entries on grants to be completed; typically it is 90 days/three months out from the end date of the grant. The Expenditure End Date is essentially a future date that we will hopefully not encounter within any specific 'Active' grant. It is 10 years past the Termination Date. It is the expectation that all grants will be closed out and completed well before the Expenditure End Date.

The effective date is the date the account is being established or a change being made. It is not possible to have a transaction on a date prior to the effective date, and the effective date cannot be changed to a date which has passed on existing funds. TIP: IF you are receiving an error that when attempting to process a document, ensure the date of the document is after the effective day of the fund.
Once a Grant and all relevant Sponsored Program Funds have been established, the SPA office will complete a GAN (Grant Award Notification) Form notifying each EDF/EDA, PD and the GO of the specifics of that award/fund for consistent reference between parties.

Cost-Sharing Account(s)

When cost-sharing exists (as referenced in C.2), the amount of time spent and/or the dollars expended on the grant must be accounted for and be auditable. This will be managed via establishment of a 'C' fund connected to the restricted grant and based within the regions operational budget line. C funds will be established by the Office of Sponsored Programs Accounting, under direction from Regional campuses via a submission of a Sponsored Program Request Form.
External third party or in-kind contributions require no college cash outlay. However, if they are to satisfy matching requirements, they must be verifiable from the records maintained by the grant recipient.
All matching documentation required by a grant, contract or agreement must be maintained in each respective site business office and be available for audit examination. It is imperative that all matching accounting records are maintained with the same level of detail as sponsored/restricted funds. Guidelines on expended cost-share/match dollars are identical to the grant which it is being expended upon. Cost-sharing/matching accounts are an extension of the grant award. Funds must be spent in accordance with sponsor guidelines and unspent funds will impact the project budget and likely the available sponsor dollars. Failure to meet matching obligations may result in a reduction of funding and overages become the responsibility of the site/region.

Physical Account Establishment

Project Folders

Physically establishing a project folder is an important task. Files should be maintained to keep documentation on grant correspondence, transaction information, award notifications, award modifications, and other project related information.

Meeting with Project Director

When a region receives a new grant, one of the most valuable activities that can occur is a meeting between the finance staff and the project director for the new grant. The new Project Director may have many questions or concerns about policies and procedures and it will be important for the EDF/EDA or their designee to make contact to start the fiscal life of the grant off quickly and accurately.

Topics could include
• Payroll Distribution Changes
• Budget Review
• Reporting Review
• Ordering process review
• PD Training from SPA
• Timeliness of purchases
• Sponsor specific guidance

2. Modifying a Grant

When a grant modification is received by the office of the EDF/EDA, the PD or the SPA Office, it should be shared with all the involved parties. It is the responsibility of SPA to modify the electronic records and maintain a copy of the approved modification in the central office grant file.

Prior Approval Grant Modifications

PD and EDF/EDA staff should partner together to prepare sponsored project prior approval amendments in line with sponsor expectations regarding format and signature. The GO is the central office resource responsible for providing guidance and submitting requests which do not flow through the PD.
Typically these changes consist of line-item budget modifications, requests for approval of changes in personnel, request for project period extensions, etc.
Requests should be completed at least 45 days in advance of the effective date or 'need' and copies of approvals should be distributed to the PD, EDF/EDA, GO and SPA without exception. Change requests and subsequent approvals must be communicated to and coordinated with the SPA in a timely manner so that the allowable/authorized project adjustments can be made within the official financial records of the College during the effective funding period of the project.
Monthly monitoring of grants will allow EDF/EDA staff and PD's to forecast their immediate needs for any budget modifications/revisions. Typically the budget revision will be prepared in line with the original grant submission guidelines showing the changes and documenting the justification for the changes in writing. It is important to note that typically a budget revision should not impact the project scope or outcome. Should it do so, it must be adequately documented for sponsor approval.
Expanded Authority

Certain sponsors and agreements have delegated expanded authority to the sponsoring institution. This authority provides the institution the ability to make some grant modifications without seeking approval from the sponsor. Instances which have been delegated are outlined below and approval must be garnered from SPA, requests must be submitted to SPA not less than 45 days in advance of end date or 'need.' SPA or the GO should be contacted by the PD or EDF/EDA or their designee to initiate changes whose authority has been delegated. Any contract/agreement specifics would supersede those guidelines listed below.
Definitions of processes delegated Expanded Authority (require at minimum SPA Approval)

• Budget Line-Item Modification - Rebudgeting within direct costs to accomplish the project objectives without a request for additional funds
• 90 Day Pre-award – Authority to incur costs up to 90 days prior to a grant start date. In order to incur costs prior to the start date, the costs must be imperative to the success of the project. Should the project not be received for any reason, the Region shall be responsible for any pre-award expenditure made.
• Single No-Cost Extension from original end date - extension of project period to meet project deliverables. SPA must notify sponsor 30 days before end date. Must be to request additional time to accomplish project objectives or phase out a project which is ending. A remaining grant balance is not a justification for an extension.
Agencies with expanded authority – authority varies by sponsor, work with GO or SPA for guidance

• ONR – Office of Naval Research (except no-cost extensions)
• NASA – National Aeronautics and Space Administration
• NSF – National Science Foundation
• USDA/CSREES – Cooperative State Research Education and Extension Service
• US-Ed – US Dept of Education
• NIH/PHS – National Institutes of Health/Public Health Service
• NOAA – Nat'l Oceanic & Atmospheric Administration
• DOE – US Dept of Energy
• EPA – Environmental Protection Agency
• ARO – Army Research Office
• AFOSR – Air Force Office of Scientific Research

D. Transaction Management

It is the responsibility of the site PD and EDF/EDA to assure that all expenditures charged to sponsored agreements are appropriate, allowable, reasonable, allocable and in accordance with all applicable federal and state laws and regulations.
Each purchase should have evidence of project director (academic) approval and appropriate fiscal authorization. Project Director's can delegate their authority for approval to other staff in Higher Markets via their EDF/EDA or their designees.

1. Procurement

It is mandatory that purchases on a grant account follow not only the college purchasing policies, but also the particular terms of the agreement (including flow down clauses). Many sponsors have specific restrictions on items such as the purchase of equipment and computers. Consult the grant agreement, SPA or the GO for assistance in identifying sponsor specific purchasing protocol.
Goods must be purchased, and received within the project period to be of benefit to the grant. Timing of purchases should be scrutinized. It may be difficult to justify an expense for furniture in the final months of a grant. However, if the grant's purpose was to prepare a classroom for students, the expense could likely be justified. The bottom line is that the goods received must benefit the project during the project.

2. Payroll

Payroll maintenance is one of the most important parts of grant management. Not only is payroll the base of our indirect cost rate, it is also the item that makes up the bulk of a college's expenses. Therefore, it has a large impact if it isn't managed appropriately.

Effort certification will be detailed later, but in summary, on Federal Grants, Federal pass-through and Perkins funds (at minimum) the college requires staff paid on grant funds to have their effort certified after the fact via signature of their supervisor at the conclusion of each pay period on the Time and Effort Certification Report. This certification indicates that the supervisor verifies the staff member did in fact spend the allocated amount of time on the grant (approximated over a longer length of time). Once certified, it is difficult to explain how a staff member was certified to a grant, but later is being moved off that grant or onto another.

Another important aspect of payroll management in respect to grants deals with the start and end dates of grants. It is important to start faculty/staff on a grant as soon as the grant is established. A delay in setting up payroll could cause issues to pay periods which have passed, or those which have been certified. Conversely, when a grant is ending it is important to be proactive in moving faculty/staff off of a grant and onto another source of funding. Failure to move faculty/staff off of grants could result in a need to process payroll redistribution, impede the grant closing process and affect future funding.

3. Allowable Sponsored Project Expenses

In order for a cost to be charged to a sponsored project, it must be allowable. There are 4 principles outlined in the Office of Management and Budget Circular A-21 which describe the considerations affecting allowability of costs. The expense must be reasonable, allocable to the project, consistently treated and allowable within the parameters of college and sponsor guidelines.

Reasonableness

Is the price of the item and the quantity appropriate given the unique circumstances of the grant/purchase occurring at the time expense is being incurred? Would a reasonable person view the expense as in line with expectations?

Allocability

Does the expense benefit the project? Is it necessary to conduct the work of the project? Is it easily tied to the specific project?
Consistent Treatment

Regardless of the source of funding, is the expense being handled in a similar fashion across the college? It is not appropriate to have a surcharge for expenses on grants or separate allowances approving purchases on grants which may not be allowable on college operation/WED funds.

Allowable

The expense is not expressly forbidden in the sponsor guidelines, government regulations, or the contract/grant requirements.

4. Unallowable Sponsored Project Expenses

In accordance with OMB Circular A-21, Section J, the following costs should not be borne on federal grants. It is the policy of the college that when the allowability of expenditures is being considered all grants be treated as federal grants unless award documentation or sponsor approval would indicate otherwise. In any case, should an approved award explicitly state that such expenses are allowable, then that would supersede the OMB guidance.

Examples of Unallowable Expenses

• Advertising and Public Relations
• Alcohol
• Alumni Activities
• Bad Debts
• Charitable Donations
• Entertainment
• Fines and Penalties
• First Class or other Non-Coach Travel
• Fund Raising
• Goods or Services for Personal Use
• Memberships

5. Unlike Circumstances

In some instances it may be appropriate to charge an 'unallowable' expense or an expense which is typically considered an indirect cost (photocopying, telephone, office supplies, postage, paper, pens, and clerical personnel) to a sponsored project. Instances when a grant will be charged for these expenses should be documented with an Unlike Circumstances form which has been reviewed and approved by Sponsored Program Accounting. This approval will be maintained in the project file and referenced on purchases or journal entries for relevant expenses. These costs must:

• Be specifically identifiable with the objectives of the project with relative ease and a high degree of accuracy
• Be relatively extensive – (fairly significant dollar amounts)
• Be included in the grant proposal budget, justification, project narrative, or approved separately by the sponsor
• Be justified adequately on the documentation for such charges

6. Time and Effort Certification

General Requirements

After-the-fact Activity Records have been adopted by the College as the method used to support the time and effort reporting requirement. The report will reflect an after-the-fact reporting of the percentage distribution of an employee's activity on a sponsored project. Charges initially may be made on the basis of estimates before the services are performed, provided that such charges are promptly adjusted if significant differences are indicated by activity reports. Short-term, such as one or two month fluctuations between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term (e.g. 120 days). To confirm that the distribution of activity represents a reasonable estimate during the period, the College has determined that the employee's supervisor will be required to sign and verify the time and effort certification report.

The Banner Payroll System will generate a Time Certification Report which will be distributed to the appropriate supervisor every payroll under the direction of the EDF/EDA. This report is to be verified and returned to the business office prior to the employee's next payroll. It is the business office's responsibility to assure that all of the Time Certification reports have been certified and returned.

Once the Time Certification report is received by the office of the EDF/EDA, a review for required changes to the labor and/or benefit account distribution must occur. If a change in account distribution is necessary, the business office will prepare and process payroll redistribution (PHAREDS). A copy of the completed Time Certification report is to be attached as backup to the payroll redistribution. The redistribution should be processed no later than 30 days after the payroll has been processed. If a grant or contract is ending, immediate processing may be necessary to include the changes in the final fiscal report. Otherwise the funds may not be reimbursed and, therefore, the regional Operations Fund would be charged. If the account distribution is a permanent change, position control should be updated in Banner.

Once a Time Certification report is certified it should not be changed. Any changes would require documentation and explanation relating to the nature of the incorrect certification and propriety of any changes. Moving charges/salary off of a grant does not require the strict review, but documentation should still be included regarding the reasoning. A new Time Certification must be manually generated by the EDF/EDA or their designee.

The Time Certification Report will be incorporated into the official records of the institution. It will reasonably reflect the activity for which the employee is compensated by the institution and it will encompass both sponsored and all other activities on an integrated basis.

Background/Process Requirements

One Time Certification will be generated per employee paid on funds requiring certification.
Time Certification reports are generated for employees who are paid on grants which are labeled as Federal, Non-Federal Pass-Through, and Subcontract Pass-Through (in FRAGRNT).

7. Correcting Documents

Overview

Ideally we would operate in a fiscal environment free of correcting documents. The reality of the matter is that it is not feasible to expect to have no correcting documents, however, it is the expectation that the use of a correcting document should be minimized as much as possible, and should never be the norm for handling transactions. If you have a process in your area which requires frequent correcting documents be processed, please contact SPA to evaluate the effectiveness of the process and determine if alternate methodology could be instituted to post charges correctly initially.

Correcting documents are a primary focus of concern when agencies conduct audits. The more transactions are being shifted onto or from sponsored project accounts after the initial entries raise the level of an agencies concern. Frequent, late, unexplained or poorly explained cost-transfers or corrections raise serious questions about the appropriateness of those adjustments as well as focus on the overall reliability of the College's accounting systems and internal controls. These speculations are only heightened when the grant in question is in overdraft or has a remaining balance.

The timeliness of entries is also a point of contention. It is difficult to justify correction of any charges greater than 90 days after the month-end in which the entry posted. It is the expectation that any corrections that are needed are made promptly, within the month following the closing month where the error occurred. All journal entries for charges which are greater than 90 days after the month-end close of their posting will require justification for the lateness of the correction. Failure to include such a justification will result in disallowance of the charge on the grant.

College procedures for correcting documents involving grants are established in accordance with federal accountability requirements contained in the Office of Management Budget (OMB) Circular A-21 "Cost Principles for Educational Institutions." (Full Text – OMB A-21) Entries which are disallowed on grants will be transferred to regional operating funds in coordination with the regional EDF/EDA.
Cost-Transfers on Sponsored Projects

This guideline is being issued to ensure the integrity of the College's charging practices for sponsored program accounts after it had been charged elsewhere in the College's accounting system and to ensure compliance with sponsor terms and conditions, regulations and college policies.
When cost transfers to move expenses involve sponsored project accounts, it is critical that the transfer meet the requirements for allowability, allocability, reasonableness, and consistency that are addressed in this financial management manual in line with OMB A-21.

It is noted that all sponsors could view frequent and/or late cost transfers and those which are inadequately documented or poorly explained as indicative of poor fiscal or project monitoring. Diligent review of financial records and timely communication between EDF/EDA, PD's, and SPA should prevent the necessity of transfers; however, under certain circumstances they may be appropriate.
The college is committed to ensuring that all cost-transfers are legitimate and conducted in accordance with sponsor terms and conditions, regulations and college policy.

Any transfers MUST be supported by documentation which contains a full explanation of the error, why it occurred and evidence of the appropriateness of the expense/entry to the account being impacted.
Cost Transfers should not be viewed or utilized as a tool to manage awards – they are a means for correction. Journal entries for reconciliation of credit card expenses and allocation of photocopying and postage charges are not recognized as cost-transfers (NOTE: photocopying and postage are typically F&A/IDC and if charged to grants require an Unlike Circumstances Form).

Cost Transfers should be prepared as soon as the need is identified. If the College is aware of an inappropriate charge on a sponsored account, it should be removed expeditiously. Charges in excess of 90 days cannot be moved to a grant without justification for the tardiness of the entry.

PD's and EDF/EDA's share a dual responsibility for quick and accurate preparation and documentation for cost-transfers.
Journal Entries

When it is determined that a Journal Entry should be prepared to correct a charge to a sponsored project, it is imperative that appropriate documentation be included with the correction.

Back-up Documentation consists of evidence of the inappropriate charge and the reason the inappropriate charge occurred. This documentation must be able to establish the allocability of the charge to the project.

Entries posting charges to a grant must include certification of the project director or another with first-hand knowledge of the transaction.

The journal entry will require a written justification explaining the correction. This explanation can be put in the 'Document Text' field or attached as a separate document. Imagine you are explaining to an auditor who picks up the file in 5 years. Explain why and how the error occurred, why the entry appropriately corrects the problem, and any steps taken to avoid the error reoccurring.

The written justification should include:
• Original Transaction Information (Doc #, Date, Entry Type)
• Explanation for how and why error occurred
• Explanation of proper project allocability
• Justification for late correction (if necessary)

Payroll Redistribution

When payroll redistribution must occur, it is mandatory that the payroll redistribution be backed up with the certification by the project director that the charges are correct. The payroll redistribution does not route through SPA for approval, so it is important that all communication regarding the change and copy of the document are maintained in the EDF/EDA project file.

The entries to redistribute payroll must be done on a timely basis. Entries greater than 120 days after the payroll date are considered questionable and must include justification of the propriety of the correction

Any entry to change payroll which had been previously certified to another grant is highly suspect and documentation should be carefully maintained to explain why effort had been certified on an alternate project. Documentation should also be maintained which shows evidence of an attempt to correct the error which caused the improper certification.

8. Document Management

Subject to any additional requirements from Ivy Tech Community College's Document retention policy (detailed in Section D of the Financial Management Manual), it is the policy of Ivy Tech to maintain files for 5 years after the end date of the project, this is not to be less than 3 years after the date of submission of the final expenditure report. Federal requirements regarding sponsored programs record retention will be followed, these are enumerated below
OMB Circular A-110 Subpart C.53 outlines the record retention requirements as well as the access guidelines for universities, hospitals and other not-for-profits receiving grants from the federal government. Subpart C.53 (b) states:

"Financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report or, for awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, as authorized by the Federal awarding agency. The only exceptions are the following:

(1) If any litigation, claim, or audit is started before the expiration of the 3-year period, the records shall be retained until all litigation, claims or audit findings involving the records have been resolved and final action taken.

(2) Records for real property and equipment acquired with Federal funds shall be retained for 3 years after final disposition.

(3) When records are transferred to or maintained by the Federal awarding agency, the 3-year retention requirement is not applicable to the recipient.

(4) Indirect cost rate proposals, cost allocations plans, etc." specified as follows:

-If the recipient submits to the Federal awarding agency or the sub recipient submits to the recipient the proposal, plan, or other computation to form the basis for negotiation of the rate, then the 3-year retention period for its supporting records starts on the date of such submission.

-If the recipient is not required to submit to the Federal awarding agency or the sub recipient is not required to submit to the recipient the proposal, plan, or other computation for negotiation purposes, then the 3-year retention period for the proposal, plan, or other computation and its supporting records starts at the end of the fiscal year (or other accounting period) covered by the proposal, plan, or other computation"

E. Cash Management

Cash for Ivy Tech sponsored projects is typically managed on a reimbursement basis. A project which will incur significant expenditures and could be drawn in advance should be researched by SPA to determine if cash advance methodology would be acceptable given the circumstances.
Sponsored project accounts cash is managed at the individual fund level.
Reference the GAN to determine if billing/invoicing is handled by SPA or the EDF/EDA.

1. Billing/Invoicing

SPA

Typically Federal, State, and large multi-regional grants are all billed/invoiced centrally by SPA.
Typically done quarterly, but could vary depending on volume of transactions and/or sponsor specific regulations/guidelines.
Cash, Checks or wires are deposited in a central office restricted holding fund before being transferred into the grant directly. Funds are then reconciled with the Unbilled Receivable to the specific fund which is being reimbursed. It is the expectation that cash balance be reconciled on no less than a quarterly basis for all sponsored program accounts billed invoiced by SPA. NOTE: If the account is one of the few Sponsored Accounts which is not set up to have accrued expenditures, then the income should be reconciled from the holding fund to the Revenue account (e.g. 1201, 1301, 1401)

Regional EDF/EDA

Typically Local Government, Local foundations, and privately funded agreements specific to a region are billed/invoiced by that region.

Billing/Invoicing should be done not less than quarterly and typically done on a monthly basis.
Cash and Checks are deposited into a holding fund prior to being reconciled to the appropriate restricted fund. Wires may be directly reconciled into the restricted fund. Contact SPA or review your GAN to ensure the account is not an account without accrued revenues. Provided the account has accrued revenue (which is usually the case) the cash should be reconciled to the unbilled receivable (e.g. A052D). If the account does not accrue revenues, then the revenue should be directly reconciled to the revenue acct (e.g. 1201, 1301, 1401).

2. Cash Reconciliation

Cash Receipts should be reconciled not less than quarterly to ensure the amounts reconciled into the restricted funds are consistent with the amounts billed/invoiced to the agencies. SPA will reconcile accounts for which it bills/invoices. EDF/EDA's or their designees are responsible to reconcile the cash on their respective accounts.

F. Monthly Expectations

1. Overdrafts

EDF/EDA's or their designees are responsible for generating lists of Grant accounts whose expenditures are in excess of their budgets not less than monthly. Management reporting will be made available for all staff to review their regional management overdrafts. SPA will contact Regional EDF/EDA staff on overdrafts to investigate steps underway to correct overdrafts.

2. Accounts Receivable

Regions and Central Office should maintain a list of invoices/bills and their 'age.' The Business Office should contact the agency at 30, 60 and 90 days to request payment. Duplicate invoices can be generated. At 120 days delinquent, the Executive Director of Finance and the Director of SPA should be notified to investigate and recommend appropriate action. These reviews should occur not less than monthly to maintain up to date accounts receivable records.

3. Expired Projects/Closing Accounts

EDF/EDA and PD staff are responsible for the review and preparation in advance of projects which are expiring. Accounts expiring in 30, 60, and 90 days should be reviewed and discussed with the Project Director to ensure spending and project goals are being met. Prepare in advance for any prior approval modification requests which will be needed and ensure the account is ready to be closed no less than 60 days after the project period end-date. Accounts should be reviewed not less than monthly to evaluate expired and expiring projects. Management reporting will be made available for all staff to review their regional expired and expiring accounts.

4. Cash Deficit

Accounts whose cash balance is in deficit should be reviewed not less than monthly. Provided a billing has been generated and the billing is equivalent to the overdraft at the prior month-end, no immediate action is required. Otherwise, reference the accounts receivable report to develop a plan of action and communicate with SPA. A management report will be available for consistent review of accounts in cash deficit.

5. Questionable Transaction Listing

Expenses for items such as food, professional development, memberships, promotion, advertisement and recruitment may be indicative of an improper usage of funds. These transactions should be reviewed carefully on a monthly basis. A management report will be made available for consistent review of questionable transactions. A sample list of unallowable expenses is located in the transaction management section of this manual.

Expenses which are deemed inappropriate for the grant account should be removed to college funds via journal entry as soon as determination is made. In cases of uncertainty, err on the side of conservative thought and remove the charge from the grant.

G. Annual Expectations

1. Management Outline

The Director of SPA and the office of the EDF/EDA should meet at least once annually to discuss active grants in the region, training needs and address any other concerns relating to grants. These informational updates can be in person or via other means (telephone, web chat, etc.)
SPA should prepare not less than annually updated training materials for delivery to new staff with Grant responsibilities or refreshers for existing staff.
New Project Directors will have training made available from SPA to help familiarize themselves with grant management expectations and federal guidelines which will dictate their responsibilities account management responsibilities.

2. Year End

At year end, closing entries are made to record Accounts Receivable and apply Cash Advances (if applicable) as of June 30th for all Sponsored Program Funds. Those A/R are reduced when cash is received and remaining advances are reduced with the expenditures are reported.

Ongoing sponsored programs are carried forward automatically by reflecting 6/30 budget balances.

Accounts which have been closed and have been inactive for 6 months should be closed out during the year-end process.

H. Closeout Expectations

1. PD/EDF/EDA

Office of EDF/EDA should have grants ready to close not more than 60 days after the project expired, with the exception of sponsors (e.g. Department of Workforce Development 30 days) who require final fiscal reports earlier.
Charges should be reviewed, billings completed, overdrafts cleared, post-period charges moved, etc.
Project ending should have been discussed with PD at 30, 60, 90 days remaining to ensure all aspects were being brought to a successful close.

2. SPA

SPA is responsible for submission of final fiscal reports and closeout materials to sponsors/agencies. SPA will work with regions to acquire signatures on documents needing regional certification; certifications, equipment inventories, etc.

SPA will invoice/report with what is anticipated to be the most reasonable expectation of final invoices and failure to have accounts prepared for close could result in disallowance of some expenses which hadn't been posted or corrected within the 60 day time frame (or less depending on sponsor regulations).

Account Closeout should be completed with a complete reconciliation of the account and cash. The project should be closed in Banner and the file should be inspected to ensure award amendments and important sponsor correspondences are maintained.

VI. Published Guidance

In addition to noted special terms and conditions or referenced regulations and state or federal laws, the following items (not to be considered totally inclusive) may be applicable to a particular grant or contract depending on the funding source:

• Education Department General Administrative Regulations (EDGAR)
• Department of Labor Titles 20, 29, and 41 of the Code of Federal Regulations
• Job Training Partnership Act and Implementing Regulations
• State of Indiana Management and Cost Principles for Administering Job Training Programs Under the Job Training Partnership Act
• OMB Circular A-87 Cost Principles Applicable to Grants and Contracts with State and Local Governments
• Notice of 2/28/80 Updated Listing of Federal Agencies Responsible for Approval of Cost Allocation Plans and Other Cost Proposals of State and Local Governments (pages A-87:8 through A-87:20)
• OMB Circular A-88 Indirect Cost Rates, Audit and Audit Follow-up at Educational Institutions
• OMB Circular A-102 Uniform Administrative Requirements for Grants-In-Aid to State and Local Governments (issued September 12, 1977) and Local Government issued March 11, 1988
• OMB Circular A-110 Grants and Agreements with Institutions of Higher Education, Hospitals, and other Nonprofit Organizations
• OMB Circular A-21 Cost Principles for Educational Institutions

SECTION M: FINANCIAL DOCUMENTS

I. Overview

Financial Documents are the official forms for the College, used to support financial transactions, and are used on a College-wide basis.  Once a form has been recommended or an existing form has been revised, the following sign-off must take place before the form is released for bid or printing:

Vice President originating request
Executive Director Data Services
Assistant Treasurer
General Counsel
Director Internal Auditing
College Affirmative Action Officer
State Board of Accounts (if applicable)

State Board of Accounts approval is required on all forms and reports used to support financial transactions.  (I.C. 5-11-1-2 and 5-11-1-6).  For further information, the Indiana Code may be referenced at http://www.state.in.us/legislative/ic/code.

The Vice President for Finance/Treasurer, or designee, should make the determination as to which forms require such approval and institute the appropriate communications.

NOTE:  Refer to FMM, Section H, Travel Authorization for travel related information.

II. Signature Card

The Financial Documents Processing and Retrieval Department staff and regional business office staff will review for proper employee signatures on all appropriate financial documents submitted to those departments.    1. Delegation to authorize purchases below $10,000 must be made on a signature card.  The  signature card must include the designated employee's signature and must be authorized by the following: 
Department Supervisor/Director
Executive Director of Finance
Executive Dean
Vice President/Chancellor
Vice President for Finance/Treasurer (Central Office staff only)   2. A Vice President's signature is not required on the purchase order check request copy when payment of $15,000 or above is being made if the signature is on the original purchase order.   3. The purchase order check request that has a material variance greater of 10% or $1000 between the invoice amount and the purchase order amount must be approved at the   authorization level outlined in Section J?Purchasing, corresponding to the total invoiced  amount for the purchase order.   4. The Executive Director of Finance is responsible for maintaining regionally approved signature cards.   The Financial Documents Processing and Retrieval Department is responsible for maintaining Central Office approved signature cards.

III. Journal Entry

Rationale

The Journal Entry is used to record changes in the accounts of the accounting system.  These entries may be of four kinds:  (1) adjusting entries, (2) correcting entries, (3) facilitating entries, and (4) entries designed to reclassify trial balance items.

Adjusting entries are required because it is impractical to record some changes on a day-to-day basis.

Correcting entries are necessary to correct errors discovered in the account balances.  While this is not the place to consider auditing procedures, it may be well to emphasize that they  correctly represent the actual facts with respect to assets, liabilities, revenue, and expense.

Facilitating entries may be necessary in order to record data from a subsidiary ledger into the  general ledger.  Sometimes it is practical to record all of a particular expense in a single account, whereas actually the amount should be allocated.

One of the most useful purposes of the Journal Entry is to permit reclassification of items shown on the trial balance that have changed due to time.

Procedure

1. The business office, in order to correct their financial figures so that their data correctly represents the actual facts, must initiate the request by preparing a Journal Entry.  The Central Office financial staff usually prepares adjusting, facilitating, and reclassification entries.

2. The Journal Entry form must include the following:

a. The titles of the accounts to be debited (charged for expenditures) indicating the fund and account descriptions followed by the amount..
b. The titles of the accounts credited indicating the fund and account descriptions  followed by the amount.
c. Each account and amount must be identified by its ten-digit account number.
d. The explanation and justification of the entry must be appended at the end.  Emphasis is placed on the necessity of including in the explanation reference to document numbers and dates, as well as a clear statement of the reason for the entry, and if applicable, the name of the sponsored program to which the entry applies.
e. Supporting documentation must be attached.  Photocopies of check vouchers with check numbers, State Board resolutions, purchase orders or other financial schedules or data will suffice for adjusting, correcting or reclassification entries.  However, the original documentation necessitating the need for an original entry must be attached, if available.
f. The explanation, justification, and supporting papers are to be sufficiently thorough to provide a complete reason for the entry.  The documentation must be adequate so "a person with basic accounting knowledge" can understand the journal entry.  For example: entries to record void checks should include original check number, reason for voiding the check, and replacement check number and date, if available.
g. The preparer/Executive Director of Finance must sign and date the request.
h. Distribution of copies needs to be indicated.

3. The College uses a double entry fund accounting system whereby each debit must have an offsetting credit, whether it is in the same fund.

4. The pink copy of the Journal Entry form is to be filed in an "open file" by the originator to be edited to the weekly (FBW091) or monthly Report of Transactions (FBM092) for the verification of processing.

5. The white (original) and yellow copies of the Journal Entry form, with adequate supporting documents, are to be forwarded to the Financial Documents Processing and Retrieval Department.

6. The Financial Documents Processing and Retrieval Department date stamps all Journal Entry forms upon receipt, assigns the document numbers, and routes them to the financial staff responsible for the affected fund's activity.  If more than one fund is affected, the Journal Entry form goes to the financial staff responsible for the affected fund with the highest fund number.

7. The financial staff responsible for the affected fund's activity reviews the Journal Entry form for accounting accuracy as defined in items 2a through 2f above.  The financial staff responsible for the affected fund's activity may make minor corrective changes to the Journal Entry form to ensure proper recording.  Some changes may require a phone call to the originator.  In some cases, the document may be returned to the originator for correction after the Financial Documents Processing and Retrieval Department voids the assigned number.

8. The financial staff responsible for the affected fund's activity then approves the posting of the Journal Entry form by signing the area designated "Posted By."  An exception to this is an entry affecting fund balance must be reviewed and approved by the Assistant Treasurer.

9. Financial Documents Processing and Retrieval Department reviews the Journal Entry form for necessary signatures, initials and processes.  Rejected items will be returned to the financial staff responsible for the entry for appropriate action.

10. The yellow copy is returned to the originator.  The white copy is filed by document number by the Financial Documents Processing and Retrieval Department in ascending numerical sequence.

IV. Cash Receipts Form

Rationale

The Cash Receipts Form (CRF) is used to record the day's receipts.  The Cash Receipts Form  must be accompanied by receipts and bank deposit tickets providing evidence for proper identification of funds received.

1. Receipts are required to be deposited and recorded daily.

2. The Cash Receipts Form must include the following:

a. Document Reference Number:  Individual CRF number.  The Region identification   number is the first two digits.  The next five are regionally assigned ascending numbers starting at the beginning of each fiscal year, July 1.
b. Depositing Department:  The department that performed the bank deposit and is  responsible for receipts. 
c. Location:  Region Name/Site
d. Date of Deposit: Validated date on deposit ticket.  One date per document is entered on-line.
e. Bank Number:  Two-position regional bank number. 
f. Source and Description:  Description of monies collected and their source using the descriptions of account attributes. 
g. Account Number:  Ten-digit account number applicable to written description. 
h. Credit Amount:  Amounts collected by item.  Amounts collected in the same revenue account from identical source may be totaled. 
i. Cash Overage/Cash Shortage:  Dollar amount of overage or shortage based on   documented receipts.

A cash overage or shortage is defined as the difference between the recorded business (cash register tapes, Cashier's Summary Reports, or handwritten receipts) for a time period as compared to total of actual cash on hand, checks received, credit sales, for that same time period.  All cash overages or shortages must be recorded on the face of the CRF to be reviewed and approved by supervisory  personnel.  All CRF's which contain a cash overage or shortage must have the approval of either the Vice President/Chancellor, Executive Dean, or Executive Director of Finance before the CRF is processed in the accounting system.

A copy of all cash over/shorts in excess of $25 must be sent to the Internal Audit Department.  Any cash over/short in excess of $250 must be reported immediately to the Vice President for Finance/Treasurer (designee is Assistant Treasurer) for review and approval.  The CRF should be processed.

j. Prepared By:  Individual preparing the form.
k. Approved By:  Authorized signature. (Vice President/Chancellor, Executive Director of Finance, or  appropriate designee.)
l. Totals reconciliation:  The amount of deposits recorded on the deposit tickets, the total of the Register Clearing Reports and manual receipts, the total of amounts recorded in the revenue accounts, the total of amounts deposited in the bank account, and the total of checks, currency, silver, and charge cards must all be equal.

Record the ending grand total for the day (if available) from each cash register tape on the CRF or supporting documentation.

If the cash register provides a breakdown of cash, checks, and/or credit sales, the  Executive Director of Finance or designee should compare the breakdown amounts of the cash, checks, and/or credit sales on the cash register tapes and the Cashiers Summary Report(s) and handwrites to those same amounts on the deposit slip.  For example: total cash on the register tape should equal total cash on the deposit slip; the total amount of checks on the register tape should equal the same on the deposit slip.  If the totals do not agree, the reason should be documented.

m. Cash Register Transaction From/To:  Period of time from/to that cash register tapes are being maintained.
n. Manual Receipts From/To:  Period of time from/to that manual receipts are being  maintained.

3. Student fee receipt tickets must be used in numerical sequence with all voids/canceled receipts recorded on the face of the Cash Receipts Form.

4. The sequence of daily deposits should agree with the sequence of Cash Receipts Forms.

5. Adequate supporting documentation providing evidence of deposit and revenue must be attached to the form to include cash register tapes, Cashiers Summary Reports, and handwritten receipts.

6. A copy of the Cash Receipts Form is to be kept and filed in an "open file" to be edited to the weekly (FBW091) or monthly Report of Transactions (FBM092) for verification of processing.

Cash Register Transactions/Manual Receipts: All void transactions should be reviewed and initialed at the time the void occurs by both the employee making the void and a supervisor.  If the supervisor is unavailable, an employee independent of the employee voiding the transaction should review and initial.  At sites where it may not be possible to receive independent approval at the time the transaction is taking place, supervisory personnel must review the supporting documentation to the extent necessary to satisfy him/herself that all voids were reported and considered adequately explained.  The customer's sales receipt (cash register/manual receipt) should always be included as supporting documentation for the void.  All void transaction numbers and amounts should be listed on that day's Cash Receipts Form for management review.  All copies of voided receipts (cash register/manual receipt) must be retained and clearly indicated as void on all copies.

PLEASE NOTE:   The volume and amount of daily voids and discrepancies should be routinely reviewed by management personnel.

 

V. Purchase Requisition/Check Voucher

The Purchase Requisition/Check Voucher form is to be used for two purposes, as a Purchase Requisition and also as a Check Voucher, depending upon the need.  The proper portion of  the form should be completed for the purpose intended.

A.  Purchase Requisition

Rationale

The Purchase Requisition portion of the form must be the first step in the purchasing  process and is required to be completed to obtain approval for all purchases before a   purchase is made, and a purchase order is issued.

Procedure

1. Purchase Requisition portion of the form includes the following:

a. Suggested Vendor (source of supply): Full name and address of supplier recommended.  Vendor changes will be made if applicable.
b. Vendor (assigned by Business Office or Purchasing): Full name and address of  vendor assigned. 
c. Purchase Order No.:Number of the authorized purchase order document to which the requisition applies. 
d. FOB: options 
Vendor pays freight
College pays freight - 3109 account
e. Terms: Conditions under which payment will be made.  Known discounts should be indicated to ensure savings. 
f. Delivery: Expected delivery date to receive goods or services as provided by  vendor.
g. Department Name/Deliver To: Department completing the requisition or for whom the requisition is being produced, and the name, building, room number to  deliver order. 
h. Vendor #: Eleven-digit identifier for specified vendor. 
i. Line No./Quantity/Unit/Description/Unit Price and Total  
j. Grant/Contract Name and Grant/Contract No.: Full name and number of grants or contracts.  Where appropriate, CVTE/CHE grant and item number should be placed in the description area.
k. Special Instructions: Any special requirement surrounding the requisition. 
l. Date Required: Date the goods and services are required.  Allow for sufficient lead time. 
m. Requested By/Date: Signature of requester and date signed.  (Required) 
n. Signatures/Date: (required)  Authorized personnel to sign the Purchase Requisition portion of the form may be department head, Business Office, Vice President/Chancellor, Budget Office, and Purchasing.   All purchase requisitions must be signed in accordance with expenditure level authorization (reference FMM Section J) prior to purchase. Any signature designations must be made in writing by the appropriate Vice President/Chancellor.

Items may not be requested and approved by the same individual.  Purchase  requisitions must be approved at management level above the requisitioner.

2. Distribution of Purchase Requisition/Check Voucher Form 

When the form is used for the purpose of a Purchase Requisition, it is suggested that the Purchase Requisition/Check Voucher form be distributed in the following manner:

a. The requisitioner/originator retains the pink copy of the form in a follow-up file.

b. The white and yellow copies will be submitted to the Business Office for  processing.  All material requisitioned will be researched by the Business Office to ensure the available discounts are taken and all possible savings are secured.  A change of vendor may be made if applicable.  The Business Office retains the white copy of the form. The yellow copy is returned to the requisitioner/ originator as an indication that the form has been approved.

B.  Check Voucher

Rationale

The Purchase Requisition/Check Voucher form is also to be used to pay for goods or services delivered to the College which are not procured through the Purchase Order process.  The Check Voucher portion of the form can be used for payments below $3,000.

The Purchase Requisition portion of the form must be completed, properly approved,  signed and dated, prior to the Check Voucher portion of the form being completed.  The Business Office or Purchasing, which receives the form and invoice, will prepare or  process the Check Voucher portion of the form to initiate payment.

Procedure

1. Purchase Requisition portion of the form includes the following:

item b. Vendor Name of vendor/individual to whom the check will be made payable, and the address where the check will be mailed.  Payee's social security number or tax identification number (if payment is to an individual).

item h. Vendor #: A unique eleven-position identifying number for a vendor.

item h-1. Voucher #: A seven-digit number uniquely identifying a voucher.  The first two digits is the location identification number.  The next five are location-assigned ascending numbers, starting at the beginning of each fiscal year on July 1.

item i.
Account #: Ten-digit account where payment will be charged. 
Invoice No.: Invoice number supplied by or created by invoice. 
Description: Brief description of transaction. 
Invoice date: Date of the invoice. 
Due Date: Use with discount processing when appropriate. 
Amount: Amount due to vendor. 
Discount Amount/Type: Amount or percent of discount.  Use decimals.  Indicate type of discount  ($ = dollar, % = percent).

item k. Grant/Contract Name and Grant/Contract No.: Required if payment is to be made against grant or contract accounts.

item o. Signatures/Date: (required)

2. Adequate supporting documentation providing evidence of payee, what was  purchased, and amount due must be attached to the form, i.e. original invoice, signed letters, bills, etc., or a valid Claim Voucher.  (Fax copies and photocopies may be used as substitutes for original receipts..)  In order to reduce the risk of duplicate payments, it is required to review payments already made to assure that the invoide has not been previously paid. Vendor invoices should be date-stamped upon receipt.

3. A copy of the Check Voucher is to be filed in an "open file" to be edited to the weekly (FBW091) or monthly Report of Transactions (FBM092) for verification of processing.

4. Distribution of Purchase Requisition/Check Voucher Form  When the form is used for the purpose of a Check Voucher, it is suggested that the Purchase Requisition/Check Voucher form be distributed in the following manner:

a. The originator retains the pink copy of the form in a follow-up file.

b. The white and yellow copies will be submitted to the Business Office for   processing.   The Business Office retains the white copy of the form.  The yellow copy is returned to the originator as an indication that the form has been processed.

C.  Hand Write Vendor Check

Rationale

Occasionally, a check must be processed as an exception to the normal Check Voucher procedure by issuing a handwritten check. Complete the Check Voucher portion only of the Purchase Requisition/Check Voucher form, as shown on Exhibit D3.

Procedure

The originator of the transaction completes the Check Voucher portion of the Purchase Requisition/Check Voucher form with the following information:

item b. Name of vendor/individual to whom the check will be made payable, and the address where the check will be mailed. Payee's social security number or tax identification number (if payment is to an individual).

item h. Vendor #: A unique eleven-position identifying number for a vendor.

item h 1. Voucher #: Central Office enters a seven-digit number uniquely identifying a voucher. The first two digits is the location identification number. The next five are location-assigned ascending numbers, starting at the beginning of each fiscal year on July 1.

item i.
Account #: Ten-digit account where payment will be charged.
Invoice No.: Invoice number supplied by or created by invoice.
Description: Brief description of transaction.

Invoice date: Date of the invoice.
Due Date: Use with discount processing when appropriate.
Amount: Amount due to vendor.

Item l. Special Instructions ? If the check should be returned to a specific person or area, these instructions must be written in the description area.

2. When the form is completed, the preparer must obtain "handwrite" approval from the Assistant Treasurer. The approval must be written in the area under Description.

3. Once the Check Voucher portion of the form is approved, the white and yellow copies, along with the original invoice, are sent to the Financial Document Processing and Retrieval Department. The form is date stamped as received, a voucher number is assigned, and a check is typed.

4. The check is verified by appropriate supervisory personnel, signed, sealed, and hand-delivered to the requesting person.

5. A session sheet is attached and the document information is entered into the accounting system. Once the document information is entered into the accounting system and the input verified, the yellow copy will be returned to the department that originated the form, confirming processing.

 

VI. Purchase Order


Rationale

A Purchase Order is a document authorizing a vendor to deliver described merchandise, materials, or services at a specified price. Upon acceptance by a vendor, a Purchase Order becomes a contract. A Purchase Order is used to encumber (set aside) necessary funds to cover an anticipated expenditure, document receipt of goods and/or services, and to initiate payment(s).

Purchase orders must be issued for all purchases of $3,000 and above. There may be occasions when issuance of a purchase order is necessary for purchases of $3,000 or less. For example, a vendor may require a copy of a purchase order or a purchase order number before an order is filled, regardless of cost. Another example may be where a Region considers it important to encumber the expenditure for budgetary purposes.

All lease purchases, service and rental agreements, construction contracts, professional services, and other financial commitments (excluding faculty agreements) should be attached to and encumbered by a Purchase Order.

Procedure

1. The Purchase Order form authorizing a vendor to deliver merchandise, materials, or services at a specified price must include the following:

a. Date: Date of Purchase Order.
b. Vendor No.: Eleven-digit vendor number beginning with V and ending with zero. At time of payment, the vendor number may change due to the invoice showing an address for remittance other than the ordering address.
c. To: Vendor name and ordering address.
d. Region PO Number Reference: Two-digit regional reference followed by pre-printed four-digit number. 
e. Ship To: Location to which order is to be shipped. 
f. Ship To/ATTN: Individual responsible for accepting delivery. 
g. Invoice To/ATTN: Accounts payable personnel responsible for payment. 
h. Line No.: Line item of goods that corresponds to the item on the approved CVTE/ CHE project equipment list as applicable. 
i. Class Code: Fixed Asset code identifying type of item(s) being purchased. 
j. Quantity, Unit, Description, Unit price, and Total 
k. Quoted prices and other information such as terms.
l. Grant/Contract Name and Grant/Contract No.: Full name and number of special grant or contract. 
m. Sales Tax Exemption No.: Last four numbers associated with the State Sales Tax    Exemption number, unique to each Region.
n. Authorized Signature: Purchase authorization - see Section J, Authorization of  Contracts, and Authorization of  Expenditures.  For items for resale, see Authorization of Expenditures in Bookstore Purchasing. If the Chancellor has already signed the purchase requisition, he/she need not sign the purchase order given there is not a material variance between the purchase requisition and the purchase order. A material variance occurs when the purchase order amount exceeds the purchase requisition amount by a material amount. A material amount is defined as the greater of 10% of the original purchase requisition amount or $1,000. The reason for the material variance must be attached to the (gold) check request copy of the Purchase Order.

2. The vendor (white) copy of the Purchase Order is to be mailed to the vendor.  The business office may make exceptions for blanket purchase orders and confirming orders.
Account number
Description
Amount of encumbrance

3. The business office (yellow) and check request (goldenrod) copies of the Purchase Order are to be retained by the initiating College business office and filed in an accounts payable "open file".  This will allow the business office to edit Purchase Orders filed in the "open file" to the Open Commitment report and to match with vendor invoices upon receipt.  The shipping/receiving copy (green) of the Purchase Order will be supplied to the receiving clerk for verification of the merchandise received.

4. Once the goods or services have been received in acceptable condition by the Region, the receiving clerk should indicate receipt on the shipping/receiving copy of the Purchase Order, and submit the copy and packing slip to the business office.  If a packing slip is not provided, the Certificate of Missing Documentation form should be attached. The form is available in the forms page of the College's intranet. If the Region has a central receiving point, then the Purchase Order should also indicate the inventory tag number placed on the item. The business office will match the receiving copy to the Purchase Order copies retained in the "open file".

5. If the merchandise or service has been received and the vendor invoice has not been received within a reasonable length of time (no more than thirty (30) days), the business office should notify the vendor to send the invoice directly to the business office to expedite payment.

6. The business office accounts payable "open file" is used to determine if a vendor invoice is applicable to a Purchase Order.  When applicable, the vendor invoice must be matched with the check request copy of the Purchase Order for payment processing.

7. The Open Commitment report is by Purchase Order number sequence.  All Purchase Orders three (3) months and older should be reviewed for delivery of merchandise or submittal of invoice and check request copy of Purchase Order for payment.

 

A. Correcting an account number or encumbered amount after purchase order issuance

1. Encumbrances can be modified regionally through the College financial accounting system using debit/credit indicators in conjunction with dollar values (not equal to original value if to be debited) or can be canceled if dollar value equals original encumbrance when using debit/credit indicator.

2. All encumbrance transactions to be modified must be reviewed by the Executive Director of Finance or designee.

 

B. Check Request Document

Rationale

The check request copy of the Purchase Order is used to pay for goods or services delivered to the College which were procured through the Purchase Order process.  The check request copy (goldenrod) alone is not adequate to substantiate payment.  The check request copy must be accompanied by adequate supporting documentation providing evidence of payee, amount due, the goods or services procured, and the proper account numbers to be charged.

Procedure - Partial or Final Payment

1. Vendor invoices should be date stamped upon receipt.

2. The check request copy of the Purchase Order form must include the following:

a. Voucher No.:  Seven-digit number assigned by Region.  First two digits identify Region.
b. Transaction Code: for regular payment, 9 for a separate check. 
c. Invoice number: supplied by or created for invoice.
d. Date of invoice and payment due date: from vendor invoice. 
e. Gross amount: from vendor invoice. 
f. Identify if payment is partial or final
g. Identify discount amount (dollar or percent): allowed by vendor if terms are met.
h. Authorized signature(s) and date(s) for payment.  The Vice President's or designee's signature will suffice for authorization of payment unless: 
There is a variance between invoice amount and Purchase Order amount which causes the total purchase to exceed the original level of authorization.  See Purchasing, Section J, N 5-c. "Material Variance Between Invoice and Purchase Order Amount.

3. Adequate supporting documentation providing evidence of payee, what was purchased, and amount due must be attached to the check request copy.  Definition of  adequate supporting documentation is originals of invoices, signed letters, bills, etc. Fax copies and photocopies may be used as substitutes for original receipts. If any of the supporting documentation is missing, the Certificate of Missing Documentation form should be completed and attached. The form is available in the forms page of the College's intranet. In order to reduce the risk of duplicate payments, it is required to review payments already made to assure that the invoice has not been previously paid. Vendor invoices should be date-stamped upon receipt.

4. Partial payment requests are accepted in accordance with the following steps:

a. Photocopy of check request copy must be attached to vendor invoice with partial  payment code identified. 
b. Each partial payment must be recorded on the business office copy of the Purchase Order, or on an attachment, so that payment history is recorded for future reference. 
c. For final payment, the original check request and invoice must be presented.  Final   payment must also be recorded on the business office copy of the Purchase Order retained by the business office in the "open file".

5. The partial or final payment of the Purchase Order should be kept in an "open file" to be edited to the weekly (FBW091) or monthly Report of Transactions (FBM092) for verification of processing.

C. Cancellation of a Purchase Order

Cancellation of a Purchase Order must be made by the College location initiating the Purchase Order.   Cancellation of an executed Purchase Order must be substantiated by a letter to the vendor explaining in full the reason for cancellation.  Copies of the letter should be retained by the business office and attached to both the business office copy and the check request copy of the Purchase Order.  The word CANCELLATION must be  written on all copies of the Purchase Order held by the business office.   All copies and supportive letters are filed in strict Purchase Order number sequence in a separate file identified as "Purchase Order Cancellations".

VI. Revolving Fund Reimbursement Voucher

Rationale

The Revolving Fund Reimbursement Voucher is used to reimburse the fund custodian for goods or services delivered to the College which were paid by issuing a revolving fund check.   These reimbursements should be processed at least weekly.  A Revolving Fund Reimburse- ment Voucher alone is not adequate to justify reimbursement.  A Revolving Fund Reimburse-  ment Voucher must be accompanied by adequate supporting documentation providing  evidence of payees, amount due, the goods or services paid for, and the proper account  numbers to be charged.  The revolving fund may be used for payments up to $300.  Exceptions may be made for "non-reimbursable" checks such as a Stafford loan where the revolving fund balance is not reduced since an offsetting deposit is made.  Often exceptions for unusual circumstances may be made upon approval by the DRBA or Executive Dean.  See Section E, Authorized Bank Accounts.

Procedure

Revolving fund checks may not be used for employee education reimbursements.  Payment to a nonemployee, which requires reporting to the Internal Revenue Service at the end of the calendar year, should not be made by a revolving fund check.  The Purchase Order or Check Voucher should be used for all such nonemployee payments which will require a Form 1099 sent to the Internal Revenue Service.   See Section J, Purchasing, 5-d, "Payments to  Nonemployees for Services Provided to the College".

1. The custodian who needs his/her revolving fund reimbursed must prepare a Revolving Fund Reimbursement Voucher to initiate the reimbursement.  Revolving fund reimbursements should be processed at least weekly.

2. The Revolving Fund Reimbursement Voucher must include the following:

a. Vendor number and date of form
b. Voucher No.: A seven-digit number uniquely identifying the document.  The first two digits is the location identification number.  The next five are location  assigned ascending numbers starting at the beginning of each fiscal year, July 1.
c. Account/Amount: Account number and amount charged to that account.
d. Date: The date payments were made.
e. Paid To: To whom the payments were made. 
f. Check No.: The check number on which payment was made listed in numerical  sequence with all checks accounted for.
g. Explanation: An explanation of items of which reimbursement is requested. 
h. Amount: The amount of each revolving fund check written.
i. Total: The total amount of request.
j. Authorized signature, Date, Region: The revolving fund reimbursement authorization, date of signature, and College location.

3. Adequate supporting documentation providing evidence of payee, what was   purchased, and amount due must be attached to the reimbursement voucher (placed  inside a manila envelope): originals of invoices, signed letters, bills, paid receipts, and  check copies or photocopies of checks.

4. All supporting documentation must be attached to its revolving fund check copy. The ten-digit account number should be recorded on the attached Purchase Requisition or on the face of the invoice.

5. All revolving fund checks must be listed on the face of the manila envelope in (check) numerical sequence.  Voided and canceled checks must also be reported in the  numerical sequence even though no reimbursement is claimed.

6. Documentation should be organized in revolving fund check number sequence within the manila envelope.

7. Petty cash receipts should be placed in a smaller size envelope with revolving fund  check copy, or attached and placed within its proper sequence with the other  documentation.

8. The total dollar amount of documentation within the envelope, the total amount recorded against the expenditure accounts, the total of all disbursements listed by  check number, and the amount requested for reimbursement to the revolving fund must all be equal to each other prior to submitting the voucher for processing.

9. The Revolving Fund Reimbursement Voucher is to be retained in the business office "open file" for editing to the weekly (FBW091) or monthly Report of Transactions (FBM092) for verification of processing.

VII. Budget Transfer Request

Rationale   The Budget Transfer Request is used in adjusting, correcting, or entering budgetary data after the beginning of a new fiscal year.  Revenue budgetary funds are transferred from one account to another by debiting the account from which the funds are coming and crediting the account which receives the funds.  The reverse is true in expenditure accounts.  Since the budget/ accounting system at Ivy Tech Community College of Indiana is a double-entry system, it is necessary to have offsetting budget accounts.  When new budgetary funds are received, the revenue budget for that particular area is credited and the revenue budget offset account for the fund group is debited.  The reverse is true for the expense budget.  Reference Budgeting, Section B, for details.   Operation revenue accounts are not to be revised regionally.  Other accounts may be transferred on-line by the Regions; however, these transfers must be documented by a Budget Transfer Request to be kept on file at the regional location for audit reference.   Procedure   1. Processing a Budget Transfer Request form must include the following:   a.Fiscal year of transfer and formal name of fund to/from which budgets are transferred. 
b. Screen Input:  Data required by College accounting system to process transaction.
c. Accounting system transaction codes to process transfer budget information. 
d. Account numbers to be transferred to/from.
e. Formal description of each account. 
f. Amount to be transferred (debit/credit). 
g. Summary totals of debit(s) and credit(s). 
h. Specific reason for the transfer request.  This section must be completed for clarity, control, and future audit reference. 
i. Region name, authorized signature and date. 
j. Authorized Central Office signature and date, if applicable.

VIII. Credit Memo

Rationale

The Credit Memo form is used for entering credit memo transactions.  A Credit Memo is issued by the vendor and represents credit for goods that were returned.  Credit Memos are used by the accounting system to offset voucher payments.  Credit Memos are entered for the following:

1. If applicable, the Credit Memo should be entered to the accounting system and  utilized against future purchases.

Where additional purchases applicable toward a Credit Memo are not anticipated  within four months and the vendor is infrequently contacted, the business office should return the Credit Memo with a request for a check refund.

2. Travel advances 

Advances are entered into the accounting system as prepaid travel which enables the system to track and apply the advances as a credit against the employee's Travel Voucher.  This process records the outstanding amount of the advance and assures the advance amount is deducted from the final payment.

3. Void revolving fund checks 

The next reimbursement check will be adjusted by the Credit Memo amount, enabling the revolving fund account to be adjusted to the authorized amount, and a credit to the respective expense account.

For additional details, see Purchasing, Section J, Other Purchasing Considerations (N-5-b),  Credit Memos and Auxiliary Enterprise, Section K, Inventory Valuation (I-fifth paragraph) Returns/Credit (Publishers).

Procedure

1. A Credit Memo must include the following: 
a. Vendor number identifying vendor's credit.
b. Voucher number assigned to Credit Memo.
c. Account number associated with the Credit Memo.  Use prepaid travel account for advances.
d. Accounting system transaction code. 
e. If applicable, Purchase Order number (including P) that identifies the Purchase Order the credit is to be applied against. 
f. Vendor assigned Credit Memo number.
g. Brief description of basis for credit. 
h. Date Credit Memo is created.  
i. Amount of monies to be credited.  
j. Prepared By/Approved By: authorized signatures and dates.

IX. Account Request/Notification


Rationale

The Account/Request Notification form (ARN) is used to request account numbers to be created, modified, or deleted.  Account Request/Notification forms are sent to Central Office for processing  The ARN will be used as a turn-around document to inform regional business offices of the completion of the request.

Procedure

1. All data items listed on the ARN must be completed if the account pertains to specific grants, contracts, or projects.  If the account does not pertain to grants, contracts, or projects, identify as such.

2. If the account utilizes payroll or benefits, Section I: Use of Funds, must be fully  completed.

X. Deferment/Payment Agreement


Rationale

Students whose tuition, fees, books, and supplies are to be paid by a third party will be required to sign a Deferment/Payment Agreement making the student liable for any balance not covered by the third party.  In all cases, tuition, fees, books and supplies that are to be billed to a third party, must be verified by a letter, contract or other documentation on file at the regional Institute.

By approval of the Vice President's designee, students who are unable to pay their entire tuition and fees may defer up to two-thirds (2/3) of their account balance.  The student must pay at least one-third (1/3) of the balance due upon registration and must pay at least one-half (1/2) of the remaining balance within thirty (30) days.  The remainder must be paid within thirty (30) days after the second payment was due (not to exceed sixty (60) days from time of  registration).  Students receiving approval are required to sign a Deferment/Payment Agreement holding them liable for the balance due.  Charges for books and supplies may not be deferred unless they are to be billed to a third party.  Exceptions are made on an individual basis and approved by the Vice President/ Chancellor or designee.

XI. Wire Transfer/Debit Adjustment Form

 

Rationale

Ivy Tech Community College of Indiana regularly performs transactions involving the Federal Wire System.  These transactions include, but are not limited to: investment activity, payment of payroll taxes, and payment of sales tax.  In addition, there is an occasional need to perform  miscellaneous debit adjustments to the accounting system.  The Ivy Tech Wire Transfer/Debit  Adjustment form is used to perform both of the above-mentioned activities.

Procedure

1. The originator of the transaction completes the form with the following information:

Originator's signature
Date prepared 
Date of the transaction
Ten (10) digit account number to be debited
Account description
Amount of the transaction

2. Adequate documentation must be attached supporting the transaction.  Maintain the pink copy and forward the form to the appropriate person for approval.

3. Once the form is approved and signed in accordance with the approved signature card authority, the white (original) and the yellow copy must be sent to the Financial documents Processing and Retrieval Department for document number assignment and input into the accounting system.

4. Once the document is entered into the accounting system, the yellow copy will be sent back to the person who approved the form.

5. The individual authorizing the College's bank to perform the wire transfer must not be the same individual who authorizes the Ivy Tech Wire Transfer/Debit Adjustment  form.

XII. Document Filing

The following describes acceptable College-wide document filing.  A College-wide standard is important to assure that documents can be identified and retrieved at all College locations.

College locations are given the option of creating supplemental files.  That is, an additional file in other than the prescribed order may be maintained if a need for such a file exists. However, all locations will assure the standard is adhered to in establishing a primary file prior to creating supplemental files.

This standard applies both to numbered and unnumbered documents.

The College's financial documents are required to be filed under one of the following two alternatives:

1. The first alternative would be that all accounting system documents be filed in batch number sequence by type of batch (Check Vouchers, Cash Receipts Forms, Purchase Orders, etc.)  All document logs will be used for cross-reference of this filing system. This file will be maintained on a fiscal-year basis.

In the batch filing system as described above, a copy of the financial document, supporting documentation, and the computer-generated report for each respective batch are to be filed with the appropriate batch control document as listed below:

AP Data Collect Control Form
FA Data Collect Control Form 
AP Real-Time Session Data Control Form
FA Real-Time Session Data Control Form

2. The second alternative is identified by filing financial documents by vendor name in alpha sequence.  All payment history should be recorded on the face of  Purchase Orders or an attachment to the Purchase Order for payment history.  All backup documentation is included with each accounting document.

Prior to filing the processed document with backup in the vendor file or batch sequence file, an "open file" should be maintained at least weekly or monthly.  It is recommended that all     processed documents in the "open file" be verified for accuracy of input.

XIII. Affidavit Concerning Forged Endorsement

Affidavit Concerning Forged Endorsement must be used when a vendor, student, or employee's check has been signed and negotiated by someone other than the payee, without permission to do so.

It is important to include a police investigation case number on the affidavit.  Along with the affidavit being completed in full, a paper must be attached where the payee has signed his or her name at least five times.

The detailed procedures to complete the form are as follows: 
(1)  the State of Indiana  
(2)  the county of the region of the College involved  
(3)  the case number given to the payee, by the police, when the police were notified of this forgery  
(4)  the name of the payee  
(5)  the word "his or her" depending on gender  
(6)  the word "he or she" depending on gender  
(7)  the issued date of the forged check  
(8)  the check number  
(9)  the issuer "Ivy Tech Community College of Indiana" 
(10)  the dollar amount of the check written out 
(11)  the word "he or she" depending on gender 
(12)  the name that was endorsed on the check 
(13)  the word "he or she" depending on gender 
(14)  the dollar amount of the check written out 
(15)  the word "him or her" depending on gender 
(16)  the payee's signature

THE NOTARY PUBLIC FILLS OUT THE FOLLOWING....
(17)  current day 
(18)  current month 
(19)  current year 
(20)  the signature of the Notary Public 
(21)  the date of the Notary Public commission expiration

AT THIS POINT THE FORM MUST BE EMBOSSED WITH THE NOTARY SEAL.

N FIXED ASSETS

I. Equipment Capitalization and Inventory Control

A. Policy

Property management is a legally mandated requirement. An inventory of capital equipment is one element of a total property management system. Because an accurate inventory of the College's physical assets is important for accounting and insurance purposes, for establishing equipment replacement cycles, and for preparing and justifying biennial budget requests to state agencies, it is the policy of the College to maintain a current inventory of all physical assets of the College. All items which have a unit acquisition cost of $3,000 or more (with the exception of computer equipment and tablets which are inventoried at up to $3,000), and a useful life of one year or greater are to be included in the inventory. All computer equipment valued up to $3,000 should be posted to account code 3403C and tablets to 3403T because they are inventoried but not capitalized. Additionally, high theft, specialized technology, scanners, projectors and printers noted below having an acquisition cost of $500 or more and useful life of one year or greater will be included in the inventory of the College. Any and all high theft, specialized technology, scanners, projectors and printers must be removed from the inventory records when lost, stolen, or otherwise disposed of. Account codes listed below should only be used for these high theft and other specialized assets:

1) 3403H – High Theft – Small digital or IT-type technology not considered a typical computing component that has value and is susceptible to theft. While not an inclusive list, some examples are iPods, PDAs, Televisions, Smart-Pens, pocket-sized scanners and digital cameras and audio visual equipment. Classroom related assets, such as specialized tools should also be considered.

2) 3403T – Specialized Digital Technology – IT related or digital technology related items such as iPads, Tablets and other computer hybrids.

3) 3403S – Projectors and Scanners < $3,000 – Overhead and Desktop Projectors and Scanners.

4) 3403P – Printers < $3,000

(This is not an all-inclusive list.)

It is the policy of the College in accordance with federal regulations that a complete physical inventory, including corrections, be completed by June 1 of each even-numbered fiscal year (i.e. 2013-2014). In the odd-numbered year (i.e. fiscal 2012-2013) each region may perform a verification of equipment at each site.
In addition to the physical inventory, the College annually confirms all land and buildings valued at $100,000 or greater with the regions prior to year-end close.
The College has established a threshold capitalization of assets at $3,000 or more. Any item valued $3,000 or more should be posted to the appropriate account code with “CAP” in the Title because it should be capitalized. Consequently all capitalized equipment for the College is maintained in an inventory.

Please note, that all equipment purchased with Carl Perkins and Department of Workforce Development (DWD) State grant funds must be tagged if the equipment has a useful life of one year or greater and a value of $500 or more. All assets purchased under these guidelines must be appropriately inventoried until disposed of. Carl Perkins and DWD assets of $500 or greater require a State of Indiana inventory tag. Contact Office of the President Sponsored Program Accounting for instructions relating to equipment tagging and reporting. These assets are not owned by the College and must be coded to account code 3403N in Banner and assigned the XA Asset Type. Other grants may have similar requirements regarding ownership. Contact Sponsored Program Accounting prior to making purchase for clarification.

 

B. Definitions

Capital Equipment is defined as any non-expendable item or a group of items making one unit with a life of more than one year and unit acquisition cost of $3,000 or more. General exceptions to this policy are materials constructed of glass or non-durable material, a repair part, or a replacement of a component of a larger unit.

Acquisition Cost of procured equipment means the net invoice price of the equipment, including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the equipment usable for the purpose for which it was acquired. Other charges such as the cost of installation, transportation and duty or protective in-transit insurance shall be included in the unit acquisition cost if they appear as part of the invoice or are identifiable and material in nature.

1) If the item is acquired by trading in another item and paying an additional amount, "acquisition cost" means the amount received for trade-in plus the additional outlay.

2) Freight charges are capitalized as part of the acquisition value of equipment if they appear as part of the original invoice, or are readily identifiable and material in nature.

3) Necessary modifications, installation charges and capital acquisition expenditures are capitalized if they appear as part of the original invoice, or are material in nature.

4) Reconditioning costs of used capital equipment at the time of acquisition are not capitalized unless they are directly identifiable and material in nature.

 

 

C. Procedures

Regional Administration:

1) It is the responsibility of each Chancellor and Executive Director of Finance or Administration to ensure that an equipment management system is in place and that responsibilities for regional Fixed Asset Coordinators have been assigned.

2) Fixed Asset Coordinator responsibilities include providing coordinated direction for physical inventory taking, and timely update of equipment inventory records on the Banner Fixed Assets system.

 

Instructional Sites:

1) Each Instruction Site is responsible for coordination of equipment by assisting the Fixed Asset Coordinator in assuring that procedures regarding equipment are followed at each site. Such responsibility is to be assigned to an individual at each instructional site.

2) Items located in the facility are to bear a unique identification tag.

3) Items newly acquired:

a) By purchase - For sites with central receiving functions, the item is to be checked, at time of equipment acquisition, against the purchase order and tagged before delivery to point of usage. For other sites, the tagging is to take place as soon as practicable. On a regular basis, the Fixed Asset Coordinator will print their regional Pending Tag listing obtained from Discoverer. The Fixed Asset Coordinator is to ensure that all of the items have been tagged and entered into the equipment inventory system in a timely manner.

b) By donation – When an asset valued at $3,000 or greater is donated to the College, the region must contact the Office of the President Finance Department upon receipt of the donation. Once the gift is received from the donor, the value of the gift must be established. For land and buildings, an appraisal stating the value of the land and buildings at the time of the gift must be obtained. For other assets, the region must establish the value of the gift by obtaining estimates or by an affidavit or appraisal provided by the donor, provided the appraisal is current. An appraisal must be less than one year old. If a building is on a piece of land, the appraised value of the building and land must be separate. All methods of valuation must be in compliance with IRS rules.

Once a gift is accepted by the region and reviewed by Office of the President Finance Department, it will be determined who is responsible for recording the gift in Banner. Just as with any other asset, once a donated asset is no longer wanted, the asset must be disposed of in the same manner as a purchased asset.

For any donated asset with a value $3,000 or greater, the asset must be capitalized and a journal entry processed to recognize the revenue for the value of the donated asset. The Office of the President Finance Department will process the journal entry. Send all documentation for donated assets to the Executive Director of Capital Assets and Debt Accounting prior to recording the donated asset in Banner.

The regions need to contact their regional Development Office so that the donated asset can be captured in their database.

c) By transfer - The transferring region is to complete the top portion of the Banner Fixed Asset Transfer Form. The form will then be sent to the receiving region’s Fixed Asset coordinator listing the item by tag number and location. The receiving region will complete the remaining portions of the form and then make the necessary updates in the fixed asset system for the asset. The form will be maintained by the receiving region.

All items that cannot be physically tagged (i.e., land, buildings, computer software and automobiles) are to have the tag and serial number attached to the Banner Fixed Asset Add Update Form describing the asset and its location. The Fixed Asset Coordinator is to maintain all forms. Items that cannot be tagged, but are attachments are to have the pending tag information attached to the Banner Add Update form for the primary asset.

4) Every department director or chairperson is to notify the Fixed Asset Coordinator when capital equipment maintained in the department does not have an attached property tag. Also, the department director/chairperson is to notify the Fixed Asset Coordinator when equipment is moved from one room to another or transferred to another department. This will facilitate keeping inventory records up-to-date and ease the reconciliation and physical inventory processes.

5) Loss or theft - Items that cannot be located must be removed from the inventory system. In each case the Executive Director of Finance/Administration must review and sign the Banner Delete Form. The College maintains insurance to replace missing equipment in the event of fire, disaster, theft or vandalism. A police report or Campus Security theft report must be obtained and maintained on file for review.

II. Standard Depreciation Policy

A. Policy

Certain assets in the equipment inventory control system which have been capitalized will be depreciated. Excluded from depreciation are land, works of art, and periodicals. The assets are to be depreciated using the straight-line method and useful lives based upon defined equipment classes assuming one-half year of depreciation in the year of acquisition and one-half year beyond its remaining useful life. For example, if an asset has a useful life of ten years, only half is taken during the first year. The full yearly amount will be charged for the next nine years, and any remaining amount will be taken in the eleventh year. A zero salvage value will be assumed for all assets based upon the College's past history. Assets which become fully depreciated over time will be maintained on the system. Assets will be deleted from the system only when they are sold, traded-in, or disposed of in another manner.

B. Definitions/Procedures

1) Capital Equipment as previously defined is depreciated.   Assets acquired under capital leases are to be depreciated. This would exclude leased land. Capital leases are entered into the Fixed Assets system under account code 3603 for Equipment and Buildings. Capital leases are treated as if assets were being purchased over time. The College records an asset and a liability at the lower of the present value of the minimum lease payments or the fair market value of the leased property. All capital leases will be entered into Banner in the Office of the President Finance Department. All entries for the capital lease will follow an amortization schedule for the specific capital lease.   The leased asset is depreciated one of two ways:   a) If the lease requires capitalization due to Criterion No. I or II:   Criterion No.   I. The lease transfers ownership of the property to the lessee by the end of the lease term.   II. The lease contains a bargain purchase option.   If the lease is capitalized due to Criterion I or II, it is depreciated in a manner consistent with the College's normal depreciation policy using the economic life of the leased asset. The economic life is determined asset type code used in Banner.   b) If the lease requires capitalization due to Criterion No. III or IV:   Criterion No.   III. The lease term is equal to 75 percent or more of the estimated economic life of the leased property.   IV. The present value at the beginning of the lease term of the minimum lease payments, excluding that portion of the payments representing executory costs, to be paid by the lessor, including any profit thereon, equals or exceeds 90 percent of the excess of the fair value of the leased property to the lessor at the inception of the lease over any related investment tax credit retained by the lessor and expected to be realized by them.   If the leased property does not meet one of these criteria, then it is considered an operating lease and should not be capitalized and depreciated.   If the lease is capitalized due to Criterion III or IV, it is depreciated in a manner consistent with the College's normal depreciation policy leased asset’s useful life. To properly depreciate for the leased asset, you must manually enter the useful life in Banner form FFADEPR. See the Fixed Assets Section in the Banner Training Manual for instructions   Capital leases (buildings and land) should be sent to the Associate Vice President for Facilities Planning in the Office of the President for approval. A copy of the approved lease will be provided to the Executive Director of Capital Assets and Debt Accounting for recording.   Capital leases (equipment) should be sent to the Office of the President Finance Department for review and approval. A copy of the approved lease will be provided to the Executive Director of Capital Assets and Debt Accounting for recording.   Throughout the term of the lease, the regions will make payment using account code 3601 or 3602. At year end, the Executive Director of Capital Assets and Debt accounting will reduce the obligation by processing a journal entry to debit the lease obligation and crediting lease expense, accounts 3601 or 3602. This is done within the Plant Fund P94000.   Although the amount capitalized as an asset and the amount recorded as an obligation at the inception of the lease are computed at the same present value or fair market value, the amortization of the asset and the discharge of the obligation follow the amortization schedule for each capital lease.

2) Leasehold improvements are improvements or additions to property obtained under a capital or operating lease. The cost of the leasehold improvement should be depreciated over the remaining life of the asset if it is a capital lease or over the remaining life of the lease if it is an operating lease not including any renewal options.

Once the project is complete, all leasehold improvements for capital leases are attached to the primary tag for the capital lease. For operating leases, once the lease expires and is not renewed, the related asset record should immediately be deleted from the Fixed Assets system.

3) Building improvements are those changes made to an owned building which are substantial but not major enough to be considered an addition (a portion which could stand alone if the original building were demolished). The cost of the building improvements should be depreciated over the remaining life of the building to which it pertains. Individual projects greater than $10,000 generally funded by the state appropriation for Repair and Rehabilitation or fund transfers fall into this category. Once a project is approved, a new fund will be set up in Banner to track all expenses.

When the cost of improvements is substantial or when there is a change in the estimated useful life of an asset, depreciation charges for future periods should be revised on the basis of the new book value and the new estimated remaining useful life.

Examples of leasehold and building improvements are: new roof, new windows, new lighting systems, and general remodeling. All are limited by the State requirements for capitalization (General R&R projects costing greater than $10,000 each).

Individual expenditures for repair and rehabilitation projects are fed through funds set up for specific projects within Banner. At year-end, projects are either capitalized when complete or construction-in-progress is recorded for those projects not yet complete. If additional expenditures occur after the capitalization of the project, the additional expenses will be capitalized and attached to the primary tag for the asset.

At year-end, the Executive Director of Capital Assets and Debt Accounting will capitalize all completed projects or record construction-in progress for those projects not yet complete.

4) Buildings which are owned, leased or under construction are added to the Fixed Assets system for purposes of having an accurate building Master List. However, facilities under construction (construction-in-progress) are not capitalized until all costs associated with the construction are completed. As these new buildings under construction are placed in service, the project is capitalized in Banner. Depreciation will be set up at this time.

Once the building or building component is placed in service, then the facility must be added as a capitalized asset of the College for depreciation purposes. The final cost will be obtained from the associated Banner Plant Fund. The process should be coordinated with the Office of the President Finance Department

Note that if additional costs are incurred after the building asset record is capitalized, then the additional capital expenses will be added to the primary asset tag for the building in the fiscal year they occur.

5) Land - All parcels of land owned or leased by the College should be included in the Fixed Assets system. The total cost of land represents the purchase price and additional costs such as razing and removal cost (less salvage value), legal fees, broker's commissions, title fees expense, and other cost directly related to the cost of acquiring the property. If the land is donated, then the fair market value at the time of donation represents its value to the College. As with R&R projects, the various costs incurred for land acquisition should be consolidated and the asset approved when the College takes possession of the property (normally the date of closing). Subsequently, any related costs incurred such as demolition should be added to the asset record during the fiscal year in which they occur. Land itself is never depreciated.

6) Land improvements are additions to property which are not part of the buildings. These include sidewalks, landscaping, parking lots, fences, and lights. These assets are to be capitalized and are to be depreciated using the straight-line method over a ten-year period.

7) Library material capitalization procedures should be the same as those applied to other assets. Library materials costing $35 or more may be capitalized as a group, but the detail of what makes up the group must be maintained and updated periodically. A new asset record will be created for each fiscal year, provided the total expense for library materials is $3,000 or greater. If the annual expense is less than $3,000, the fiscal year expense can be attached the previous fiscal year asset tag.

Detailed instructions for recording library materials is outlined in the Banner Fixed Assets Training Workbook.

8) Depreciation represents the decline in service potential or value of capitalized equipment of buildings during a fiscal period. The decline results from use of the assets and new assets becoming available to replace the existing assets.

9) Straight-line depreciation is the computation of depreciation by dividing the cost of the asset by the useful life of the asset. This represents the current year decrease in the asset value.

10) Useful life is an estimate, at the time of purchase, of the asset's functional life (normally in years). This estimate is made based upon the use of the asset, past history of the College with respect to similar assets, and present growth in technology relating to this asset. Because the useful life is an estimate, the asset may be in service long after it is fully depreciated, or it may be obsolete, worn out, or disposed of before the end of its useful life. Useful life is associated with an asset by assigning a proper Asset Type on FFAMAST.

11) Repair expenditures for equipment should be capitalized if their unit value is greater than $3,000 and they extend the asset's useful life by more than three years. These costs should be depreciated over a life which is one-half of the repaired asset's original life. If the cost is greater than $3,000 and the assets useful like is not extended more than three years, then the repair cost should simply be added to the value of the already existing asset and depreciated over the already adopted remaining useful life of the existing asset. However, expenditures that do not add to the utility of the asset should be charged to expense (i.e. an expenditure for repairing a piece of equipment that was damaged during shipment).

12) One-half year depreciation is an assumption used when an asset is purchased or disposed of prior to its becoming fully depreciated. Regardless of the month in which it is acquired or disposed of, one-half of the normal single year depreciation will be taken.

13) Accumulated depreciation represents the total decline in book value of the asset resulting from depreciation. It is the sum of the yearly depreciation recorded since the asset was acquired.

14) Net book value is the accounting value placed upon the asset. This value is computed by reducing the acquisition cost by the accumulated depreciation. At the time of disposal, the accumulated depreciation not only includes the depreciation recorded in previous periods, but also includes the depreciation for one-half of the current year (one-half year assumption).

15) Losses are automatically calculated in Banner when the asset is written off.

 

III. Fixed Assets System

A. Procedures

For an asset to be inventoried and depreciated, it must be entered into the Banner fixed asset system. Refer to the Banner Finance Fixed Asset Workbook for the procedures to enter assets into the fixed asset system. The following items are required before the asset can be depreciated by the system.

1) Asset Description
2) Asset Type
3) In-service date
4) Owner/Title To
5) Pending Tag Number
6) Custodian
7) Equipment Mgr.
8) Acquisition Date
9) Acquisition Method

The Banner fixed asset system is fully integrated with the accounts payable system and certain details are pulled automatically from that system. Banner will assign a pending tag number (and the acquisition cost. The pending tag report is obtained in Discoverer under Fixed Assets. At the time of tag conversion, the asset description must be updated to reflect the asset. The acquisition cost may need to be adjusted to consider any trade-in value not included on the original purchase. The Executive Director of Capital Assets and Debt Accounting will adjust the asset record for the trade-in value.
 

B. Asset Transfers Between/Among Main Instructional Sites

If an asset is transferred from one site to another, the Banner Transfer Form should be initiated by the site the asset is being transferred from. The top portion is completed by the sender. The receiving site will complete the remaining portion of the form. The receiving site will make the necessary changes in Banner using FFATRAN. The Banner Transfer form can be found on the forms tab on the Infonet. If an agreed upon value for transferred assets is involved, the transferring region is required to prepare the following journal entry:

General Fund:

Dr. 3499 SE Interregional Expense (Receiving Region)

Cr. 1889 Rev Interregional Non Taxable (Transferring Region)

C. Trade-Ins

As stated earlier, the trade-in of another asset and paying an additional amount, "acquisition costs" means the amount received for trade-in plus the additional outlay.

The amount received for the old trade-in equipment is necessary for proper recording of the new asset.

No gain or loss is ever recognized with trade-ins.

It is only necessary to delete the traded-in asset. The new asset tag will automatically feed from AP; however, it is necessary to add to the amount fed from AP any amount received for the trade-in of the old asset. Contact the Executive Director of Capital Assets to make the appropriate adjustment to the new asset.

The following is an example:

Original cost of old trade-in equipment was $7,000

Amount being given for trade-in of old equipment is $1,500

Additional outlay of new replacement equipment is $8,000

1) Delete the old trade-in equipment in Banner

2) The cost of the new equipment will be generated through the Banner AP at the additional outlay amount of $8,000.

Once the new equipment is converted in Banner, the amount should be changed from $8,000 to $9,500 on Banner Form FFAADJF. The Executive Director of Capital Assets and Debt Accounting will make the adjustment.

D. Reconciliation

A reconciliation is performed monthly for the College-wide fixed asset system in Banner. This reconciliation is performed by the Executive Director of Capital Assets and Debt Accounting.

 

E. Correction of Approved Assets in FFX

If any corrections are needed on an asset already in Banner, contact the Executive Director of Capital Assets. This does not include changes to the asset record, such as; the description, custodian, equipment manager, location or title to. This type of correction can be accomplished with the Banner FFATRAN or FFAMAST forms. For these types of changes and corrections, the paper Transfer Form is not required; however, the regions can choose to use the form as an additional method of tracking the changes made in Banner. Any change to an asset record must be done in a timely manner in order to maintain the ability to track assets. Additionally, regions need to create procedures that will allow for the timely update of assets in Banner records anytime an employee leaves the college, equipment is moved from one location to another, or the Equipment Manager changes, such as a change to the EDF position.

 

F. Assets Discovered that Should be Added to Banner

On occasion, an asset not in the Banner fixed asset system will need to be added for tracking purposes. For these instances, contact the Executive Director of Capital Assets and Debt Accounting for guidance.

IV. Policy for Off-Campus Usage of Property

A. Reason for the Policy

With today’s mobile workplace, concerns regarding the proper use of property owned by the College or other property for which the College is responsible, particularly as that use may involve removing such property from authorized College locations. The College wants to support faculty and staff in carrying out their work while meeting its obligation to be responsible for the proper use, care, and preservation of such property. It is in this context that the following policy has been prepared for the Ivy Tech Community College of Indiana.

B. Policy and Procedure

1) All property that is owned by the College, or for which the College is responsible, is to be used only for College purposes.

2) Responsibility for College property rests with Department Chairpersons, Directors, and Managers of the various locations or individual accounts. Property is charged to the specified account upon acquisition and is reconciled by a College-wide physical inventory every two years. As a general policy, College property will not be removed from authorized locations. However, there are instances in which it would be advantageous to allow faculty, staff, or students to remove the property for off-campus usage.

3) Should it be necessary in the performance of College duties for a faculty member, staff member, or student to remove such property from authorized College locations, the following requirements must be met.

a) Such property must be used for College purposes.

b) Any person removing such property from authorized locations assumes the responsibility for seeing that appropriate care is taken in its transportation and security and that such property is returned in satisfactory working condition. The person may be liable for the replacement or repair costs of any property not so returned.

c) Approval to remove property not assigned to an employee from authorized locations must be secured from the immediate supervisor if the period is for one week or less. The Off Campus Equipment Use Authorization Form (found on the Forms Tab on the Infonet) should be completed. This authorization shall be maintained in the office of the immediate supervisor.

d) Note that the top half of the form is completed for a period of one week or less. Property shall be returned to its normal College location as soon as possible, ordinarily within one week, unless a more extended period is specifically approved. For periods of more than one week, approval from the immediate supervisor is required. The Off Campus Equipment Use Authorization Form should be completed. Also, the Off Campus Equipment Use Authorization Form will be sent to the Executive Director of Finance for review and then submitted to the Fixed Asset Coordinator. The Fixed Asset Coordinator will then update the Custodian for the asset in the Banner fixed asset system. This review by the Executive Director of Finance can be designated to the Business Office Supervisor or Director of Facilities.

4) In the event of the extended absence of an individual who has property off-campus, the property will be returned to the authorized location prior to departure.

5) All such property removed from authorized College locations shall be subject to the immediate recall by the College at any time.

6) In order to implement the policy, each departmental chair or supervisor shall identify such property items that are currently away from their normal College locations, ascertain their temporary location, and either approve their continued use away from the College or have them returned. This inventory and approval should be completed no later than June 01 of each even-numbered year.

 

V. Sales or Disposal of College Property or Materials

A. Unrestricted Funds Property Disposition

Disposal - Items other than those purchased with restricted funds are to be disposed of according to the manner prescribed below. Disposal is to be coordinated by both the Regional Fixed Asset Coordinator and the Executive Director of Finance to ensure that both inventory and accounting records are properly updated.

Sales of any College property or materials must be reviewed and approved by appropriate College staff. Disposition requires the same signature authorization as is currently required for purchasing (see Section J). The amount used to determine the required signature authorizations will be based on the higher of the depreciated value or the estimated market value of the asset being disposed of. The Banner Fixed Asset Delete Form must contain the appropriate signatures and be retained in the business office files for a minimum of three years. The Banner Fixed Asset Delete Form can be found in the Forms Section of the Infonet.

After appropriate approvals/signatures are obtained, certain items (2) and (3) are to be offered to all other College sites prior to disposal or sale.

1) Items that are obviously broken and beyond repair, or the repair cannot be justified because of the age or condition of the equipment, may be disposed of with the agreement of the Custodian and the Executive Director of Finance. Sufficient documentation must exist to answer any questions regarding such a disposition. Notice to other regions is not required. Usable parts (if any) should be removed from the equipment prior to disposal. It should be noted, no computers are to be sold with the hard drive. All hard drives must be removed and destroyed prior to disposal or sale.

a) Rather than immediate disposal, it may be in the region's interest to have a "Yard Sale" once a year to see if any money can be raised for the equipment in "junk" or "poor" condition noted above.

b) Care should be taken when selling a piece of equipment to a faculty or staff member who may have been involved in determining if the equipment was technologically current or operational. There may be the possibility or appear to be the possibility of a conflict of interest. (The Executive Director of Finance is responsible for assuring that sufficient documentation exists to answer any questions regarding such disposition.)

2) Items that are broken/obsolete but can be repaired at a reasonable cost, or are still in working condition must be advertised to the other regions. Notice may be sent to other regions, as well as posted on Ivy News notifying the faculty, staff and students of the items for sale.

3) Items that are still operational and in fair or good working condition must be advertised to the regions for a period of not less than one week. If there are no internal bidders, any item with an acquisition or donated value of $5,000 or more and a depreciated value of $1,000 or more may be advertised in addition to posting on campus. One week should elapse before the sale of the equipment.

4) Another option for sale of surplus or obsolete property is using Craigslist or EBay. This option can occur only after the assets are offered to other regions and staff.

When assets are offered for sale, the following procedures will apply:

a) The sales price is determined by those knowledgeable of the assets value and authorized by the Executive Director of Finance. This would include the regional facilities office, regional fixed asset coordinator, and custodial department. Items may be offered on a fixed price basis on Craigslist or on a negotiable price basis on EBay. If using a negotiable price, a bottom line amount should be determined. Only the EDF has the authority to vary or negotiate the sales price.

b) No individual involved with the determination of asset obsolescence or price can purchase an asset offered for sale regardless of the method of sale used.

c) If using Craigslist, an account in the College’s name must be established. Payment can be made by cash, cashier’s check, money order, wire transfer or credit card. If personal checks are used for an item, the College will hold the items for 10 working days or until the check has cleared, whichever is sooner.

d) If using EBay, an account in the College’s name must be established. Payment can be made by credit card or wire transfer.

e) All payments must be processed through the Business Office. Once the payment is processed, the buyer will be issued a receipt.

f) No current employees will be granted any benefit or opportunity not granted the general public in acquisition of the assets through the disposal process.

g) All assets are conveyed “AS IS” with no warranty, express or implied, of merchantability or fitness for a particular purpose, or with any other warranties or guarantees. A purchaser or disappointed bidder will have no recourse against Ivy Tech Community College, or any of their officers, employees or agents. All sales will be final.

h) Assets sold through Craigslist must be picked up at the College.

i) Assets sold through EBay, will be shipped or can be picked up in person at the College. It should be documented in the posting what shipping charges will be and that the shipping charges will be paid by the buyer.

j) All payments received for assets sold following this policy, will be posted to other income after deducting all fees involved with the sale.

k) Items will be held in a secure location until picked up by purchaser.

If item is picked up in person, the individual will provide ID to verify that the item is being given to proper individual. The purchaser must also sign a receipt indicating they picked the item up in person. Once all the alternatives noted above have been exhausted to dispose of items, and all appropriate documentation is on file to ensure proper procedures have been followed, the items may be discarded. All computer related equipment need to follow set guidelines for disposal as outlined below.

5) Information and Instructional Technology Property Disposition

The College’s non-academic information and instructional technology department shall handle disposal of all informational or instructional technology assets across the organization regardless of residual value. Such disposal is to be a coordinated effort between the following entities to ensure that both inventory and accounting records are properly updated:

• Regional IT leadership acting with direct authority over the regional information and instructional technology assets
• Regional Inventory Manager/Site Inventory Coordinator
• OIT Asset Coordinator
• Executive Director of Capital Assets from the Office of the President

Disposal of technology-related assets shall be in accordance with College data integrity and IT security standards, and shall involve data destruction through either software and/or physical methodologies prior to release to any non-Ivy Tech entity.

The following methodologies, philosophies and strategies shall guide the disposal of assets covered under this policy:

a) Disposal that seeks to maximize the value of the technology asset or component and minimize the disposal effort.

b) Disposal through non-profit charity or donation methods

c) Disposal at the lowest cost where the disposal source promotes corporate social responsibility such as green recycling, landfill diversion, and improving the quality of life in the local communities the College serves.

d) If an asset is sold to another region, a journal entry will be processed for the transferred assets. See Transfer of Asset instructions in Section B, above. All payments made to the College are to be given to the regional business office for deposit into account code 1813 OTH INC Sale of Equipment.

B. Policy and Procedure


It is a regional responsibility to properly dispose of any equipment acquired with restricted funds. As grants and contracts are funded, copies of applicable regulations should be obtained and retained for future reference at the time of disposition. For all equipment acquired with grant or other restricted funds, you must contact Sponsored Program Accounting prior to disposition or trade-in. Many grants and private contracts have equipment restrictions. Sponsored Program Accounting can provide guidance for the disposition of these assets.