The Internal Sales compliance office facilitates the review of, and gives approval for, all internal sales to other departments. The office works with the units to ensure:
- consistent cost estimating,
- accumulating costs in order to have reliable cost estimates,
- improve cost control,
- enhance accountability,
- costs incurred for the same purpose in like circumstances are treated consistently,
- to accurately accumulate all allowable and allocable costs within an identified segregated set of accounts,
- to recognize subsidies to the operation,
- to provide a means to operating within federal guidelines, and
- to establish rates based on total costs.
University colleges and departments are encouraged to utilize academic expertise and institutional resources on an ongoing basis that are unique, convenient, or are not readily available from external resources to other internal customers.
Steps to obtain approval to conduct internal sales activity
- Does it meet the following criteria?
- Provide a specific ongoing good or service to other units or projects, and recover the costs by charging the users on a "rate basis."
- Develop their rates to consistently and equitably recover the costs of the service.
- Rates are reviewed annually to operate on a breakeven basis.
- Customers are other university colleges or departments.
- Annual internal sales revenue greater than $25,000.
- Charging a federal grant of any dollar amount.
The following units would not be classified as internal sales activity:
- Parking or housing services, that primarily serve individuals and whose revenues are recorded as income to the University (these are auxiliary services).
- Provide a one-time distribution of an expense rather than an on-going activity.
- Annual internal sales less than $25,000 that do not charge federal grants. (These units should use cost allocations, cost sharing or transfers.)
- Obtaining Approval to Conduct Internal Sales Activity (step 2, 3)
- Establishing an Internal Sales Accounting Structure (step 6)
- Establishing Internal Sales Rates (step 4)
- Reviewing Internal Sales Activity Annually
- Establishing Internal Sales Capital Equipment Funds and Recording Depreciation (step 6)
- Internal rate development (ppt)
- Advanced internal rate development (ppt)
- Internal sales reviews (ppt)
- Obtaining approval to conduct internal sales (ppt)
- Annual requirements and certification (ppt)
- Annual requirements and certification video (wmv)
- Subsidies, surplus, and deficit management (ppt)
- Equipment and depreciation (ppt)
- Equipment and depreciation reconciliation (ppt)
- A-21 Guide (ppt)
- Fiscal year-end actions for ISOs/ESOs (FY 2014) (ppt)
- UM Reports presentation handouts Fall 2011
- FY14 Certification of Annual Review of Internal Sales Activity for FY14 Rates (docx) UM1743
- Internal/external sales business proposal outline (doc, enable macros please) (step 3)
- Internal/external sales approval form (xls) (step 2)
- What's included in an internal sales rate development (pdf)
- Entering an Internal Sales Journal Voucher (pdf)
- Researching UMNIS Vouchers
- Internal Sales Responsibility List (xlsx)
- Certification of Annual Review Job Aid (docx)
- Most common audit issues
- Compliance Review Findings (pdf)
- Sample rate sheet per hour (xls) and Sample rate sheet per test (xls)
- Calculation for Billable Hours (xls)
- Examples of Unallowable Costs (pdf)
- Internal Sales process flow (pdf)
- ISO Chart of Accounts information (pdf)
- Inventory held for ISOs and ESOs (pdf)
- ISO budget guidelines (pdf)
- Direct versus Indirect costs (pdf)
- Equipment and depreciation reconciliation process (ppt)
The internal sales training modules are required every two years for RRC managers and anyone in the department involved with the internal sales activity. Each module takes about 30 minutes. After completion of each module the "personal training records" of the individual will be updated to show the course has been completed. These courses are in the ULearn system.
- Course1 Overview of Policy Governing Internal Sales
- Course2 Transacting Internal Sales and Rate Development Basics
- Course 3 Rate Development Example
Step 1 - Verify that the activity is an internal sale. See "Is your activity an internal sale?" information above.
Step 2 - Complete the Internal/External Sale Approval form and send to firstname.lastname@example.org for review. See Administrative Procedure: Obtaining Approval to Conduct Internal Sales Activity.
Step 3 - Complete the Internal/External Business Proposal Outline and sent to email@example.com for review. See Administrative Procedure: Obtaining Approval to Conduct Internal Sales Activity.
Step 5 - After the Internal Sales Compliance Office has completed review, obtain administrative approvals.
Step 6 - Establish an accounting structure. See Administrative Procedure: Establishing an Internal Sales Accounting Structure.
Step 7 - Complete activity and invoice.
Want a printable version of the checklist? Click here.
- Failing to base rates on actual required resources and\or usage.
- Failing to charge all internal customers the same rate.
- Rate calculations and/or actual costs include unallowable costs.
- Transfers out (other than depreciation) recorded without adequate documentation.
- Conducting activity with excessive operating margins creating a surplus or deficit.
- Unsupported combination of external sales with internal sales for cost or revenue.
Other questions frequently asked
How do I "pay" Campus Club?
Campus Club customers should enter a manual journal entry into the General Ledger. Use this account string for the Campus Club side of the transaction: Fund 9000, DeptID 12065, Program 21383, Account code 520601. Campus Club asks that departments also fax a copy of the journal entry to the Campus Club.
If I am not an ISO, can I do a Journal Voucher in the AP system to charge another department for goods or services that our department sold to them?
No. You have to be an ISO in order to do the Journal Voucher in the AP system to charge a department for goods or services sold to them. Contact the Helpline to assign a ticket to the ISO group for them to determine if your department should be an ISO.