Appropriation 136 includes all monies received for, or on account of, UW – Madison, unless otherwise specifically appropriated, to be used for general operations. Several types of activities occur within Appropriation 136, each of which has separate ending cash balance targets (see below).
Internal operating activities primarily relate to internal services such as copy centers, research testing, and analysis support, etc. Operations that primarily serve University departments, including customers that pay with federal grants, are subject to Uniform Guidance (https://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tplTitle 2 Subtitle A Chapter II Part 200). According to Uniform Guidance, rates should be on a cost-recovery basis and cash balances should be managed to zero, as there should not be a positive cash balance for internal operating activities. Deficit cash balances are allowable if appropriately invested in related inventory or equipment or if there are outstanding amounts to be paid. Rate reductions or completeness of expenditures should be considered if cash balances are growing.
External operating activities primarily relate to services provided to external customers including student, faculty and/or staff and may include by-product sales (e.g. crops) or passive income (e.g. rents and royalties).
Also consider the following strategies regarding balances:
- If services are research-related, evaluate whether the activity should be transferred to Appropriation 133 – Non-Federal Grants & Contracts.
- Evaluate external account revenue for the potential for deferred, unearned revenue which should be separately designated as advance deposits and deducted from cash balances.
- Evaluate pricing for compliance with Regent Policy 12-1 Competition with the Private Sector. If compliance with this policy results in the creation of a profit, plans should be developed for spending down the resulting cash balances.
- There are no specific policies regarding reserve accumulations on individual Fund 136 activities. Operations that sell primarily to external customers may generate cash balances because indirect costs must be included in the rates. These balances are available for general department use and should not be accumulated indefinitely.
Mixed accounts include a mixture of revenue from internal and external customers in the same activity. These activities are subject to the same requirements as internal and external activities in terms of rate structure. Units should carefully review mixed account activities and follow the applicable sections of the guidelines noted above.
Clearing accounts should not have cash balances at the end of the fiscal year unless they are related to in-transit items. In-transit items should be routinely reconciled. Reconciliation procedures should be reviewed to confirm these accounts are properly managed and controlled.
Inactive accounts should be closed based on criteria established by school, college or auxiliary unit. Any remaining cash balances should be eliminated through the use of Cost Transfer Tool and a request to close the zero balance account should be submitted to Accounting Services at firstname.lastname@example.org using the Department ID Action Request Form.