Sometimes I receive incorrect IDIs from Central Administration, and I reverse the transaction by processing IDIs for the same amount on the account. Is this a correct procedure?

 How can I segregate an entire account for tracking purposes?

 My department was cited for non-compliance with University policies regarding Unallowables. The auditor was questioning expenditures on ledger 5 accounts that had been charged to sub code series 8500. Although we had discussions with the auditor, I still am not sure as to the reason for non-compliance. After all, we did use subcode series 8500. 

 Our department is planning to have a reception which will include wine. The price per person from the caterer includes alcoholic beverages. How do I segregate the alcoholic beverages correctly if I do not know the amount? (presuming that the rest of the function is for an "allowable" --not a segregated-- purpose.) 

Q. Sometimes I receive incorrect IDIs from Central Administration, and I reverse the transaction by processing IDIs for the same amount on the account. Is this a correct procedure? 

Response:

You should refrain from this practice. The best approach is to contact the department responsible for the IDI, explain to them the reasons why the IDI is incorrect, and allow them to make the appropriate adjustments. A list of people to contact for certain types of IDIs available at our document regarding IDI charges in the General Accounting - Reconciliation segment of Go Ask Audit. 

Q. How can I segregate an entire account for tracking purposes? 

Response:

This question pertains to certain units of the University in which the **entire activity** supported by the account is generically unallowable (for example, fundraising). Since EVERY expense charged to the account (salaries, travel, supplies, etc.) is unallowable, every transaction charged to the account would have to be coded to an unallowable sub code. This might create a problem for tracking and budgeting purposes. If you have such a situation, contact the Associate Controller for Restricted Funds to discuss the possibility of segregating the entire account. Note that even if the entire account is segregated, specifically unallowable costs (e.g., alcoholic beverages, flowers, etc.) would still need to be segregated. 

Q. My department was cited for non-compliance with University policies regarding Unallowables. The auditor was questioning expenditures on ledger 5 accounts that had been charged to sub code series 8500. Although we had discussions with the auditor, I still am not sure as to the reason for non-compliance. After all, we did use sub code series 8500.

Response:

The reason for non-compliance in your department's case is that "unallowable" transactions were charged to ledger 5 accounts. As you know, ledger 5 accounts are government grants and contracts; it is University policy that ledger 5 accounts may not be charged for costs designated as "unallowable" by Federal regulations. When it is determined that an expenditure is "unallowable" but nevertheless reimbursable (i.e., when incurred for appropriate business purposes in accordance with University guidelines), the item may NOT be charged to a ledger 5 account regardless of what sub code you are using. Instead, if you have an unallowable cost such as alcoholic beverages or flowers which are nevertheless reimbursable, the cost of these items must be charged to accounts in other ledgers (such as ledgers 2 or 4) using series 8500 sub codes. 

Q. Our department is planning to have a reception which will include wine. The price per person from the caterer includes alcoholic beverages. How do I segregate the alcoholic beverages correctly if I do not know the amount? (presuming that the rest of the function is for an "allowable" --not a segregated-- purpose.) 

Response:

First try to get the caterer to list the charge for wine separately. If this can be done, then the usual rules will prevail (segregate the cost of the alcoholic beverages and any food costs which exceeds established allowable limits.) Otherwise, the University must assume that alcoholic beverages "taints" the event, and all costs should be treated as unallowable. This means segregated into a sub code beginning with 8xxx. The reason for this is that the University considers it best to be conservative and take no chance of being deemed out of compliance.