PURPOSE:
- To document an agreement between two campus entities where one party will provide services to another. The service provider will recover from the service recipient the costs associated with providing these services. An MOU is not a substitute for a contract of services with an off-campus entity. Service contracts with off-campus entities should be arranged through Purchasing and Contracts Administration.
- An eMOU or contract of services must be approved before services are performed. eMOUs will be processed annually and must be fully approved no later than June 15th. (If June 15th falls on a weekend the deadline will be the following Monday).
- When completing the Accounting Detail portion of an eMOU, enter actual costs and totals. If the actual costs are unknown, enter your best estimate; the amount fields are required in the eMOU module.
- An existing eMOU may be amended if necessary due to cancellation, change of service, change in the rate for services, or an extension of the time covered by the agreement (i.e. original eMOU for fall semester, extended to cover the spring semester). The Amendment form should be completed prior to providing services, but at least five days prior to billing for services rendered under the amendment. An Amendment is not required when the original eMOU is based upon an estimated number of transactions.
- To comply with Executive Order (EO) 1000-Delegation of Fiscal Authority and Responsibility.
TYPES OF MOU ENTITIES:
- Auxiliary Corporations; the Associated Students Incorporated (ASI), CSUN Foundation, North Campus Corporation, The University Corporation (TUC), and the University Student Union (USU).
- Enterprises; TSENG College of Extended Learning (ExL), Health Facilities, Parking Services, and Housing.
- General Operating Fund Entities; (485xx) any subdivision (e.g., center, department, college, division) of the University that is providing services to another campus entity.
- Cohorts (Agreements made between the Tseng College of Extended Learning (ExL) and a college). Review Memorandum of Understanding Procedures for Cohorts.
TYPES OF COST RECOVERY AND REIMBURSEMENTS NOT REQUIRING AN eMOU:
Documents that articulate the agreements listed below are required.
- Between General Operating Fund Entity providing services to another General Operating Fund Entity
- Costs to be recovered by the service provider under the agreement should include only salaries/wages and operating expenses. Benefit costs should be excluded.
- Payments should be made via the on-line budget transfer system. It is not necessary to send any documentation to Financial Services.
- Space Rentals/Leases
- Student Assistant Agreements
- Service Agreements
TYPES OF COST RECOVERY AND REIMBURSEMENTS REQUIRING AN eMOU:
Between General Operating Fund Entity providing services to an Enterprise
- An eMOU is required. See Creating eMOU Guide.
- The service provider must categorize the reimbursement by (1) Salaries, (2) Benefits, and (3) Operating Expenses.
- Salaries must be further broken out by the type of salary being reimbursed using the appropriate class codes:
- 99991 - Management Salaries
- 99992 - Support Staff Salaries
- 99993 - Faculty Salaries
- 99994 - Student Wages
- 99995 - Special Consultant Wages
- 99996 - Full/Part Time Lecturer Wages
- An MOU Reference Number will be assigned once the eMOU has been saved.
- Upon completion of billing, a journal entry will record the reimbursement in Fund 48540 based on the approved billing lines submitted in the module. The following revenue accounts should be used for recording reimbursement:
- 580814—Cost Recovery Campus O&E
- 580815—Cost Recovery Campus Salaries
- 580816—Cost Recovery Campus Benefits
- The journal entry will record the payment by the service recipient in account: 617001—Service from Other Funds/Agencies.
- As part of month-end closing, allocation processes will charge:
- The standard overhead rate of 2.75% against the revenue (service provider) transaction.
- Revenues and expenses for each department must net to zero at year end. Beginning July 1st, 2015, a number of monthly allocations will be run to transfer expenditures from fund 48501 to fund 48540. No expenses or encumbrances may be processed to these funds unless they have opted out of the allocation process. Based upon the account numbers and class codes used to record the eMOU revenue, the monthly allocation process will record the following:
- Salaries and Wages will be transferred to/from salary and wage expenditure accounts based upon account code 580815 and the class code selected as noted above.
- Worker’s Compensation will be charged based upon 3% of all salary and wage.
- Benefits will be transferred to/from Benefits accounts based upon the Revenue in account 580816.
- Operational expenditures will be transferred based upon the amount credited in account 580814, with 60% being transferred from Supplies and Services, and 40% from Expenses – Other
- The service provider may move expenditures as necessary for their departments utilizing a Journal Entry Form.
- An Authorized Signature Form for the billing and financial approvers must be on file for a service provider before using Fund 48540.
Between Enterprises
- An eMOU is required. See Creating eMOU Guide.
- An MOU Reference Number will be assigned once the eMOU has been saved.
- Upon completion of billing, a journal entry will record revenue to the service provider using the following account: 580896—Revenue.
- The journal entry will record the payment by the service recipient in account: 617001—Service from Other Funds/Agencies.
- As part of month-end closing, an allocation process will charge the standard overhead rate of 2.75% against the revenue (service provider) transaction.
Between a General Operating Fund Entity providing services to an Auxiliary
- An eMOU is required. See Creating eMOU Guide.
- The service provider must categorize the reimbursement by (1) Salaries, (2) Benefits, and (3) Operating Expenses.
- Salaries must be further broken out by the type of salary being reimbursed using the appropriate class codes:
- 99991 - Management Salaries
- 99992 - Support Staff Salaries
- 99993 - Faculty Salaries
- 99994 - Student Wages
- 99995 - Special Consultant Wages
- 99996 - Full/Part Time Lecturer Wages
- An MOU Reference Number will be assigned once the eMOU has been saved.
- Upon completion of billing, University Accounts Receivable will prepare an invoice to the Auxiliary. This invoice will record the reimbursement as follows:
- 580825 - Cost Recovery AUX/3rd Party Salaries
- 580826 – Cost Recovery AUX/3rd Party Benefits
- 580824 – Cost Recovery AUX/3rd Party O&E
- As part of month-end closing, allocation processes will charge:
- The standard overhead rate of 2.75% against the revenue (service provider) transaction.
- Revenues and expenses for each department must net to zero at year end. Beginning July 1st, 2015, a number of monthly allocations will be run to transfer expenditures from fund 48501 to fund 48541. No expenses or encumbrances may be processed to these funds unless they have opted out of the allocation process. Based upon the account numbers and class codes used to record the MOU revenue, the monthly allocation process will record the following:
- Salaries and Wages will be transferred to/from salary and wage expenditure accounts based upon account code 580825 and the class code selected as noted above.
- Worker’s Compensation will be charged based upon 3% of all salary and wage.
- Benefits will be transferred to/from the Benefits accounts based upon the Revenue in account 580826.
- Operational expenditures will be transferred based upon the amount credited in account 580824, with 60% being transferred from Supplies and Services, and 40% from Expenses – Other
- The service provider may move expenditures as necessary for their departments utilizing a Journal Entry Form.
- An Authorized Signature Form for the financial approvers must be on file for a service provider before using Fund 48541.
Between an Enterprise providing services to an Auxiliary
- An eMOU is required. See Creating eMOU Guide.
- An MOU Reference Number will be assigned once the eMOU has been saved.
- Upon completion of billing, University Accounts Receivable will prepare an invoice to the Auxiliary. This invoice will indicate that the revenue will be recorded in one of the following accounts:
- 580891—Revenue—The University Corporation (TUC)
- 580892—Revenue—CSUN Foundation
- 580893—Revenue—Associated Students Incorporated (ASI)
- 580894—Revenue—North Campus Corporation
- 580895—Revenue—University Student Union (USU)
- As part of month-end closing, an allocation process will charge the standard overhead rate of 2.75% against the revenue (service provider) transaction.
AMENDMENTS TO MOU AGREEMENTS:
- Existing approved eMOUs may be amended for the following changes:
- Cancelation, services no longer needed and or provided.
- Extension of time the MOU covers; for example the original MOU is for the Fall semester, and it is being extended for the Spring Semester
- Rate change for services
- Change in the scope of services
- The MOU Amendment Form is required for all changes noted above:
- Fill in the original approved MOU Reference Number
- Check the appropriate box indicating the reason for the change
- Describe in detail the reason for the change to the original MOU
- Complete the Accounting section
- The MOU Amendment Form must signed and dated by both departments.
- Submit the signed MOU Amendment form to Financial Services (MD 8337), no later than five working days prior to billing for services.
- Attach the signed MOU Amendment form to the original approved eMOU.
- An amendment is not required when the original eMOU is based upon an estimated number of transactions.
COST RECOVERY CALCULATION METHODOLOGIES:
The methodology for calculating costs to be recovered through an eMOU must be reasonable and related to the services performed.
Below are frequently used approaches for calculating costs eligible for recovery:
- Actual full or prorated costs of salary and benefits for a specific faculty member or staff employee who provides services directly to another campus entity.
- Prorated salary, benefits and operating expenses where a department provides services to another campus entity, and the work is done by multiple employees. In this situation, salary and benefit costs should exclude employees above the first level of supervision. Operating expenses should include depreciation for equipment, but should not include costs for space, furniture and fixtures. Operating expenses typically are allocated in the same proportion as salary cost, but other models may be appropriate. The 2.75% overhead charge may be included in Operating Expenses. Examples of this methodology might include departments such as Human Resources and Information Technology.
- For service providers that provide measurable services, it may be appropriate to determine cost per transaction or event. Examples of this methodology might include invoices prepared, parking permits sold or number of vouchers.
RESPONSIBILITIES:
The manager of each department providing reimbursable services of an on-going nature to any other department shall initiate a Memorandum of Understanding as described in the above procedures.
Completed eMOU Agreements must be submitted via the eMOU module. The Associate Vice President of Financial Services will approve and verify that all eMOUs are in compliance with University and State policies.
In the event that an amendment is necessary, it is the responsibility of the department providing the services to submit to Financial Services for final approval (MD 8337) the completed the MOU Amendment form and the new MOU Cost Recovery worksheet at least five working days prior to initiating any invoicing or transfer of funds documents.
It is the responsibility of a department requesting services not covered under the terms of an eMOU to complete an appropriate chargeback requisition form. Upon completion of services, the services provider must request the Office of Resource Management within Financial and Accounting Services to charge the expense to the services requestor and credit the appropriate revenue to the service provider.