UCR

UCR Policies and Procedures

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Campus Policy Number 200-03

BEA, NCT, Recharge Use

Policy Owner: Associate Vice Chancellor-Resource Planning and Budget
Effective Date:  11/11/1998

Revision Date:   5/10/2011

    • PURPOSE
    • BUDGET ESTABLISHMENT AND ADJUSTMENT (BEA)
    • NON-PAYROLL COST TRANSFER (NCT)
    • RECHARGE
    • FUNCTIONAL EXAMPLES
    • OTHER REFERENCES

    The purpose of this policy is to clarify when it is appropriate to use the Budget Establishment and Adjustment (BEA), the Non-Payroll Cost Transfer (NCT), or the Recharge applications within the UCRFS to process or correct a financial or budgetary transaction.

    The overall guiding principle when making this determination is that an expense should be recorded against the FAU where it is most appropriate for it to be reflected in accordance with Generally Accepted Accounting Principles (GAAP).Simply stated, expenses should be recorded against the activity or program they benefit or for which they were incurred.This will not necessarily be where the funds are currently allocated. 

     

    The Budget Establishment and Adjustment (BEA) application is used to enter the financial representation of a unit’s strategic operating plan into the UCRFS.This financial representation is commonly referred to as a budget.

    The BEA Application is used either to establish a new budget, or modify an existing budget by increasing, decreasing, or otherwise adjusting amounts allocated to the Full Accounting Unit (FAU), or to individual components that comprise the FAU.The BEA application is used to establish or adjust both permanent (on-going) and temporary (current-year) budgets.

    While the BEA Application should be used to adjust a budget to reflect changes in the unit’s strategic operating plan, it should not be used to adjust a budget where expenses have been posted to an incorrect FAU combination.Please refer to the section on Non-Payroll Cost Transfers for guidance on correcting expense-posting errors.

     

    The Non-Payroll Cost Transfer (NCT) application enables the transfer of posted expenses from one Full Accounting Unit (FAU) to another, or between individual components within an FAU combination.   The NCT application is a means of redistributing (or sharing) expenses originally charged to a single FAU, or making minor error corrections.This application may only be used to affect expenditures actually posted to the general ledger, up to the amount of the original transaction.

    Redistributions are generally limited to expenditure accounts within an Expense Group, as this application cannot be used to change the underlying nature or classification of an expense.  Such corrections, if necessary, will be transacted by the Accounting Office.

    While both functionally and conceptually very similar, redistributions or corrections involving federal funds, with their more restrictive award requirements, must be processed through the Federal Non-Payroll Cost Transfer (FCT) application, rather than the basic NCT application.

    Note that the redistribution of original salary and employee benefit expenditures will continue to be transacted through the Payroll and Personnel System (PPS).

     

    The Recharge application is used to process charges for goods or services provided by an approved campus service provider to another campus department or activity.  Use of the Recharge application is restricted to activities authorized to provide and charge for goods and services (generally, Sales and Service Activities and Auxiliary Enterprises).

    The recharge application may not be used to redistribute expenses or to correct posting errors.  These actions are accomplished via the Non-Payroll Cost Transfer (NCT) application.Please refer to the section on NCT for further guidance.

     

    The following examples are provided to help guide the decision-making process when making the determination as to which application is most appropriate to use in a given situation.

    1. The Dean agrees to provide $5,000 to fund a reception and dinner associated with a planned symposium that Department is hosting.  Applying the guiding principle defined in Section I above, the Dean’s Office should prepare a BEA to allocate the $5,000 to the Department, and the expenditures should be recorded in the appropriate Department FAU.
    2. Three departments share a photocopy machine physically located in Department 1.Each month, Department 1 receives a bill for the use of the photocopy machine from P&R.  Applying the guiding principle defined in Section I above, Department 1 should prepare a NCT to re-distribute the proportionate share of the expense to the appropriate FAUs in Departments 2&3.
    3. Staff Employee in Department 1 agrees to provide temporary services to Department 2.Vice Chancellor authorizes Department 1 to purchase a computer with Staff Employee 1’s salary savings.Applying the guiding principle defined in Section I above, Staff Employee’s payroll and benefit costs should be recorded in the appropriate FAUs in Department 2.  Correspondingly, Department 1 should prepare a BEA to move the salary savings to the Equipment and Other Inventorial Items budget category, and the expense related to the computer purchase should be recorded in the Equipment, Computer expense account.

     

    Business and Finance Bulletins:

    A-47,  University Direct Costing Procedures

    UCR Policies and Procedures:

    Section No:xxx,  BEA Users Guide

    Section No:xxx,  NCT Users Guide