Last Revision Date: December 9, 2019
This paper establishes policies and defines procedures to be used to account for interinstitutional financial transactions and/or when making payments for personal services involving an individual who holds a concurrent appointment at another UW institution.
- UW System Administrative Policy 320 (SYS 320), Internal Services Chargebacks (formerly F24) establishes procedures on “Accounting for Interdepartmental Transactions” that also apply to some types of interinstitutional transactions.
- UW System Administrative Policy 308 (SYS 308), Budget Transfers (formerly F5) establishes a systemwide “Budget Transfer Policy.”
- UW System Administrative Policy 235 (SYS 235), Personal Services Payments (formerly F31) establishes procedures for determining payment status of personal services provided by both employees and nonemployees.
- UW System Administrative Policy 165 (SYS 165), The Academic Calendar (formerly ACPS 4.0) includes criteria for determining when compensation may be paid on an “overload” basis to academic staff.
- Section 16.417(2), Wis. Statutes, limits the amount of additional compensation that full-time employees of one UW institution may earn during the same year from another UW institution.
For purposes of this paper, financial transactions between UW institutions are divided into six broad categories.
Category A Payments for personal services involving an individual with a concurrent appointment at another UW institution.
Category B Transfers of extramural funds from one UW System institution to another.
Category C Budget reallocations between UW institutions.
(Category D was made obsolete and removed due to UW Restructuring.)
Category E Payments for specialized or technical services and/or materials received from another UW institution.
Category F Payment for travel expenses of a staff member of another UW institution.
Category G Continuing education workshops, etc., provided by UW departments which are targeted for the general public.
Special End of Month Payroll: This refers to the special faculty and academic staff payroll run by the UW Processing Center each month with a pay date of the 12th of the month. This payroll has special processing rules which avoids all optional deduction processing.
Budget authority should be transferred from one institution to another when the major responsibility for program delivery has moved either permanently or on a one-time basis. The various contractual responsibilities should also transfer with the budget authority. Examples of transfers of budget authority include, but are not limited to: the annual extension allocation to support integrated outreach programs, the American Ethnic Studies Grants, and Urban Corridor Consortium allocations.
When a budget transfer is not appropriate, interinstitutional transactions should be accounted for in a manner that ensures revenues and expenditures are not double-counted on a systemwide basis. The accounting treatment and processing procedures for each of the categories of transactions defined in Section III are detailed in the following section.
A. Category A – Payment for Personal Services
Situations involving the employment of a classified employee by two institutions require coordination between the Classified Personnel offices of each institution and should be handled on a case-by-case basis (e.g., represented staff may have contractual provisions, FLSA may impose overtime obligations, interchange reporting to DER may apply, etc.). The following procedures apply to situations where one UW institution (Institution B) wants to either employ or purchase the services of an individual who is an unclassified employee of another UW institution (Institution A). The procedures described below are presented as a decision tree in.
- If the services to be provided fall within the scope of the individuals employment at Institution A (part-of-load), an interinstitutional transfer of funds should be made: Institution B (Buyer) prepares an Inter-Institutional Agreement Form (see ) and, if both institutions approve, the UW Processing Center processes the Inter-Institutional Agreement Form (IIA) to transfer the funds from Institution B (Buyer) to Institution A (Seller) as reimbursement for the employees services. The UW Processing Center will process all IIA expenditures as direct charges. Institutions that wish to encumber the agreement amount will be responsible for liquidating the encumbrance.
- If the services provided are outside the scope of the individuals employment at Institution A, completion of an Inter-Institutional Agreement Form is not required and Institution B payrolls the employee directly.
- If the individuals combined appointments (at Institution A and Institution B) will not exceed 100% employment: Institution B (Buyer) establishes a separate appointment with an appropriate title and payrolls the employee directly on the End of the Month payroll.
- If the payment exceeds $1,000 and either the individual is employed 100% at Institution A or the combined appointments (at all UW institutions, including Institution A and Institution B) will exceed 100%: Institution B (Buyer) prepares the Inter-Institutional Employment Overload Request Form for Unclassified Employees (SYS 165, The Academic Calendar, an overload is an “unusual, short-term or nonrecurring” work assignment. ) and, if both institutions approve, Institution B (Buyer) establishes a separate appointment with an appropriate title and payrolls the employee directly on the End of the Month payroll. Please note: as defined in
- If the payment is $1,000 or less and either the individual is employed 100% at Institution A or the combined appointments (at all UW institutions, including Institution A and Institution B) will exceed 100%: Institution B (Buyer) establishes a separate appointment with an appropriate title and payrolls the employee directly on the End of the Month payroll; an Inter-Institutional Employment Overload Request Form is not required because of the size of the payment. Please note: as defined in SYS 165, The Academic Calendar, an overload is an “unusual, short-term or nonrecurring” work assignment.
In situations where Institution B payrolls an individual directly, an I-9 must be completed and retained for the required period of time by the hiring department at Institution B.
Effective July 1, 2013, Wis. Stat. § 16.417(2)(f) states that the $12,000 overload cap does not apply to individuals employed by the UW System but only with respect to compensation received within the system. The $12,000 cap continues to apply for compensation earned by a UW System employee at any other state agency, although it does not apply to compensation earned at private organizations.
Overload compensation received from within the UW System may not exceed the higher of either 20 percent of the employee’s academic (c-basis/9 month) or annual (a-basis/12 month) salary or $18,000 unless the chancellor or designee determines that good cause exists to exceed this threshold and issues an exception in writing.
B. Category B – Transfers of Extramural Funds
The method of accounting for transfers of extramural funds depends upon whether the transfer is related to joint participation in a sponsored project or whether the transfer is simply payment for goods/services that one institution has provided another. Typically, joint participation in a sponsored project will be evidenced by a formal grant proposal on which both institutions are named (and of which both institutions have foreknowledge).
In the case of transfers related to joint projects:
Both institutions should establish a 144 account or a 133 account as appropriate;
- The institution named as the primary recipient is responsible for reporting to the granting agency the full amount received and disbursed under the grant and for reporting the full amount of the award to the Board of Regents;
- The primary recipient shall reimburse the secondary institution’s indirect costs at the lower of the rate received by the primary recipient or at the negotiated rate of the secondary institution;
- To ensure that revenues and expenditures are not double counted with respect to the UW System as a whole, account code 3910 should normally be used to account for transfers between institutions. However, by mutual agreement, transfers may also be made on revenue account code 9968. Revenue transfers of Federal funds may be made on account code 9230 in cases where the grant account number of the secondary institution is a subaccount of the UWPC account number used by the primary institution; for non-Federal funds, account code 9500 may be used in this situation. Regardless of which method is used, it is essential that both institutions use the same account code so that the offsetting amounts can be identified.
- An “Agreement to Transfer Extramural Funds Between UW Institutions” ( ) should be completed.
When one institution is simply purchasing services from another institution, the selling institution will not set up a 144 or 133 account and there will normally be no pass-through of indirect cost reimbursement. The selling institution should account for the receipt as a sale or sales credit in accordance with UW System Administrative Policy 320 (SYS 320), Internal Services Chargebacks depending on the appropriation from which services are being provided. This will ensure that there is no double counting of revenues and expenditures with respect to the UW System as a whole except as appropriate under generally accepted accounting principles for colleges and universities.
Normally the distinction between joint participation in a sponsored project and a sales transaction should be clear. In all cases, the nature of the agreement and not the amount involved should be the determining factor. However, in cases where the distinction may not be clear, the amount involved may be a weighing factor as follows:
- Agreements involving more than $5,000 should be examined with particular care to ensure that joint projects are not inadvertently treated as sales and that the administrative requirements imposed by the extramural sponsor are met by all parties to the agreement.
- If the amount of the agreement is less than $5,000, the additional administrative cost associated with administering joint projects may weight the classification decision in favor of a sales treatment.
Category C – Budget Reallocations Between Institutions: Budget reallocations between institutions are handled as budget transfer transactions and need to be coordinated with the UW System Controller’s Office. A Budget Transfer form must be processed. See UW System UW System Administrative Policy 308 (SYS 308), Budget Transfers for additional information.
Category E – Supplies and Services: The procedure for processing transactions involving the purchase of specialized or technical services and/or materials from another UW institution vary depending on whether former WARF or Peterson Processing Center (PPC) institutions are involved. Between former WARF Processing Center institutions (EAU, LAC, OSH, PLT, RVF, STP, STO, SUP, WTW): For one-time predetermined costs, if the buying and selling institutions are both former WARF Processing Center institutions, the selling institution should submit an invoice to the buying institution. The buying institution secures the necessary internal approvals, codes the invoice and processes for payment. Depending on the internal procedures of each institution, requisitions and/or purchase orders may be issued in advance of securing the goods/services. Payment must be made by check whenever the selling institution issues an invoice to the buying institution. An alternative method of payment would be via a Cash Transfer initiated by the selling institution. The selling institution would need to know the account(s) to be charged at the buying institution. The seller would then create the transfer transactions and submit the data to UWPC via an FTP batch.
Former Peterson Processing Center (PPC) institutions (GBY, MSN, MIL, PKS, SA, UWC): For one-time, predetermined costs, if the buying and selling institutions are both former PPC institutions, the transactions are handled as internal transfers and can be initiated in either of two ways:
The buying institution/department can process an internal requisition and send the appropriate copies to the seller. The selling institution enters the credit, coding the white and yellow copies of the requisition and processes them through regular administrative channels for payment transfer. If the transaction involves an extended period of time and is cost reimbursing in nature, a “blanket” type of internal requisition could be prepared by the buying institution. The selling institution submits invoice transfers.
The transaction can be initiated by the selling institution by submission of an invoice directly to the buying institution. The buying institution processes for payment by either attaching a “confirming” internal requisition or by entering the coding to be charged directly on the invoice.
Between former WARF and former PPC Institutions: For one-time, predetermined costs, the selling institution should submit an invoice to the buying institution. The buying institution secures the necessary internal approvals, codes the invoice, processes for payment and a check is issued to the selling institution. Depending on the internal procedures of each institution, requisitions and/or purchase orders may be issued in advance of securing the goods/services. An alternative method of payment would be via a Cash Transfer initiated by the selling institution. The selling institution would need to know the account(s) to be charged at the buying institution. The seller would then create the transfer transactions and submit the data to UWPC via an FTP batch.
Note: For recording transactions under all of the above options, the buying institution should use account code 2650 “Services Internal – State & University” unless there is a specific account code (i.e., account code 2600 “Data Processing Services-State & University Departments”) that applies. The selling institution should generally code the credit as account code 9050 “Sales Credit-Internal.” Departments that expect to provide significant services to other departments should budget for internal sales credits.
Category F – Travel Reimbursement: When one institution is reimbursing the staff member of another institution for travel-related expenses incurred on behalf of the buying institution, the staff member should submit a Travel Expense Report form directly to the buying institution. If there is payment for services, it is a Category E transaction.
Category G – Training Programs: When contracting for an in-service training program, etc., with a department that primarily provides continuing education programs for the general public, the “buying” department should record the transaction using account code 2650. The selling department may record the transaction using revenue account code 9160 “Fees-Continuing Education – Informal Instruction.”