3.10 Sponsored Billings, Gifts, Fees and Other


Sponsored Billings, Gifts, Fees, and Other Cash Receipts (not including reimbursements to expenses)

General description:

Each MIT Summary Statement and DTR is divided into three sections: Principal (relating to additions and changes to MIT's endowed funds), Revenue, and Expense. This section deals with transactions most commonly found on the "Principal" and "Revenue" sections of the Summary Statement and DTR.

Most general operating cost centers do not have revenue. Auxiliary cost centers do have revenue transactions, as do many "fund" internal orders. Sponsored WBS elements generally reflect only bills to the project sponsor. In some WBS element project families, billing is reflected only at the "parent" level for a project.

SAP Document type:

SR, RV, S1 (sponsored billing related); SG (from the gift system); SK (a deposit made through the Cashier).

Central MIT Controls:

MIT has strong central controls over sponsored billings, the proper accounting for endowment and investment income, and gift revenues. Most auxiliary enterprises have procedures developed that are specific to the business they are in, to ensure the proper billing of customers and the collection of amounts billed.

Level of Risk: Low.

Explanation: Central controls over the recording of sponsored billings, gift activity, and Cashier deposits are strong. The primary risk is that fee or gift deposits could be posted to the wrong cost object, or that gifts or receipts from a sponsor or other customer could be posted directly to a cost object and not through the proper subsidiary system.

For example, if a payment received from a sponsor was not posted through the Sponsored Receivables system, there is a risk the revenue would be posted twice -- once as an accounts receivable, and once when actually received. Furthermore, the sponsor would continue to receive bills after payment has been made.

A similar problem occurs if a payment is made outside of the gift system. Even if not in payment for a pledge, if a gift is not posted through the gift system, the donor will not get the appropriate tax receipt information, or the proper MIT acknowledgment of the gift.

Documentation to Retain:

  • Copies of deposit slips may be retained for convenience. (After the Department has ascertained that a deposit was properly recorded in SAP, it is not necessary to retain the deposit receipt. The Cashier is the office of record for this information.)
  • The record copy of the sponsored agreement is held in the Office for Sponsored Programs. Most Departments also retain a copy and refer to it when questions arise. This practice is recommended. Sponsored agreements may contain billing schedules, a useful reference in monitoring billings.
  • Any correspondence or documentation relating to a gift, or other cash receipt, which was not submitted to the VPF with the deposit slip, should be retained in the Department.

DLC tasks:

Ongoing:

  1. Make deposits in a timely manner.
  2. For departments with a large volume of cash receipts, checks should be restrictively endorsed immediately upon receipt.

Statement-related:

  1. Review any transactions under these document types to see that they appear reasonable and appropriate on the cost object and GL account.
  2. Make sure that all deposits expected to be posted to the cost object have been, through review of the detail, through comparison of actual revenue to the amount budgeted, or through comparison to the previous year's volume.
  3. For sponsored billing amounts to federal sponsors, review the transactions to ensure they are reasonable in relation to the expenditures on the project.
  4. For corporate sponsors, check to ensure that billings are consistent with the agreed upon billing schedule.

Note: The DTR shows sponsored billings revenue when amount due is recorded in the system as an accounts receivable. VPF Sponsored Accounting is generally responsible for ensuring that amounts billed to sponsors are paid, and it is not necessary for the department to monitor payment - only billings.

In cases where the responsibility for monitoring sponsor payments is shared with the Department, VPF Sponsored Accounting will provide additional information about how to monitor payment activity.

Contact for questions:

Updated 5/22/12