ADMINISTRATIVE PROCEDURE

Internal Sales Office Review of Internal Sales Activity

Introduction

The rate development, accounting and rate charging practices for internal sales activity must comply with OMB Uniform Guidance regulations and the rates should fully cover, but not exceed, costs.

The Internal Sales Office reviews rates on a periodic basis determined by the risk profile and frequency defined below. The review process includes an engagement letter which outlines the role and responsibilities of the Internal Sales Office and the recharge center, the documentation necessary and the activity under review. The process also includes a final report that summarizes the review and findings (if applicable).

Internal Sales review process:

  1. Determine when a review is necessary

    The Internal Sales Office reviews the Internal Sales activity based on the risk profile outlined in the chart below. The risk profile is based on the following criteria; revenue recognized on an annual basis, charging sponsored projects and the type of recharge center. Auxiliary Services, Facilities Management and other University Wide Recharge Centers fall into the no applicable risk (Minimal Risk) category if they are not charging sponsored projects, and will not be reviewed by the Internal Sales Office. See the detailed list below.

     Minimal Risk*Low RiskLow RiskLow RiskMedium RiskMedium RiskHigh Risk
    Internal Sales Revenue Varies $25K - $100K $25K - $100K $101- $500K $101- $500K $501K and higher $501K and higher
    Charges Sponsored Projects No No Yes No Yes No

    Yes

    *

    Dept. #Department DescriptionRRC Code
    10051 OIT Support Services Admin OITXX
    10054 OIT Onsite Support OITXX
    10251 CPPM Project Delivery CPPMX
    10290 FM U Construction FMXXX
    10294 FM Abatement of Haz Material FMXXX
    10297 FM Matl & Shops - Sign FMXXX
    10300 FM Energy Management FMXXX
    10302 FM Steam Operations FMXXX
    10303 FM Electricity Operations FMXXX
    10304 FM Water and Sewer Operations FMXXX
    10305 FM Gas Operations FMXXX
    10306 FM Chilled Water Operations FMXXX
    10307 FM Facilities Engineering FMXXX
    10309 Central Security, Dept. of PUBSF
    10310 Emergency Management PUBSF
    10311 Police Department PUBSF
    10311 Police Department PUBSF
    10312 Environmental Health & Safety UHLSF
    10313 Building Code Division UHLSF
    10464 D Police UMDXX
    10465 D FM Admin UMDXX
    10472 D FM Project Admin UMDXX
    10474 D FM General Construction UMDXX
    10477 D FM Engineer UMDXX
    10480 D FM Electrician UMDXX
    10481 D FM Plumbing UMDXX
    10503 UMD Stores Administration UMDXX
    10621 M Facilities Management Admin UMMXX
    10649 M Bookstore UMMXX
    11619 St. Paul Bookstore AUXSV
    11620 Crookston Bookstore UMCXX
    11628 Copyright permissions AUXSV
    11633 Campus Mail Sorting AUXSV
    11635 U Card Office  AUXSV
    12055 FM Building Controls FMXXX
    12131 FM Design FMXXX
    12149 FM Low Voltage FMXXX
    12151 U Market Services Logistics AUXSV
    12172 FM Locksmiths FMXXX
    12173 FM Technical Services FMXXX
  2. Determine frequency of reviews

    The frequency of the Internal Sales Office review is based on the risk profile. The frequency of the reviews may be sooner based on severity of the recharge center’s prior reviews compliance issues or by request from the unit.

    FrequencyMinimal RiskLow RiskMedium RiskHigh Risk
    (# of Years) No Review required 5 to 7 3 to 4 2
  3. Process of the review
    Engagement Letter

    The Internal Sales Officer sends an Engagement Letter (link to sample letter) to the recharge center. The letter includes the activity being reviewed, the review period, the objective of the review, the process and what documents are necessary for the review.

    Review

    The Internal Sales Officer analyzes the rate development and associated financial documents that are received from the recharge center. The Internal Sales Officer meets with the recharge center unit to discuss process, answer any questions and ask any questions about the activity to gain a clearer understanding.

    The Internal Sales Officer completes the checklist (link to sample checklist). This is a quantitative summary of activity being reviewed. This form is the basis to determine the narrative associated with the compliance memo.

    Compliance Memo

    The Internal Sales Officer drafts the compliance memo (link to sample memo). This memo includes the activity/areas reviewed, a summary and rating of findings (if applicable), the policy/procedure included in the review, and the resolution to satisfy the finding.

    The compliance memo and checklist is sent to the recharge center for review and understanding of the identified findings.

    A final draft of the compliance memo and the checklist are sent to the significant parties involved in the Internal Sales activity. The Internal Sales officer will work with the recharge center to develop a Management Action Plan which defines the process/actions necessary to resolve the findings.

  4. Follow-up

    The Internal Sales Officer will work with the recharge center to fulfil the Management Action Plan. Useful findings should be adopted as best business practices to avoid findings in the future. Significant findings must be corrected during next budget cycle. Essential Findings must be corrected within three months of date of final memo.

  5. Results

    Internal Sales reviews serve several purposes and are designed to result in greater awareness of policies, procedures and best practices. The review is also designed to highlight opportunities that will enhance compliance or efficiencies related to rate development, overall management and monitoring of the internal sales activity.

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