Recovery Accounts/Recoups

Approving Authority:	Council
Establishment Date:	26 March 1997
Date Last Amendment:	27 May 2002
Nature of Amendment:	Recoups
Date Last Reviewed:
Publication Reference:
Contact Officer:	Director, Financial Services

5.6	Recovery accounts
	Introduction The purpose of Recovery accounts is to provide a mechanism and procedures for dealing with transactions that fall outside the normal recurrent and grant operations of the university, eg. self-funding operations/services within the university; Flinders Press,** etc.
	Principle The University will establish and maintain recovery accounts to record transactions outside normal recurrent and grant account funding. Monies generated through recovery accounts remain the property of the University. The treatment of any surplus deficit generated will be determined by the person responsible for the recovery account in the best interests of the University.
	Procedure 5.6.1 Recovery account funds are treated in the same way as University funds and transactions fall within the normal policies and guidelines for expenditure adopted by the University. 5.6.2 To establish a new Recovery Account — an ‘application for new account’ form (draft attached as Appendix 5.6a) is completed and forwarded to the Director, Financial Services for approval. 5.6.3 The Director, Financial Services will ensure that all details are complete and that there is justification for the establishment of the account. 5.6.4 When the new accounts have been established approval will be communicated by returning a copy of the application form suitably endorsed by the Director, Financial Services in the space printed on the form. 5.6.5 Periodic reviews of the account balances will be undertaken by personnel responsible for each account on a four weekly basis. 5.6.6 An independent check will be carried out by the Director, Financial Services (or nominee) as indicated below. TABLE 2 Periodic reviews of account balances Balances Periodic reviews < $10,000 annually > $10,000 < $50,000 bi-annually > $50,000 < $100,000 quarterly > $100,000 4 weekly
	Recoups
	Principles Funds paid to the University by an external entity will be recorded as revenue, unless they create a matching liability. Income received by the University as a result of the conduct of University business, will be recorded as revenue.
	Examples The University provides a photocopying service to students at cost (or subsidised). the student payment is recorded as revenue. Reason: payment by an external entity for services provided. The University contracts to provide consulting services for $1,000 per day plus reimbursement of travel costs. all payments are recorded as revenue. Reason: payment by an external entity for services provided. The University employs a professor and is part funded by a Government Agency. record contribution by the government agency as revenue. Reason: payment by an external entity and the expense is a normal University expense ie a University staff member. The University pays an individual's salary and gets reimbursed. The reimbursement is revenue. Liabilities The University may receive funds that are not 'owned' by the University eg deposits. If receipt of a payment creates a liability, then the payment is not revenue.
	REVENUE (EXTERNAL INCOME) ACCOUNTS External Income (revenue) Credit income accounts (beginning '0') ***Accounts beginning with '0' must be credited on all invoices raised.*** Recoup Credit expense account ***recoup only for transactions within entity 01*** When crediting an account, first consider: Is this income from an internal or external source? If: External (ie income received from outside the University)   It is revenue and an invoice must be raised. Internal (ie income received from within the University - Entity 01)   It is a Recoup and funds are transferred by general journal.