| Chapter 12 - Prorate Entries |
| DEFINITION |
| Prorate entries are pre-defined recurring mechanical journal entries. They may be utilized to record indirect cost, general and administrative cost or any other recurring journal entry transaction. The entry may be based on a fixed dollar amount or a fixed percentage. Each entry is unique in that it affects only one debit account and one credit account, however, multiple account controls or subcodes may be affected by one prorate entry. Prorate entries are run at each month end closing except the second June closing. Prorate entries used at Colorado State University are Indirect Cost (FBM953) and General Prorate (FBM952). |
| PRORATE ENTRY FORM COMPLETION |
| Users establish prorates by inputting them into the RDR module of FRS. Users must be given permission to input or view data in the RDR module. The following guidance and instruction is provided to assist users in completing the form. |
| Prorate Options |
| Prorate entries may be layered, that is, one prorate entry may affect another prorate entry. This is possible because more than one prorate cycle is run at month end. When establishing a prorate entry, it is important that the entry be assigned to the appropriate cycle option. Prorate entries that do not depend on the processing of other prorate entries should be run in the first cycle. Business & Financial Services determines the appropriate cycle option for all prorate entries. Please contact them for guidance. |
| Base Account |
The base account is the general ledger or sub-ledger account that is analyzed to develop the basis for the prorate entry. The subcode portion of the account number is utilized by FRS to define how the base account is to be analyzed. The following selections are available:
- A specific account control or subcode may be entered. Masking is available, such as, 2XXX for all salary subcodes.
- Several Specific account controls or subcodes may be selected by entering 0000 for the base account subcode and entering the specific account controls or subcodes to be included or excluded in the subcode table section of the form. Masking is also available in the subcode table section.
- All account controls or subcodes in the base account may be selected by entering 0000 for the base account subcode and leaving the subcode table section of the form blank.
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| Percent Versus Fixed Dollar |
| The selection of percent versus fixed dollar is heavily dependent on the purpose of the prorate entry. Most indirect cost entries are based on a percentage of modified total direct cost. General and administrative entries use both percent and a fixed dollar amount. Percent is used for 22 funds while a fixed dollar amount is used for auxiliary enterprises. The following guidelines are provided: |
| If a fixed dollar journal is selected, specify the amount in the "rate" area of the form (right justified with no pennies) and place a "$" in the "$/%" field. The base account and method code must be entered, however, the subcode table may be left blank, or if entered, will be disregarded. |
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| If a percent is selected, specify the percent in the "rate" area of the form (must provide three decimal places) and place a "%" in the "$/%" field. The base account, method code must be entered, however, the subcode table may be left blank if using method code 0, 3 or 6. |
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| Debit And Credit Accounts |
| The debit account is the general ledger or sub-ledger account that will be debited when prorates are run at month end. The credit account is the general ledger or sub-ledger account that will be credited by the prorate entry. Both must be selected and entered on the form. Their absence will result in the rejection of the prorate entry by the FRS. |
| Description |
| The description entered in this field will be the description that is reflected on the FBM091 report. |
| Method |
| The method code specifies what time period is being analyzed and whether or not the subcode table section is to be utilized or ignored. It also defines whether subcodes in the table are included or excluded from the prorate calculation. Users must select from the following list. |
| Method Code | Subcode Use | Dollar Field Code |
| 0 | Disregard Subcode Table | Project-to-Date |
| 1 | Include Subcodes in Table | Project-to-Date |
| 2 | Exclude Subcodes in table | Project-to-Date |
| 3 | Disregard Subcode table | Year-to-Date |
| 4 | Include Subcodes in table | Year-to-Date |
| 5 | Exclude Subcodes in table | Year-to-Date |
| 6 | Disregard Subcode table | Current Month |
| 7 | Include Subcodes in table | Current Month |
| 8 | Exclude Subcodes in table | Current Month |
| 9 | Subcode Table Greater Than 6 | N/A |
| Subcode Table |
| The Subcode table is tied to the base account and defines which account controls or subcodes are to be included or excluded from the prorate analysis. Masking may be used in defining subcodes entered into the table, such as, 2XXX for salary subcodes. The subcode table is also tied to the method code. Users must determine whether it is easier to exclude unwanted subcodes or identify needed subcodes. |
| The tricky part comes into play when there are from seven to twelve subcodes. A transaction with seven or more subcodes is composed with two entry lines. Line 1 contains the first six subcodes with a method code of 9. Line 2 contains the remaining subcodes; the method code must be the method the prorate is to be calculated, such as zero through eight. Each line through the description field (upper limit - optional) must be completed. They must also be identical to each other. Examples of prorates with more than six subcodes follow. |
| The Report Description Record (RDR) contains all prorate records and is maintained on-line. The system does not provide a batch program. Due to the nature of the RDR only a few individuals will have input access to the RDR. |
| The attached input forms will be for internal "worksheet" use only. |
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RULES FOR PROCESSING
- If the rate or dollar amount is zero, the prorate entry will not be processed.
- If the base account is non-existent, deleted or frozen, a diagnostic is produced and the prorate will not be processed.
- No edits are performed on the debit and credit account numbers. If they are frozen, deleted or non-existent, they will go to the suspense file and be reported on the suspense list.
- If the base account being analyzed has revenue and expense subcodes, the user must determine whether or not to include or exclude one set or the other. This can be done through the subcode table section of the coding form.
- The prorate amount is based on either current month, year-to-date, or project-to-date, dependent on the method code for percentage calculations.
- The calculated amount = base account dollars x percent x .01.
- If the amount to be prorated is negative, the accounts are reversed in the transaction process. Users should evaluate this eventuality and reverse the debit and credit accounts on the entry form to obtain the desired results.
- If the amount to be prorated is zero, no transaction is generated.
- Prorates enter the Report Description File without edit; therefore, the transaction list should be reviewed and corrected as necessary before prorate processing is initiated.
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| USEFUL HINTS |
Testing of the prorate program has provided results that may be helpful to users. The following defines results users may expect from various coding options.
- When the base account, debit account and credit account all have "0000" in the subcode field and method code 0, 3 or 6 is used, the prorate will generate for the debit and credit accounts an entry for each subcode appearing in the base account. If "0000" is used for the debit account and not for the credit account (or vice versa), the directory record will not pass the edit and no entries will be created.
- When the base account, debit account and credit account all have "0000" in the subcode field and method code 1, 4 or 7 is used, the prorate will generate for the debit and credit accounts an entry for only those subcodes common to both the base account and the subcode table.
- When a specific subcode is entered for the base account and method code 0, 3 or 6 is used, the prorate will generate for the debit and credit accounts an entry to the specific subcodes entered in the debit and credit accounts. The subcodes entered may be different than the one entered for the base account.
- When the base account has "0000" in the subcode field, specific subcodes for the debit and credit accounts and method code 2, 5 or 8, the prorate will generate an entry to the specific subcodes entered in the debit and credit accounts based on all subcodes in the base account except those listed in the subcode table.
- When selecting a fixed dollar prorate, the base account and method code must also be completed. Even though a fixed dollar entry disregards the base account in the computation, an account number and subcode must appear in the field. A method code (makes no difference which one) must also be entered.
- The base account subcode may identify a range of subcodes through the use of masking, such as, 2XXX salary subcodes. When masking is utilized in conjunction with method code 0, 3 and 6, only that range of subcodes will be selected. If other method codes are utilized, the selection process will be affected by the subcode table. The entry to the debit and credit accounts will be determined by the subcodes entered for those accounts. Masking may also be utilized in the subcode table.
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