What is an IFR?

Income Fund Reimbursable (IFR) accounts are self-supporting accounts that support activities related to the campus' mission. These accounts have clear and defined income/expenditure relationships. A unique aspect of IFR accounts is their ability to carry forward cash balances from one fiscal year to the next. An IFR account should have basically one purpose and one revenue source. Each IFR account should maintain a positive cash balance. The expenses charged to the account should be covered by the revenue which the account generates. 

In accordance with NYS Finance Law and SUNY Procedure 7553, NYS A/G and OSC approval are required for revenue contracts at $25,000.00 and above. Departments are required to aggregate revenue streams with individual vendors in order to adequately calculate the total contract value. Departments must be able to demonstrate to NYS that the revenue the University receives is fair and reasonable.

SUNY System Administration, based on the recommendation of the state University Business Officer Association (SUBOA), approved a new methodology for assessing Administrative Overhead and Maintenance and Operations charges to the IFR program starting July of 1999. This new methodology allows campuses to set their own rates and encourages campuses to maximize their IFR usage, expand their entrepreneurial activities while recovering the indirect costs associated with providing the various programs. Fringe benefits were not considered during the review.

Stony Brook University implemented an assessment against revenue remitted to the IFR account based on a current rate of 15% with limited waiver exceptions. The rate is to be deemed a combined rate including administrative and maintenance/operation costs. Previously the basis was on the expenditures (Administrative Overhead (AOH) @ 5.93% and Maintenance and Operations (MO) @ 9.58% or 5.6% and 8.74% respectively on revenue for a combined rate of 14.34%).

The overhead assessment is designed to recover the indirect costs associated with the IFR programs for the following areas: campus central administrative services, utilities, maintenance and operation costs, and a SUNY system administrative contribution. The overhead assessment is reviewed on a periodic basis in concert with the University’s budget process and consistent with management’s decision to facilitate the entrepreneurial mission. The campus has elected to consider the combined assessments generated by the program in total when considering the anticipated recovery of the indirect cost.

SUNY policy provides for the establishment of Income Fund Reimbursable (IFR) accounts to be managed within a Special Revenue Fund on each campus. The fund (the total of all accounts) must have a positive cash balance at all times. IFR’s are self-supporting accounts that support activities related to campus’ missions. These types of accounts have clear and defined income/expenditure relationships. Each IFR account must generate revenue sufficient to cover costs incurred and be managed to a positive cash position. A number of accounts generate revenue through contracts and other entities. In some cases these contracts require an initial outlay of funds before reimbursement can be requested. For these and other accounts with like circumstances where revenue follows expenditures, an accrual basis can be used to assure a break-even status at fiscal year-end.

Over the past several years, the Budget and Office of the Controller have advanced and documented a budget development process for Income Fund Reimbursable Accounts. This process assures a reasonable level of annual review of the past operating experience by account, and projects allocation requirements for the upcoming year. Any accounts with serious cash deficit balances will be structured to correct the negative cash conditions through the rate process, revenue and expenditure projections or allocation decisions within the following fiscal year. If a deficit is of a size that prohibits a solution through the traditional budgeting techniques, vice presidential area representatives must identify “other resources” that can be appropriately used to resolve the deficit. “Other resources” may include the VP area’s state shortfall. Account deficits must be resolved in one year. The only exception to this policy concerns the management of service-related IFR accounts whose rates are reviewed every two years. If a deficit develops in such an account the elimination of that deficit must be addressed as part of the next rate development exercise. The revised rates in those accounts should be established to eliminate the existing deficit and prevent the development of a new deficit. 

There are four types of Income Fund Reimbursable accounts:

1. General Income Fund Reimbursable
2. SUTRA Income Fund Reimbursable (State University Tuition Reimbursable Account.) These accounts were established to provide State University the ability to retain a limited amount of tuition revenue generated in excess of targeted levels and create entrepreneurial incentives for campuses to expand enrollment and programs.
3. Dormitory Income Fund Reimbursable (DIFR)
4. Hospital Income Fund Reimbursable (HIFR)

An account request form is submitted by the department to the Vice President Office for approval of the new program or activity. The Vice President’s Office approves the request and forwards the information to the Office of the Controller. The Office of the Controller will review the proposal, determine the appropriateness of the account, consider if the account involves a rate or is associated with a student charge. The Office of the Controller will also identify the source and use of the funds to determine if any of the waivers indicated below apply. Once the appropriate approvals and documentation are established, the Office of the Controller will request the creation of the account by SUNY system administration. The Office of the Controller will also request the appropriate waivers for the overhead assessment of the account if it is not the standard 15% rate.

Petitions for only approved waiver codes will be considered. If a department feels that their account qualifies for a waiver based upon the university approved waivers and has not received this consideration, the department can petition the University Controller to review the account for final determination. Creation of a new category must be done in consultation with the Budget Office and the Office of the Controller. Approval for new waiver categories are subject to the University President’s approval. 

The petition can be approved for the account or for the individual transactions.

Petitions for waivers have been granted for accounts where the unit substantially pays for the items traditionally covered by the administrative overhead fee including grounds, electrical, snow removal, custodial, rent, facility improvements and maintenance. 

Petitions for individual transactions have been granted where the transaction is a transfer from another Stony Brook entity and already assessed an administrative charge.

Petitions have also been approved where the entity is paying the campus specifically disallows the assessment of the overhead via an approved contractual arrangement. Departments are instructed to require the payment of the overhead, however there are extenuating circumstances where the administrative overhead can not be assessed. The Office of the Controller takes into account if the activity is going to be located off campus, is a one time event as well as the associated potential expenditures/effort in making the determination.

Stony Brook policy maintains that the financial stability of IFR accounts is the responsibility of the President, Provost, or Vice President within whose organizations the account resides.

The Stony Brook Account Master (SBAM) is the official organizational structure and is the responsibility of the Vice Presidential areas to identify this structure in consultation with the Budget office. It is the responsibility of the Office of the Controller Office to maintain this file. 

It is the responsibility of the Office of the Controller to work with the VP areas to close inactive accounts. Upon verification from the VP area that the account will no longer be required, the Office of the Controller will work with the VP area to ensure that the cash balance is zero and any allocation will be remitted back to one of Stony Brook’s undistributed accounts. At that time the Office of the Controller will submit a request to Albany to close the account. The closing of sub-accounts is only allowed at the end of the state fiscal year upon receipt of the “Chart of Account Deletion” request from the Office of the Vice Chancellor for Finance and Business.

Duties and authority of the operating departments:

1. Maintain account integrity - The IFR program for which the account was established must generate sufficient revenues to support operational costs.
2. An accrual basis will be used to assure a break-even status at fiscal year-end. Each account manager must complete the semiannual (December and June) IFR accrual data worksheets.
3. Along with the IFR accrual data worksheet, for those accounts with inventories, each June a physical count must be performed, documented and submitted to the Office of the Controller. The documentation must be a detailed listing of all items. It must include the item description, quantity at hand at June 30th, the cost of item (not resale value) and the extended value. The operation’s manager and an employee who participated in the physical count must sign the documentation.
4. At least every two years a rate review must be performed for those accounts that are service operations and supported by a user fee. The Account Manager must submit the rate review to their respective Dean/VP Offices for review and approval, and subsequently to the Office of the Controller for approval. The University Controller must approve all fees.