Cost Recovery Funds
Per the Integrated CSU Administrative Manual [ICSUAM] on Cost Allocation/Reimbursement, it is the policy of the California State University [CSU] to recover both direct and indirect costs incurred in providing services, products, and facilities to other funds within the university or between the CSU, auxiliary organizations, and external parties. Recovery of direct costs must be based on actual costs incurred. Recovery of indirect costs must be based on an allocation plan. The campus cost recovery plan addressing direct and indirect costs is approved annually by the campus Chief Financial Officer [CFO].
Cost Recoveries from Internal University Departments [Chargebacks]
Chargebacks have been used as a way for a department to collect funds from other department[s] for the services they provided. Effective in 2018/19, select 77xxx funds have been closed and were folded into 70000 or another trust fund based on the type of activity. Affected units have already been notified. Other 77xxx funds are still used for services such as:
- Facilities services from FD&O
- Postage charges from Distribution & Asset Services
If your department needs to collect funds from multiple departments [including auxiliary organizations], complete the Journal Upload Entry Request [xlsx] and submit your request via .
For services provided to outside customers, e.g. a sorority/fraternity or the City of San Jose, Accounting Services will need to issue an invoice. To request an invoice be sent to an outside customer, complete the Billing Request Template [xlsx] and send it to Accounting Services.
Cost Recoveries from Outside Organizations
Effective in FY 2022/23, specific funds shall be used to record cost recovery revenues from auxiliaries. Please continue to use appropriate fund codes and project codes for the organization being billed:
| Fund | Organization Billed | Project Code Prefix | Account |
|---|---|---|---|
| 78005 | Research Foundation | F | 580095 |
| 78006 | Tower Foundation | T | 580095 |
| 70000 | Student Union | SU | 580095 |
| 70000 | Spartan Shops* | N/A | 580095 |
| 70000 | Associated Students | AS | 580095 |
*Spartan Shops currently uses the "shared services" set up with 91ÁÔÆæ and is no longer being billed; instead, a journal entry is being processed to recover from Spartan Shops.
How should departments process Cost Recovery for auxiliary activities?
Departments should process Cost Recovery activities in the appropriate fund [see table above] and reference the appropriate auxiliary project codes. Transactions with a reimbursable project code will trigger invoicing at the end of the month.
To learn more about the auto billing process, see Accounts Receivable & Billing.
Important: Whenever possible, expenses that are intended to be charged 100% to an auxiliary organization should be paid directly using that organization's procurement process, rather than being paid by the university and coded for reimbursement as described above.
How are cost recovery expenses invoiced?
At the end of the month, Accounting Services runs the reimbursed billing process in CFS, which issues invoices for any expenses posted to an expense Account [6xxxxx], in Funds 70000, 78005, or 78006 and with a reimbursable Project code in a specific month. The issuance of the bill will result in a credit to revenue Account 580095.
For example:
- Expense in 660003-78005-1234-F3412346789 for $200.
- When the invoice is issued, a credit will appear in 580095-78005-1234-F3412346789 for $200.
What Project codes are invoiced?
Project codes with the prefixes AS, F, SU, and T will be invoiced to the auxiliaries each month in the auto-billing process.
Faculty Release Time Authorization Chargebacks
Effective FY 2022/23, there will be two project codes used to identify payroll expenses that are being reimbursed through the RTA [Release Time Authorization] chargeback process.
- 99999 - Faculty Release Time/Do Not Bill
- 88888 - Faculty Additional Employment/Do Not Bill
The foundation providing release time will initiate an RTA form and route it to Accounting Services. The signed RTA serves as an invoice request that will be used to generate the reimbursement. Once generated, two credits will post to the receiving department: One will post to account code 601817 to reflect the academic salary reimbursement, and the other will post to 603810 to reflect the associated benefit reimbursement.
For more information about this process, see .
All Other Cost Recovery Funds
Cost recovery funds for FD&O, IT Services, MLK, Financial Aid, and Capital Project Management will remain in place until further notice. Please contact either the Office of Budget and Financial Management or Accounting Services.
For cost recoveries from other CSU Campuses, including the Chancellor's Office, see Cost Recovery from Other CSU Campuses.
