From:  Philip Harding , Director of Finance                                                   15^th July 2003

Earlier this year the Financial Systems section of the Finance department carried out a review of the current methods for internal recharging. A full copy of the review is available on the Finance Intranet.. 

 

The review highlighted the following areas of concern:-

 

1. The value of individual Internal Charge Notes (ICNs) ranges from a minimum of 11pence to £368,000.

 

2 .More than 50% of the ICNs processed within the University are for items under £250 in value.

 

3.  80% (approximately) of the total ICNs issued relate to transactions initiated by four departments Estates and Facilities , Marketing & Development , ISLS and the School of Biosciences.

 

4.A considerable amount of staff time and hence indirect cost is involved in processing recharged transactions which could be usefully spent on other activities.

 

5. Extensive duplicate records are kept to supplement ICNs.

 

6. In some instances long delays occur between work being completed and ICNs being returned which effectively means that some departments effectively subsidise others.

 

7. In  some instances the ICN mechanism is used as a means of bypassing certain accounting control procedures

 

In the light of this, the following procedures will be adopted with effect from 1^st August 2003:

 

 

As mentioned above, three departments and the School of Biosciences in Cavendish Campus initiate the majority of the ICNs within the University. From 1^st August 2003 the practice of recharging the cost of work by ICN in these areas will cease.

 

This will be replaced by a new procedure whereby the budget holder must provide the cost centre and category code which is to be charged when 'ordering' work or items of software, equipment or consumables. The departments will be charged directly on this code when work is completed via a monthly schedule, which the central departments will send to Finance for processing. Any corrections (once proved) will be made retrospectively.

 

This will affect the following areas:

 

Estates and Facilities Reprographic work , telecommunications

 

Marketing and Development Printing , publicity materials , events etc

 

ISLS Computer equipment , consumables , software etc

 

The School of Biosciences has successfully implemented a new computer system (Hyperdata) which is currently used to log all requisitions and orders made on the School store. This data contains all of the information required for internal recharging and will be adapted to phase out the manual ICN forms which are currently used.

 

 

The procedures outlined above will eliminate the majority of the ICNs processed. However there are instances where departments do need to make recharges outside of these areas.

 

To achieve this from 1^st August 2003, the ICN mechanism will remain in place but a minimum limit of £250.00 will be introduced on individual transactions. ICNs below this value will not be accepted.

 

These new procedures should ease the burden which internal recharging places on both academic and administrative staff within the University.

 

Could you please inform staff within your campuses and departments of these changes.