Service Enterprise Activities FAQ

A Service Enterprise Activity provides, at approved rates and on a regular and continuing basis, goods or services to a wide variety of campus departments, rather than to individuals. Typically, a service enterprise will have only incidental non-UC income. 

In accordance with Business and Finance Bulletin A-59, Costing and Working Capital for Auxiliary and Service Enterprises, federal costing regulations define certain costs as unallowable as a charge to federal funds. Inclusion of funds accumulated for capital asset replacement in excess of depreciation on current equipment, and accumulated surpluses will require refunds to the federal government. The federal government will not accept any markup above cost, even if the purpose of that markup is to accumulate funds for equipment replacement or addition or for inventory expansion. Therefore, at the end of each fiscal year, those activities which provided services to federally-funded contract and grant activities will prepare a statement of costs that excludes any interest expenses except for capital equipment lease purchases, accumulation of funds for capital asset replacement in excess of depreciation expense for currently used assets, and accumulated surplus balance in excess of one month of the recharging unit’s activity. The difference between such a statement of costs and the revenues actually generated is considered excess pricing by the federal government. The portion of the difference which can be attributed to federal contract and grant activities will be refunded to individual active grants and contracts or in lump sum to the U.S. Treasury.

Federal costing regulations do not allow interest costs (except for capital equipment lease purchases), working capital or capital costs to be charged to federal users. There are two alternate ways to comply with federal costing regulations:

1. Establish dual-pricing structures for federal and non-federal activities (this can be accomplished by rebating the federal users); or
2. Instruct federally-funded activities not to make use of certain service activities 

Activities include but are not limited to: Imprints, Police and Telecommunication Services.

Service activities frequently use contracts referred to as service agreements. A service agreement is a written legal agreement between the University and a non-UC source containing terms and conditions under which goods or services are to be furnished by the University. Service agreements must be signed only by persons having UCSD contracting authority. 

For service agreements by non-recharge activities, please refer to “Other Income-Producing Activities”.

The University operates a large number of service enterprise activities. The fund range for service enterprise activities is generally 60000a through 69999z, except 63xxxx (Medical Center). However, there may be some overlap of the numbers. There are academic and “other” type activities in the fund range 60000a through 69999z that are not subject to guidelines for service enterprise activities.

Prior to the establishment of a Service Enterprise Activity, the need for such goods or services must be identified which, if provided at a reasonable cost and at a convenient location, would enhance and support the University’s instructional, research or public service programs. There must be a regular and continuing demand by departments for the goods or services to be provided by the enterprise. The demand must be significant, both in dollar amounts and number of transactions. 

The benefits, including relative prices and quality, of the proposed activity providing goods or services must be weighed against the benefits of obtaining similar goods or services from commercial sources or other University sources.

Goods or services should not be sold to the general public unless the goods or services are unique or sales will not compete with commercial sources. If services are to be provided by the activity, they must be unique or specialized, as opposed to general administration or other institutional support services. For example, an activity that provides temporary employees to non-UC users would not be allowed.

If it is anticipated that the activity may generate unrelated business income, e.g., related to the sale of goods and services to the general public, the potential tax liability also must be considered in planning and budgeting for the activity. 

The originating office submits to Department Chair or Administrative Unit Head a service enterprise activity proposal. The proposal is also referred to as a recharge rate proposal. 

The proposal should be prepared prior to the start date of a new rate or activity. However, in some instances the proposal may be retroactively approved to a date not preceding the beginning of the fiscal year.

The recharge rate proposal consists of the “Request to Establish a New Activity or Modify Rates/Services for an Existing Activity for Service Enterprise Activities”, an approved template to show the calculation of the rates and the financial statement (Statement of Operations).

The recharge rate proposal template must be from the approved templates:

• Approved Productive Hours and Statement of Operations Template
• Approved Lab Test, Productive Hours and Statement of Operations Template

The rate calculations in the rate proposal include, but are not limited to, productive hours; services that are mainly labor; services that provide stock merchandise; services that provide equipment for rental or use, etc.

The proposal is sent to the Department Chair or Administrative Unit Head of the activity for approval and signature. The signed copy must be maintained by the department. The proposal is then electronically sent to the activity’s Vice-Chancellor’s office for review and approal. The activity's Vice-Chancellor's office will then send the proposal to BFS-GA at SelfSupportAct@ucsd.edu. Although a “PDF” copy of the signed questionnaire and checklist is acceptable, the excel templates must be sent as excel files and not PDF. 

Upon approval by the Vice-Chancellor’s Office,  the proposal is sent electronically to BFS-GA at SelfSupportAct@ucsd.edu. BFS-GA will review the data for correctness and compliance to cost accounting policy. Upon approval by BFS-GA, the proposal is sent to the Recharge Rate Review Committee coordinator. The Recharge Rate Review Committee chairperson or designee reviews proposals for compliance to Office of Management and Budget (OMB) Circular A21, Cost Principles for Educational Institutions. The proposal is also sent to the Recharge Rate Review Committee members and the campus controller for their review and approval. Proposals for activities with projected annual income of less than $200,000 are reviewed and approved by the Chair of the Recharge Rate Review Committee on behalf of the full Committee and on behalf of the campus controller.

Upon approval by the Committee, the proposal is electronically submitted to the Assistant Vice Chancellor Business and Financial Services/Controller who final approves the proposal.

The Recharge Rate Review Committee is comprised of a Chair and a member of each of the Vice Chancellor areas. For a current listing of the members, please refer to this website. 

Exempt examples include but are not limited to:

• Student Health Services fees for patient services
• Facilities Design and Construction (methodology must be approved annually by the Recharge Rate Review Committee)

Recharge rates will be based on allowable costs. Rates will be stated in measurable units of goods or services. A separate rate should be established for each class of goods or services provided. All users of goods and services must be charged at established rates. The payroll costs will be based on a reasonable estimate of productive hours which is the number of hours per employee which annually can be directly attributed to the provision of goods or services. This excludes the hours allowed for vacation, holiday, sick leave, jury duty, military leave, and clean-up activities. The effective labor billing rate would be the sum of wage and wage-related costs to be recovered divided by the number of productive hours. Refer to "productive hours template" for sample calculations. 

Recharge activities will be operated on a no-gain/no-loss basis. Any surplus or deficit occurring in any one year will be corrected by adjustment of rates in the succeeding year to achieve a break-even balance at the succeeding year end. Every effort should be made to ensure that year-end surpluses or deficits do not exceed one month of the recharging unit's expenses. The adjustment of rates will generally be based on estimates since actual performance data for the year will not be available prior to the development and publication of the succeeding year's recharge rates. In exceptional cases when such an adjustment would create a severe fluctuation in rates from one year to the next, achievement of a break-even balance can be extended for a reasonable period beyond the succeeding year upon approval by the Recharge Rate Review Committee. The Recharge Rate Review Committee may also approve the maintenance of surpluses in excess of one month of the recharging unit’s activity when appropriate. 

Rates will be based on standard cost accounting methods. Rates should not be based on prorations or other overhead methods of cost allocations, unless the method is a calculation of unit costs supporting the goods and services provided, and the rate(s) is(are) approved by the Recharge Rate Review Committee. Rates must have an auditable basis. For example, a 25% mark-up for materials without any basis would not be allowed. Unless specifically approved by the Recharge Rate Review Committee, fixed-price jobs will not be quoted or billed to either university or non-university users. 

Any subsidy provided to UC users should be provided through a central allocation of discretionary funds that will permit activities to charge rates based on full costs. There may be exceptions caused by Federal grant stipulations. Certain recharge activities are subsidized by Federal grants which pay specific costs, such as salaries, for the recharge activity. However, the Federal grants specify that only certain users may benefit from the subsidy, causing tiered rates. 

All activities will publish a schedule of approved rates and prices. 

The rates, including rates for non-UC users, of Service Enterprise activities are subject to review by the Recharge Rate Review Committee. 

Goods sold to the general public may be subject to California sales tax. 

The mark-up cost is an increase above the original purchase price of materials. In certain activities such as machine shops, a handling fee for the cost of materials is appropriate. The mark-up percentage is normally computed by dividing the total materials processing costs by the total materials cost.  Materials processing costs usually consists only of the cost of salary and benefits of the person(s) involved in ordering, receiving, etc. of materials but could also include related costs such as computer, telephone, etc.

Start-up costs are non-recurring costs necessary to prepare a new activity for its normal business purpose. Start-up costs may include both capital expenditures, such as those for equipment, and non-capital expenditures, such as moving expenses. Start-up costs that benefit more than one year must not be charged to the operating fund of the recharge activity and must be funded by discretionary funds. The start-up costs may be recovered through amortization. Generally, the amortization period should be five years or the number of years benefited by the cost.           

An existing activity which has been converted to a recharge activity will generally not have new start- up costs. 

Any relief to UC users of recharge activities, such as a subsidy for instructional use of computers, should be provided through a central allocation of discretionary funds to the users which will permit the recharge activity to charge the established rate for goods or services based on its full costs. Unless specifically approved by the Recharge Rate Review Committee, rates charged to non-university users are not to be subsidized in any manner. 

There may be exceptions caused by Federal grant stipulations. Certain recharge activities are subsidized by Federal grants which pay specific costs, such as salaries, for the recharge activity. However, the Federal grants specify that only certain users may benefit from the subsidy, causing tiered rates.

Costs incurred and assigned to the activity must be essential to the purpose for which the activity was established, also known as (a.k.a.) direct costs.

Direct costs, also known as operating costs, are defined as all readily identifiable costs associated with the furnishing of goods or services, except for incidental administrative support such as clerical and secretarial assistance or minimal supervisory assistance that is not significant in time or dollar value, benefiting a single period. These costs include but are not limited to wages, wage-related costs, supplies, materials, equipment maintenance and equipment depreciation. The operating costs are expenditures, benefiting a single period, that are necessary to conduct normal business. Examples of operating costs include employee wages and benefits, supplies and equipment maintenance. 

Appropriate wage-related costs will include provision for leave benefits. Amounts generally will be based upon the estimate of actual costs of such benefits expected to be used during each year of operations. 

Training costs that are specific to the activity are allowed. However, training costs to create new goods/services are not allowed in the operating fund because to do so, would be charging users for services/goods not yet rendered. 

Non-current expenditures, such as for equipment acquisitions or facility modifications, cannot be charged to a service enterprise activity’s operating fund. Fees and stipends for undergraduate and graduate students cannot be charged to the operating fund.

Some activities buy capital equipment using an approved installment contract/lease (must be processed through Procurement and Contracts). Interest expense for capital equipment is considered to be a direct cost of the operation. However, principal payments must be paid from Renewals and Replacements funds or from some other funding source, such as Vice-Chancellor’s discretionary funds.

The overhead cost recovery rate is the rate applied to sales to non-UC users of activities in order to recover the indirect costs related to the activity. The activities must, at a minimum, charge non-UC users the standard differential income rates.

The standard differential income rates are for:

• Campus - If a sales/service activity is located in campus space, the campus differential rate will be added to sales to the general public.
• Off-Campus - If a sales/service activity is located in space that is not owned or maintained by UC, an off-campus differential rate will be added to sales to the general public.
• Ship Use - If a sales service activity is affiliated with the ship-use operation, with no space costs and all departmental support costs factored into the charge rate, a ship use differential rate will be added to sales to the general public.

Generally, waiver requests are approved for the activity’s Vice-Chancellor’s portion only and waiver requests must meet one of the following conditions in order to obtain approval. Waiver requests must be submitted to the Recharge Rate Review Committee for review and recommendations, with final approval by the campus controller and must be renewed at least every five years.

• Capacity Considerations - When a sales/service activity needs non-UCsales to attain/maintain a desirable capacity that keeps the sales/service cost available for University clients, but the standard overhead cost recovery rate would reduce the number of users.
• Quid Pro Quo - When a particular client, or all clients, is/are providing something of tangible value to UCSD that can be counted in lieu of full overhead on the sales/service charge.

Where a sales/service has obtained approval to charge a reduced overhead recovery rate for non-UC sales, the income will first be distributed to the administrative Vice-Chancellors, to fund their share, with the balance, if any, retained by the Vice-Chancellor responsible for the activity.

Rates are based on the current negotiated research rate for the campus, less four components: Equipment Depreciation, Sponsored Project Administration, Library, and Student Administration & Services. In the case where a particular sales/service activity involves the resources of, or results in, administrative burden/cost to Sponsored Project Administration, Library, or Student Services, the affected components should not be excluded. The rates may change after a Federal audit. For current rates, refer to "Overview of Self Supporting Activities."

Based on UCOP policy, a recharge activity will be operated on a no-gain/no-loss basis. Any surplus or deficit occurring in any one year will be corrected by adjustment of rates in the succeeding year to achieve a break-even balance at the succeeding year end. Every effort should be made to ensure that year-end surpluses or deficits do not exceed one month of the recharging unit's activity. 

The adjustment of rates will generally be based on estimates since actual performance data for the year will not be available prior to the development and publication of the succeeding year's recharge rates. In exceptional cases when such an adjustment would create a severe fluctuation in rates from one year to the next, achievement of a break-even balance can be extended for a reasonable period beyond the succeeding year upon approval by the local campus recharge review committee. The local campus recharge review committee may also approve the maintenance of surpluses in excess of one month of the recharging unit’s activity when appropriate. Accordingly, the Recharge Rate Review Committee has agreed upon using two months of the recharging unit’s activity for surplus balances. 

All Service Enterprises activities must notify BFS-GA via email at SelfSupportAct@ucsd.edu of unacceptable surplus or deficit balances by October 1^st following the fiscal year and provide an explanation and a business plan to correct the balances.

Those activities that have an unacceptable surplus or deficit balance as June 30^th and have not sent an explanation to BFS-GA by October 1^st following the fiscal year, will be subject to scrutiny by the Recharge Rate Review Committee. BFS-GA will send after October 1^st a listing of all those activities not in compliance to the Recharge Rate Review Committee and a copy to the activity’s financial contact. 

If no response is received from the activity’s financial contact within 30 days of notification to the Recharge Rate Review Committee, the listing will be sent by the Recharge Rate Review Committee coordinator to the respective Vice Chancellor’s Office.

Requests to change rates of established activities, or request to add rates for new goods or services of established activities must include a recharge rate review proposal which includes a “Request to Establish a New Activity or Modify Rates/Services for an Existing Activity for Service Enterprise Activities,” an approved template to show the calculation of the rates and financial statements. Follow the same approval procedures as for new activities. 

The recharge rate proposal templates must be from the list of approved templates. Select the template that best fit your needs:

• Approved Productive Hours and Statement of Operations Template
• Approved Lab Test, Productive Hours and Statement of Operations Template

Rate changes due to increases/decreases in the differential rate are automatically approved. 

Unrelated business income is a type of income resulting from sales of goods or services to individuals or non-University entities. If sales are not substantially related to University educational or research purposes, proceeds from the sales are considered to be unrelated business income and are subject to Federal income tax reporting requirements. Examples include income from sales by machine shops to the general public.

Upon approval by the Controller or Chairperson of the Recharge Rate Review Committee, an email is sent to BFS-GA at SelfSupportAct@ucsd.edu 

A Service Enterprise activity will have a specific fund number.  Each activity will be assigned a unique fund number in the appropriate COA series by BFS-GA. The fund is referred to as the “operating fund.” 

If there will be sales to non-UC customers, a revenue account code will be established. A revenue account code is also referred to as an “income account.” 

A new organization code will be established. 

A program code of xxx030 is generally used for operating expenses and xxx070 for cost of goods sold. 

A specific expenditure account will be established if departments will be recharged. 

An index code will be associated with the above COA elements, a.k.a. IFOP = Index, Fund, Organization and Program codes. 

A rule class is generally established for a recharge activity as a mechanism to record recharges. 

In addition to the operating fund, a Renewals and Replacement fund (76xxxx) will be established if equipment is involved. An equipment plant fund will also be established which is the operating fund with a 9 as the last character, e.g., 640009. 

If sales to non-UC users are involved, a differential income reserve fund (75xxxx) will also be established.

Operating fund is the accounting mechanism used to record operating costs, UC recharges and income.

Service Enterprise Activities may receive revenue/income from the sales of goods or services to the general public. Occasionally, revenue/income may be received from the sale of surplus assets sold via the campus Surplus Sales Office. 

It is the University's policy not to sell goods or services to non-UC consumers except where such goods or services are unique or where such sales would not be in competition with commercial sources. University facilities are not to be used for tests, studies, or investigations of a purely commercial nature except when it is shown conclusively that satisfactory facilities and such services do not exist elsewhere.

The revenue/income is recorded in the revenue account code which is generally a 5 in front of the fund number.

Recharges are income received from charges for sales and services to campus departments or other UC campuses. Recharges should be the primary source of income for Service Enterprise Activities.

For University financial reporting, a recharge is considered to be cost redistribution. Therefore, it appears as a credit in the expenditure account code 693900.

Operating costs are expenditures, benefiting a single period, that are necessary to conduct normal business. Examples of operating costs include employee wages and benefits, supplies and equipment maintenance. Interest expense for capital equipment may be an allowable cost for externally financed purchases. However, the principal payment cannot be recorded in the operating fund. Capital (inventorial) equipment or other capital costs cannot be recorded in the operating fund.

Expenditures for the operations are recorded in the Index, Fund, Organization, Program (xxx030) codes using appropriate expenditure account codes that categorize the type of expense. For cost of goods sold expenditures, activities must use program code xxx070.  Go to account expenditure codes for a listing. 

The cost of goods sold program codes are used to separate expenditures for re-sale vs. operating costs of the activity.

A budget must be established for each service enterprise activity in accordance with campus budget procedures. Generally, the department prepares a transfer of funds. The department will also request a “BD” index to be set up by the Budget Office.

A differential income reserve fund is the accounting mechanism used to segregate and accumulate overhead cost recovery (differential income rate) from sales of goods or services to non-University individuals or entities. A differential income fund (75xxxx) may be established if it is expected that sales to non-UC users will be made. A differential income fund is not allowed to have a deficit balance.

For example, if total income recorded in account 5xxxxx is $100,000 and the overhead cost recovery rate is 45%, differential income is not $100,000 multiplied by 45%. The $100,000 includes both regular income and differential income. If x is regular income and .45x is the differential, then x + .45x = $100,000 and regular income is $100,000 divided by 1.45, or $68,966. Differential income is $100,000 minus $68,966 which equals $31,034.

Funds representing overhead cost recovery generated will be distributed as follows:

65% to, or as directed by, the Vice Chancellor responsible for the activity that generated the overhead cost recovery

35% to, or as directed by, the administrative Vice Chancellors

If an activity is determined to be off-campus or to involve ship use, and the off-campus rate or ship use rate is added on sales to the general public, the differential income which is generated will be distributed according to the standard 65%-35% formula. 

When a sales/service has obtained approval to charge a reduced overhead cost recovery rate for non-UC sales, the income will first be distributed to the administrative Vice Chancellors, to fund their share, with the balance, if any, retained by the Vice Chancellor responsible for the activity. Example: If the sales/service charge is $100, the standard overhead cost recovery rate is 45%, and the approved rate exception is 20%, resulting in $20 in overhead cost recovery, the administrative share would be 35% of $40 or $14; the remaining portion of $6 is retained by the cognizant Vice Chancellor.

Differential income, in excess of the standard overhead cost rate will be distributed to, or as directed by, the Vice Chancellor responsible for the activity that generated the overhead cost recovery. 

In certain circumstances, such as collaborative programs, there may be multiple differential income rates for profit and non-profit entities. However, the differential income rate cannot be less than the standard differential income rate.

Funds representing differential income, which are distributed to an activity's differential income reserve, cannot be used to fund operating costs of the activity.

Funds representing overhead cost recovery, which are distributed to an activity's differential income reserve (funds 75xxxx), may be used to fund non-operating costs, such as equipment and capital improvements of the activity. With the approval of the cognizant Department Chair or Administrative Unit Head, such funds also may be used for operating costs of the department or unit, other than those of the activity itself.

Service Enterprise Activities are allowed to accumulate funds in funds beginning with 75xxxx for differential income. Following are the financial entries to record differential income:

Debit (+):        index, operating fund, organization, transfer account code 720702

Credit (-):       RMGDIFI, reserve fund, organization, transfer account code 720702

Credit (-):       index, reserve fund, organization, transfer account code 720702

Rule class FB08

Until the campus is able to provide an automated process to record differential income transfers, the department financial manger is responsible for recording the proper entries in the ledger. The entries must be recorded in the same fiscal year that the income is received. Failure to record the entries may result in notifying the department’s Vice Chancellor. 

An equipment R&R reserve fund is the accounting mechanism used to segregate equipment cost recovery funds from the operating fund. Reserves are accumulated to replace equipment to ensure that the facilities are operated on a continuous basis. The funds may be used to replace or upgrade the inventorial and non-inventorial equipment in the activity but may not be used for operating costs of the activity or for the operating costs of any other recharge activity.  R&R reserve funds are also used to record depreciation. Expenditures for salaries, benefits and travel are not allowed. An equipment R&R reserve fund is not allowed to have a deficit balance. 

If equipment is to be used for an activity, the R&R fund is established once the activity is approved by the Recharge Rate Review Committee. The transfers to record the depreciation expense begin when the equipment is put to use in the approved recharge activity. 

With Vice Chancellor approval, the funds can be used to purchase equipment for another self supporting activity or equipment for other departmental activities.

Equipment is recorded in the R&R reserve funds using the appropriate expenditure account codes. R&R reserve funds begin with 76xxxx. 

With approval of the cognizant Department Chair or Administrative Unit Head, equipment may be purchased by other unrestricted funds.

A discrete custodial code for the activity will be established for inventorial equipment purchases. The code can be obtained by contacting the Equipment Management Office. If the equipment is in the department’s primary custodial code, an interdepartmental transfer will need to be processed to transfer the equipment to the activity’s new custodial code.

Depreciation expense is a periodic charge for the cost of equipment. Equipment cannot be fully expensed in the operating fund in the year of acquisition. Depreciation will be on a straight-line basis over the remaining life of the equipment unless it can be demonstrated that some other method is more appropriate.  The life of the equipment normally should be based on the UCOP useful life table. Depreciation costs are to be included as a cost element for rate determination purposes. 

Any inventorial equipment, including gifted equipment, lease purchases or equipment purchased from another unrestricted fund, assigned to the activity other than that furnished by the Federal government will be depreciated. Federally-funded equipment cannot be depreciated and cannot be included in the costs basis for UC customers. Recharge activities can, however, create a rate for non-UC users that includes the federal depreciation component in the rate. Activities can then depreciate the equipment for non-UC users only. In this scenario, there would be two rates:  1) for UC customers (recharges) that does not include depreciation component in the rate and; 2) for non-UC customers (income) that does include the depreciation component for federally funded equipment.

In certain circumstances, the equipment depreciation may be waived. The waiver can only be applied to the rate for UC customers. You will need to provide the rationale for the waiver as part of the proposal. The Department Chair/Administrative Unit Head must approve prior to submission to the Recharge Rate Review Committee.

Provisions/reserves for replacement are funded from enterprise operations by charging the operating fund and crediting the reserve account for depreciation expense. The following are the financial entries to record depreciation expense:

Debit (-):         index, operating fund, organization, transfer account code 720500

Credit (+):       index, R& R fund, organization, transfer account code 723000

                       Rule class FB08

During the year, the cash balance of all UC funds participate in the Short-Term Investment Pool (STIP). Distribution of the interest earned (surplus balances) or charged (deficit balances) will be in accordance with the procedures in Business and Finance Bulletin A-60, Short-Term Investment Pool Distribution of Income. Current campus procedures dictate that the STIP be recorded in the respective Vice Chancellors’ STIP funds.

Activities that have non-UC users must use ISIS billing services by completing a detail code and/or category code and submitting to Student Billing Services. Billings must be recorded no less than monthly.

When an activity is no longer in operation, you must notify BFS-GA at SelfSupportAct@ucsd.edu to coordinate the closing of the fund(s). The funds need to zero-out prior to inactivating the index and numbers. If the activity had a Renewals and Replacement Reserve fund and/or Differential Income fund, those balances have to be zero and the funds and index numbers need to be inactivated. It is imperative to close the funds to avoid additional charges. In addition, if the activity has balance sheet accounts, such as credit card clearing accounts or accounts payable accounts, those accounts must be cleared also. 

The remaining inventory of an activity that is to be closed should be transferred at cost to another departmental activity or transferred to surplus sales in accordance with campus policy.

There may be specific fiscal closing entries that are required. An instruction document is prepared each fiscal year, “Recharge & Other Income-Producing Activities Fiscal Closing Special Items Instructions”. The document is available by the end of April. All Service Enterprise activities must refer to this document for entries that may be required for closing the activity.

UC and Federal Policies:

Business and Finance Bulletin A-47, University Direct Costing Procedures

Business and Finance Bulletin A-59, Costing and Working Capital for Auxiliary and Service Enterprises

Business nd Finance Bulletin A-60, Short-Term Investment Pool Distribution of Income

Business and Finance Bulletin A-61, Procedures for Determining Unrelated Business Income and Expenses

Business and Finance Bulletin BUS-29, Management and Control of University Equipment

Office of Management and Budget (OMB) Circular A-21, Cost Principles for Educational Institutions

UCSD Information:

• Account Code Overview
• Sales Tax Overview
• UCSD Cost Accounting Standards Board Disclosure Statement (CASB DS-2)
• Service Enterprise Activity Policy

The responsibilities include but are not limited to:

• Submit to Department Chair or Administrative Unit Head a service enterprise activity proposal
• Participate in resolution of comments, questions, and objections to proposal.
• Assure costing and pricing policies are followed.
• Ensure that only the recharge activity’s own revenues/recharge income and expenses are recorded in the operating fund.
• Ensure activities maintain records to substantiate recharge and other billing transactions, including requisitions, purchase orders, or similar written verification of individual user requests for goods or services.
• Ensure activities provide users with a receipt or similar written confirmation for each sale of goods or services at the time the sale is made. In addition, recharge users will be provided a detailed monthly statement for each index number recharged.
• Ensure activities initiate recharge or other billing transactions when goods and services are provided. Activities will not initiate recharge or other billing transactions in advance of providing goods and services. Progress recharges or billings may be made for jobs in process. 
• Conform to approved cash-handling, credit card compliance, billings and recharge procedures.
• Ensure that capital expenditures, including cost of equipment, are not charged to the operating fund.
• Ensure that activity will charge all users of goods or services at established, approved rates.
• If applicable, ensure that differential income transfers are processed periodically and that by the fiscal year end, all differential income transfers are posted to the ledger.
• Ensure that identical goods or services provided to University users must have identical rates.
• Obtain a discrete custodial code for the activity if any equipment depreciation is included in the charge rates
• Process interdepartmental transfer form to transfer existing equipment to the new custodial code
• Notify BFS-GA at SelfSupportAct@ucsd.edu  of unacceptable surplus or deficit balance by October 1^st following the fiscal year and provide an explanation and a business plan to correct the balances.

Responsibilities include but are not limited to:

• Approve and sign the proposal from originating office.
• Responsible for the business management functions, such as budget control and the receipt, custody, and disbursement of revenues, accounting and financial reporting; and procurement of supplies, equipment, and services.
• Responsible for any unfunded deficits of the activity.
• If applicable, approve request for equipment depreciation and differential income waiver(s).
• Forward proposal via email to  activity’s Vice-Chancellor’s Office.Participate in resolution of comments, questions, and objections to request.
• Ensure that notification is sent to BFS-GA at SelfSupportAct@ucsd.edu of unacceptable surplus or deficit balance by October 1^st following the fiscal year.

Responsibilities include but are not limited to:

• Review and approve the proposal from originating office.
• Forward proposal via email to BFS-GA at SelfSupportAct@ucsd.edu.
• Responsible for any unfunded deficits of the activity.

Responsibilities include but are not limited to:

• Review proposals for compliance to Office of Management and Budget (OMB) Circular A21, Cost Principles for Educational Institutions.
• Provide policy interpretations and guidance for individuals/units responsible for preparing recharge proposals.  Coordinate review process, including resolution of Committee comments, questions and objections.
• Submit Committee's recommendations to the Assistant Vice Chancellor, Business and Financial Services for review and approval of proposals over $200,000.
• Provide written confirmation of approved requests to originating office, Department Chair or Administrative Unit Head, Recharge Rate Review Committee and BFS-GA.
• If no response to the surplus/deficit notice is received within 30 days of notification to the Recharge Rate Review Committee, the listing will be sent by the Recharge Rate Review Committee coordinator to the respective Vice Chancellor’s Office.
• As needed, extract all equipment under custodial codes associated with Service Enterprise activities and exclude them from campus indirect cost recovery rate
• Maintain the website for recharge activities, including current rates, waivers, etc.
• Review and approve proposals for activities with projected annual income of less than $200,000 on behalf of the full Committee

Responsibilities include but are not limited to:

• Review and approve proposals and waiver requests distributed by Committee Chair/Coordinator.
• Provide policy interpretations and guidance for individuals/units responsible for preparing recharge proposals.
• Communicate comments, questions, and objections to Chair.
• Participate in resolution of comments, questions and objections relating to proposal.

Responsibilities include but are not limited to:

• Establish discrete custodial codes for new activities that include equipment depreciation in their charge rates.
• Associate the activity's custodial code with the activity's operating fund and organization code.

Responsibilities include but are not limited to:

• Review and approve detail codes and category codes for billing to non-UC users.

Responsibilities include but are not limited to:

• Review and approve the proposal for correctness and compliance to cost accounting policy and approves.
• Provide COA accounting distribution elements for new activity.
• Produce an annual listing of any recharge activities with a surplus or deficit balance in excess of an amount equivalent to one month of operating costs. 
• Send after October 1^st a listing of all those activities not in compliance to the Recharge Rate Review Committee, Chair and the activity’s financial contact. 
• Ascertain whether activities are subject to unrelated business income tax and if applicable, submit financial worksheets to UCOP for inclusion in the consolidated income tax return.

Responsibilities include but are not limited to:

• Provide final approval for proposals over $200,000.
• Provide final approval of waiver requests.
• Approve exceptional circumstances, such as an extended recovery plan for overdrafts.