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Chapter 05.15 - Auxiliary Service Enterprises, Recharge Centers, and Self Funded Activities

REGENTS’ POLICY
PART V – FINANCE AND BUSINESS MANAGEMENT
Chapter 05.15 - Auxiliary Service Enterprises, Recharge Centers,
and Self Funded Activities

P05.15.010. General Statement. 

1. The board recognizes that auxiliary service enterprises, recharge centers, and self funded activities are needed and reflect the quality of services that a campus desires for the convenience and necessity of its students, faculty, staff, alumni, and campus community. 
2. An auxiliary service enterprise is an entity that exists to furnish goods or services primarily to individuals such as students, faculty or staff and charges a fee directly related to, but not necessarily equal to, the cost of the goods and services. University departments and the general public may incidentally be served by some auxiliary enterprises. However, with the exception of 1) sales to students, faculty and staff, 2) the University of èßäÊÓƵ Press, as outlet for printed materials from limited sources, and 3) sales at off-campus èßäÊÓƵ sponsored events, auxiliary enterprises shall not solicit business from persons off campus and shall not deliver merchandise off campus. Auxiliary service enterprises include activities such as the University of èßäÊÓƵ Press, housing, bookstores, parking, food service, health care, including hospital or infirmary services, and child care. 
3. Recharge Centers furnish goods or services primarily to èßäÊÓƵ departments and are supported by internal charges to the user. Such goods or services might be available for purchase from commercial sources, but for reasons of convenience, control, efficiency, or necessity, the èßäÊÓƵ chooses to provide them through, or as part of, an institutional department. Recharge Centers include operations such as tele/video/network communications, motor pools, central copy pools, and electronic or chemistry supplies. 
4. Self-funded activities are those activities that do not meet the definition of an auxiliary enterprise or recharge center, but are self support operations. Examples may include some aspects of student recreation centers, conference activities, and international education.

(02-17-95)

P05.15.020. Authorization. 

1. With the exception of housing facilities, which require board approval in accordance with regents’ policy on facilities, approval to operate any èßäÊÓƵ auxiliary service enterprise must be obtained from the chief finance officer.
2. Approval to operate any recharge center or self-funded activity must be obtained from the MAU’s chief financial officer. The president shall promulgate èßäÊÓƵ regulation to govern the operation of auxiliary service enterprises, recharge centers, and self funded activities. 

(02-17-95)

P05.15.030. Pricing of Goods and Services, Budget Approvals, and Interest. 

1. Auxiliary service enterprises are operated primarily for the convenience and necessity of students and the campus community. Such auxiliary services may make books, office supplies, other items, and services conveniently available for direct or indirect sale to èßäÊÓƵ employees and departments unless it is inconsistent with state procurement code, èßäÊÓƵ regulation, or èßäÊÓƵ procedures. University regulation shall ensure that pricing of goods and services, though not necessarily equal to such costs, is, to the extent practicable, sufficient to maintain high quality facilities or services and directly related to:
   1. full direct costs, 
   2. full indirect costs, 
   3. periodic contributions for renovation and remodeling projects, and 
   4. periodic contributions for renewal and replacement projects.
2. All auxiliary service enterprises, recharge centers and self-funded activities shall have the full cost of its activities identified, and, unless otherwise limited by provisions of Circular A-21 regarding federal grants and contracts, èßäÊÓƵ regulation, or statewide accounting procedures, those costs will be allocated and charged to the activity which incurs them. In order to 1) minimize the cost of books and other items goods or services sold by such activities, 2) maintain a competitive position with state, local, and national markets, or 3) accomplish other management objectives, the èßäÊÓƵ may provide financial support for such things as space, utilities, maintenance, student service programs, financial accounting, auditing, and administrative costs for such activities from funds other than those derived from auxiliary activities. However, all such costs shall be identified in the budget and accounting processes, with other financial support clearly identified in conformance with èßäÊÓƵ regulation and the statewide accounting manual. Only direct auxiliary revenues may be used to fund a renewal and replacement reserve balance. 
3. No funds other than the revenues of an auxiliary service enterprise may be obligated, transferred, or spent by that auxiliary service enterprise without the prior written approval of the MAU's chief financial officer. 
4. At least annually , interest on auxiliary interfund balances and reserves for renewal and replacement of equipment and facilities within housing and other approved auxiliaries shall be imputed and charged or credited to the appropriate auxiliary or the appropriate component of the Auxiliary System of the University, established under P05.15.040.B, in accordance with èßäÊÓƵ regulation and the statewide accounting manual. 
5. While interest may be imputed and charged against negative balances, no interest earnings shall be imputed, credited, earned, accrued, or due prior to the submittal of a budget to the chief finance officer identifying all revenues and costs set forth in this section and èßäÊÓƵ regulation.

(04-15-04)

P05.15.040. Housing System of the University; Auxiliary System of the University.

1. In order to reduce borrowing costs and maximize flexibility and debt capacity, all facilities previously made part of the Housing System of the University are hereby removed from the Housing System of the University. 
2. In order to accomplish internal goals, the board directs the chief finance officer to establish the Auxiliary System of the University. If any facility is used, in whole or in part, for apartment, residence, dormitory, housing, dining, boarding, hospital, infirmary, parking, bookstores, or student activities, and that use has been approved as an Auxiliary Service Enterprise by the chief finance officer , that whole or part shall thereby be automatically made a part of the Auxiliary System of the University. 
3. Each chancellor shall create, maintain and annually update a strategic plan for housing that:
   1. identifies all campuses or other sites which have housing or are anticipated to need housing; 
   2. states the goals and objectives to be accomplished over time in managing and developing housing where it is currently located or where new or additional housing is anticipated to be needed; 
   3. identifies the timing and quantity of the anticipated need; 
   4. provides sufficient detail as to the type of housing and how it is to be acquired or otherwise established; 
   5. sets forth a financing plan consistent with the MAU's capital plan and reasonable operating expectations; and 
   6. summarizes progress made on the goals and objectives stated in the previous strategic plans
      
      All strategic plans for housing shall be presented to the board for approval.

(02-17-95)

P05.15.050. Student Services Programs within Housing Facilities. 

1. Student service programs within housing facilities provide an environment where students can experience personal growth and development, a sense of community, and opportunities for student leadership. These program costs shall be identified in the budget. 
2. Each chancellor shall establish rules and procedures governing the operation of student services programs within housing facilities.

(02-17-95)

P05.15.060. Competition with the Private Sector. 

1. Except for real estate development and management, èßäÊÓƵ business activities shall be directly related to meeting the èßäÊÓƵ's instructional, research, and public service missions or shall be conducted for the convenience and necessity of the èßäÊÓƵ community. This policy is not intended to address the instructional offerings central to the mission of the èßäÊÓƵ, but to establish general direction for non-instructional functions of the èßäÊÓƵ. 
2. The èßäÊÓƵ has a responsibility to carefully consider any decision to provide products and services to students, faculty, staff, public or private organizations, or the public at large, particularly when the products and services to be provided might compete with similar products or services offered by the private sector. Some degree of competition between the èßäÊÓƵ and the private sector is unavoidable, even when the èßäÊÓƵ is engaged in the narrowest pursuit of its instructional, research, and public service missions. Where a potentially competitive situation exists, the èßäÊÓƵ should consider the concerns of affected private businesses and the community as a whole and act with sensitivity and good faith regarding those concerns. 
3. The èßäÊÓƵ may enter into business activities that are necessary either to enhance, promote, or support the èßäÊÓƵ's instructional, research, public service, or other educational functions, and the needs of the students, faculty, staff, and members of the public participating in institutional events. 
4. Provision of services by èßäÊÓƵ departments to other èßäÊÓƵ departments is not competition with the private sector. A chancellor shall consider obtaining, by contract or other means, these services from the private sector when to do so would provide equivalent or better quality service at a lower price than the full costs of providing such services internally.

(02-17-95)

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