UCR

UCR Policies and Procedures

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Campus Policy Number:         300-02
Policy Topic:                 Administrative Cost Recovery and Special Service Agreements for Central
                              Administrative Services and Land Rent
Policy Owner:                 Resource Planning and Budget
Initial Date:                 11/30/1996
Revision Date (A):            02/01/2009
Revision Date (B):            04/01/2012
      
I. Table of Contents
Section II.       Policy Objective
Section III.      Policy Implementation and Review Responsibility
Section IV.       Administrative Cost Recovery - Definitions and Guiding Principles
                  A.    ACR Calculation Methodology Review and Approval Process
                  B.    Description of Steps and Timeline in the ACR Calculation Review and Approval Process
                  C.    ACR Annual Calculation and Timeline
Section V.       Unit Costs Recovered by Administrative Cost Recovery 
Section VI.       Units Authorized to be Charged Administrative Cost Recovery
Section VII.      Special Service Agreements
                  A.    SSA Annual Review and Approval Process 
                  B.    Description of Steps and Timeline in the Annual SAA Review and Approval Process
Section VIII.     Land Rent
Section IX.       References
 
II.  Policy Objective
 
This policy is intended to clarify the application of Administrative Cost Recovery (ACR) and Land Rent and also to clarify the use and applicability of Special Service Agreements (SSA). Specifically addressed are the costs that ACR is intended to recover, which administrative services costs are recovered by ACR, which units may be charged, and the process whereby SSAs may be utilized to purchase additional central administrative services.
 
III. Policy Implementation and Review Responsibility
 
The Office of Resource Planning and Budget (RP&B) is charged with the responsibility of interpreting this policy, for assisting the affected units in implementation of ACR, SSAs, and Land Rents, and for making formal policy recommendations to the Chancellor and/or Executive Vice Chancellor and Provost (EVC&P) for approval. All questions and correspondence pertaining to this policy are to be directed to RP&B.
 
IV.  Administrative Cost Recovery-Definitions and Guiding Principles
 
Whenever goods or services are sold to external entities or individuals, the price charged must recover the full cost of providing that good or service, including both direct and indirect costs (See Business and Finance Bulletin A-56, page 3). Indirect Costs are costs that cannot be directly identified or related to a specific good or service, but represent costs incurred to support the provision of that good or service. Indirect cost rates must include an amount to recover administrative and support services provided within the unit itself as well as those provided at the institutional level (See Business and Finance Bulletin A-56, page 3). Administrative Cost Recovery (ACR) is the UCR mechanism for recovering the cost of administrative and support services provided at the institutional level; specifically, central administrative services.
 
ACR is a charge for services such as Accounting, Purchasing, and Payroll. It is based on the relative demand on core services by a unit calculated under an indirect cost recovery methodology.
 
ACR is only assessed against that portion of a unit's budget derived from external income. Other funds, such as General/Core Funds or other Chancellorial resources, Contract and Grants funds, or Gifts funds, are not assessed. It should be noted that a number of these revenue streams are charged for the cost of central administrative services through other mechanisms, such as Indirect Cost Recovery for Contract and Grants. ACR becomes a discretionary resource that may be utilized to provide support to central administrative services.
 
All campus units are required to obtain services from central campus administrative units. The Chancellor and/or EVC&P may grant an exception if it is determined that it is in the best interests of the campus to allow a unit to seek services elsewhere. 
 
      A.    ACR Calculation Methodology Review and Approval Process
 
ACR calculation methodologies and any subsequent modifications requested by a campus unit must be presented to RP&B for its review through the appropriate Vice Chancellor or Dean. Upon completion of its review process, RP&B will forward its recommendation along with the necessary supporting documentation to the Chancellor and/or EVC&P for review and action. RP&B will inform the appropriate Vice Chancellor or Dean of the decision of the Chancellor and/or EVC&P, as well as notify the applicable affected units.
 
 
B.    Description of the Steps and Timeline in the ACR Calculation Methodology Review and Approval Process
 
1.    Unit enters into a consultation process with RP&B to revise the ACR methodology and its projected customer impact (July-September)
2.    RP&B reviews the submittal and forwards its recommendation along with the necessary supporting documentation to the Chancellor and/or EVC&P for review and action (September-October)
 
3.    RP&B notifies affected units of the decision rendered by the Chancellor and/or EVC&P (November – December)
 
C.    ACR Annual Calculation and Timeline 
 
On an annual basis, RP&B will calculate the ACR assessment for each campus unit. RP&B will inform each unit of its annual assessment and the unit will be responsible to communicate this information to its customers.
 
1.    RP&B calculates proposed ACR charges for the upcoming fiscal year on a customer-by-customer basis (November - December)
 
2.    RP&B notifies each unit of its ACR assessment amount effective the first of July (January)
 
3.    Each campus unit notifies its customers of the outcome of the review and approval process and prepares the necessary budgetary entries for processing (February - June)
 
V.    Unit Costs Recovered by Administrative Cost Recovery
 
Costs in the following central administrative services are currently recovered by ACR charges. The associated units are predominantly supported by the General Fund and provide services to all campus units. This list is reviewed on an annual basis by RP&B and modified accordingly.
 
* Accounting/Payroll
* Environmental Health and Safety
* Equipment Management
* Human Resources/Labor Relations
* Risk Management/ Insurance
* Internal Audit
* Police/Community Service Officers
* Purchasing
* Receiving/Shipping
* Real Estate Services
* Resource Planning and Budget
* Student Business Services/Cashier’s Office
 
VI.   Units Authorized to be Charged Administrative Cost Recovery
 
To be charged ACR, a campus unit must generate annual external income and/or income from individuals in the amount of $50,000 or more. The following units either currently generate or have the capacity to generate income in this amount. This list is reviewed annually by RP&B and modified accordingly. It should be noted that cash deposits into these accounts are the equivalent of income for the purpose of this policy.
 
* Agency Accounts
* Agricultural Operations
* A. Gary Anderson Graduate School of Management (AGSM) Executive Programs
* Associated Students of UCR (ASUCR)
* California Education Research Cooperative
* Campus Store
* Career Center
* Child Development Center
* Cultural Events
* Dining Services
* Equipment Management
* Highlander Union Building (HUB)/Commons
* Housing Services
* Intercollegiate Athletics
* Library
* Medical/Health Sciences Compensation Plans
* New Student Orientation
* Parking Operations
* Professional School Fee Programs
* Plant Services
* Recreation Center/Programs
* Registration Fee Programs
* Self-Supporting Degree Programs
* Student Business Services (SBS)
* Student Health Services
* Summer Sessions
* Telecommunications
* Transcript of Records (Registrar)
* Transportation Services
* UCR California Museum of Photography
* UCR Card Operations
* University Club
* University Extension
 
VII. Special Services Agreements
 
A Special Service Agreement (SSA) is a type of agreement whereby a central administrative support unit agrees to provide additional and specifically identifiable goods or services to a unit for a fee. An SSA always requires the central administrative support unit to acquire additional resources. An SSA charge may be based on a unit price or a negotiated amount. Regardless of the methodology chosen, the SSA must recover the full cost (both direct and indirect) of providing that good or service. 
 
An SSA is not to be utilized in place of ACR, since ACR represents an institutional cost recovery. An SSA is a fee for a documented specific good or service. 
 
A.    SSA Annual Review and Approval Process
 
On an annual basis, all service units implementing SSAs must present to RP&B, through the appropriate Dean or Vice Chancellor, for its review proposed agreements by service and by customer. Upon completion of its review process, RP&B will forward its recommendation along with the necessary supporting documentation to the Chancellor and/or EVC&P for action. Note that RP&B, as part of its review process, will closely examine the relationship between ACR and SSA charges.
 
RP&B will inform the appropriate Dean or Vice Chancellor of the decision rendered by the Chancellor and/or EVC&P. At that time, the service unit must notify its customers of the outcome of the review and approval process.
 
B.    Description of the Steps and Timeline in the Annual SSA Review and Approval Process
 
1.    Each campus unit enters into a consultation process with RP&B to secure input on policies, materials, and guidelines to help facilitate the development and implementation of a proposed SSA (July–February)
 
2.    Each campus unit prepares its proposed SSA for the upcoming fiscal year on a service-by-service and a customer-by-customer basis, forwarding the information to RP&B for review (February-March)
 
3.    RP&B reviews the submittal and forwards its recommendation, along with the necessary supporting documentation, to the Chancellor and/or EVC&P for review and action (April-May)
 
4.    RP&B notifies the campus unit of the decision rendered by the Chancellor and/or EVC&P (May)
 
5.    Organization notifies customers of the outcome of the review and approval process and prepares the necessary budgetary entries for processing (May - June)
 
VIII. Land Rent
 
Each campus unit authorized to be charged ACR according to section VI of this policy may also be assessed charges for Land Rent. Each campus unit physically located on real property controlled by UCR, effective July 1, 2011, is charged annually for Land Rent. The charge is based on the square footage of the land boundary of each campus unit. Land boundaries are determined and converted into square footage by the Office of Capital and Physical Planning (C&PP).   RP&B is responsible for calculating and recommending the proposed Land Rent charges for review, action, and approval by the Chancellor and/or EVC&P. If self-supporting and auxiliary enterprises lease space in a building, have purchased the land, or if the land is tied to a third party lease, no Land Rent applies.
  
IX.  References
 
Business and Finance Bulletin A-47, University Direct Costing Procedures
Business and Finance Bulletin A-56, Academic Support Unit Costing and Billing Guidelines