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UT System Administration Policy Library -- Policy UTS101
Guidelines For Allocation of Utility Costs to Auxiliary Enterprises |
Responsible Officer: Executive Vice Chancellor for Business Affairs
Sponsoring Office: Office of Risk Management
Effective Date: July 1, 1987
Last Reviewed: December 5, 2007
Next Scheduled Review: December 1, 2010
Errors or changes to: policyoffice@utsystem.edu
CONTENTS
Policy Statement
Rationale
Scope
Website Address For This Policy
Related Statutes, Policies, Requirements Or Standards
Contacts
Definitions
Responsibilities
Procedures
Forms Tools/Online Processes
Appendix
POLICY STATEMENT
UT System Institutions shall develop a method for allocating utility costs to auxiliary enterprises.
RATIONALE
The General Appropriations Act specifically prohibits the use of educational and general funds appropriated to any institution to be expended to support auxiliary enterprises, unless specifically authorized in the Act. (General Appropriations Act, Higher Education Special Provisions, Sec. 6 (8b), 80th Leg. R. S.)
Auxiliary enterprises should be charged for allowable costs associated with facilities, goods and services provided by the institution from educational and general funds. The purpose of this policy is to require institutions to establish a methodology for allocating utility costs to Auxiliary Enterprises.
SCOPE
All institutions and UT System Administration
WEBSITE ADDRESS FOR THIS POLICY
http://www.utsystem.edu/policy/policies/uts101.html
RELATED STATUTES, POLICIES, REQUIREMENTS OR STANDARDS
UT System Administration Policies & Standards |
Other Policies & Standards |
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CONTACTS
If you have any questions about UT System Administration Policy UTS 101, Guidelines for Allocation of Utility Costs to Auxiliary Enterprises, contact the following offices:
DEFINITIONS
Auxiliary Enterprises – a program, activity or fund source used to furnish facilities, goods, or services to students, patients, faculty, staff, or, incidentally, to the general public. An auxiliary enterprise typically charges a fee directly related to, although not necessarily equal to, the cost of the facilities, goods or services. The distinguishing characteristic of an auxiliary enterprise is that it is managed on an essentially self-supporting basis. Examples are student housing, food services, college stores, parking and student health services. Hospitals, although they may serve students, faculty, or staff, are classified separately because of their financial significance.
Auxiliary Enterprise Buildings or Space - income-generating structures and space such as dormitories, cafeterias, student union buildings, stadiums, athletic facilities, housing or boarding facilities used by a fraternity, sorority, or private club, and alumni centers used solely for those purposes. Auxiliary space is not supported by State appropriations.
Education and General (E&G) - space used for teaching, research, or the preservation of knowledge, including the proportional share used for those activities in any building or facility used jointly with auxiliary enterprise, or space that is permanently unassigned. E&G space is supported by state appropriations.
Utilities - may include electricity, natural gas, water, chilled water, steam, and wastewater.
Cost Allocation Plan – documentation relating to the process for using a set of allocation methods to the benefiting objective.
RESPONSIBILITIES
UT Systen Institution
- Develop and document an equitable cost allocation plan for utility costs incurred by other funds applicable to Auxiliary Enterprises.
PROCEDURES
The development of cost allocation plan and costing standards is an evolving process and requires continual monitoring of the methodology used. The allocation methodology determined for each fiscal year will remain in effect for that entire fiscal year. The allocation methodology should be properly documented in a cost allocation plan.
The cost allocation plan shall be reviewed on an annual basis and approved by the Chief Financial Officer, to ensure that all utility costs incurred by other funds applicable to Auxiliary Enterprises are recovered by those funds.
The allocations shall be made on the basis of the most accurate and reliable information; using the most reasonable basis relative to the activity; and based on documented principles and procedures. Metered information, when available, is the most accurate and consequently, the preferred basis for making allocations. In the absence of individual meters, usable square footage is the normal method of allocation. Alternative methods may be used. Each institution must evaluate its own circumstance and develop an appropriate methodology.
Dormant structures not being utilized or readied for a specific activity and which are consuming minimal quantities of utilities while in a mothballed state should be included in space computations at a similarly minimal percentage of their actual usable square footage. Because of an institution's obligation to care for its facilities, these should be classified as E&G facilities at such time as their auxiliary activity usage has ceased.
FORMS AND TOOLS/ONLINE PROCESSES
None
APPENDIX
None
