1. Charges, Fees, Assessments and You
UAccess Community Symposium 2018

2. Administrative Service Charge
What is ASC? Why does the University charge it?
Assessed on external revenues and operational expenditures
Intended to recover overhead costs
An assessment on external revenues and operational expenses intended to support overhead costs and administrative services that benefit the entire University.

3. Administrative Service Charge
Recovers costs not easily assignable
Payroll processing
Human resources
Budgeting
Procurement
The revenues generated from the Administrative Service Charge (ASC) are used specifically to support overhead costs (activities on campus which benefit the entire institution, but which are not easily assignable to any one unit, for example, utilities, processing payroll and purchase orders) University charges non-state/grant accounts a fee to recover facilities and administrative costs like utilities or building maintenance or processing payroll or purchase orders.

4. Administrative Service Charge
How much is charged and who determines it?
ASC % determined by President’s Cabinet
Revenue:
9.5% as of July 1, 2015
Expense:
1% as of July 1, 2015

5. Administrative Service Charge
Exemptions?
Special exemptions granted for ASC on Revenue only
Must be approved by Senior VP & CFO
Exemptions are very rare and must be approved by Senior VP & CFO.

6. Administrative Service Charge
Revenue Base
Auxiliary (AX), Designated (DE), and Designated- Service Center (DR)
External
Revenue
Auxiliary examples: Bookstore, Student Union, Campus Recreation, Intercollegiate Athletics
Designated examples: Department or Administrative Sales and Services and Conference Accounts
Designated Service Centers examples: Research Service Centers like Arizona Research Lab, Telecom

7. Administrative Service Charge
Revenue exemptions
Tuition
Course Fees
Retained Fees
Gifts
Mandatory Fees
Internal Revenue
Example accounts that are exempted: Accounts that record mandatory fees like Campus Recreation Student Fees, Student Technology Fees, Student programs.

8. Administrative Service Charge
Expenditure Base
Auxiliary (AX) and Designated (DE)
Operational Expenditures

9. Administrative Service Charge
Expense Exemptions
Cost of Goods Sold
Cost of Farm Feed
Student Aid
ASC
Bad Debt Expense
Capital Expenditures
Transfers Out

10. Administrative Service Charge
Expense Exemptions
Exempted Sub-funds
Allocated Funds
Banner
Exempted sub-funds: Allocated Administrative Service Chg (ALCASC); Allocated Investment Income (ALCINV); Allocated Program Fees and Differentials (ALCPRG); Allocated Student Retained Fees (ALCSRF); Banner Affiliation Agreement Clinic Svcs (BAACS); Banner Academic Funds Flow (BAFF); Banner Supplementary Agreements (BANSUP); Banner Continuing Medical Education (BCME)

11. Administrative Service Charge
Expense Exemptions
Exempted Accounts
Institutional Designated Accounts
Handle institutional mandated costs
What are some institutional mandated costs:
Institutional Legal Fees, Licenses, and obligations (like to Tucson Fire)
Institutional Student Aid
Institutional Banking Fees
Institutional Leases
Institutional debt service

12. Administrative Service Charge
When is it Assessed?
ASC is assessed monthly
Posting occurs on the last day of monthly close after all transactions have posted
ASC is automatically assessed by the Prorate Journal Entry module.
Posting occurs on the last day of the monthly close (usually 2nd business day of new month)

13. Prorate Journal Entry Account Line
Revenue:
UAccess Financials
Prorate Journal Entry Account Line

14. Prorate Journal Entry Account Line
Expense:
UAccess Financials
Prorate Journal Entry Account Line

15. Administrative Service Charge
$25.5M Generated
ASC on Revenue
~$19.6M
~$2.8M Endowment Management Fee
ASC on Expenditures
~$3.1M

16. Administrative Service Charge
Division
Budget
% of Total
Units of the President
$12,924,465
51%
Business Affairs
$9,332,490
36%
All Other Divisions
$3,243,045
13%
Total
$25,500,000
100%

17. Endowment Management Fee
What is it?
1.35% annual management fee based market value (1.25% After July 1, 2018)
Applies to all University and Foundation endowments
Non-cash, non-income producing assets are not subject to the management fee
1.35% annual management fee based on the market value of the assets held in the endowment.
Non-cash, non-income producing assets are not subject to the management fee until the assets are sold and reinvested.

18. Endowment Management Fee
How is it Assessed?
Fee is collected monthly
Posts on object code 0781
The fee is collected monthly through a DI initiated by the endowment accountant.
Fee post to the Endowment account (7XXXXXX) on OC 0781.

19. Development Fee What is it?
Supports development activities and oversight
Applies to gifts $1,000 or greater
Applies to the first $3.5M of a major gift

20. Development Fee Accounting Revenue in OC 0962 Expenditure in OC 7960
DI processed monthly by FSO.

21. Development Fee Exemptions? Pass-through scholarships
Fully expended within 12 mos.
Gifts to purchase specified equipment
New gifts from donors who have cumulatively given $15 million or more

22. Development Fee ~$500k Generated Gift Fee 6% on Revenue
4% Development Office
1% President’s Office
1% College Development Offices

23. Facilities and Administrative (F&A) Cost
What is F&A?
Defined in CFR 2 Part §
Costs incurred for a joint purpose
Not readily assignable
F&A costs are defined in CFR 2 Part §  as costs that are "incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity."

24. Facilities and Administrative (F&A) Cost
 F&A costs are sometimes referred to as indirect costs. 

25. Facilities and Administrative (F&A) Cost
How is the F&A rate calculated?
Negotiated with the federal Department of Health and Human Services (DHHS)
Developed and negotiated every four to six years
The University negotiates F&A rates with its cognizant agency—the Department of Health and Human Services (DHHS), Division of Cost Allocation (DCA), San Francisco office.  Rates are developed and negotiated approximately every four to six years

26. Facilities and Administrative (F&A) Cost
Action
Amount
A researcher buys supplies on a sponsored project
$100
The F&A rate on sponsored project
53.5%
F&A expenses generated by UAFinancials (obj. code 7950)
$53.50
Total
$153.50

27. Facilities and Administrative (F&A) Cost
Project Type
Effective Date
Rate
On-Campus Research
7/1/16-6/30/20
53.5%
Off-Campus Research
26.0%
On-Campus Instruction
50.0%
Off-Campus Instruction
On-Campus Other
47.0%
Off-Campus Other

28. Facilities and Administrative Revenue
$77.8M Generated
Allocated
~$56.3M
211xxxx
Budgeted
Departmental Accounts
~$21.5M
210xxx/214xxx
Cash Style

29. Facilities and Administrative Revenue
Division
Budget %
Colleges
$25,100,008
32%
Inst. Debt, O&M, Etc.
$21,736,087
28%
Research Incl. Dev. Fund
$18,374,645
24%
All Others
$12,586,360
16%
Total
$77,797,100
100%

30. Federal Work-Study Overhead Fee (SWS Overhead)
What is it?
10% fee assessed on Federal Work-Study gross earnings processed through payroll.
Funds the administrative cost of On-Campus and Off-Campus Federal Work-Study Programs.

31. Federal Work-Study Overhead Fee (SWS Overhead)
What is it?
Exclusions
WordCats and MathCats tutoring positions

32. Federal Work-Study Overhead Fee (SWS Overhead)
How is it Assessed?
Assessed bi-weekly the same time as payroll.

33. Work Study Revenue $350k Generated Local Fund Budget
Support of Operations of the Office of Scholarships and Financial Aid (OFSA)
95% Salary & ERE
5% Operations

34. UA Online Revenue and Assessments
UA Online Program
Distributes on OC 0255
TUITION MODELS
COLLEGE
AISS
UA Undergrad
65%
35%
UA Grad
70%
30%
3rd Party Grad/Int’l Partner
80%
20%

35. UA Online Revenue and Assessments
Distance Campus Program
Distributes on OC 0256
TUITION MODELS
COLLEGE
AISS
UA Undergrad
70%
30%
UA Grad
3rd Party Grad
80%
20%

36. UA Online Revenue and Assessments
International Education Program
Distributes on OC 0256
TUITION MODELS
COLLEGE
AISS
UA Undergrad
70%
30%
UA Grad

37. UA Online Revenue and Assessments
Community Campus
Distributes on OC 0257
TUITION MODELS
COLLEGE
AISS
UA Undergrad
100% 0%
UA Grad
Subject to 5.7% ASC

38. UA Online Revenue and Assessments
Massive Online Courses (MOOCs)
Distributes on OC 0940
College 80%, AISS 20%
Subject to ASC
UA Online has a partnership with Coursera for MOOCs. Enrolled students can choose to pay for a certification, and Coursera shares a portion of the revenue with UA under a partnership agreement. 
This revenue is distributed on a quarterly basis as received.

39. Responsibility Centered Management (RCM)
Current Model Assumptions
Undergraduate Tuition 30.96%
Subvention 30.96%

40. Responsibility Centered Management (RCM)
Current Model Assumptions
Graduate Tuition 12.38%
Program Fees and Differential Tuition %
Sponsored F&A 12.38%
Undergraduate and Subvention Rates Set first, then Graduate, F&A, and PFDT set at 40% of UG/Subvention Rate

41. Responsibility Centered Management (RCM)
Current Model Assumptions
Strategic Investment 2.75% FY18
3.5% FY19, 5% FY20 and Beyond
NASF $25.19/sq. ft.

42. Responsibility Centered Management (RCM)
Location of Assessments
Model/Spreadsheet/”Paper Exercise”
Program Fees and Differential Tuition
Accounting
Plus Model “True Up”

43. Responsibility Centered Management (RCM)
Location of Assessments
Budget Allocation Not Revenue Allocation
Lump Sum Distribution
Year Lag

44. Responsibility Centered Management (RCM)
Revenues and Assessments
Undergraduate Tuition (Net of Aid) $369M
Graduate Tuition (Net of Aid) $66M
Program Fees and Differential Tuition (Net of Aid) $48M

45. Responsibility Centered Management (RCM)
Revenues and Assessments
F&A Recovery (see previous) $78M
Subvention $314M (Appropriations and ASC)
Assessments $371M

46. Responsibility Centered Management (RCM)
Budgets Support by Assessments
Facilities $111M
Debt Service, Operations & Maintenance (incl. Utilities), Leases
Institutional Funds, Planning, Design, and Construction and Facilities Management

47. Responsibility Centered Management (RCM)
Budgets Support by Assessments
Administrative Support Units $233M
Senior Leadership, Libraries, UITS, Human Resources, FSO, Student Affairs Administration, Budget Office, etc.

48. Responsibility Centered Management (RCM)
Budgets Support by Assessments
Strategic Investment $27M
Reinvestment in Colleges/Strategic Initiatives

49. References 6.17 Administrative Service Charge Policy
8.33 University Development Fund Policy and Procedure