Standard for Non-Recharge Unit Revenues

November 14, 2024
Categories: Standards and Governance Tags: and Compliance, Debt, Trust fund management

Purpose

This standard serves as a supplement to Section II.C.3 of University Policy 602.12, Revenue Generating Activities. This standard provides guidance on managing revenues and expenditures resulting from department operations, including those related to activities that formerly were a recharge unit (RU) but no longer qualify as such.

Scope

This standard applies to all revenue-generating activities by campus departments where revenue is recorded in the 13XXXX fund range, including situations where a recharge unit operating with a 13XXXX University fund number is determined to no longer qualify as a recharge unit and must inactivate the fund number(s) associated with the activity. The existing fund number will be replaced with a fund number in the 150000-150020 range.

Contacts

Direct any general questions about this standard to your department’s business officer or fund administrator. If you have specific questions, please refer to the contacts for fund use guidance listed in Appendix 1 of the University’s Financial Management Guidelines.

Standard

  1. Revenue generation: All revenue generating activities must support the University’s mission of teaching, research or outreach. These activities are not a source of discretionary funding.
  2. Business plan: The revenue activity of a former RU may continue within an established business plan that addresses the following:
    1. An initial projected budget and business plan should be included with the request for a new 15XXXX fund and submitted to Financial Services and Legal Affairs for approval. Any subsequent changes to the business plan must be provided to Financial Services.
    2. A signed service agreement must be in place prior to the delivery of goods or services. A copy of the executed service agreement must be included with the business plan.
    3. Rates charged should approximate the cost of goods or services provided. The rate calculation should be adjusted periodically to reflect current costs.
    4. The business plan should provide sufficient detail about the nature and type of expenditures to be incurred as part of the planned activity.
    5. The plan should identify the business officer or fund administrator within the department responsible for managing the fund to be used for the planned activities (e.g., the individual responsible for processing the receipts generated by the activity and making the related expenditures).
    6. The goal is for these activities to operate close to break-even. If a minimal surplus occurs, the business plan should describe how any surplus will be applied for the purpose of delivering the goods or services in a future period. Surpluses may not be transferred to another fund without approval from Business Affairs.
    7. Any gifts received by the department must not be deposited into this fund. Gifts must be processed through The Foundation of the University of North Carolina at Charlotte, Inc., as described in University Policy 602.2, Solicitation and Acceptance of Gifts.
  3. Expenditures: Expenditure guidelines are the same as those for other unrestricted trust funds. Any usual and customary business expense related to the delivery of the good or service is permissible, such as:
    1. Salaries, wages
    2. Supplies
    3. Equipment
    4. Scholarship assistance
    5. Other costs directly associated with providing the good or service
  4. Non-permissible expenses:
    1. Donor solicitation expenses
    2. Alcohol and entertainment expenses
    3. Expenses that confer a personal benefit
  5. Annual report: By September 30 each year, the department conducting the revenue-generating activity is required to provide an annual report to Financial Services summarizing the program activity for the most recent fiscal year ending June 30. As part of the report, the department should include any adjustments needed to the previously approved business plan or rate calculation. The department’s annual report should also include a statement that re-affirms the department’s adherence to the related University Policies and Standards governing the revenue generating activity.

Related Resources

Revision History

  • Initially approved November 14, 2024