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Handbook of Operating Procedures
Chapter 9 - General Provisions
Publication Date: July 28, 2009
Responsible Executive: VP for Business Affairs

9.42 Auxiliary Enterprises


POLICY STATEMENT


This policy covers the approval to establish auxiliary enterprise services, their relationship with the university, and the university's retention of proper operating control over such services to ensure compliance with applicable state regulations, laws and university policies.


RATIONALE


This policy provides consistent guidelines for the establishment and administration of auxiliary enterprises, including the decision and management of privatized educational business activities and the university's retention of operating controls over outsourced operations.


SCOPE


This policy applies to all auxiliary enterprise services at The University of Texas at San Antonio (UTSA).


WEBSITE ADDRESS FOR THIS POLICY


http://www.utsa.edu/hop/chapter9/9-42.html


RELATED STATUTES, POLICIES, REQUIREMENTS OR STANDARDS


1 Section 2252.061 of the Texas Government Code SUBCHAPTER
C. PRIVATE AUXILIARY ENTERPRISE PROVIDIN G SERVICES
TO STATE AGENCIES ORINSTITUTIONS OF HIGHER EDUCATION
http://tlo2.tlc.state.tx.us/statutes/docs/GV/
content/htm/gv.010.00.002252.00.htm
2 UTS 142.1 Policy on the Annual Financial Report
http://www.utsystem.edu/POLICY/policies/uts142_1.html
3 UTS 101 Guidelines for Allocation of Utility
Costs to Auxiliary Enterprises
http://www.utsystem.edu/bor/procedures/policy/policies/uts101.html
4 UTS 130 Vending Machine Contracts
http://www.utsystem.edu/policy/policies/uts130.html
5 Texas Education Code: Sec. 51.009. DEFINING AND
ACCOUNTING FOR CERTAIN INCOME. http://www.statutes.legis.state.tx.us/Docs/ED/htm/ED.51.htm
State Comptroller Purchasing Guidelines -
Section 7.008 Auxiliary Enterprises https://fmx.cpa.state.tx.us/fm/pubs/purchase/index.php
7 NACUBO Advisory Report 1999-2 Accounting and Reporting
for Auxiliary, Auxiliary-Other and Other Self-Supporting Activities http://www.nacubo.org/Business_and_Policy_Areas/Accounting/Advisory
_Reports/Advisory_Report_1999-2_Accounting_and_Reporting_for
_Auxiliary_Auxiliary-Other_and_Other_Self-supporting_Activities.html

CONTACTS


If you have any questions about HOP policy 9.42, Auxiliary Enterprises , contact the following office:

The Office of the Associate Vice President for Financial Affairs
210-458-4210


DEFINITIONS


Auxiliary Services are defined by Section 2252.061 of the Texas Government Code, as any "business activity that is conducted at a state agency, provides a service to the agency, and is not paid for with any appropriated money." An auxiliary enterprise exists to furnish goods or services to students, faculty, staff, other institutional departments, or incidentally to the general public, and charges a fee directly related to, although not necessarily equal to, the cost of the goods or services. Auxiliary services are self-supportive activities, vital to the total academic experience, and their proper and efficient management is an important determinant of student satisfaction. These activities are often referred to as Auxiliary Enterprises because the operations meet the Governmental Accounting Standards Board (GASB) definition of enterprise funds.

Enterprise funds are defined by the Governmental Accounting Standards Board (GASB) as those funds used "to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the cost (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and /or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes."


RESPONSIBILITIES


 

Implementation/Enforcement Step Responsible Office/Officer
1. Approval of a new Auxiliary Enterprise President
2. Approval to privatize an Auxiliary Enterprise Vice President for Business Affairs

PROCEDURES


  1. Auxiliary Enterprises
  1. The University may authorize the establishment of an auxiliary enterprise when it is determined necessary to charge fees for providing goods and services as authorized by The University of Texas Board of Regents and Texas Education Code.
  2. To be approved as an auxiliary enterprise, the activity must be integral to the fulfillment of the university's instructional, research or public service missions, comply with all state or federal regulations pertaining thereto, and meet the criteria set forth below:
    1. there are compelling reasons of economic efficiency to do so;
    2. providing the product or service is a convenience to the campus community or to members of the public participating in institutional activities;
    3. offering the product or service is of importance to maintaining the quality of the institution; and
    4. the project or service is unavailable elsewhere in the community.
  3. In accordance with Texas Education Code Sec. 51.009, auxiliary enterprise funds shall be accounted for in a manner recommended by the National Association of College and University Business Officers and approved by the Comptroller of Public Accounts and the Texas Higher Education Coordinating Board. Other rules and procedural guidelines established for the administration of university budgets, finances, human resources, procurement, business, facility and administrative services may also apply to auxiliary enterprises.
  4. All applicable laws and regulations pertaining to auxiliary enterprises shall be complied with, including taxation, conflict of interest and unfair competition.
  5. Privatization of business activities such as contracting with an external party for the operation of campus business services shall only be undertaken at the direction of the President after careful consideration and review. When business activities are privatized, the Vice President for Business Affairs shall ensure that each contract contains a mechanism to assure quality services are provided as required in the scope of work, with adequate provisions for noncompliance and operational control as appropriate.
  6. The following are authorized as a current self-supporting auxiliary enterprise:
    1. Athletics
    2. Business Auxiliary Services, includes Bookstore (contracted-out), Food Service (contracted-out), Parking, Transportation Services, Self-Operating Copiers, UTSA Card and Vending (contracted-out).
    3. Child Development Center
    4. Institute of Texan Cultures Store
    5. Recreation Center
    6. Student Health Services - Pharmacy / Lab
    7. University Center
    8. University Housing (includes Laundry)