Departmental Sales and Services Activity
Accounting and Financial Reporting
View policy pdf: Departmental Sales and Services Activity Policy
Departmental sales and service (DSS) funds are considered institutional (state) funds and should only recover costs for providing the sales or service. If salaries will be charged to DSS funds, then employee benefits will need to be funded by the DSS revenue sources. Most DSS revenue sources are from billing rates charged to customer for providing sale or service. The billing rate should be developed for the activity based on incurred costs and charges users for their actual usage. The rate(s) should be computed so as to cover only allowable costs, which should include salaries, wages, employee benefits, costs of materials and supplies, travel, repairs and maintenance, outside service costs, departmental administration, equipment depreciation, or other support costs. Departmental administration is typically about 15% of directly related costs for activities. There should be no markup for profit. Some DSS activities will not have a billing rate (eg. Incidental by-product sales) and should charge a reasonable rate to cover any costs. DSS funds are also used to deposit miscellaneous income departments may receive on rare occasions or for immaterial amounts.
A departmental sales & service activity can sell to external users in addition to internal University units. External users are defined as entities that do not have a University fund; or students, faculty, or staff acting in a personal capacity. The service may be provided on a direct (ownership) basis or on a contractual (rental or service agreement) basis. An external rate can be established for external users to include, in addition to the direct costs, indirect costs such as building/room depreciation (space used), equipment depreciation, utility services, and departmental administration.
Departmental Sales & Service activities whose income is generated from billing rates must have documentation that clearly outlines the basis of costing practices and business procedures of the activity including:
- Supporting documentation and calculation of rate(s), including direct costs of items. Detailed supporting documentation should be available for an audit upon request.
- The financial position with respect to 'break-even' is reviewed periodically (at least annually) so the rate may be adjusted if necessary.
- Documentation that the rate(s) is applied uniformly to all users.
- Billings are timely and adequately documented, receivables billed are controlled and reconciled, and cash receipts are deposited timely.
The purchase of goods and services within the University System of Georgia is accomplished using University System Service Level Agreements. These agreements may be between UGA and other USG institutions or UGA and the University System Office and may be both sponsored agreements and sales and service agreements. Intra USG purchases of goods/services are exempt from a competitive procurement process and will be addressed through a Service Level Agreement. Please refer to Procurement section 4.10 “University System Service Level Agreements” for policy, procedure, and forms related to these agreements.
Responsible University Senior Administrator: Vice President for Finance & Administration
Responsible University Administrator: Associate Vice President for Finance Division
Policy Owner: Accounting
Policy Contact: Darlene McConnell email@example.com
Phone Number: 706-542-6874