REVENUE GENERATING ACTIVITIES

• 1.0 Purpose
• 2.0 Policy
  • 2.1 Overview
  • 2.2 Sales of Services and Products by a Revenue Generating Activity
  • 2.3 Authority to Establish a Revenue Generating Activity (RGA)
  • 2.4 Responsibility for the Management of a Revenue Generating Activity
  • 2.5 Unrelated Trade or Business
• 3.0 Definitions
• 4.0 References
• 5.0 Approvals and Revisions

1.0 Purpose

This policy describes the general guidelines for managing University revenue generating activities.

2.0 Policy [Top]

2.1 Overview

Revenue Generating Activities (RGA's) are defined as all operations that produce income or recover costs by providing goods or services to the University community or, in some cases, to the general public.

RGA's include the Medical Center, Auxiliary Enterprises, and other support service functions.

RGA's include, but are not limited to:

• Departments and activities that solicit the patronage of the general public. These include the Medical Center, the Athletic Department, the University Theatres, and the University Press.
• Departments and activities that provide goods or services to the general public on a basis incidental to their major mission of serving University faculty, staff and students. These include Dining Services Facilities, UVA Bookstore, Parking and Transportation Services, and Athletics.
• Departments and activities that normally confine their provision of goods or services to the divisions of the University community, and coincidently to University faculty, staff and students. These include Copy Centers, Machine Shops, Printing Services, the Physical Plant Department, and the Computing Centers. In exceptional circumstances, where they are not in competition with commercial enterprises, such departments and activities may provide goods or services to entities outside of the University community.

2.2 Sales of Services and Products by a Revenue Generating Activity

All sales of services or products by RGA's must have a direct relationship to the goals and missions of the University.

RGA's must conform to all University policies and procedures.

No RGA shall be established at the University without prior approval of the appropriate University officer.

2.3 Authority to Establish a Revenue Generating Activity (RGA)

With the exception of the Medical Center, no RGA may be established without the prior approval of both the University Comptroller and the appropriate Dean or Vice President.

No RGA may be established at the Medical Center without the prior approval of the Medical Center Director of Finance.

A department or activity that desires to establish an RGA must submit a written request to the appropriate University officer. This request should describe the relationship of the proposed RGA to the programs and purposes of the department or activity and contain a description of proposed accounting procedures. This request should be approved by the department or activity head and the responsible dean or director.

See also Policy V.B.2, "Credit and Collections."

See also Policy XV.G.3, "University Services and Activities."

2.4 Responsibility for the Management of a Revenue Generating Activity

The department or activity head is responsible for the sound management of each RGA in his/her area. This responsibility includes the establishment and maintenance of adequate internal controls. If a cashiering activity is incidental to an RGA, the department or activity head is also responsible for adherence to policies governing cashiering activities.

See also Policy I.A.1, "Internal Controls."

See also Policy IV.D.1, "Cashiering Activities."

2.5 Unrelated Trade or Business

An RGA will not be conducted for the PURPOSE of carrying on a trade or business.

An RGA could be considered a trade or business if any of the following conditions apply:

• The RGA is regularly carried on, i.e., the activity is frequent and continual.
• The RGA (not the proceeds from it) does not contribute to the mission on the University.
• The RGA is conducted in competition with taxable organizations.

However, a RGA carried on for the convenience of students, faculty, employees, patients, or visitors is not considered a trade or business.

See also Procedure 15-70, "Approving New or Expanded Services and Activities."

See also Policy XV.G.4, "Analysis of Unrelated Business Income."

3.0 Definitions [Top]

Revenue Generating Activities (RGA's) are defined as all operations that produce income or recover costs by providing goods or services to the University community or, in some cases, to the general public.

4.0 References [Top]

• Policy IV.E.1, "Credit and Collections."
• Policy XV.G.3, "University Services and Activities."
• Policy I.A.1, "Internal Controls."
• Policy IV.D.1, "Cashiering Activities."
• Procedure 15-70, "Approving New or Expanded Services and Activities."
• Policy XV.G.4, "Analysis of Unrelated Business Income."

5.0 Approvals and Revisions [Top]

       Previous version in effect from 6/10/93 to 3/8/00 available in policy archive.