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Policy: V.A.1

Issued: June 10, 1993

Owner: University Comptroller

Latest Review: March 8, 2000

REVENUE GENERATING ACTIVITIES

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:


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:

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]

5.0 Approvals and Revisions [Top]

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


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© 2000 by the Rector and Visitors of the University of Virginia