| I. Documentation |
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| Certain auxiliary enterprises have valid Leases, Operating Agreements, and/or Memoranda of Understanding (MOUs) with the Trustees/University. These documents describe the various General Fund facilities, goods, and services provided to them and the method (direct or indirect) of calculation for the reimbursement to the General Fund. A summary schedule of these documents and the relative types of reimbursement allocation required is contained in the Annual Cost Allocation Plan Matrix (Appendix A). A Sample Cost Allocation Worksheet is included in Appendix B. |
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| II. Definition |
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| Auxiliary Enterprises-a program, activity or fund source used to furnish facilities, goods, or services to faculty, staff, or, incidentally, to the public. An auxiliary enterprise typically charges a fee directly related to, although not necessarily equal to, the cost of the facilities, goods, or services. The distinguishing characteristic of an auxiliary enterprise is that it is managed on an essentially self-supporting basis. Examples are faculty, staff, and student housing, food services, college stores, parking and student health services. For the purpose of this policy, officially recognized auxiliary organizations of the California State University are also considered auxiliary enterprises. |
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| III. Direct Costs |
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| Direct operational costs incurred by the auxiliary enterprises include salaries and benefits, and general operating expenses. For example, University Police provides services for the safety and security of the University Village Apartments and the Clarke Field House. The costs for these employees are paid directly by the enterprise fund or billed through Reimbursed Activities. Direct costs also include costs that are recorded in the General Fund, such as metered utilities, and periodically charged to the auxiliary enterprises. |
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| IV. University Recharges (Internal) |
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| Some services provided to the auxiliary enterprises that are of a direct nature are recharged using a campus approved recharge rate, e.g. telephone, postage, electronic mail, non-maintenance services, etc. All approved recharges are subsumed into this cost allocation plan. |
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| Example: Facility Services provides non-maintenance services to the campus on a recharge basis. Facility Services establishes chargeback rates that recovers the direct labor based on the number of hours expended by each individual skilled-labor position and a portion of the Facility Services indirect costs. |
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| Example: Instructional and Information Technology Services (IITS) provides telephone services to all University employees. The auxiliaries and enterprises are charged for these services provided to their employees. IITS recovers the direct costs (license, etc.) and a portion of the indirect costs, e.g. new installations, moves, etc. through an approved recharge rate. |
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| V. Services Provided by General Fund Support - Indirect Costs |
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| Indirect costs associated with providing facilities, goods, and services to the auxiliary enterprises include the following: |
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A. Finance and Business Services - Finance and Business Services provides financial services to auxiliary enterprises including the cost of administrative systems support. Areas include:
Fiscal Services, including Controller's Office, Accounting, Accounts Payable, Financial Reporting, etc.
Student Financial Services
Procurement and Support Services, including Materials Management
Student Accounts/Non-Student Account Billing
Payroll
Systems Operations and Development
Mail Services - The Mail Center provides mail delivery service to the campus and a portion of these costs may be allocable to the auxiliary enterprises. Postage and shipping costs are allocated on a direct cost basis through the departmental chargeback. |
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| B. Budget Office - The Budget Office provides services to auxiliary enterprises including data entry, research and analysis, mid-year projections, budget approval of personnel forms and assistance in preparing the annual budget plans. |
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| C. Human Resources and Equal Opportunity - Human Resources and Equal Opportunity provides services to auxiliary enterprises including hiring, position review, benefits administration, etc. |
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| D. Library and Media Technology - The Library and Media Technology provides services to students enrolled in self-supported instruction. A portion of this function's operational costs will be allocated to the auxiliary enterprises. |
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| E. Enrollment Management Services - Enrollment Management Services provides services for students enrolled in self-supported instruction. A portion of this function's operational costs will be allocated to the auxiliary enterprises. |
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| F. Academic Programs - Academic Programs provides Extended Studies with scheduling and curriculum services such as creating instructor records, scheduling classrooms, creating special course forms and maintaining these on the Academic Programs website, analysis of topics course proposals, and building special Extension Credit Courses and "e"-versions of courses in the student information system. |
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| G. Facility Services - Facility services are usually charged via work orders or MOUs that include chargeable salaries, benefits and an appropriate overhead rate plus actual materials used. Costs for utilities are either metered separately or estimated based on square footage occupied by the auxiliary and are outlined in an MOU. |
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| H. Planning, Design and Construction (PDC) - PDC services are provided for all capital projects at the University. Services being recovered include project management, contract services, administrative support, and business services. The University recovers costs for these services based on total project cost, complexity of project and delivery. |
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| I. Risk Pool/Insurance - The University is self-insured through the CSU Risk Management Authority (CSURMA). CSURMA provides liability insurance, workers compensation coverage, property insurance, and other forms of coverage to the University. The costs of participating in the risk pool are allocated to the auxiliary enterprises including Clarke Field House/University Student Union, Extended Studies, Parking Services, Health Services, and Health Facilities. |
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| The Cal State San Marcos Foundation, San Marcos University Corporation, and Associated Students, Inc. are insured through the CSU Risk Management Authority (CSURMA) Auxiliary Group Purchase Insurance Program (AGPIP) and are therefore not subject to reimbursement allocation costs. |
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| J. Risk Management & Safety - The risk management and safety function provides risk analysis, environmental, health, and safety review and services to the campus. A portion of this function's operational costs may be allocable to the auxiliary enterprises. |
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| K. University Police - University Police services associated with an auxiliary are normally direct costs and as such, are recovered via an MOU or an event request for these organizations. Recovered costs include salaries and benefits for officers supporting the needs of these organizations. |
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| L. Fire Suppression and Prevention (Food Services) - The Cal State San Marcos Foundation contracts directly with the provider for this service as it relates to their food service operation. |
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| M. Hazardous Materials Management - These services are provided to the campus and costs associated with providing biological, chemical, and radioactive waste removal plus other hazardous materials management services may be recovered from the auxiliary enterprises. Most of these services are direct billed or recovered through an MOU with the auxiliary enterprises. |
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| N. Information and Instructional Technology Services (IITS) - IITS provides centralized computing services to the campus. A portion of this function's operational costs may be allocable to the auxiliary enterprises. |
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| O. University Advancement - University Advancement provides communications and marketing resources to units of the University that are self-supporting or are funded by other than state General Fund revenues. Some services to units funded by the state General Funds are also charged for these services. |
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| P. Space Utilization |
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| 1. Research - The majority of research activity performed by faculty is facilitated through the Cal State San Marcos Foundation. The Foundation calculates the costs of space allocated to research annually according to the Policy on Space Reimbursement for Auxiliary Organizations Conducting Externally Funded Projects (Compilation of Policies and Procedures for California State University Auxiliary Organizations). Indirect costs recovery funds allocated to the campus exceed the annual costs calculated for research and office space. |
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| Note: Centers and Institutes are exempt from this policy unless specifically agreed upon in the charter under which they operate. |
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| 2. Auxiliary Enterprises/Auxiliaries - Facilities occupied by the auxiliary enterprises are charged according to the lease agreement and/or on a square footage basis. |
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| Note: Since Clarke Field House/University Student Union is financed through a systemwide revenue bond and debt service on this bond is being paid by Student Union fees, no reimbursement is necessary for this space. |
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| VI. Cost Recovery Methodology |
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| A. Finance and Business Services - Finance and Business Services provides support for all University expenditure activity including the General Fund, enterprise funds, trusts, etc. Finance and Business Services personnel and other operating expenses are funded by the General Fund or are recovered from enterprise funds, trust funds, or other entities. Indirect costs are allocated to auxiliary enterprises based on the following formula: |
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Budgeted Auxiliary Expenditures
Total General Fund Operating Budget |
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| Each state fund is evaluated as to whether it meets the definition of an auxiliary enterprise, and if so, is classified as a "billable" fund. Each billable fund is assigned a pro-rata share of total expenditures (after adjusting for direct costs). Using this percentage, the pro-rata share of costs (except those recovered as direct costs) is allocated to each billable fund. |
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| B. Budget Office - The Budget Office provides support for all budgeting functions for the General Fund, enterprise funds, trusts, etc. Budget personnel and other operating expenses are funded by the General Fund and allocable costs are recovered from enterprise funds, trust funds or other entities based on the following formula: |
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Budgeted Auxiliary Expenditures
Total General Fund Operating Budget |
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| Each state fund is evaluated as to whether it meets the definition of an auxiliary enterprise, and is so, is classified as a "billable" fund. Each billable fund is assigned a pro-rata share of total expenditures (after adjusting for direct costs). Using this percentage, the pro-rata share of costs (except those recovered as direct costs) is allocated to each billable fund. |
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| C. Human Resources and Equal Opportunity - Human Resources and Equal Opportunity provides support for all University personnel-related expenditures including the General Fund, enterprise funds, trusts, etc. Human Resources and Equal Opportunity personnel and other operating expenses are funded by the General Fund and allocable costs are recovered from enterprise funds, trust funds, or other entities based on the following formula: |
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Budgeted Auxiliary Expenditures
Total General Fund Operating Budget |
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| Upon evaluation, if a state fund meets the definition of an auxiliary enterprise and contains payroll expenditures, the fund is classified as a "billable" fund for allocation of human resources costs. Each billable fund is assigned a pro-rata share of total expenditures (after adjusting for direct costs). Using this percentage, the pro-rata share of costs (except those recovered as direct costs) is allocated to each billable fund. |
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| Note: Human resource costs are not allocated to Cal State San Marcos Foundation and Associated Students, Inc. since these services are provided by the auxiliaries. |
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| D. Library and Media Technology - The Library is used by students enrolled in state-supported instruction, self- support instruction, and the general public. The Library recovers costs of providing services for self-support instruction through an MOU with Extended Studies. |
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| E. Enrollment Management Services - Enrollment Management Services provides services for state-supported instruction and self-support instruction. Costs of services provided for self support are recovered through an MOU with Extended Studies. |
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| F. Academic Programs provides services to Extended Studies as described above and recovers these costs through an MOU. |
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| G. Planning, Design and Construction (PDC) - PDC services for capital projects are recovered based on total project cost, complexity of project, and delivery method. A sliding scale developed by PDC will be used as a guideline to determine these costs. PDC will continue to evaluate costs based on these criteria and update the scale as required on an annual basis. |
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| H. Risk Pool Premiums including Workers Compensation, Non-Industrial Disability (NDI), Industrial Disability (IDL), Unemployment, Liability, and Property Insurance - The University employs the same allocation methodology to distribute costs of participation in CSURMA that is used by the insurer. Workers' compensation, NDI, IDL, and unemployment insurance costs are prorated based on University payroll costs. Liability insurance costs are prorated based on University expenditures. Property insurance costs are allocated to the enterprise occupying the insured space. |
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| Cal State San Marcos Foundation, San Marcos University Corporation, and Associated Students, Inc. pay these costs, if incurred, directly to their insurance providers. |
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| I. Risk Management & Safety - Risk Management & Safety provides support for all University expenditure activity including the General Fund, enterprise funds, trusts, etc. Risk Management personnel and other operating expenses are funded by the General Fund or are recovered from enterprise funds, trust funds, or other entities. Indirect costs are allocated to auxiliary enterprises based on the following formula: |
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Budgeted Auxiliary Expenditures
Total General Fund Operating Budget |
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| Each state fund is evaluated as to whether it meets the definition of an auxiliary enterprise, and if so, is classified as a "billable" fund. Each billable fund is assigned a pro-rata share of total expenditures (after adjusting for direct costs). Using this percentage, all costs (except those recovered as direct costs) are allocated to each billable fund. |
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| J. Hazardous Materials Management - The disposal and other costs associated with managing hazardous materials (biological, chemical, radioactive, etc.) are usually direct billed or recovered through an MOU with auxiliary enterprises. |
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| K. University Advancement - The services provided by University Advancement are charged to the auxiliaries and other General Fund departments through an approved chargeback policy or an MOU. |
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| L. Space Utilization - Costs for space occupied by non-General Fund entities are recovered through MOUs with those entities. Costs are allocated using the Chancellor's allocation per square footage rate for maintenance, utilities, etc. |
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| Note: Since Clarke Field House/University Student Union is financed through a systemwide revenue bond and debt service on this bond is being paid by Student Union fees, no reimbursement is necessary for maintenance, utilities, etc. |
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| VII. Exchange of Value |
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| University entities may be given credit for either tangible or intangible goods and services provided to each other if the value that is being exchanged between entities is quantifiable on a reasonable basis. This will generally take the form of value provided by an Auxiliary Enterprise to a General Fund supported unit, such as unrestricted gifts benefiting the campus, additional service hours to meet university needs, and public outreach to the extended campus community and its constituents. However, such Exchange of Value may be from a General Fund supported unit to an Auxiliary Enterprise or between Auxiliary Enterprises. |
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| In order for exchange of value to take place, a written request is submitted to the Vice President, Finance and Administrative Services, identifying the services, goods, and/or facilities exchanged and the dollar value. |
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| VIII. Annual Review |
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| The Cost Allocation Plan will be reviewed on an annual basis and approved by the Chief Financial Officer, to ensure that all costs incurred by the General Fund applicable to the Auxiliary Enterprises are recovered by the General Fund. |
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| This review will be completed by February of each year to facilitate the incorporation of the charges in the auxiliary enterprise budget plans for the following year. |
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| The computed indirect cost allocation percentage will remain constant for a period of three years beginning with FY 2005/06 or until new rates have been approved. |
