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University organizations that sell to other departments are expected to offer goods or services on an on-going basis that are unique, convenient or not readily available from external sources. The sale of goods or services must be consistent with the University's mission and the normal activities of the college or unit associated with the organization.
University colleges and departments must obtain approval from the Internal Sales Office for activities expected to charge sponsored projects or exceed $25,000 in revenue annually prior to conducting internal sales activity. The rates charged for the goods or services must comply with the Office of Management and Budget (OMB) Uniform Guidance CFR number 2 CFR 200, be based on actual consumption of the product or service being provided, and fully cover, but not exceed, costs. Planned subsidies must be included in the rate development and the budget.
Business Manager must review rates annually to determine feasibility of continuing the activity. Rates must be both reviewed and updated every two years. Operating variances greater (based on a three year average) than 15% must be reconciled and resolved with the Internal Sales Office.
When establishing the operating accounts in the financial system for the internal sales activity, units conducting the internal sales activity must ensure that revenue and costs of all other activity including External Sales activity are separated from the revenue and costs of internal sales activity.
Transactions must be charged to departments within 60 days from the day the product or service was provided. Transactions require substantiation, justification and proper record retention. See related Administrative Policies: 1) Documenting Financial/Accounting Transactions and 2) Processing Accounting Transactions.
Requests for exception to this policy and/or the related procedures must be submitted to the Internal Sales Office and approved by the Controller or designee.
Reason for Policy
To ensure that units are consistent with accounting, costing, and federal compliance requirements.