Creating a Fee-for-Service Educational Activity

Directive Statement

University departments desiring to conduct sales of goods or services on a continuous basis (expected to exceed 12 months) must obtain University approval to establish a Fee-for-Service Educational Activity (FSEA).  The application process ensures that proposed units are approved to operate in accordance with federal cost principals and university directives and policies.

FSEA requests must define the proposed users of the FSEA, per unit description and estimated output of all proposed services, a rate calculation for internal and external users for proposed levels of activity, and an annual budget for the year.  The request and proposed rates are reviewed by the Department Dean/Chair and approved through signature, indicating acceptance of financial responsibility for the proposed unit.

Fee-for-Service Educational Activities are established pursuant to, and in accordance with, an authorization and statement of purpose approved by the Senior Vice President of Finance and Chief Financial Officer.

The University of Florida operates several types of FSEA Units.

Reason for Directive

To provide a framework for the fiscal operations for University of Florida Fee-for-Service Educational Activities that will ensure compliance with sound business practices, financial accounting and reporting principals, and government regulations.  Guidelines are also provided for establishing a new FSEA unit and ensuring compliance with federal regulations.

Fee-for-Service Educational Activity units have an inherent financial risk and significant compliance concerns associated with unit operations and, as a result, a thorough proposal and approval process is warranted.

Who must comply?

All UF departments.

Request to Operate an FSEA Form

The process of creating an FSEA begins with the completion of the Request to Update an FSEA that serves to justify the need for the service, document the resources required to establish the operation, and describe the plan for a compliant operation of the proposed unit.

The requesting department must review applicable FSEA Authoritative Guidance prior to submitting a request to the Auxiliary Accounting Office.  The Dean/Director/Chair or applicable designee will sign the FSEA request and accept operational and financial responsibility for the proposed unit.  At that time, the Auxiliary Accounting Office can proceed with the request review process.

Refer to the document Setting up a Fee-for-Service Educational Activity under Attachments for a guide on the process.

Criteria to Establish an FSEA

The requesting department must justify the need for the new activity.  Various criteria will be considered by the Auxiliary Advisory Committee and Senior Vice President of Finance and Chief Financial Officer prior to approval of a new FSEA unit.

The following criteria will be considered when establishing a new Fee-for-Service Educational Activity by the University of Florida:

  1. The activity is deemed to be an integral part of the fulfillment of the University’s instruction, research, public service, or campus support function as supported by the responsible Dean, Director, or Vice President
  2. The activity provides goods or services to students, faculty, and staff that are necessary or desirable, but not readily available elsewhere in terms of cost, quality, quantity, timeliness, convenience, or other similar considerations
  3. The activity is performed for the primary benefit of the University Community or for supporting the University’s mission, but with sensitivity to the area community
  4. The activity has a sound financial plan (this includes an annual budget, appropriate rate setting to ensure cost recovery and long-term continuity)

Resources

FSEA Rate Workbook – August 2022

Setting up a Fee for Service Educational Activity

Contacts

Auxiliary Accounting: (352) 294-7236

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