Administrative Charge To Auxiliary And Designated Fund Units

Purpose 

The purpose of this policy is to outline the assessment of a 5% rate on all qualifying expenses for auxiliary and designated fund units. This rate, along with investment income earned on their balances, helps the university recover costs associated with providing essential administrative services. 

These services include Accounting, Payroll, Banking, Human Resources and Legal services, ensuring the efficient operation and support of these units. 

Intended Audience

Business officers that manage accounts for auxiliary or designated fund units.

Policy

Beginning on September of 2018, a 5% administrative charge applies to: 

• Auxiliary Fund (29 accounts) that generate external income
• Designated Fund (19 accounts) that generate external income or receive other external (non-UT account) funding
• Accounts that are funded 100% via transfer from an account that is assessed the charge. Transfers will not be allowed from accounts that are assessed the charge to those that are not. 

Exemptions

University academic units are not charged this fee because it is already included in student tuition. Before tuition funds are distributed to academic units, a portion is used to cover the University’s administrative costs. 

An account will be exempt if it meets any of the following criteria: 

• It is specifically exempted by the University Budget Council (UBC) for special documented reasons.
• The program or activity directly supports earning a University of Texas undergraduate degree.
• The program or activity is fully funded by central University funds.
• The income is generated by or exclusively for student organizations. 

Additionally, certain expenses, such as capital outlay, scholarships, royalties, and food purchased for resale are automatically excluded from the charge. A full list of exempt expense categories can be found below. 

Preparation of Budgets

For budgeted accounts, an estimate of the charge should be shown in the budget document as a transfer to either 29-7120-0095 or 19-0206-0695, depending on the source of funds. 

Monthly Charge 

Funds will be automatically assessed and transferred monthly, based on actual expenses, on the 10th of each month. New accounts will also be charged the 5% fee unless they qualify for one of the exemptions listed above.