Financial Services Manual (FIN)

Effective: 4/1/1999

Revised: 7/1/2009

FIN 213: Establishment of Resale Activities to the General Public

Purpose

To define when the university may engage in resale activities to the general public

Sources

Arizona Revised Statutes § 41–2753

Arizona Board of Regents Policy Manual 1–105

University policy

Applicability

All university agency/orgs

Background

State law and regents’ policy require the university to avoid competition with private enterprise. Specifically, the university may not provide to the general public goods, services, or facilities that are practically available from private enterprise unless the provision of the goods, service, or facility offers a valuable educational or research experience for students as part of their education or fulfills the public service mission of the university. In addition, the university may not provide to students, faculty, staff, or invited guests goods, services, or facilities that are practically available from private enterprise except as authorized by the Board of Regents.

Policy

Resale activity can be to (1) the general public, including students, faculty, and staff, or (2) other ASU departments.

If more than 50 percent of the sales activity’s revenues are from charges to other university departments, the university’s internal Service Center Policy is to be followed.

If more than 50 percent of the sales activity’s revenues are from charges to the general public, this policy is to be followed. There is, however, an exception for any resale activity’s sales to other university departments. Instead of sales being based on the greater of (1) full-cost recovery or (2) market prices, the sales prices must be solely on a break-even basis, based on the cost incurred by the service center account itself. This break-even requirement is based on federal regulations and university policy.

For a sales activity that is around 50 percent to the general public, including students, faculty, and staff, and around 50 percent to other ASU departments, high consideration should be given to two sales units, one being a resale activity to the general public, and a second being a service center.

The following activities or programs are authorized resale activities:

1. ASU Bookstore
2. ASU PGM Driving Range
3. ASU Software Factory
4. Clay Sampling Tests—the Biodesign Institute at ASU
5. Clinical Research—Kinesiology
6. Community Health Services
7. Intercollegiate Athletics
8. International Programs Office (Passport Office)
9. Memorial Union
10. Microelectronic Teaching Factory (MTF)
11. Museum Store
12. Old Main—Alumni Association
13. Parking and Transit Services
14. Public Events
15. Residential Life
16. Campus Health Service
17. Student Media
18. Student Recreation Activities
19. University Club
20. University Towers.

All new resale activities to the general public must be approved by the college dean, the associate vice president for research, the senior associate vice president for Finance and deputy treasurer, the director of Purchasing and Business Services, and the director of Accounting Services.

For information on service centers, see the ASU Service Center Policy.

Procedure

Requests to establish a new resale activity to the general public will be submitted through the director of Purchasing and Business Services and the director of Accounting Services for final approval. Approvals by the dean, associate vice president for research, and senior associate vice president for Finance and deputy treasurer must be obtained on the Sponsored Project versus External Sales Guidelines Questionnaire by the external sales center manager prior to submission to the director of Purchasing and Business Services. The questionnaire is available online.

Requests to establish a new resale activity must include the following information:

1. Evidence that the proposed resale activity offers or supports a valuable educational or research experience for students as part of their education or fulfills the public service mission of the university

   or

   evidence that the goods and/or services to be provided are not practically available from private enterprise, or if available, do not satisfy the objective of the program.

2. Evidence that similar goods or services are not already being provided by another university department or program.
3. A completed New Account Application Form, in accordance with FIN 202.
4. A business plan and proposed operating budget.
5. The prices charged for sales to external ASU customers (general public) need to be the greater of (1) full-cost recovery, including overhead and indirect costs of ASU, or (2) market prices, unless an exception is approved in writing by the vice president responsible for the resale activity.
6. A completed and signed Sponsored Project versus External Sales Guidelines Questionnaire that supports the conclusion that the sales activity is a resale activity.

Requests, after approval of the Sponsored Project versus External Sales Guidelines Questionnaire, will be submitted to the director of Purchasing and Business Services. If a request is approved, the director of Purchasing and Business Services will forward it to the director of Accounting Services for final approval.

Cross-Reference

For information on establishment of a new agency/org, see FIN 202, “Establishment of Agency/Orgs.”

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