At UCLA, Sales & Service activities adhere to Federal Uniform Guidance and have breakeven fund balance parameters. Sales & Service activities are designed to fully recover allowable direct costs and breakeven over a one to three-year period. Per UCLA Policy 340, Sales & Service units must evaluate their fund balance and adjust billing rates at least every two years. When Sales & Service activities revise billing rates, the surplus or deficit is built into the revised rate structure.
- Fund Surplus: Federal Uniform Guidance allows for a 60-day working capital reserve as part of retained earnings. This allowance is defined as 60 days cash expenses for normal operating purposes. The working capital reserve is calculated by taking the last 12 months of expenditures divided by 6.
- Fund Deficit: Best practice for operating deficits is not to exceed 60 days cash expenses. If deficits exceed 60 days cash expenses, the Costing Policy & Management Analysis department and Academic Planning Budget unit may require a written plan to cover the fund deficit.
Breakeven fund balance parameters apply to all Sales & Service activities on campus that recharge Federal contract and grant funds. In the UCLA financial tables, these funds are categorized in the following UCOP fund group codes:
- 409190 - CURR, SALES & SERV: EDUCATIONAL ACTIVITY
- 410100 - CURR, OTHER, SERVICE ENTERPRISES
