Original Issuance Date: July 26, 1991
Last Revision Date: December 9, 2025
1. Policy Purpose
This policy establishes requirements for the financial management of auxiliary enterprises.
2. Responsible UW System Officer
Vice President for Finance and Administration
3. Scope and Institutional Responsibilities
Institutions are responsible for ensuring the programmatic and fiscal soundness of their auxiliary operations.
University of Wisconsin System (UW) Administration will monitor the fiscal soundness of auxiliary operations through normal budgetary reviews and by means of the Program Revenue Balances report submitted each year in accordance with Regent Policy Document 21-6, Program Revenue Calculation Methodology and Fund Balances Policy.
4. Background
The National Association of College and University Business Officers (NACUBO) defines Auxiliary Enterprises as follows:
An auxiliary enterprise is an entity that exists predominantly to furnish goods and services to students, faculty, or staff and that charges a fee directly related to, although not necessarily equal to, the cost of goods or services. The general public incidentally may be served by some auxiliary enterprises.
Within the UWs the term “auxiliary enterprises” (or “auxiliary operations” or simply “auxiliaries”) is used at various times to refer to at least three different sets of operations, as described in Section 5, Definitions below.
5. Definitions
Function 8 auxiliaries: The “function” definitions used by the UWs for expenditure recording are based upon the definitions of expenditure categories contained in NACUBO’s Financial Accounting and Reporting Manual; this includes the definition of auxiliary enterprises cited in Section 4, Background. In the accounting systems, “auxiliary enterprises” are designated by function code 8 (FN0800) and are largely limited to housing services, food services, retail sales (including the retail operations of the student center and textbook sales) and parking.
Student fee funded auxiliaries: The operations considered as student fee funded auxiliaries are housing, food services and operations funded by student segregated fees. In the accounting systems, housing and food services are coded as “auxiliary enterprises” while segregated fee operations are coded as “student services” (function 0 – FN0000). Student services operations are determined on the basis of program purpose under the provisions of UW System Administrative Policy 822 (SYS 822), Student Services Funding and UW System Administrative Policy 316 (SYS 316), Auxiliary Enterprises Support Services Chargebacks.
Other 128 auxiliaries: In addition to “function 8 auxiliaries” and segregated fee funded operations, this category is used to budget and account for internal service centers and a variety of other fee-based, self-sustaining operations.
6. Policy Statement
The following provisions apply to all auxiliary activities:
- All auxiliary activities must be integral to the fulfillment of the institution’s instructional, research or public service missions or must meet one of the other four criteria specified in Regent Policy Document 12-1, Competition with the Private Sector. That is, the product or service must be offered only if: i) there are compelling reasons of economic efficiency to do so; ii) the product or service is unavailable elsewhere in the community; iii) providing the product or service is a major convenience to the campus community or to members of the public participating in institutional activities; or, iv) offering the product or service is of major importance to maintaining the quality of the institution.
- Prices and rates should be established in accordance with the principles established in Regent Policy Document 12-1, Competition with the Private Sector. See Attachment 2.
- Pricing/rates should be established in a manner that considers funding equity among successive cohorts of students/customers.
- Generally, revenues are to be expended for the auxiliary operation for which they were generated. Transfers must be approved by UW Administration Vice President for Finance and Administration and are subject to the criteria established in Attachment 1. Inter-program loans must be repaid with interest within a defined time period and must not adversely affect rates in the program making the loan during the period the loan is outstanding.
- Balances should be accumulated to meet debt service requirements, to ensure that equipment and facilities can be maintained, replaced, remodeled or refurbished as needed, and to provide an operating cushion to offset short-term revenue losses or unanticipated expenditures.
- Universities may choose to designate funds for capital projects by depositing the funds into Fund 228 (FD0228). Funds set aside for this purpose should have documented spending plans.
- Universities shall have a review process and a multi-year financial plan in place to ensure that adequate but not excessive balances are maintained. Balance accumulations must be clearly linked to specific programmatic and operating needs. Anticipated ending balance levels shall be projected as part of the annual operating budget. Funds in excess of appropriate balance levels should be used to reduce rates in the next operating budget or, where appropriate, to smooth rates over the next several operating budgets. One-time surplus funds may be transferred to support other student related activities in accordance with the criteria in Attachment 1.
- The use of generally accepted accounting principles is expected for effective fiscal management in order to ensure that revenues and expenditures are recognized and matched in the appropriate periods, that liabilities are fully recognized and that assets and their impairment are fully considered.
- Each university will submit to UW Administration – Financial Administration, a report detailing its year-end Unrestricted Program Revenue Balances, including auxiliary balances, as detailed in Regent Policy Document 21-6, Program Revenue Calculation Methodology and Fund Balances Policy. The balances are categorized by the methodology used in the Legislative Audit Bureau’s Report 13-17. The categories are obligated, planned, designated, reserves, and undocumented. The format and due date for this report will be prescribed in the annual Program Revenue Balances reporting instructions.
7. Related Documents
Regent Policy Document 21-1, Internal Management Flexibility of Auxiliary Funds
Regent Policy Document 12-1, Competition with the Private Sector
Regent Policy Document 21-6, Program Revenue Calculation Methodology and Fund Balances Policy
UW System Administrative Policy 320 (SYS 320), Internal Services Chargebacks
UW System Administrative Policy 316 (SYS 316), Auxiliary Enterprises Support Services Chargebacks
UW System Administrative Policy 318 (SYS 318), Charging Fuels and Utilities – Auxiliary Enterprises
UW System Administrative Policy 822 (SYS 822), Student Services Funding
8. Policy History
Revision 2:
Revision 1: June 18, 1999
First approved: July 26, 1991
9. Scheduled Review Date
December 2030