Sales and Service Accounts
- Distinguishing between Sales & Service and Sponsored Activities
- Determination checklist
- Use of equipment originally purchased with federal funds involved in generating Sales & Service revenue
In some cases, a department/center/institute may receive funding for providing goods/services or services for a fee to the external community. Per Montana Board of Regents Policy 1909, such recharge activities are appropriate when:
- the production of those goods or services is consistent with the normal activities of the department/center/institute;
- substantially supports the teaching, research, or outreach mission of the University; and,
- the activity does not unfairly compete with the private sector.
Direct sales of goods/services means an exchange of tangible or intangible property or services by the University with external customers for monetary consideration. The following factors will be considered and weighed in determining whether a direct sale of goods/services will be authorized:
- The goods/services represent the transfer of knowledge or expertize from the University to the public.
- The goods/services support and extend the University’s teaching, research, or outreach mission.
- The prices charged to external customers for the goods/services takes into account all direct and indirect costs of providing the goods/services, as well as the competitive price of such items in the public market.
- The goods/services are not commonly available or otherwise easily accessible in the public market.
- The provisions of goods/services represents an opportunity to utilize existing capacity or under-performing assets in order to reduce the University's internal costs of providing the goods/services.
Sales & Service
- Activities generally do not require any intellectual interpretation or scholarly expertise, nor principal investigator oversight and involvement
- Sale of products or services (e.g., printing/photocopy, laboratory analysis) that could be commercially purchased; price determined by established fixed-fee schedules; data belongs to client
- Indemnification/hold harmless language is never included
- Activity typically originates when Client requests services
- Client generally provides samples (or content/material)
- Activities generate net income, often from a per unit sale
- Never accomplished via cost-reimbursable award mechanism
- Reporting requirements (e.g., financial, time & effort, etc.) or federal assurances never required
- Activity never cites a CFDA number, cost match, an MOU/MOA, F&A, or FAR clauses
- Never requires institutional authorized official signature
- Activities require specific intellectual interpretation or scholarly expertise, and principal investigator oversight and involvement
- Provide specific deliverables per sponsor terms and conditions
- Indemnification/hold harmless language may be included
- Activity usually originates when a proposal is submitted to sponsor
- Researcher may collect samples (or provide content/material)
- Activities typically do not generate net income
- Accomplished via specified award mechanism (e.g., fixed price or cost-reimbursable agreements)
- Reporting required (e.g., financial, time & effort, etc.)
- May involve cost match or F&A
- Collaborator relationship exists (e.g., publication)
This determination checklist is a helpful tool to help identify whether an activity is more appropriate to be administered via a Sponsored Program.
If equipment originally purchased with federal grant funds are involved in generating any Sales & Service revenue, the Department (Center, Institute, etc.) is responsible to ensure that use of equipment is compliant with Uniform Guidance 2 CFR 200.313 (or OMB A-110 Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, with particular attention to Section C Equipment).
For further information, contact your accounting liaison in Business Services or ORSP.