Accounting Policies for Auxiliary Enterprises

An auxiliary enterprise is an accounting entity which exists to furnish goods or services to students, faculty, or staff and which charges a fee directly related to, although not necessarily equal to, the costs of the goods or services.  The distinguishing characteristic of an auxiliary enterprise is that it is managed essentially as, and intended to be, a self-supporting activity.

• Child development center (Mini University, Inc.)
• Main campus bookstore (Barnes & Noble Bookstore Company)
• Ervin J. Nutter Center
• Food service (Service America Corporation)
• Intercollegiate athletics
• Lake Campus bookstore
• On-campus housing
• University Center
• Vending operations

• Each auxiliary enterprise will be accounted for separately on the accrual basis, (i.e., revenue is recorded when earned and expenses recorded when incurred), regardless of when, whether, or how much cash has been received or paid.
• Each auxiliary enterprise will normally establish an auxiliary fund balance which may be used for the following purposes:  unbudgeted expenditures, equipment and furnishings replacements, and new acquisitions of equipment and furnishings.
• Each auxiliary enterprise's auxiliary fund balance will retain its separate accounting identity and will be reported separately.
• The designated responsible parties, with respect to each auxiliary enterprise budget, and the appropriate vice president will receive annual reports on accumulated auxiliary fund balances.
• The designated responsible parties, with respect to each auxiliary enterprise budget, and the appropriate vice president must authorize any major expenditure ($10,000 or more) which would result in a draw against auxiliary fund balances.
• At the end of each fiscal year, the excess of income and subsidies over expenditures will accrue as an addition to each respective auxiliary enterprise's auxiliary fund balance.
• At the end of each fiscal year, deficits in excess of expenditures over income and subsidies will be charged against each respective auxiliary enterprise's auxiliary fund balance.
• With respect to the auxiliary enterprises that receive nonmandatory transfer payments from the general fund, these transfer payments will not be considered as amounts necessary to cover operating budget deficits, but rather as operating budget subsidies from the general fund.
• Each auxiliary enterprise will be allocated indirect costs as specified by the Uniform Manual of Accounting for Higher Education, State of Ohio.
• Each auxiliary enterprise will earn all interest income that the university generates from the investment of its auxiliary's excess cash, and this interest income will be credited as an addition to the auxiliary fund balance.
• Likewise, each auxiliary enterprise will pay interest on funds borrowed from the university, unless designated as exempted by the president.
• Using auxiliary fund balances for purposes other than their designated purposes must be with the concurrence of the president in consultation with the appropriate vice presidents.