New Accounts/FAUs

New accounts/FAUs may be set up based on source of allocation, purpose, and whether the activity fits within the university’s mission in relation to patient care, research, education, or community engagement. PI or administrator should contact Unita Morris or Julie Schaefer prior to receipt of any funds to determine if an approved mechanism (such as those listed below) is already in place to receive it.

Business Contracts

Business Contracts (BCs) are revenue service agreements between UCLA and a (non-federal) client where the client will pay UCLA to render services and net income is achieved.

Business contracts are assessed 39% overhead that is returned to the department.

ELEMENTS OF A BUSINESS CONTRACT

Specific Intent to Generate Net Income after Revenue & Expenses, which can be used to fund other educational & related goals
Typically more complex than a standard sales & service rate agreement
No Pre-Defined rates are set
Defined Time Frame and End Date – i.e., 1 week, month, year (Jan 1 – March 1)

The following documents are required to set up a business contract:

Conflict of Interest (COI) form
UCLA Business Contract template
FY25 Business Contract Budget template
Unrelated Business Income Tax (UBIT) non-financial short form

More information can be found here.

Contact Lily Reyes and Julie Schaefer to assist you in setting up a business contract.

Sales & Service (Forms Example)

Sales & service activities fall into two categories.

Service Center refers to a SSA established by a UCLA department, whose primary purpose is to provide a SSA to multiple Internal and/or External Customers, on a reoccurring basis, and charges customers a preestablished rate for services rendered and goods delivered. Examples include, but are not limited to, laboratory services, data processing, animal care facilities, and computer services.
Other Sales Activity refers to a SSA established by a UCLA department that charges Internal and/or External Customers that does not fit the definition of a Service Center, Business Contract, or Central Administrative Unit. Examples include, but are not limited to, facility rentals, student services, community service programs, publications, conferences, and seminars for the public.

Sales & service activities typically operate on a breakeven budget, but there is an option to earn markup on external users. In addition, an overhead rate of 39% is assessed on the revenue and returned to the department.

To establish a new SSA, the following criteria is considered:

A minimum of $25,000 projected expenditures for fund establishment
The goods and/or services do not constitute research activities
The goods and/or services will be provided on a regular basis (for a Service Center)
The cost of goods and/or services can be clearly identified
Usage by customers can be reasonably measured

Additional criteria and information can be found here.

Contact Lily Reyes and Julie Schaefer to assist you in setting up a sales and service fund.

Academic Enrichment

Surplus clinical earnings can be transferred to an academic enrichment account, if the HCOMP faculty elects to have an academic enrichment account in March of the prior fiscal year. It is assessed 8% department overhead and can be used to support research and academic activities and/or employee development.

FAQ in Annual AE (Academic Enrichment) Election

Does this apply to Basic Science faculty member? – Since BSCP faculty members don’t have clinical revenue, this election applies mostly to faculty members in clinical compensation plans (MCP and PCCP) who generate clinical revenue.
Which option is most flexible? – In order to maintain flexibility with distributions throughout the year, it is recommended to elect Option C with a large dollar figure (e.g. $100,000) or percentage for the AE portion. There is no limit to, or required distribution to the AE account; but transfers are capped at the amount provided on the form, regardless of when that threshold is met.
What if I don’t submit my election by March 31? -Faculty members who don’t submit their elections by March 31, will be defaulted to Option A (Z payment only). In other words, they won’t be allowed to make contributions of their clinical surplus to their Academic Enrichment accounts in the next fiscal year. The next time they may opt in AE transfer will be March of the following fiscal year.
Does this election replace the requests in the bi-monthly Z/AE process? – The distribution of balances on the bi-monthly process will still require a request submitted via division administrators. Only the June 30th balances will be automatically distributed, according to the AE Election, if nothing has been submitted to the administrator for processing.
Can I save funds in AE for future salary or 19935 (formerly 19900) benefit funding shortfall obligations? – Due to IRS rules, AE funds are NOT allowable to pay for 19935 (formerly 19900) Benefit Funding Shortfall or any payroll expense (faculty, staff or trainees).

Salary Savings

Salary savings is available for FTE holders only. When a PI/faculty receives grant sources to cover their salary, their 19935 (formerly 19900) salary can be reduced and saved accordingly.

To request salary savings, complete the Salary Savings Memo Template with your faculty information and submit to Unita Morris.”

Once it has been processed, the salary savings FAU will be available in the psychiatry comp plan fund. It is assessed 5% department overhead and can be used for most business expenses, including travel, entertainment, books, relevant supplies, and salaries.

Note that the salary savings memo is a request only and does not indicate the actual amount processed and assessed at fiscal year‐end. The amount may differ from the amount requested due to several components and factors comprising faculty salary.

Salary Savings Formula:

19935 (formerly 19900) FTE Value

Less salary charged to 19935 (formerly 19900)

Less salary charged to Dept. COMP PLAN (due to OTC):

= Variance (or salary savings)

Transfers In from other departments

See “How Do I Set Up a New/Account FAU”