U N I V E R S I T Y of H O U S T O N
MANUAL OF ADMINISTRATIVE POLICIES AND PROCEDURES
SECTION:
AREA:
Procurement
On-Campus Purchases
SUBJECT:
I.
I.
PolicyNumber:04.03.01
Service Center and Auxiliary Purchases Requisitions
PURPOSE AND SCOPE
The purpose of this policy is to prescribe the appropriate means for university
departments to acquire goods or services from service centers and auxiliary enterprises
within the University of Houston.
This policy applies to non-cash transactions between university departments and service
center or auxiliary accounts, with restrictions on fund sources as prescribed. Cash
transactions are covered under separate MAPPs.
When goods or services are acquired internally from departments that are not service
centers or auxiliary enterprises an ex, the Expenditure rReallocation or Correction form is
prepared.used (MAPP 05.02.03).
This policy applies to non-cash transactions between university departments and auxiliary
or service center accounts, with restrictions on fund sources as prescribed. Cash
transactions are covered under separate MAPPs.
II.
DEFINITIONS
A.
Service centers (recharge centers, service departments): Service centers are
departments which provide goods or services that may or may not be purchased from
commercial sources but are more economically and conveniently provided, and can
better be controlled, by the institution. Service centers provide goods and services to
university departments, rather than individuals, and are supported by recovering their
expenses through charges to the departmental operating accountsuniversity
departments that purchase their goods and services. Examples of service centers are
repair shops, glass-blowing shops, mailing services, printing shops, supply stores, and
audiovisual services (Addendum A). A service center should serve a large segment
of the university community. At the University of Houston, service centers are set up
in fund 2XXX cost centers.
Rates charged by a service center should reflect all operating costs, including wages,
benefits, cost of materials and supplies, cost of physical facilities, depreciation, and a
share of general and administrative expense. While service centers may be subsidized
October 5, 1992; Revised December Draft June 1, 2008
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Service Center and Auxiliary Purchases Requisitions
MAPP Policy 04.03.01
in their operations by authorized university allocations, they may not make a profit or
generate a surplus balance.
Auxiliary enterprise: An entity which furnishes goods or services primarily to
students, faculty, and/or staff; which charges a fee that is directly related
(although not necessarily equal) to the cost of the goods or services delivered, and
which is managed as a self-supporting entity. The general public may incidentally
be served by some auxiliary enterprises. Examples include residence halls, food
services, student stores, vending machines, and intercollegiate athletic
(Addendum A). At the University of Houston, auxiliary enterprises are set up
in fund 3XXX cost centers.
Auxiliary enterprises are related to the educational objectives of the university
and contribute significantly to the achievement of those objectives. The
specific functions performed by each auxiliary enterprise are determined by the
university administration.
B. B. Auxiliary enterprise: An entity which furnishes goods or services primarily to
students, faculty, and/or staff; which charges a fee that is directly related (although
not necessarily equal) to the cost of the goods or services delivered, and which is
managed as a self-supporting entity. The general public may incidentally be served by
some auxiliary enterprises. Examples include residence halls, food services, student
stores, vending machines, and intercollegiate athletic (Addendum A). At the
University of Houston, auxiliary enterprises are set up in fund 3XXX cost centers.
Auxiliary enterprises are related to the educational objectives of the university and
contribute significantly to the achievement of those objectives. The specific functions
performed by each auxiliary enterprise are determined by the university
administration.
Service centers (recharge centers, service departments): Service centers are units which
provide goods or services that may or may not be purchased from commercial
sources but are more economically and conveniently provided, and can better be
controlled, by the institution. Service centers provide goods and services to
university departments, rather than individuals, and are supported by recovering
their expenses through charges to the departmental operating accounts. Examples
are repair shops, glass-blowing shops, mailing services, printing shops, supply
stores, and audiovisual services (Addendum A). A service center should serve a
large segment of the university community. At the University of Houston, service
centers are set up in fund 2XXX cost centers.
Rates charged by a service center should reflect all operating costs, including
wages, benefits, cost of materials and supplies, cost of physical facilities,
depreciation, and a share of general and administrative expense. While service
centers may be subsidized in their operations by authorized university allocations,
they may not make a profit or generate a surplus balance.
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Service Center and Auxiliary Purchases Requisitions
MAPP Policy 04.03.01
III.
POLICY STATEMENT
II.
POLICY STATEMENT
University of Houston administration provides for the internal acquisition of goods or
services. The acquisition process should provide timely delivery of goods or services at a
reasonable cost and a means for acquiring unique goods or services not readily available
from external vendors.
When a university department obtains goods or services from a service center or an
auxiliary enterprise of the university, the transaction must be recorded through the use of
a Service Center VoucherRequisition (SCR Voucher). wWhen using local (not stateappropriated) funds, form. Use of tT the SC Voucheris form will credit the service
provider's cost centeraccount and will charge the procuring department's cost
centeraccount. This is a non-cash process. When using state appropriated funds, the SC
Voucher will charge the procuring department’s cost center and generate a state warrant
payable to the service center or auxiliary.
Service Center VouchersRequisitions (SC VouchersRs) must conform to this policy
and the companion procedures; those not meeting the prescribed standards will not
be processed.
III.
DEFINITIONS
A.
Auxiliary enterprise: An entity which furnishes goods or services primarily to
students, faculty, and/or staff; which charges a fee that is directly related
(although not necessarily equal) to the cost of the goods or services delivered, and
which is managed as a self-supporting entity. The general public may incidentally
be served by some auxiliary enterprises. Examples include residence halls, food
services, student stores, student unions, vending machines, and intercollegiate
athletics (Procedure Addendum AB). At the University of Houston, auxiliary
enterprises are set up in fund ledger 3XXX cost centers.
Auxiliary enterprises are related to the educational objectives of the university
and contribute significantly to the achievement of those objectives. The specific
functions performed by each auxiliary enterprise are determined by the university
administration.
B.
Service centers (recharge centers, service departments): Service centers are units
which provide goods or services that may or may not be purchased from
commercial sources but are more economically and conveniently provided, and
can better be controlled, by the institution. Service centers provide goods and
services to university departments, rather than individuals, and are supported by
October 5, 1992; Revised December 19, 1997; Draft June 1, 2008
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Service Center and Auxiliary Purchases Requisitions
MAPP Policy 04.03.01
recovering their expenses through charges to the departmental operating accounts.
Examples are repair shops, glass-blowing shops, mailing services, printing shops,
supply stores, and audiovisual services (Procedure Addendum BC). A service
center should serve a large segment of the university community. At the
University of Houston, service centers are set up in designated, ledger 2,
accountsfund 2XXX cost centers.
Rates charged by a service center should reflect all operating costs, including
wages, benefits, cost of materials and supplies, cost of physical facilities,
depreciation, and a share of general and administrative expense. While service
centers may be subsidized in their operations by authorized university allocations,
they may not make a profit or generate a surplus balance.
IV.
TYPES OF TRANSACTIONS ALLOWED
A.
Service Center VouchersRequisitions (SC VouchersRs) may be used only when
actual goods or services are procured from approved service or auxiliary units.
SC VouchreRsVouchers may not be used for procurement from any other
university units, or as an expenditure reallocation, or transfer mechanism. Those
transactions must be processed using a journal entry, or voucher (for state to local
or local to state reallocations)), or Payroll Reallocation n Expenditure
Reallocation or Correction (ERC) form (MAPP 05.02.03).
B.
Auxiliary units cannot accept SC Vouchers from state-appropriated (1XXX) funds; local
funds (2XXX, 3XXX, 4XXX, or 5XXX) must be used. Service centers, however, may accept
state funds, as well as local funds.
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Service Center and Auxiliary Purchases Requisitions
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B.
Auxiliary units cannot accept SC VouchersR transactions from
state-appropriated (ledger 1XXX) funds; local funds (ledger 2XXX, 3XXX, 4XXX, or
5XXX) must be used. Service
centers, however, may accept ledger 1 state funds, as well
as local funds.
II.
V.
PROCEDURE
A.
V.
It is the responsibility of all parties to the SC Voucher to ensure that the voucher
complies with this policy and procedure and with any other pertinent University
of Houston
regulations. It is The requesting department must ensure the SC
Voucher is complete, the responsibility of the requesting department to
ensure
that the SC Voucher is complete and properly documented, and approved. The Service
Center/Auxiliary must ensure
It is the the correct account and cost center information is recorded and
appropriate documentation is uploaded to the financial system asresponsibility of the
service center to ensure that all appropriate supporting documentation is uploaded to the
financial system as an attachment to the SC Voucher. It is the responsibility of any
other approving department to
ensure the document is processed and approved in a
timely and appropriate
manner.
B.
AWhile a SC Voucher always serves as a request for goods or services, an invoice
for those goods or services, and a mechanism for payment for the goods or
services from service centers and auxiliaries, it may also serve as the request for
goods or services and/or invoice depending on the service center or auxiliary’s
procedures. The SC Voucher may beis almost always initiated by the department
requesting the goods and services or by the service center. However, if the
service center or auxiliary initiates the SC Voucher, they must document the
department’s approval to pay before submitting the SC Voucher to General
Accounting for final approval. In general, the department preparing the SC
Voucher should complete all fields in the financial system, including invoice
information, cost center, debit and credit accounts, upload supporting
documentation, and appropriate routing via workflow. Guidelines for processing
SC Vouchers are available at: http://www.uh.edu/finance/pages/References.htm.
While individual service centers may establish their own billing procedures, all
such procedures must comply with this policy.
Note: Service centers may accept state (1XXX) and local funds (2XXX – 9XXX)
as payment. However, sState accounting regulations prevent auxiliary units from
accepting SC Vouchers charged against state funded (1XXX) cost centers unless
the auxiliary is treated in the same manner as any other vendor (i.e., purchase is
made due to best price, quality, or other documentedbusiness reason. When goods
or services are requested from an auxiliary unit and payment must be made with
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state funds, a non SC Voucher must be used (MAPP 04.01.03).. (Why a non SC
Voucher and not a state SC Voucher?)).
C.
Documentation supporting SC Voucher charges (quotation, work request,
stockroom receipt, etc.) must be uploaded to the SC Voucher in the financial
system when the SC Voucher alone does not provide an adequate explanation of
the transaction. If supporting documentation is provided, a summary description
of goods or services, including the invoice, work order or stockroom receipt
number is sufficient. Service centers must retain copies of supporting
documentation as specified in the current University of Houston System
Document Retention Schedule.
If supporting documentation is not provided with the SC Voucher because the
service center does not routinely generate separate documentation, a complete
explanation of the nature of the transaction must be included in the voucher
comments. Abbreviated descriptions such as "monthly fee," "copy charges" or
"supplies" are not acceptable unless supported by attached documentation.
All SC Vouchers must include a benefit and purpose statement which provides
the purpose of the purchase and how the University will benefit from the
purchase. SC Vouchers for charges relating to public events, entertainment or
other activities subject to any University of Houston travel and entertainment
policy must include the dates of the event or expense, the number of attendees,
and the names of the attendees, if 10 or fewer. If the attendees total more than 10,
the SC Voucher must include the names of the host(s), and guest(s) of honor, and
a description of the group.
C. The SC Voucher must be routed to the authorized approver via workflow in the
financial system. Additional signatures and approvals may be required,
depending on the specific transaction, in accordance with MAPP 05.02.01 and
MAPP 05.02.02.
VI.
VII.
REVIEW AND RESPONSIBILITIES
Responsible Party:
Associate Vice President, for Finance
Review:
Every three years, on or before September June 1
APPROVAL
Executive Vice President for Administration and Finance
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Service Center and Auxiliary Purchases Requisitions
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President
Date of President’s Approval:
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Service Center and Auxiliary Purchases Requisitions
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VII.
REFERENCES
•
•
•
•
•
MAPP Policy/ Procedure 05.02.03 (Expenditure Reallocation and Correction)
MAPP 03.03.01 - Service Centers (Recharge Centers)
Addendum A – Hyperlink to Business Processes for UH Service Centers and
Auxiliaries
Addendum B - Descriptions of University Service Activities Not Classified as
Service Centers or Auxiliaries
Addendum C - Other General Information Regarding University Services and
Transactions
Index Terms:
◦ Internal purchases
◦ Recharge centers
◦ Service center vouchers
◦ Service centers
◦ Service departments
◦ Auxiliary enterprises
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Addendum A
Hyperlink to Business Processes for UH Service Centers and Auxiliaries
http://www.uh.edu/finance/pages/References.htm, link: Service Center and Auxiliary
Business Process Matrix
Addendum B
DESCRIPTIONS OF UNIVERSITY SERVICE ACTIVITIES NOT CLASSIFIED AS
SERVICE CENTERS OR AUXILIARIES
A university department must acquire a variety of goods or services in order to fulfill its
instructional, research or administrative responsibilities. Goods or services may be acquired from
external vendors or from internal service centers. Likewise, university departments may provide
services to external, as well as internal, customers.
The following are descriptions of university operations that are not classified as service centers
or auxiliaries, but thatthatwhich sale may sell generate the sale of goods or services to a variety
of customers or us ers which could include other university departments, faculty, staff, students,
or the general public. This policy provides for internal, non-cash payment for goods or services
to the most common internal providers--auxiliary enterprises departments or service centers-through Service Center Vouchers. In cases where other types of service providers may provide
goods or services to another university department, such transactions must be made using a
journal entry or voucher (for state to local or local to state reallocations), (MAPP 5.02.03).
Auxiliary Enterprises
An auxiliary enterprise is an entity which exists to furnish goods or services to students, faculty,
or staff and which charges a fee that is directly related--though not necessarily equal--to the cost
of the goods or services delivered, and which is managed as a self-supporting entity. The general
public may incidentally be served in some auxiliary enterprises. Examples include residence
halls, food services, student stores, student unions, vending machines, and intercollegiate
athletics.
Auxiliary enterprises are related to the educational objectives of the university and contribute
significantly to the achievement of those objectives. The specific functions performed by each
auxiliary enterprise are determined by the university administration.
Auxiliary enterprises customers include: students, faculty, staff, university departments (with
certain fund restrictions), and occasionally the general public.
Organized Activities Related to Educational Departments
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These organizations are entities which exist to provide an instructional or laboratory experience
for students and which incidentally create goods or services that may be sold on campus or to the
general public. Included in this category may be optometry clinics, nursery schools, speech
laboratories, demonstration schools, and college theaters. At the University of Houston, the
Optometry Clinic is an organized activity operation.
Organized activities may provide by-products or services which are available for a charge to
students, faculty, and staff, or to the general public.
Service Centers (also called Recharge Centers or Service Departments)
Service centers are units created to provide goods or services that may or may not be purchased
from commercial sources, but are more economically and conveniently provided and can be
better controlled by the institution. Service centers provide goods and services to university
departments, rather than individuals, and are supported by recovering their expenses through
charges to the departmental operating budget. A service center should serve a large segment of
the university community. Examples are repair shops, glass-blowing shops, mailing services,
printing shops, supply stores and audiovisual services.
Rates charged by a service center should reflect all operating costs, including salaries, wages,
benefits, cost of materials and supplies, cost of physical facilities, depreciation, and a share of
general and administrative expense. While service centers must be business-like operations, they
may not make a profit or generate a surplus balance.
Sales and Services of Educational Departments
This category of operations includes revenues of educational departments from activities that are
not conducted primarily for professional training of students. These activities may include
special academic centers and programs, sales of publications, sale of class materials, and sale of
reference materials, film rental, testing services, departmental copy machines, and similar
activities.
Customers of these activities may be students, faculty, staff, other departments, or the general
public.
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Addendum D
Other General Information Regarding
University Services and Transactions
Recording Sales, Cost Distributions, and Corrections
With the exception of service centers, the university operations described may create sales to
both internal and external customers. Sales to the general public, students, faculty, and staff will
be cash sales. These sales will be recorded on a cash deposit journal and deposited to the UH
Bank in accordance with MAPP 5.01.01. This journal entry should reflect the amount of sales tax
collected and payable to the State Comptroller.
Sales to other university departments, expenditure reallocations, and corrections are recorded on
a journal entry or a voucher (for state to local or local to state reallocations) to record the
amounts to be charged, the amount of income, or recovered costs.
Other Internal Activities
Transactions posted in error will be corrected by a journal entry or voucher (for state to local or
local to state reallocations) MAPP 5.02.03). Such a request may be made whenever an
accounting error is found in a departmental cost center.
A reallocation of expenditure may be initiated by a department in order to properly allocate
charges to user departments which have received goods.
REVIEW AND RESPONSIBILITIES
Responsible Party:
Associate Vice President, Finance
Review:
Every three years, on or before September 1
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Service Center and Auxiliary Purchases Requisitions
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VI.
APPROVAL
Randy J. Harris
Vice President for Administration and Finance
Arthur K. Smith
President
Date of President’s Approval:
VII.
February 6, 1998
REFERENCES
y MAPP Procedure 4.03.01
y MAPP Policy/ Procedure 5.02.03 (Expenditure Reallocation ands/ Corrections)
y MAPP 3.03.01 - Service Centers (Recharge Centers)
y Index Terms:
◦ Internal purchases
◦ Recharge centers
◦ Service center vouchers requisitions
◦ Service centers
◦ Service departments
◦ Auxiliary enterprises
October 5, 1992; Revised December 19, 1997; Draft June 1, 2008
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