POLICY TITLE: Auxiliary Enterprise Financial Policy
POLICY NUMBER: 7.10.1
EFFECTIVE: July 1, 2015
An Auxiliary Enterprise is an entity that exists to furnish goods or services primarily to benefit students, faculty, and staff, and that charges a fee directly related to, although not necessarily equal to, the cost of the goods or services. These activities are referred to as Auxiliary Enterprises because the operations meet the Governmental Accounting Standards Board (GASB) definition of enterprise funds.
Auxiliary Enterprises are managed as self-supporting activities through the fees that they charge their customers for products or services rendered and may not obtain any support from the Educational and General Fund (E&G). At all times, auxiliary activities must support the educational endeavor of the College and enhance its functioning and the student experience.
Contractual/commission auxiliaries produce restricted revenue that is to be conditionally held in reserve in specifically designated funds within the institutional financial statements. Working capital accounts to finance accounts payable and inventory and cash flow management, capital improvement and equipment replacement funds, are examples of such funds. The Auxiliary Indirect Cost expense will be calculated on a basis that is consistent with Board of Education Auxiliary Enterprise Overhead Policy. These funds will be remunerated to the college each fiscal year.
To assist the Bookstore in its ability to make prompt institutional reimbursements, vender payments and negotiate favorable terms, a reasonable working capital cash fund will be established as follows:
The remaining fund balances generated by auxiliary sources will be deposited into the Auxiliary Enterprise Fund. Appropriate use for these funds for (a) auxiliary purposes will be first intent and (b) for subsidizing Educational and General (E&G) will be brought to Postsecondary Council for approval as part of the annualized budget request cycle and the Capital Improvement Planning (CIP) process.
In conformance with RI General Laws, Title 16, Chapter 59-9, section (d), Auxiliary Enterprises at the Community College of Rhode Island are specified as financially self-supporting entities to include: the Bookstores, the Student Unions, and Dining and Vending commissions for all four campus locations.
The office of the Controller is responsible for implementing and maintaining this policy.