Appendix S: Sales & Service Additional Information


Facilities and Administration Cost Recovery

Sales & Service Activities, providing goods or services to external, non-university entities must at a minimum recover both the direct and indirect cost of producing those goods or providing those services.

Indirect costs, also known as the Facilities and Administration (F&A) overhead rate, are added to the total Direct Costs. F&A rates are based on the current Federal (negotiated) research overhead rate for the campus, less four specific components:

  • Equipment Depreciation
  • Sponsored Project Administration
  • Library
  • Student Administration & Services

The applicable F&A rate depends upon where the Sales & Service Activity takes place. If the activity occurs on campus, it will include costs for campus buildings, operations and maintenance. An off-campus activity (in a building not owned or maintained by UCI) does not include those costs.

Internally, the direct cost of the good or service is credited back to the unit, while the Indirect cost recovery funds are distributed in two parts:

  • Central administration
  • Departmental support (or to the Vice Chancellor responsible for the activity)

Some departments may elect to forego the recovery of overhead that will ultimately be distributed back to their department and in doing so, may offer their goods or services for a lower price (minimum indirect rate).

The standard distribution for overhead cost recovery generated is as follows:

Activity Location

Central Administration S&S Rate


Departmental/School Support*


For Budgeting: Indirect Cost Rate on Direct Expenses

Central S&S Rate Applied to Revenue

On Campus






1-(1/1.146) = 12.74%

Off Campus






1-(1/1.08) = 7.41%

Indirect Rate Calculation

The calculation should be as follows:
For example, if total income recorded in income object code is $100,000 and the overhead factor is 14.6%, F&A cost recovery is not $100,000 multiplied by 14.6%.

The $100,000 includes both regular income and F&A cost recovery. If x is regular income and .146x is the overhead rate, then x + .146x = $100,000 and regular income is $100,000 divided by 1.146, or $87,260.03.

F&A cost recovery is $100,000 minus $87,260.03 which equals $12,739.

Revenue Object Codes

Revenue collected from Non-University Entities is credited to the unit and should be recorded using external revenue object code RXXX or SXXX. The indirect cost (F&A) component of the revenue will be assessed automatically and transferred to the appropriate support account.

Income object code for SSXXXX Accounts in sub-fund group code 409190

Object Code

Object Code Title













Income Object Code for OSXXXX Accounts in sub fund group code 410290

Object Code

Object Code Title



Differential Income

Sales & Service Activities rates are built upon first recovering the Direct and Indirect costs of producing the good or service as outlined above. That pricing is known as the Official Recharge Rate. Any income generated that is in excess of the Official Recharge Rate for the same service is considered Differential Income.

To facilitate clear annual reporting on Sales & Service Activities, income attributable to Official Recharge Rate should be deposited directly to the recharge account. Differential Income associated with higher Sales & Service Activity rates (due to Indirect Cost recovery portion of the rate and any additional mark-up charged to Non-University Entities) should be recorded in a separate account. Both accounts are subject to the assessment and distribution of proceeds also noted above. Differential Income is unrestricted and can be used to cover unit/school support services, and to subsidize the Recharge Activity if necessary.

Sales and Service accounts review - 5-year cycle.

Annually, the Accounting and Fiscal Services Office will review a sampling of approximately 1/5th of the funds with income recorded in the following Sub Fund group codes:

  • 410290 - OTHER

Certain activities are excluded from this annual review, since they do not fall under S&S education activity policies:

  • Medical Compensation Plan
  • Income in Control Organization codes
  • Athletics
  • Student Affairs
  • Medical Center

The annual review will confirm the following:

  1. An Recharge / Sales & Service Activity Information Sheet is on file (and to collect a current version from the unit if one is not)
  2. Evaluate whether the activity is being appropriately assessed to recover indirect costs, consistent with policy and documented waivers.

The set of funds, involving 1/5th of those with activity, will be clearly defined each year, and will not repeat for five years. The table below defines the schedule for 5 years beginning with FY20-21. Due to the volume, the School of Medicine accounts are broken down evenly in each of the 5 years reviews.

Year 1 - FY20-21

Year 2 - FY21-22

Year 3 - FY22-23

Year 4 - FY23-24

Year 5 - FY24-25

School of Medicine

Academic Affairs

School of ICS

Executive Management


School of Business

School of Biological Sciences

School of Medicine

Office of Research

School of Education

School of Medicine

School of Humanities

School of Law

School of Nursing

School of Physical Sciences

School of Medicine

School of Social Ecology

School of Social Sciences

VC Health Affairs

University Advancement


OVP Teaching & Learning

School of Medicine

School of the Arts

Information Technology

School of Engineering