Non-Credit Bearing Professional Development Programs

A non-credit bearing professional development program billing rate is the cost per participant to participate in the program. Costs included in the rate calculation must be:

• Allowable.
• Directly attributable to the program.
• A necessary and appropriate component of the rate.
• Documented.
• Reviewed post-program or annually for recurring programs.

New rates and changes to existing rates must be reviewed and approved by:

• Financial Management.
• Department chair or head.
• Unit Business Officer (UBO).
• University Controller.
• Provost Designee.

Rates for recurring programs must be reviewed prior to the next program and adjusted as necessary.

Budgeted Costs are based on prior program costs or an estimate of the upcoming program costs. New program rates must be based on a reasonable estimate of the costs to provide the program.

Budgeted Number of Participants is the total number of individuals expected to participate in the program. This budgeted number must be based on the total number of participants regardless of whether the participant is charged. This is necessary to avoid having some participants pay higher rates to compensate for reduced rates charged to other participants.

Once the program base rate is calculated, variable billing rates may be established, based on the participant types. 

The internal rate is billed to internal participants. Internal participants include academic, research, administrative and auxiliary units whose originating source of funds is within or flows through the university. The originating source includes State, Research Foundation (RF), UB Foundation (UBF) and Faculty Student Association (FSA) funds.

The same internal rate must be charged to all internal university participants. Multiple internal rates can be established if alternate pricing structures (e.g. based on department affiliation) have a sound management basis, do not discriminate among participants and do not result in recovering more than the cost of hosting the program. All internal rates must be recorded to ensure they are not inappropriately charged to other participants.

Internal rates are based on the program base rate (cost), minus any approved subsidies.

The external rate is billed to external participants. External participants are individuals or organizations whose originating source of funds is outside the university. External participants include faculty, staff and students acting in a personal capacity.

Multiple external rates can be established if alternate pricing structures have a sound management basis, are measurable and do not discriminate among participants. Examples of acceptable external rates include external student, external faculty or staff and external community or industry.

External rates are based on the program base rate (cost), plus GUSF and any approved markups. Markups must be justified based on going market rates for similar programs.

External rates may be subject to sales tax and Unrelated Business Income Tax (UBIT).

Non-credit bearing professional development program rates must be developed so that revenues offset costs for each program.

With proper approval, program operations may be subsidized, if the program is meeting research or educational mission to serve the university. When rates are lower than cost, the resulting deficit cannot be carried forward as an adjustment to future billing rates. 

Participants whose payment source is university funds (State, Research Foundation (RF), UB Foundation (UBF)) cannot be charged more than cost.

With proper approval, the department may choose to allow attendance at no charge or at a lower rate than other participants. However, the program rate must be calculated for all internal participants based on total expenses and total participants. Variable rates must be based on clear and identifiable criteria.

Departments are permitted to charge external participants a rate higher than the rate charged to internal participants. Departments are required to track revenues and costs associated with external participants separately to avoid the perception of overcharging.

Rates charged to external customers may include:

• Full direct costs of the program operation including direct costs not charged to internal users.
• General University Service Fee (GUSF).
• Sales tax, where applicable.

External rates cannot be significantly different than the prevailing rate for identical programs provided by other organizations in the area.

Revenue from external users may have Unrelated Business Income Tax (UBIT) implications.

During the rate development process, Financial Management will provide an annualized break-even pro forma and assist with reviewing the break-even analysis annually.

Because external rates cannot be significantly different than the prevailing rate for identical programs provided by other organizations in the area, departments need to submit market comparisons if charging above or below break-even. 

All newly established non-credit bearing professional development program fees must be deposited in a separate account. An Income Fund Reimbursable (IFR) account should be established to record program activity. A Research Foundation (RF) income account or a University at Buffalo Foundation (UBF) account may be established to record program activity with prior approval from Financial Management and the University Controller.

At a minimum, programs must have at least one account for tracking revenue and expenditures. If a program has funding from multiple funding sources (i.e. registration revenue and expenses in State IFR or donation funding in UBF), all accounts related to the program must be documented in the approval forms. 

A university member may not sign or otherwise execute a procurement contract that binds the university unless they have been delegated signature authority in accordance with the Approval Authority Policy. Refer to the Financial Management of Non-Credit Bearing Professional Development Procedures to request a contract. 

Departments should work with Purchasing and Contract Services to negotiate contracts with vendors. Requests can be made via the ShopBlue Request Form.

Revenue must be collected using approved non-credit bearing professional development rates.

The department must reconcile accounts receivable against program accounts.

Revenue collection must be processed through a university-approved method. Departments may elect not to accept internal methods of payment for the program.

Billing must be based upon participation, using approved billing rates, and processed on a timely basis.

• Invoices must be based on documented and properly approved rates.
• All invoicing must be processed on a timely basis (i.e., within one month from the time of the program) and with approved program rates.
• Invoices must include the following information:
  • Name of the program.
  • Invoice number or another unique identifier.
  • Date of program.
  • Itemized registration fees (must match approved rate list).
• The department is responsible for monitoring collections on accounts receivable.

Depending on the program funding source and the customer’s funding source, there are different processes for invoicing and collecting payments.

Payment types not listed in table must be approved by Financial Management prior to collection.

If departments are using multiple payment platforms to collect program fees, keep records of all participants and their payment method. Use Excel if another platform is not available.

Departments collecting revenue must ensure that the appropriate segregation of duties is maintained to safeguard funds and the university’s reputation, as required in the Safeguarding Cash and Cash Equivalents Policy. For instance, a person who receives payments should not be the person who deposits payments or reconciles the account.

When staffing resources make segregation of duties difficult, compensating controls must be implemented to provide the appropriate checks and balances to detect errors, deter fraud, and prevent the concealment of irregularities.

Financial Management can assist departments with templates that outline these procedures. 

The department must maintain rate development documentation. Documentation includes the actual costs of providing the program, the number of participants, billings, collections, and the annual surplus or deficit.

These records are subject to external audit (e.g. federal, state, RF, other sponsors) and internal review.

Departments should work within their departments to store documentation.