Fee-for-Service activities in academic settings generally encompass service projects for which an external client requests a deliverable, generated using known practical applications of standard procedures and established theories, methods and standard experiments using special or unique MSU research capabilities. The results of such work are of specific interest to the client and normally involve a set fee according to a published rate schedule routinely charged to all potential customers, off-the-shelf tools and established protocols. Fee-for-service work does not require original, creative, or scholarly analyses or non-standard interpretation of data sets by MSU faculty, staff or students engaged in the work. Questions regarding these activities should be directed to an office’s Fee-for-Service Activities Officer (FSAO), Business Connect (BC) or Office of Sponsored Programs (OSP). MSU allows for a unit to exercise approval and oversight for routine/higher volume fee-for-service entities within the unit through a University approved Fee-for-Service Activities Officer (FSAO). A FSAO has limited delegated signature authority to engage in the fee-for-service activity as a self-directed operation. Of particular importance, is that if a project satisfies the non-intervention criteria as outlined in MBP Section 315, the FSAO is authorized to act on its own to sign an MSU agreement for the project with a client. For more information, please see MSU’s Manual of Business Procedures, section 315: http://ctlr.msu.edu/COMBP/mbp315EBS.aspx.
DY accounts are created specifically to account for fee-for-service activities conducted in an academic setting.
- Requests to establish a new DY account begin with the initiation of a new account doc in KFS. All new DY account docs are routed to CGA for approval. CGA will review and approve appropriate KFS new account requests that have a description of services that is sufficiently comprehensive to reflect anticipated activities.
- F&A will be assessed at 26% for externally generated revenue deposited into DY accounts unless a different rate is approved by the Vice President for Research & Innovation. Documentation of OR&I approval needs to be attached to the DY new account request if less than 26% F&A is requested.
DY New Account Instruction Sheet:
Download the PDF.
A FSAO is a special designation given to a person within an office who, when given approval by a FSAO approval letter, has authority to sign certain MSU Standard Agreements on an expedited basis. The FSAO has authority and responsibility for assisting fee-for-service activities within a department, unit or college. Anticipated responsibilities include: assisting in account setup, operation, compliance activities such as export control, coordinating billing rate review with the Office of Financial Analysis, and the execution of MSU Standard Agreements (within quantitative limits/authorization). See MBP section 315 I.C.2 (c, d, f, and g) and II B for more information. The current MSU Standard Agreement can be found at: https://vprgs.msu.edu/msu-services-agreement-form
When dealing with non-MSU clients, it is sometimes necessary to have a description of the activities to be performed and the terms and conditions governing that work, written into an agreement that needs official signatures from the client and MSU, i.e. time frames, payment schedules, warrantees, FOIA protections, etc. Given the potential for liability associated with these agreements, the authority to sign agreements is limited to the following:
- FSAO officer: For activities that use the MSU Standard Agreement, and are for an amount within the FSAO’s approval thresholds, which is documented in the FSAO approval letter, the FSAO is authorized to sign for MSU.
- Agreements with For-Profit Entities: Documents will be reviewed, negotiated if necessary, and signed by Business Connect (BC). In order for BC to complete its review, an Institutional Proposal (formerly known as Transmittal) will need to be competed. BC will review the related Institutional Proposal and compliance documents, as well as verify that the billing rates have either been approved by Financial Analysis (FA) or, for non-recurring activities, verify that reasonable costing principles have been applied.
- Agreements with Non-Profit Entities: The Office of General Council (OGC) will review, make recommendations if necessary, and then pass to the Director of Contract and Grant Administration (CGA) for signature. CGA will review the documents and rate schedules and may require an Institutional Proposal or the Fee-For-Service Project Form before the agreement is signed to ensure departmental support of the activity.
- Agreements with governmental flow-down clauses must be reviewed by OSP.
- Academic credit: payments for activities where the faculty member would like the activity reflected in the sponsored projects award (SPA) database (sometimes referred to as the CGA database), must include the appropriate Institutional Proposal (IP) # (formerly known as App #)in the line description of the KFS deposit document. The format for the line description must be “IP XXXXXX” to be counted towards academic credit. CGA will use this information to periodically run a report of all DY deposits for inclusion in the SPA award database and also for addition to the Board of Trustees report.
- No Academic credit: payments for activities where it is not necessary for the activity to be reflected in the SPA database, should not include Institutional Proposal information in the line description of the KFS deposit document.
- Revenues from externally generated activities should be deposited by the unit into the DY account using a KFS Cash Receipt (cash or checks) or an Advance Deposit (wires) document, including a copy of the check and related sponsor correspondence, using one of the following revenue object codes.
- 4500 – Fee-for-Service – Industry
- 4505 – Fee-for-Service – Other
- Revenues generated from on-campus services will not be assessed F&A, i.e. internal revenues cannot use object codes 4500 or 4505.
- If a particular activity within an established DY account receives approval by the OR&I (as a one-off activity) to proceed with a lower F&A rate, the approval from OR&I should be attached to the eDoc. Please contact CGA’s Cash Management Group (firstname.lastname@example.org), so that CGA can process a manual F&A adjustment for the one-off activity. To expedite CGA’s review, please include the KFS doc number and documentation of OR&I one-time F&A waiver or reduction.
- Billing rates for fee-for-service activities must be reviewed by the Office of Financial Analysis and Reporting, or for non-recurring activities, BC (for-profit) or CGA (non-profit) will ensure that reasonable costing principles have been applied. In addition, the activity should be evaluated for potential Unrelated Business Income Tax. Questions regarding taxation should be directed to the Office of Financial Analysis and Reporting.
- Any questions related to these compliance activities should be directed to the FSAO, BC or Office of Sponsored Programs (OSP). See MBP section 315 I.C.2 (c, d, f, and g) and II B for more information.
- Revenues for activities that include valid Institutional Proposal numbers in the KFS Deposit line item description will be recorded in the SPA award database and reported on the Board of Trustees (BOT) report on a periodic basis.
- A list of all DY deposits with “IP XXXXX” in the line item description field will be provided to the DY account manager or FSAO in order to verify the deposits and Institutional Proposals are accurate. This will be a negative confirmation report and no action is required by the unit unless an error is discovered.
- A correction of a prior BOT acceptance will be considered if > $20,000 and it does not affect a prior fiscal year.
- All DY account activities will be reported on a cash basis, i.e. as cash is received.
- F&A revenues will be distributed based on the F&A distribution identified on the latest Institutional Proposal, or the KFS Organizational unit assigned to the DY account if no Institutional Proposal.
- Externally generated revenue deposits into DY accounts will be limited to object codes 4500 Fee-for-Service – Industry, or 4505 Fee-for-Service – Other.
- Since fee-for-service activities are not gifts, they will not receive a gift announcement from University Advancement.
- Balances in DY accounts will be reviewed periodically to ensure that excessive amounts of working capital are not accumulated.
- DY Accounts will be reviewed every five years for continuation or closure.
Frequently Asked Questions
Can I have multiple PI's using the same DY account?
Yes, provided that the PI's are all conducting the same Fee-for-Service activity assigned to the DY account. Please note that the F&A revenues will be distributed based on the F&A distribution identified on the latest Institutional Proposal or the KFS Organizational unit assigned to the DY account.
How will Export Control issues be reviewed?
Export control regulations are administered by several agencies of the United States government. These laws impose access, dissemination, and participation restrictions on the transfer of controlled goods, software and information. Trade sanction regulations enforce economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign individuals, entities and governments. Questions should be directed to the office of Export Controls and Trade Sanctions at email@example.com, (517)432-4499 or https://exportcontrols.msu.edu/
What title does the FSAO typically have?
The decision of who should be an FSAO is determined by the unit. It is advised that the individual be able to represent a Department as well as the College since delegated signature authority will be issued to the FSAO on behalf of the College.
These accounts, sometimes referred to as general research accounts, will be partially phased out over time. Some RG accounts will remain for limited purposes such as research gifts, nonfederal clinical trials, fixed-price research agreements, project GREEEN, MSU foundation activities, and some internally selected research projects like HARP. It is assumed that these activities will not have restrictions on expenditures, or detailed reporting requirements.
These accounts will be processed according to the established RC/RG process in accordance with section 315 of the MBP.