IFAS Internal Management Memoranda

IFAS; Policy and Procedures for Distributing Accretion of Value Resulting from Sales of University of Florida Foundation, Inc. (UFF) SHARE Owned Livestock

EFFECTIVE DATE: October 21, 1996

INTERNAL MANAGEMENT MEMORANDUM NUMBER: 6C1-6.40-12 (Revised)

SUBJECT: IFAS; Policy and Procedures for Distributing Accretion of Value Resulting from Sales of University of Florida Foundation, Inc. (UFF) SHARE Owned Livestock

  1. General -- Various classes of livestock (beef cattle, equine, swine, etc.) are required for use in the research, extension and/or academic programs of the Institute of Food and Agricultural Sciences (IFAS). Livestock for these programs are made available as follows:

    1. Purchased with State appropriated funds.

    2. Purchased with UFF SHARE funds.

    3. Donations to UFF SHARE.

  2. Policies -- The following policies apply pertaining to livestock purchased or owned by the UFF SHARE.

    1. Livestock purchased with State appropriated funds and progeny of State owned animals shall not be sold to the UFF SHARE.

    2. An annual livestock lease agreement will be prepared for each unit covering each class of livestock, including beef cattle, equine, and swine, owned by the UFF SHARE and used by that IFAS unit in research, extension, and/or academic programs (copy of the livestock lease agreement is attached). A monthly printed inventory reflecting gains and losses that took place in the covered class of livestock during the month is provided quarterly to the UFF to be attached to the annual lease agreement.

    3. Poultry (chicks, poults, pullets, eggs, etc.) may be purchased with UFF SHARE funds, but must be immediately placed on state inventory. Donations of poultry or eggs to the UFF will be transferred immediately to state inventory.

    4. The accretion of value resulting from sales of cuts of carcasses of UFF SHARE owned livestock will be handled as follows:

      The Animal Science Meats Laboratory Manager will provide a list showing the specific animals by inventory number to be slaughtered and whose carcasses are to be sold by "cuts" over a period of time. Each group of "cuts" carcasses will be assigned a "group number" for control purposes. All funds received from sales of "cuts" from carcasses within a group will be deposited into the UFF (Animal Science SHARE) account with a back-up memorandum stating "...funds are for cuts of meat involving carcasses for group. The Animal Science Department will establish a sub-account for each group. Inventory adjustment information will be submitted and appropriate distribution of accretion value will be accomplished as soon as all funds are received for all "cuts" of carcasses within a specific group."

    5. The accretion of value resulting from UFF SHARE owned livestock will be distributed as follows:

      1. The UFF SHARE shall first be reimbursed for the inventory value of said animals. (Such inventory value in the case of donated animals would be the appraised value resulting from an independent appraisal secured by UFF SHARE; in the case of purchased animals, the receipted purchase price; or, in the case of progeny either zero or the cost of the breeding or stud fee).

      2. The remaining proceeds at time of sale shall be divided between UFF SHARE and the IFAS Research Incidental Income Account, based on the actual annual accounting of direct maintenance costs by fund sources (i.e., State and UFF SHARE) for the prior year. All concerned units will be notified annually of the ratio to be used.

      3. At the close of the fiscal year, there will be an adjustment based on the actual annual accounting of direct maintenance costs by fund sources (i.e., State and UFF SHARE).

    6. Other policies are enumerated in the annual lease agreement.

  3. Procedure for distributing proceeds at the time a leased animal has been sold (see Paragraph 2-e(1) and (2), above). For example:

    1. Five leased beef cattle are sold February 8, 1988, for $500 a head. Therefore, the buyer pays $2,500 (5 x 500) to the UFF SHARE.

    2. The inventory value is $200 a head.

    3. Computation would be as follows:

      2/8/88 -- Five beef cattle @ $500 = $2,500
      Less: Inventory value @ $200/head = $1,000
      Net Proceeds $1,500

      Divide net proceeds based on the previous year's ratio which is:

      6.5% to State (Research Incidental) $97.50
      93.5% to UFF (SHARE) $1,402.50

    4. In this case, SHARE would retain $2,402.50 ($1,000 inventory value, plus 93.5% of the net proceeds -- $1,402.50; SHARE would pay the State (Research Incidental) $97.50 (6.5% of the net proceeds).

  4. Procedures for actual annual accounting of direct maintenance costs by fund sources (see Paragraph 2) e)(3)) are:

    1. Each unit (Department or Research Center) involved will maintain auditable records annually for each class of livestock (i.e., beef cattle, equine, or swine). These records will be maintained on a fiscal year basis.

    2. Set up a file for each class of livestock and include the lease and any lease amendments including copies of monthly class inventory reports on animals leased from UFF SHARE. Also, place in the file a copy of any fiscal document (purchase order, invoice, etc.) involving a direct cost expenditure for the maintenance of that class of livestock.

    3. At the conclusion of each fiscal year, these records will be used to effect any year-end adjustment pertaining to any sales (during that fiscal year) of livestock leased from UFF SHARE. For example:

      1. The Animal Science Department had 365 beef cattle during fiscal year 1985-86. Of these, 229 were state owned and 136 were leased from UFF SHARE.

      2. A total of $120,512 in direct costs was expended for feed, fertilizer, temporary labor, etc. to maintain these beef cattle. Of this amount, $77,427 was from state appropriated funds and $43,085 was from UFF SHARE funds.

      3. Thus, the average direct cost to maintain one animal was $330 ($120,512 divided by 365).

      4. Computation would be as shown in the following example. Upon completing the computation with copies of fund deposit documents attached will be sent to Director, Planning and Business Affairs, Room 2022 McCarty Hall, for proper adjustment.

EXAMPLE

Summary of State-Share Data
For Beef Cattle: 1987-88
(22KB pdf)

LEASE AGREEMENT

IFAS - Animals (20KB pdf)