UFRF Guidelines and Procedures
Introduction and Purpose
The University of Florida, with the approval of the Board of Regents, established the University of Florida Research Foundation, Inc. (UFRF), a direct support organization (DSO), in June, 1986, to promote, encourage and provide assistance to the research activities of the University faculty, staff, and students. Incorporated by the State of Florida in August 1986, the not-for-profit organization provides a venue by which discoveries, inventions, processes and work products of the University of Florida faculty, staff and students can be created and transferred from the laboratory to the public. Funds generated by such discoveries are used to enhance research at the University of Florida.
How the Research Foundation Works
Research-generated inventions and copyrights with commercial value may be assigned to the Research Foundation for marketing to private industry. Use of the Research Foundation permits greater flexibility in arranging license agreements, in direct investment of income and in holding of equity positions than is possible directly through the University. All income received from license agreements, royalties, and equity positions will be distributed by the Research Foundation in accordance with the University of Florida Patent Policy to inventors and their departments. The remaining share will be used to support technology transfer of the University work products and for the direct support of research throughout the campus.
It is generally the policy of the University of Florida to accept Contracts and Grants, however the Research Foundation may accept and administer contracts and grants from private industry, foundations and other non-governmental agencies. Accounts for such awards are maintained within the Research Foundation according to guidelines and procedures established by the UFRF Board of Directors. All overhead funds derived from contracts or grants are used to support research at the University of Florida.
Board of Directors and Officers
The Research Foundation’s Board of Directors consists of eleven voting members, unless the Chairman of the Board of Governors of the State of Florida chooses to appoint a member, in which case the Board of Directors shall consist of twelve voting members. The President of the University of Florida, the Provost/Vice President for Academic Affairs, the Vice President for Research, the Vice President for Finance and Administration, Senior Vice President for Agricultural and Natural Resources, the Senior Vice President for Health Affairs, the Dean of the College of Engineering and the Dean of the College of Liberal Arts and Sciences, or their respective designees, shall be members of the Board of Directors. There will be three members of the Board of Directors nominated by the President of the University of Florida and elected by the Board, who shall serve staggered three years terms. Each of these members shall be elected by a majority of the other members of the Board of Directors at a regular annual meeting. The Board of Directors designates a President, Executive Director, Secretary, and Treasurer as officers of the Research Foundation.
Invention Disclosure Procedures
University employees are required to disclose all patentable inventions and technological developments which the employee may develop or discover while employed by the University of Florida. A discovery or invention made in the field or discipline in which the investigator is employed or made by using University support, funds, personnel, equipment, facilities, etc., is the property of the University; the inventor, and the inventor’s department will share in the proceeds of any licensing agreements. Discoveries made outside the field or discipline in which the employee is employed and for which no University support was given will be considered the inventor’s property, although the invention must still be disclosed to the University so that official determination of patent rights assignment can be made.
After disclosure by the inventor, discoveries or inventions are evaluated by the appropriate University patent committee(s) which will recommend to the Vice President for Research and the University President whether the University should exert an interest in a particular invention, or whether the patent rights should be released to the inventor. Patent rights to commercially valuable inventions are assigned to the UFRF.
Distribution of Funds
The University of Florida Research Foundation, Inc., in seeking to patent, develop and market the invention, will pay all costs of the patent application and related activities such as travel, attorney fees and those costs related to active licensed production. Once application for a patent has been made, the Research Foundation will be responsible for the development and negotiation of licensing agreements to ensure that the invention is managed to best serve the public interest. Net income (gross royalties minus the direct cost of patenting, licensing, legal and other related expenses) resulting from the inventions to which the Research Foundation takes title will be divided according to the established policy referenced at /otl.
Indirect Cost Distribution
Indirect costs will be charged on grants and contracts in the same manner as all University sponsored research and will be returned according to the same formula used by the University to return the overhead dollars that are managed through the Division of Sponsored Programs. The return is as follows:
7.5% Dean 7.5% Department Chairperson 10.0% Principal Investigator
An additional 7.5% will be returned to a Center if one is involved.
The remainder is retained by the UFRF to be used for general support of research on campus.
Disbursement Guidelines for Income
Funds may be used for:
- Support of University research programs broadly and investment in research with the potential for technology transfer and commercialization opportunities.
- Payment of legal fees associated with patent and copyright applications, maintenance, licensing agreements and infringement defense.
- Memberships in associations related to economic development, research parks, and technology transfer.
- Marketing expenses related to research parks, technology transfer, University/industry agreements, license agreements, consultants, etc.
- Expenses related to the function and administration of the Research Foundation.
- Disbursements for investment of Research Foundation funds require the UFRF Finance Committee recommendation and approval by the Board of Directors.
Contracts and Grants
Guidelines for Acceptance
The President of the UFRF has the option to have the UFRF administer grants or contracts, should funding come from a private source (i.e. private industry, individuals or other foundations).
The UFRF cannot accept grants or contracts from the following sources:
- From Federal agencies such as NSF, NIH or DOE.
- State of Florida agencies, including the University of Florida.
- Gifts (However, the UFRF can accept a gift that is tied to a project that entails the use of human or animal subjects).
- Any grant whereby the grantor would be deemed by IRS to not have complied with the Internal Revenue Code 170. Basically, this prohibits a charitable deduction for any donation whereby the donor would be construed as maintaining direct control over the donated property or can reasonably expect to receive an economic benefit in return (i.e. a Principal Investigator donating money to his own research project).
There will be no charge for processing transactions. A variable management fee of 2.5% to 5% will be charged against incoming revenue as it is received, if IDC is not allowed by the Sponsor/Grantor. Conversely, no interest will be paid on funds in accounts.
Financial summaries of the status of each account will be available online in Peoplesoft to the Principal Investigator or his/her designee, i.e. the Dean or Chair’s office.
UFRF projects will be included in the Division of Sponsored Programs listing of Sponsored Research Awards.
The UFRF is audited annually by an independent Certified Public Accounting firm. All annual reports as well as IRS FORM 990, Return of Organization Exempt from Income Tax, and all other accounting records are on file in the UFRF Business Office, Room 288 Grinter Hall, University of Florida.
The UFRF requests that all procedures and guidelines for establishing accounts and for expending funds be carefully followed to maintain the integrity of the process.
Establishing a Research Grant or Contract Account
Grant with a Proposal or Contract
A grant that is to be administered by UFRF must have the following documents attached to the proposal.
- A completed UFRF Form UFRF-A1, “Authorization to Establish a Contract or Grant Account” with all requested signatures. Signatures will include not only the Principal Investigator, but the Dean or Director and the Department Chairperson. If the Dean or Director is the Principal Investigator, then approval must come from the Vice President. (There must always be approval from someone in the department or center that holds a position of authority above the Principal Investigator.)
- Approval, or proof that approval has been requested from the Institutional Review Board or Institutional Animal Care Use Committee, to use human or animal subjects, if applicable.
- A justification as to why the Grant or Contract should be accepted by the UFRF rather than the University of Florida. The proposal should be submitted to the Division of Sponsored Programs, Proposal Processing office, Room 207, Grinter Hall.
Indirect Cost Rates
All grants, contracts and agreements must be charged the official full indirect cost rate for the University of Florida if such costs are allowed by the sponsor. It is recognized that clinical trials are supported by a different rate, and some private foundations and funding agencies have an established policy that caps the amount of indirect costs they will pay, or they do not pay any indirect costs to an institution. The UFRF will accept funds in these instances on an exception basis, if policy information from the foundation or agency is made available to the UFRF.
Establishing the Account
Once the proposal and all relevant documents have been reviewed and approved by the President or his designee, and award has been made, a project number will be established and the Principal Investigator will be notified. This number should always be referred to when making inquiries or requesting payments from the account.
Depositing Funds for a Grant or Contract
Initial Deposit of Funds
Funds from the granting agency must be made payable to the University of Florida Research Foundation, Inc. The UFRF cannot accept checks made payable to the University of Florida or any other entity. The funds may accompany the Authorization to Establish Account (form UFRF-A1) or may be sent to the UFRF Business Office if received after the above form is submitted. In either case, receipts from sponsors should be transmitted to the UFRF Business Office immediately and will be deposited in the bank within 24 hours or on the next business day. Please make sure all funds are properly identified as to Principal Investigator, project name and name of grantor.
Depositing of Additional Funds
If additional funds from the same grantor or another source for the same purpose are to be deposited into an existing UFRF account, use the Deposit Request Form (UFRF-DEP1). This form must be signed by the Dean or Director and Department Chairperson, as well as the Principal Investigator. (The appropriate Vice President should sign if the account is for a Dean or Director.)
General Disbursement Guidelines for Grant Funds
- All project expenditures, including travel, must be processed thru UF Accounts Payable in People Soft.
- All expenditures must be reasonable and in support of research at the University of Florida.
- All expenditures must comply with any restrictions stated by the grantor.
- The expenditure must not jeopardize the UFRF’s tax exempt status.
- All expenditures must have original receipts and a written justification stating the relationship to the research project.
- The Principal Investigator and the Chairperson or signature authority should review expenditures and assure that they comply with the grantor’s intent.
- The University of Florida will bill UFRF quarterly, for all project expenses incurred.
- No University employee can be reimbursed for unallowable charges directly through the UFRF.
- No expenditure, direct or indirect, may be made for political or charitable contributions, dues to social clubs, fines or penalties. Expenditures for Personal inurement and dues for non-professional memberships are not an appropriate expense item.
- No individual other than an officer of the UFRF or the Director of Sponsored Research has authority to enter into contracts on behalf of the UFRF.
- When possible, checks should be made payable directly to vendors, rather than to reimburse individuals for out-of-pocket expenses.
- Payments of all types to foreign nationals may require special tax treatment and should be brought to the attention of the University of Florida Tax Services Office prior to the finalization of commitment.
Regulations Affecting Purchases
Code of Ethics and Standard of Conduct
All University personnel engaged in the purchasing cycle are bound by the standard of conduct for public officers and employees set forth in Chapter 112, Part 3, Florida Statutes, and shall file an Outside Activities Report Statement annually. The University also adheres to the Code of Ethics set forth by the National Association of Educational Buyers (NAEB).
Conflict of Interest
With regard to procurement, UFRF adheres to the same guidelines as are imposed on the University of Florida under Chapter 112, Part 3, Florida Statutes, and University rules. Except as may be permitted by these statutes and rules, it shall be a breach of ethical standards for any personnel responsible for purchases to participate directly or indirectly, in a procurement when he/she know that:
- They or any member of their immediate family has a financial interest pertaining to the procurement; or
- A business or organization in which they or any member of their family, spouse, children, parents, brothers and sisters, has a financial interest pertaining to the procurement; or
- Any other person, business or organization with whom they or any member of their immediate family is negotiating or has an arrangement concerning prospective employment is involved in the procurement.
All University of Florida personnel having a financial interest in a private concern doing business with UFRF shall file an Outside Activities Report disclosing such interest prior to any business transactions between the private concern and the UFRF.
It shall be a breach of ethical standards for any personnel to accept a gratuity of any kind in connection with any purchasing decision.
UFRF will follow University Purchasing Directives. http://www.purchasing.ufl.edu/departments/directives-procedures.asp
General Expense Requests
The University enforces all federal and state rules and regulations. In addition, no UFRFI funds may be used for:
- First class travel unless a verified health condition or business need exists
- Private club memberships, lavish or extravagant travel and entertainment
- Political or charitable contributions
- Personal benefit to an individual except the distribution of royalty and license income to inventors
Travel and Entertainment
(a) Business Meals and Entertainment: It is essential when reimbursement is sought from the UFRF for a business meal, that there is a clear business purpose that furthers the support of research. Any such expense must not be lavish or extravagant.
The UFRF has established a cap for meal reimbursements, per person, up to the following limits:
$15 Breakfast $20 Lunch $50 Dinner
Detailed receipts for meals must be presented to UFRF in support of each charge. This is not an automatic per diem.
In the event meals or entertainment are for multiple individuals, the names of each person, their relationship to the research project, the topic of discussion and purpose of meeting must be detailed. Due to IRS requirements, please be SPECIFIC. Travel and entertainment of any person who is not a participant in the project (such as a nonparticipating spouse) cannot be reimbursed.
Payments for entertainment that jeopardize the tax exempt status of the UFRF and/or research goals, or appear to be excessive will not be paid or reimbursed.
Amounts expended for the purchase of alcohol must be reasonable. The University’s alcohol policy must be followed with to UFRFI events involving University students at which alcoholic beverages are served.
- Alcohol may be reimbursed if served with a meal.
- UFRFI will not reimburse bulk alcohol purchases. UFRFI will reimburse for a conference or a hospitality area if they are run by the hotel staff or the meeting location staff.
The following meals are not considered reimbursable by UFRFI:
- Meals do not qualify if the event is held off-campus and all of the guests are faculty/staff members. To qualify, at least one non-university attendee (research related) must be present.
- Meals furnished to promote goodwill or boost morale.
- Meals that have no research business benefit to the University (e.g. birthday, retirement, holiday, going away or employee appreciation parties)
The Research Foundation is not structured to pay salaries. If salary money is included in the grant or contract, it will be expended through the University of Florida H/R-P/R System.
Contracting to Individuals
The Internal Revenue Rule 87-41 lists 20 factors as guidelines for making the determination as to whether an individual is truly considered an independent contractor and, therefore, not subject to withholding or whether an individual is an employee subject to the greater control of the employer. Those factors are:
- Instructions. The right to instruct when, where, and how the worker is to perform services indicates control, therefore, is a factor indicating an employer/employee relationship.
- Training. Training a worker indicates control.
- Integration. The integration of the worker’s services into the overall business operations indicates control.
- Services Rendered Personally. The worker who must render services personally (i.e., no right to subcontract the work) is controlled as to the means by which the work is accomplished.
- Hiring, Supervision and Paying Assistants. If the entity, for which the services are provided hires, supervises and pays assistants for the worker, this factor indicates control. On the other hand, if the worker hires, supervises and pays the worker’s own assistants, this factor indicates independent contractor status.
- Continuing Relationship. Indicates control.
- Set Hours of Work. Indicates control.
- Full Time Required. Indicates control; an independent contractor is free to work when and for whom the worker chooses.
- Doing Work on Employer’s Premises. Suggests control, especially if the work could be done elsewhere.
- Order or Sequence Set. The ability of the person for whom the services are provided to require the worker to perform services in a particular order or sequence indicates control.
- Oral or Written Reports. The requirement that the worker submit regular or written reports indicates control.
- Payment by Hour, Week, Month. Indicates control, unless it is just a convenient way of paying a lump sum agreed upon as the cost of a job. Payment by the job or on a commission basis generally indicates that the worker is an independent contractor.
- Payment of Business and/or Traveling Expenses. Indicates control.
- Furnishing of Tools and Materials. Indicates control.
- Significant Investment. An investment by the worker in facilities used in performing services that are not typically maintained by employees indicates that the worker is an independent contractor. Lack of such investment indicates control.
- Realization of Profit or Loss. “A worker who can realize a profit or suffer a loss . . . is generally an independent contractor, but the worker who cannot is an employee.”
- Working for More Than One Firm at a Time. May indicate an independent contractor relationship.
- Making Service Available to General Public. Indicates an independent contractor relationship.
- Right to Discharge. Indicates control. An independent contractor cannot be fired so long as the worker produces a result that meets contract specifications.
- Right to Terminate (by the worker). Indicates an employer-employee relationship.
No one factor is determinative, but the common law factors above focus on the amount and type of control exerted over the individual contracted. In general, any indication of employer “control” generally indicates an employee status.
The UFRF will examine each case individually to determine if there are circumstances indicating an employee/employer relationship. If such a relationship is deemed to exist, the UFRF cannot pay the individual.
If it is determined that the services contracted meet standards to be classified as an independent contractor, invoices for such services must include the following:
- A breakdown of hours charged, if applicable, the hourly rate, date of each service performed, and description of service.
- Any travel expenses must be supported with dates of travel, destination, purpose, and receipts for travel expenses.
- Administrative expenses must have a breakdown of date and purpose of expense.
Payments to University Employees
Payments to a University of Florida employee, excluding allowable reimbursements noted above, must be made through the University. A transfer of funds from UFRF to the University of Florida will be implemented.
The following payments to University employees are examples of payments that cannot be made through the UFRF, and must be paid through the University:
- Salary supplements
- Automobile allowances
- Life insurance (reimbursement to an employee for a third-party vendor payment)
- Supplemental health plans (same situation as life insurance)
*Approved items from the Bill of Lading must be paid through the University Comptroller’s Accounts Payable Office. The reimbursement of other types of moving related expenditures may be paid as salary supplements through the process described herein and are subject to federal withholding and FICA taxes.
State of Florida Tax Exemption
The UFRF has a State of Florida Sales and Use Tax Exemption. In order for a transaction to be eligible for exemption, it must be billed directly to the UFRF and paid directly by UFRF. In addition, the purchase as well as pick up receipt of goods must take place in Florida in order to use the exemption. Please keep this in mind when making purchases. Contact the Business Office in Room 288 Grinter Hall for UFRF’s State Tax Exemption number.
Collection of Receivables
The Office of Technology Licensing is responsible for the timely collection of all funds due to the UFRF in accordance with the terms of project/royalty agreements.
Delinquent payments will be monitored by the UFRF Business Office and brought to the attention of the UFRF Finance Committee. Accounts that are determined to be uncollectible will be submitted to the UFRF Finance Committee for review or approval of write-off. Following such approval, the Business Office will be authorized to adjust the account.
Contact and Assistance
The UFRF Business Office is available to assist Principal Investigators who wish to utilize the University of Florida Research Foundation. Questions can be directed to the UFRF Business Office, at (352) 392-5221, 288 Grinter Hall.
Revised September 2010