Issued: 06/18/09
Last Revised: 06/07/2024
Last Reviewed: 06/07/2024
1. Policy Purpose
Consistent with its tax-exempt purposes, USC may, from time to time, establish affiliates that operate as separate organizations, furthering USC’s mission. The objective of this policy is to ensure the activities of USC’s Affiliated Organizations are consistent with those of USC by providing oversight for the efforts and activities of each affiliated entity, while preserving their separateness.
2. Scope and Application
To facilitate compliance with the purpose discussed above, this policy sets forth requirements for the creation, acquisition, disposition, and termination of legal entities affiliated with USC, ensuring alignment with relevant legal and regulatory frameworks. Individual USC schools, departments, or units may not take independent action with respect to legal entities. USC employees contemplating the creation, acquisition, disposition, or termination of an affiliated legal entity should contact the Office of the General Counsel (“OGC”), which will advise on the approach best suited to support USC’s objectives.
3. Definitions
| Term | Definition |
| Affiliated Organization | For purposes of this policy, an affiliated organization is an organization (whether or not a separate legal entity under state, federal, or international laws) over which USC has legal or other authority to exercise supervision and control. |
| USC | USC includes the University of Southern California, the USC Health System and their respective subsidiaries and affiliates. |
4. Policy Details
USC will undertake to ensure all Affiliated Organizations are operated in a manner that enables USC to further its tax-exempt purposes and that is consistent with the tax status of each affiliate. Any policies and practices adopted by USC shall extend to Affiliated Organizations to the extent necessary to ensure alignment and consistency with USC’s mission. The establishment of all Affiliated Organizations, as well as their continued status as an Affiliated Organization, is subject to final review and approval by the President, which may be delegated to either (i) the Provost and Senior Vice President, Academic Affairs or the Senior Vice President, Health Affairs, for Affiliated Organizations related to USC Health System and its subsidiaries and affiliates; or (ii) the Senior Vice President, Finance and Chief Financial Officer.
5. Procedures
Individual USC schools, departments, or units considering establishing an Affiliated Organization must consult with OGC, as well as University Finance, Office of the Comptroller or the Health System Finance Office, as appropriate, at the earliest stage of the planning process to ensure all legal, financial, and policy requirements are fulfilled.
Please consult the Procedure for Affiliated Organizations for additional details.
6. Forms
N/A
7. Responsibilities
| POSITION or OFFICE | RESPONSIBILITIES |
| Affiliated Organization | Must implement sound fiscal and accounting procedures (e.g., annual audit or USC approved financial review), adhere to USC standards of ethics and integrity, and enter into a memorandum of agreement or other formal agreement with USC. |
| USC School, Department or Unit sponsoring the potential Affiliated Organization | Must consult with OGC if considering establishing an Affiliated Organization (new or existing entity), develop a detailed written proposal for the Affiliated Organization as outlined in the Procedures section above, collaborate with the senior USC oversight official and OGC to examine relationships with the Affiliated Organization as needed (and at least every five years) to determine whether to maintain or to terminate the Affiliated Organization’s status. |
| Office of General Counsel | Consult with the sponsoring USC school, department, or unit to discuss purpose for seeking Affiliated Organization, review and approve proposals for Affiliated Entities in collaboration with University Finance, Office of the Comptroller or the Health System Finance Office, as appropriate, collaborate with the senior oversight official, sponsoring USC school, department, or unit to examine the relationships with the Affiliated Organization as needed (and at least every five years) to determine whether to maintain or terminate the Affiliated Organization’s status, implement sunsetting processes when Affiliated Organization status is terminated, including providing USC administration with notice of the termination, and prepare and file corporate organizational documents, including annual state filings (note, this does not include business, tax, or regulatory filings required for operating purposes). |
| University Finance, Office of the Comptroller | Review and approve (i) proposals for Affiliated Entities in collaboration with OGC and (ii) Affiliated Organization’s finances annually, if applicable. |
| President Provost and Senior Vice President, Academic Affairs Senior Vice President, Health Affairs Senior Vice President, Finance and Chief Financial Officer | The establishment of all Affiliated Organizations, as well as their continued status as an Affiliated Organization, is subject to final review and approval by the President, which may be delegated to either (i) the Provost and Senior Vice President, Academic Affairs or the Senior Vice President, Health Affairs, for Affiliated Organizations related to USC Health System and its subsidiaries and affiliates; or (ii) the Senior Vice President, Finance and Chief Financial Officer. |
8. Related Information
N/A
9. Contacts
Please direct any questions regarding this policy to:
| OFFICE | PHONE | |
| Office of the General Counsel | (213) 740-7922 | gcoffice@usc.edu |