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Service Center: Difference between revisions
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*'''Unallowable Costs''' - Costs that cannot be charged directly or indirectly to sponsored programs. These costs are specified in the OMB Circular A-21. Common examples of unallowable costs include advertising, alcoholic beverages, bad debts, charitable contributions, entertainment, fines and penalties, goods and services for personal use, interest (except interest related to the purchase or construction of buildings and equipment), selling and marketing expenses. See [[Unallowable Cost Policy|Policy 6103, Unallowable Costs]], for additional information. | *'''Unallowable Costs''' - Costs that cannot be charged directly or indirectly to sponsored programs. These costs are specified in the OMB Circular A-21. Common examples of unallowable costs include advertising, alcoholic beverages, bad debts, charitable contributions, entertainment, fines and penalties, goods and services for personal use, interest (except interest related to the purchase or construction of buildings and equipment), selling and marketing expenses. See [[Unallowable Cost Policy|Policy 6103, Unallowable Costs]], for additional information. | ||
===Billing Rate=== | ===Billing Rate=== | ||
The amount charged to a user for a unit of service. Billing rates are usually computed by dividing the total annual costs of a service by the total number of billing units expected to be provided to users of the service for the year. (See | The amount charged to a user for a unit of service. Billing rates are usually computed by dividing the total annual costs of a service by the total number of billing units expected to be provided to users of the service for the year. (See [http://info.unmc.edu/fincompliance/core_lab_rate_congifuration_example.xls Rate Setting Procedure] for further explanation). | ||
*'''Billing Unit''' - The unit of service provided by a service center. Examples of billing units include hours of service, animal care days, tests performed, machine time used, etc. | *'''Billing Unit''' - The unit of service provided by a service center. Examples of billing units include hours of service, animal care days, tests performed, machine time used, etc. | ||
*'''Break-even Concept''' - A rate development theory where revenues offset expenses over a reasonable period of time. | *'''Break-even Concept''' - A rate development theory where revenues offset expenses over a reasonable period of time. | ||
*'''Surplus''' - The amount of revenue generated by a service center that exceeds the cost of providing services during a fiscal year. | *'''Surplus''' - The amount of revenue generated by a service center that exceeds the cost of providing services during a fiscal year. | ||
*'''Allowable Surplus''' - A surplus (including both the annual surplus and the carry forward surplus/deficit from prior years) equal to or less than 60 days worth of operating expenditures for a fiscal year. | *'''Allowable Surplus''' - A surplus (including both the annual surplus and the carry forward surplus/deficit from prior years) equal to or less than 60 days worth of operating expenditures for a fiscal year. | ||
*'''Deficit''' - The amount that the costs of providing services exceeds the revenue generated by the service center during a fiscal year. | *'''Deficit''' - The amount that the costs of providing services exceeds the revenue generated by the service center during a fiscal year. | ||
== Policy == | == Policy == | ||
Service centers can result in charges, directly or indirectly, to sponsored programs at UNMC. As a recipient of federal grants and contracts, UNMC must comply with cost principles and cost accounting standards promulgated by the federal government. | Service centers can result in charges, directly or indirectly, to sponsored programs at UNMC. As a recipient of federal grants and contracts, UNMC must comply with cost principles and cost accounting standards promulgated by the federal government. | ||
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*capital reserves (cash balance at fiscal year end) are not to be in excess of 60 days of annual expenses. | *capital reserves (cash balance at fiscal year end) are not to be in excess of 60 days of annual expenses. | ||
*billing rates must exclude unallowable costs (see Policy 6103). | *billing rates must exclude unallowable costs (see Policy 6103). | ||
*billing rates are to be developed based on actual costs and adjusted annually. | *billing rates are to be developed based on actual costs and adjusted annually. | ||
== Responsibilities == | == Responsibilities == | ||
The [http://info.unmc.edu/dept/fincompliance/ Department of Financial Compliance and Cost Analysis] (FCC) is responsible for reviewing service centers when there are more than $10,000 in federal charges within a fiscal year by a particular service center. FCC also must approve the use of depreciation in rate calculations for '''all''' service center that includes depreciation expense in their billing rate. | The [http://info.unmc.edu/dept/fincompliance/ Department of Financial Compliance and Cost Analysis] (FCC) is responsible for reviewing service centers when there are more than $10,000 in federal charges within a fiscal year by a particular service center. FCC also must approve the use of depreciation in rate calculations for '''all''' service center that includes depreciation expense in their billing rate. | ||
== Guidelines == | == Guidelines == | ||
=== Service Center Billing Rates === | === Service Center Billing Rates === | ||
Billing rates should be designed to recover the direct operating costs of providing the goods/services on an annual basis excluding all unallowable costs. Billing rates should be computed annually by the service center. The rates should be based on a reasonable estimate of the costs of providing the services for the year and the projected number of billing units for the one year period. The billing rate computation should be documented and maintained on file. Deficits or surpluses should be carried forward as an adjustment to the billing rates in the next fiscal year. Surpluses cannot exceed more than 60 days worth of operating expenses for the service center. | Billing rates should be designed to recover the direct operating costs of providing the goods/services on an annual basis excluding all unallowable costs. Billing rates should be computed annually by the service center. The rates should be based on a reasonable estimate of the costs of providing the services for the year and the projected number of billing units for the one year period. The billing rate computation should be documented and maintained on file. Deficits or surpluses should be carried forward as an adjustment to the billing rates in the next fiscal year. Surpluses cannot exceed more than 60 days worth of operating expenses for the service center. | ||
=== Service Center Billing === | === Service Center Billing === | ||
All billing must be processed on a timely basis at established service center rates. Billing must not occur until the service has been rendered. Prepayments are not allowed. The service center must retain documentation supporting the charges, including documentation of the expenses and usage. | All billing must be processed on a timely basis at established service center rates. Billing must not occur until the service has been rendered. Prepayments are not allowed. The service center must retain documentation supporting the charges, including documentation of the expenses and usage. | ||
=== Service Centers that Provide Multiple Services === | === Service Centers that Provide Multiple Services === | ||
Where a service center provides different types of services to users, separate billing rates should be established for each service that represents a significant activity within the service center. The costs, revenues, surpluses and deficits should also be separately identified for each service. The surplus or deficit related to each service should be carried forward as an adjustment to the billing rate for that service in the following period. The surplus from one service may be used to offset the deficit from another service only if the mix of users and level of services provided to each group of users is approximately the same. | Where a service center provides different types of services to users, separate billing rates should be established for each service that represents a significant activity within the service center. The costs, revenues, surpluses and deficits should also be separately identified for each service. The surplus or deficit related to each service should be carried forward as an adjustment to the billing rate for that service in the following period. The surplus from one service may be used to offset the deficit from another service only if the mix of users and level of services provided to each group of users is approximately the same. | ||
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*[http://www.whitehouse.gov/omb/circulars/a133_compliance_supplement_2011 A-133 Compliance Supplement] | *[http://www.whitehouse.gov/omb/circulars/a133_compliance_supplement_2011 A-133 Compliance Supplement] | ||
*[http://info.unmc.edu/dept/accounting/index.cfm?L1_ID=7&CONREF=15 General Ledger Account Listings] | *[http://info.unmc.edu/dept/accounting/index.cfm?L1_ID=7&CONREF=15 General Ledger Account Listings] | ||
*[http://info.unmc.edu | *[http://info.unmc.edu/fincompliance/core_lab_rate_congifuration_example.xls Rate Setting Procedure] | ||
*[http://grants.nih.gov/grants/guide/notice-files/NOT-OD-13-053.html NIH FAQs to Explain Costing Issues for Core Facilities ]<br /> | *[http://grants.nih.gov/grants/guide/notice-files/NOT-OD-13-053.html NIH FAQs to Explain Costing Issues for Core Facilities ]<br /> | ||
This page maintained by [mailto:dpanowic@unmc.edu dkp]. | This page maintained by [mailto:dpanowic@unmc.edu dkp]. | ||