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Service Center: Difference between revisions
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<td style="padding:0.5em; background-color:#e5e5e5; font-size:90%; line-height:0.95em; border:1px solid #A3B1BF; border-bottom:solid 2px #A3B1BF" | <td style="padding:0.5em; background-color:#e5e5e5; font-size:90%; line-height:0.95em; border:1px solid #A3B1BF; border-bottom:solid 2px #A3B1BF" | ||
width="20">[[Intellectual Property]]</td> | width="20">[[Intellectual Property]]</td> | ||
<td style="border-bottom:2px solid #A3B1BF" width="3"> </td> | |||
<td style="padding:0.5em; background-color:#e5e5e5; font-size:90%; line-height:0.95em; border:1px solid #A3B1BF; border-bottom:solid 2px #A3B1BF" | |||
width="20">[[Faculty]]</td> | |||
</tr> | </tr> | ||
</table> | </table> | ||
<br /> | <br /> | ||
[[Sponsored Programs]] | [[ | [[Sponsored Programs]] | [[Sponsored Programs Costing]] | [[Facilities and Administrative Cost]] | [[Institutional Base Salary]] | [[Unallowable Cost Policy]] | [[Sponsored Project Cost Share]] | [[Effort Certification]] | [[Cost Transfer]] | [[Service Center]] | [[Subrecipient Policy]] | [[On-Campus and Off-Campus Indirect Cost Rates on Federally Sponsored Projects]] | ||
<br /><br /> | <br /><br /> | ||
Policy No.: '''6107'''<br /> | Policy No.: '''6107'''<br /> | ||
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*'''Service Center Child Account''' - A child account cost center is created to collect depreciation charges associated with capital equipment for a service center. Purchases of capital equipment for the service center should be capitalized through this account. Child should only be analyzed in conjunction with the operation cost center. Child accounts CANNOT be created or utilized without the approval of the Department of Financial Compliance and Cost Analysis (FCC). All depreciation entries will be calculated by FCC and booked by General Accounting. | *'''Service Center Child Account''' - A child account cost center is created to collect depreciation charges associated with capital equipment for a service center. Purchases of capital equipment for the service center should be capitalized through this account. Child should only be analyzed in conjunction with the operation cost center. Child accounts CANNOT be created or utilized without the approval of the Department of Financial Compliance and Cost Analysis (FCC). All depreciation entries will be calculated by FCC and booked by General Accounting. | ||
*'''Depreciation''' - The depreciation of capital equipment charged to service center operations is based on the straight line method over the useful life of the asset. | *'''Depreciation''' - The depreciation of capital equipment charged to service center operations is based on the straight line method over the useful life of the asset. | ||
*'''Useful Life''' - Service center capital equipment must be depreciated using the useful lives outlined in [ | *'''Useful Life''' - Service center capital equipment must be depreciated using the useful lives outlined in [https://info.unmc.edu/management/finance/general-accounting/information-manual/index.html Capitalization Policy and Definitions] section of the Accounting Information Manual. | ||
*'''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 [https://info.unmc.edu/management/finance/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. | ||
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*'''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. | ||
OMB Circular A-21: The Cost Principles for Educational Institutions are set forth in the Office of Management and Budget Circular A-21. Section J.47 of OMB Circular A-21 deals specifically with service centers and is explicit in the following two concepts: | |||
*recipients of federal funds are not to recover more than cost. | *recipients of federal funds are not to recover more than cost. | ||
*recipients are not to discriminate in the price of services charged to governmental and non-governmental users. | *recipients are not to discriminate in the price of services charged to governmental and non-governmental users. | ||
The principles provide for recognition of the full allocated costs of federal grants and contracts with no provision for profit or other increment above actual incurred, documented costs.<br /> | The principles provide for recognition of the full allocated costs of federal grants and contracts with no provision for profit or other increment above actual incurred, documented costs.<br /> | ||
<br /> | <br /> | ||
Service centers also must follow three additional regulations stated in the | Service centers also must follow three additional regulations stated in the A-133 Compliance Supplement (document page 3-B-39 & 3-B-40): | ||
*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 [ | The [https://info.unmc.edu/management/finance/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 === | ||
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In some instances, the University, or a school or department, may elect to subsidize the operations of a service center, either by charging billing rates that are intended to be lower than costs or by not making adjustments to future rates for a service center's deficits. Service center deficits caused by intentional subsidies cannot be carried forward as adjustments to future billing rates. Since subsidies can result in a loss of funds to the University, they should be provided only when there is a sound programmatic reason. | In some instances, the University, or a school or department, may elect to subsidize the operations of a service center, either by charging billing rates that are intended to be lower than costs or by not making adjustments to future rates for a service center's deficits. Service center deficits caused by intentional subsidies cannot be carried forward as adjustments to future billing rates. Since subsidies can result in a loss of funds to the University, they should be provided only when there is a sound programmatic reason. | ||
==Additional Information== | ==Additional Information== | ||
* | *[mailto:mhrncirik@unmc.edu Senior Manager, Financial Compliance and Cost Analysis] | ||
*[http:// | *[http://info.unmc.edu/management/finance/fincompliance/index.html Financial Compliance and Cost Analysis] | ||
* | *OMB Circular A-21 | ||
*Cost Accounting Standards Board | |||
*[http://grants.nih.gov/grants/policy/air/rate_setting_manual_2000.pdf National Institute of Health's Cost Analysis and Rate Setting Manual for Animal Research Facilities] | *[http://grants.nih.gov/grants/policy/air/rate_setting_manual_2000.pdf National Institute of Health's Cost Analysis and Rate Setting Manual for Animal Research Facilities] | ||
*[[General Accounting|General Accounting Policy, UNMC Policy No. 3000]] | *[[General Accounting|General Accounting Policy, UNMC Policy No. 3000]] | ||
*[ | *[https://info.unmc.edu/management/finance/general-accounting/information-manual/index.html Accounting Information Manual] | ||
*[[Unallowable Cost Policy|Unallowable Costs Policy, UNMC Policy No. 6103]] | *[[Unallowable Cost Policy|Unallowable Costs Policy, UNMC Policy No. 6103]] | ||
* | *A-133 Compliance Supplement | ||
*[ | *[https://info.unmc.edu/management/finance/general-accounting/general-ledger.html General Ledger Account Listings] | ||
*[ | *[https://info.unmc.edu/management/finance/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]. | ||