Financial and Business

Service Centers and Recharge Centers

Section:	Financial & Business Policies
Policy Name:	Service Centers and Recharge Centers
Policy Owner:	Executive Vice President
Responsible University Office:	Office of the Vice President For Finance and Deputy Treasurer
Origination Date:	February 1, 2017

SCOPE OF POLICY
1. This policy applies to all activities within the University that provide goods and/or services to both internal and external users and charges a fee for the goods or services. It provides a framework for establishing and operating service/recharge centers and helps ensure compliance with applicable federal regulations related to Federal grants, contracts, and cooperative agreements.
2. Service/recharge centers are established when management determines that a service or product is most effectively provided within the University. Services or products may be provided by a department for itself, other University departments, and external customers.
3. The purpose of a service/recharge center is to control the cost of providing internal services or products within the University. The goods and services provided may range from the relatively simple (departmental copying machines, word processing) to the complex (provision of electron microscope services). Some other types of services provided are instrument repair, computing services, stockroom operations, photography, machine shop, glassware services, and lab testing.
4. In the event that the Service Center has a separate agreement with a Federal Agency, the policy and procedures of that agency supersede this policy.
DEFINITIONSAs used in this policy, the following terms shall have the meanings specified.
1. Administrative Costs – general administration and general expenses such as the director’s office, accounting, personnel and all other types of expenditures not listed specifically under one of the subcategories of “Facilities.”
2. Applicable Credits – are transactions that offset or reduce costs; includes but is not limited to purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates, adjustment of overpayments or erroneous charges. For purposes of charging Service Center costs to federally-sponsored programs, applicable credits also include any direct federal financing of Service Center assets or operations (e.g. the direct funding of Service Center equipment by a federal program).
3. Auxiliary Enterprise Operations – An activity that provides goods or services primarily to students, faculty, staff and others for their own personal use, rather than as a service to internal University operations. Examples of Auxiliary operations include residence halls, dining halls, and bookstores. Auxiliary operations are not subject to this Policy Statement.
4. Billing Rate – also known as a user fee, is the amount charged to a user for a unit of product or service. The rate calculation generally follows the equation “total cost divided by some unit of measure, e.g., hours of service, animal care days, tests performed, etc.”
5. Capital Equipment – is equipment with a purchase cost of $5,000 or more. Capital equipment purchased prior to July 1, 2015, is included in the University’s Facilities and Administrative rate and is excluded from the Service Center billing rate calculations. Purchases made subsequent to June 30, 2015, should be made from the Service Center and the associated depreciation will be incorporated in the Service Center rates. Federally owned, contractor owned, government acquired, federally purchased equipment and the associated depreciation will not be incorporated in the Service Center billing rates.
6. Deficits – are the amount by which a Service Center’s operating costs exceed revenues and recharges.
7. Depreciation – is the allocation of the cost of a capital asset over the expected useful life of the asset. Annual depreciation is calculated by dividing the cost by the number of years of useful life (straight-line depreciation). Depreciation of donated equipment is calculated based on its fair market value.
8. Direct Operating Costs – are costs specifically assignable to the operations and services provided by a service/recharge center. These costs may include the salaries, wages, and fringe benefits of University faculty and staff directly involved in providing the service at the federal fringe benefit rate; materials and supplies; purchased services; related travel expenses; equipment rental; etc. Also included are costs that can be directly identified with a Service Center, but not with a particular good or service provided by the center, such as the salary and fringe benefits of the center’s director.
9. External Users – are customers outside the organizational/administrative structure of the University. This category includes students and members of faculty or staff acting in a personal capacity.
10. Institutional Indirect Costs – are facility and administrative costs allocated to a Specialized Service Facility for building depreciation, equipment depreciation, administrative, and operations and maintenance.
11. Internal Users – are customers who are part of the organizational/administrative structure of the University, including academic, research, and administrative departments, affiliated corporations, and auxiliary units. Internal users usually have a University purpose code.
12. Minor Service Centers – have total annual direct costs exceeding $20,000 but not greater than $1,000,000. Cost components that may be included in the billing rate are the total direct cost of operations and equipment depreciation (if purchased July 1, 2015, or later).
13. Recharge Operations – are departmental units, which provide goods and/or services, primarily to University departments, for a fee and/or services of less than $20,000. Cost components that may be included in the billing rate are only the total direct cost of operations.
14. Revenues – are fees recovered from users that pay the billing rate in order to receive certain products and/or services.
15. Service Centers – are operating units that provide goods and/or services, primarily to University departments, for a fee based upon actual incurred costs. There are three types of Service Centers – Recharge Operations, Minor Service Centers, and Specialized Service Facilities.
16. Specialized Service Facilities – have total annual direct costs exceeding $1,000,000. Cost components that may be included in the billing rate are the total direct cost of operations plus all indirect costs for building depreciation, equipment depreciation, administrative, and maintenance and operations.
17. Surpluses – are the amount by which a Service Center’s recharges and revenues exceed operating costs.
18. Unallowable Costs – are certain costs defined in Uniform Guidance section 200.420 – 200.475 (formerly OMB Circular A-21, Section J) and are not eligible for reimbursement from the federal government and must not be recorded in service/recharge center purpose codes. These include but are not limited to:
  1. Advertising;
  2. Alcoholic beverages;
  3. Bad debts;
  4. Commencement or convocation costs;
  5. Contingency provisions;
  6. Contributions, donations, remembrances;
  7. Entertainment;
  8. Fines and penalties;
  9. Goods or services for personal use of employees;
  10. Personal use of an institution-furnished vehicle;
  11. Public relations;
  12. Student activity costs;
  13. Travel – first-class.
19. Uniform Guidance – is the federal regulation governing the University regarding the charging of facility and administration and direct costs to federally financed sponsored activities.
20. Unrelated Business Income (UBI) – is income produced by the sale of goods or services to external users that is regularly carried on and is not substantially related to the University’s tax-exempt purpose. Unrelated business income revenue is subject to taxation by the IRS. Activity carried on for the convenience of the University community, including students, is not subject to taxation. Contact the Director of Tax Compliance for specific information.
POLICY STATEMENT
1. The University will operate and account for service/recharge centers in accordance with the provisions of the Office of Management and Budget Uniform Guidance 2 CFR 200, section 468.
2. The costs of services provided by highly complex or specialized facilities operated by the institution, such as high-performance computing clusters and wind tunnels that are material must be charged directly to applicable awards via a Service Center rate.
3. Only Specialized Service Facilities with annual budgets exceeding $1,000,000, may include in the costs used for developing the rates their allocable share of all indirect (F&A) costs.
4. All service/recharge center charges must be based on actual usage of the services on the basis of a schedule of rates or established methodology.
5. Charges and rates cannot discriminate against federally-supported activities of the institution, including usage by the institution for internal purposes.
6. Rates must be designed to recover only the aggregate costs of each service and should be determined for each different service provided.
7. The costs of each service included in the rate calculation shall consist normally of its direct costs and applicable equipment depreciation costs. Only Specialized Service Facilities may recover indirect costs.
8. Rates shall be adjusted at least biennially, and shall take into consideration surpluses/deficits of the previous period(s).
9. Rates must take into account any items of income or federal financing that qualify as applicable credits.

POLICY STANDARDS AND PROCEDURES

Types of Service/Recharge Centers

Three categories of service/recharge centers are recognized at the University:

Specialized Service Facilities (SSFs) have total annual direct costs exceeding $1,000,000. Cost components that may be included in the billing rate for a Specialized Service Facilities are the total direct costs of operations plus all indirect costs.
Minor Service Centers have total annual direct costs exceeding $20,000 but not greater than $1,000,000. Cost components that may be included in the billing rate are the total direct cost of operations and applicable equipment depreciation.
Recharge Centers are departmental units, which provide goods and/or services, primarily to University departments and funded by general funds, for a fee and have total annual direct costs of providing those goods and/or services of less than $20,000. Billing rates may include only direct costs.

Differences associated with the classes of service center/recharge operations are as follows:

	Specialized Service Facilities	Minor Service Center	Recharge Center
Annual Direct costs (a)	Over $1,000,000	BETWEEN $20,000 and $1,000,000	UNDER $20,000
Requires Service Center Purpose Code	YES	YES	YES
Rate calculations must include Direct Costs	YES	YES	YES
Direct Salary costs use the external Fringe Benefit Rate	Federal	Federal	Federal
Administrative	YES	NO	NO
Equipment depreciation	YES	YES (b)	NO
Building depreciation	YES	NO	NO
Building maintenance and operating costs	YES	NO	NO
Final Approval	COST ACCOUNTING DEPT.	COST ACCOUNTING DEPT.	COLLEGE BUSINESS OFFICER

(a) If total direct costs changes from one threshold to another, the services center or recharge operation designation changes accordingly.
(b) Effective July 1, 2015, equipment depreciation will be included in the service center and excluded from the F&A proposal.

Responsible Offices
1. Service/Recharge Center Director – has an obligation to assure that:
  1. A schedule of rates is prepared and submitted to the College Business Officer or other appropriate administrators during the preparation of the service/recharge center’s operating budget;
  2. Estimated revenues and expenses for each service provided and rate requested is calculated and shown;
  3. Periodic notifications sent by Cost Accounting Department of the Office of Finance regarding surplus and deficit information are reviewed and acted upon as necessary;
  4. The service/recharge center’s financial results with respect to break-even are reviewed on a timely basis at year-end, and future rates are adjusted for over recoveries and/or under-recoveries as appropriate;
  5. The Controller’s Office is notified immediately of new equipment purchases for equipment used by the service/recharge center so that depreciation is calculated accurately;
  6. The service/recharge center’s equipment is reconciled with the Controller’s Office inventory listing on an annual basis and specific equipment funded through federal sources is identified;
  7. Equipment depreciation (as provided by the Controller’s Office) is incorporated in the Service Center rates for Specialized Service Facility only. The rates for Minor Service Center may include equipment depreciation only for items purchased on and after July 1, 2015;
  8. Billings are timely and adequately documented; receivables are controlled and reconciled, and records are maintained in accordance with the procedures set forth in this policy so that inquiries concerning charges may be addressed.
2. College Business Officer or other relevant administrators – Ultimate responsibility for each service/recharge center rests with the Dean and the College Business Officer or other appropriate administrators. Responsibilities include:
  1. Review and approve/reject/modify and forward to Cost Accounting Department, the request to establish each new service/recharge center within the area;
  2. Review and approve/reject/modify and forward to Cost Accounting Department individual rates and any rate adjustments for all Service Centers within the area;
  3. Review financial performance of all service/recharge centers with respect to break-even at fiscal year-end and carry forward surplus and deficits to the Service Center purpose codes within the area to the next fiscal year;
  4. Review and approve/reject/modify individual rates and any rate adjustments for all recharge centers within the area;
  5. Ensure appropriate record retention for all service/recharge centers.
3. Cost Accounting Department – is assigned responsibility for the following:
  1. Review and approve, in conjunction with the College Business Officer or other appropriate administrators, all requests to establish new service/recharge centers;
  2. Review and approve, all proposed future fiscal year Service Center rates as part of the income and expenditures estimates during the operating budget process. The Cost Accounting Department review consists of but is not limited to, comparing the budgeted amounts used in the rate calculations versus the funds actually budgeted in the accounts and making judgments of the reasonableness of the rate calculations. Estimated usage by type of service provided is also reviewed and compared to prior results.
  3. Monitor service/recharge center balances periodically and notify the Service Center Director when the surplus or deficit exceeds guidelines;
  4. Review, in conjunction with College Business Officer or other appropriate administrators, closure documentation when an area requests that a Service Center be eliminated.
Establishing a Service/Recharge Center
1. Proposals to establish a service/recharge center will require review and approval by the College Business Office or the Director of the specific University Administrative Unit if not part of a College. After the proposal has been discussed at the department/unit level and approved by the College Business Office or the Director of the Administrative Unit, final approval will be by the Cost Accounting Department. The review process will ensure that the minimum requirements to establish service/recharge centers have been met.
2. The request to establish a service/recharge center should be submitted to the Cost Accounting Department at least 90 days prior to the proposed start date. In order to establish a service/recharge center, the New UD Service Center Request Form should be completely filled out, and appropriate signatures obtained prior to submission to the Cost Accounting Department. See Appendix A to this Policy for the required form to be submitted requesting a service/recharge center.
3. Maintaining Service Centers for relatively small operations or operations that do not support sponsored projects increases the University’s administrative costs and risk of non-compliance under the Uniform Guidance. If existing Service Centers do not meet the criteria set forth above for a Service Center, the Cost Accounting Department will work with the department and College Business Officer to phase out the Service Center and to establish recharge centers for these operations.
Annual Monitoring Procedures
1. Individual service/recharge centers are typically operated by a manager in the department, College, or other specific University business unit in which the service/recharge center was established.
2. Service/Recharge Center Directors should manage their costs and revenues on a monthly basis to assess the break-even status of the center. Deficits or surpluses should be carried forward as an adjustment to the billing rates of the following year.
3. A comprehensive annual review should be conducted by the Service/Recharge Center Director at the end of the fiscal year (or other 12 month period if considered more appropriate) at which time rate changes may be made for the subsequent year if deemed necessary to maintain break-even status.
4. All Service Centers financial matters are overseen by the Cost Accounting Department. Proposed rates and reviews must be submitted to the Cost Accounting Department for final approval. The Cost Accounting Department generally will review the information submitted and discuss the proposed rates with the Service Center Director and College Business Officer or other appropriate administrators. See Appendix B to this Policy for the required form to be submitted during the rate review process.
Rate Development and Break-even Considerations
1. A Service Center must develop rates so that revenues do not exceed expenses for services provided to customers who use federal funds to pay for services. For evaluation purposes, the calculation of the over / under recovery should exclude the portion of revenue charged to outside users in excess of “cost”.
2. A Service Center’s surplus or deficit for a given fiscal year should not exceed 15% of annual operating expenses. To the extent that a surplus or deficit for a fiscal year is within the break-even range of +/- 15%, that surplus or deficit should be carried forward and the rate calculation for the subsequent year should include the adjustment. If a deficit exists beyond the break-even range of +/- 15%, it may be necessary for the department, College or business unit to cover the deficit from unrestricted funds.
3. The rate development process varies with the size and complexity of each Service Center and is often coordinated with the departmental, college or administrative unit, and University budget cycles.
4. When it appears that the operating results will exceed the 15% break-even range at fiscal year-end, the Service Center should adjust its rates. A mid-year review by the Service Center is strongly recommended if, at fiscal year-end, the Service Center’s operating results exceed the 15% break-even range:
  1. Surpluses beyond the 15% range must be eliminated through future rate adjustments.
  2. Deficits beyond the 15% range should be funded by an unrestricted fund; the amount is transferred into the Service Center account as a subsidy. Deferrals of inclusion in future rates, greater than 2 years require the approval of Vice President for Research, Scholarship, and Innovation, College Business Officers, and Vice President for Finance and Deputy Treasurer.
5. A Service Center with various operations may occasionally incur a surplus on some services and a loss on others. Higher prices may not be charged for one cost center in order to subsidize losses on another cost center.
6. During preparation and submission of the biennial operating budget and rates, revenue and expense information must be presented in total for the center as well as by each rate charged, whether to internal or external users. For example, if the center has five services and charges a different rate for each service to internal and external users, then revenues and expenses for each of the ten rates must be presented, as well as the overall total.
7. The Service Center Director must provide information on all capital equipment used by the center as part of the rate and budget submission. Questions should be directed to the Cost Accounting Department.
Capital Equipment and Related Depreciation
1. All capital equipment used by a Service Center must be identified by the Service Center Director when submitting both the initial request to establish the Service Center and the biennial budget and rate submission. This will help ensure that the equipment is properly identified and tracked in the University’s plant asset system and records.
2. Unless approved in writing by the government or contractor, federally owned, contractor owned, federally furnished, and contractor furnished equipment cannot be used in a Service Center.
3. Depreciation on Minor Service Center equipment purchased prior to July 1, 2015, is not included in the rates of the services provided. Rather, equipment depreciation is recorded and recovered as part of the University’s facilities and administrative (F&A) rates. As such, it cannot also be charged as a direct cost as part of the user rates.
4. Depreciation is incorporated in the Service Center rates for Specialized Service Facilities. The rate for Minor Service Center may include equipment depreciation only for items purchased on and after July 1, 2015.
Non-discriminatory Rates
1. A service/recharge center must charge all internal users at the same rate for the same level of services or products purchased in the same circumstances.
2. Rates should be designed to recover only the aggregate costs of the services. Rates for the same service provided must not differentiate among internal users.
3. The use of special rates, such as for high volume work or off-hour usage, is allowed, but the special rates must be equally available to all users.
4. External users, however, may be charged a higher rate that may include administrative and other costs incurred to support the external users.
Billing Rates
1. The billing rate should be computed using the following formula:Budgeted operating costs +/- prior year (surplus)/deficits
  Expected units of activity
2. The calculated rate is then applied to the actual level of activity when charging users. This analysis must be performed at the individual service provided so that appropriate rates can be established for each service provided.For example, a machine with estimated operating costs of $300,000 and $40,000 deficit carry forward from the previous year has an expected output of 2,000 hours for the year. This would result in a rate of:
  
  $3000,000 + $40,000 = $170 per hour
  
  2,000
  
  If the department uses the machine for three hours then it should be charged, 3 x $170 = $510.
  
  See Appendix C for more sample rate calculations.
  
  Questions on rate calculations should be directed to the Cost Accounting Department.
Pricing for Multiple Services
1. A service/recharge center is required to perform and document the rate calculation for each type of service it provides.
2. Service/Recharge centers with multiple services must ensure that there is no cross-subsidization between user groups. Services that generate deficits cannot be used to offset services that generate surpluses in the rate-setting processes.
3. When submitting the biennial rate schedule information and request, the center’s total budgeted expenditures and revenues must be allocated to each service provided.
Transferring Money Out of a Service/Recharge Center
1. As a general rule, funds should not be transferred out of a service/recharge center to the University’s general funds or to other departments. Exceptions in rare circumstances may apply. All transfers must be approved by the Vice President for Finance and Deputy Treasurer.
Billing Procedures
1. Billings must be based upon measured and documented utilization.
2. All billings must be processed on a timely basis at established service/recharge center approved rates.
3. All rate changes must be approved by the College Business Officer or other appropriate administrators.
4. All invoices must include the name of the services/goods provided (e.g., DNA sequencing or glass-washing), – the number of units (e.g., pounds, hours, # of items), and the amount charged per unit.
5. The user of the services is responsible for documenting the purpose of the charge and the allocability of the expense to the funding source.
6. The service/recharge center is responsible for the proper use of the account codes related to the recording of revenue and expense.
7. Billing cannot occur until the goods or service has been rendered.
8. Service/Recharge centers should provide appropriate supporting invoicing documentation.
9. Service/Recharge center revenues from internal users must be recorded using the expense account codes established by the accounting policy (account code range: 190850-190899).
10. Revenues from external customers must be recorded in revenue account codes (account code range: R12450-R12499).
11. Each service/recharge center will receive unique general ledger account numbers for its internal and external billings. Additional general ledger account numbers may be provided for each service that has a unique rate.
12. Internal billings for each Service/Recharge center must be done on separate JVs to allow for proper tracking of revenue and expenditures. Combining multiple Service/Recharge billings on one JV is not acceptable.
Documentation Support
1. At the service/recharge center level, the Service/Recharge Center Director is obligated to maintain, and produce upon request, detail support for the rates charged to users. This support is to include records of the expenses incurred for the operation charged.
2. All charges must be supported by a document/invoice, which details the nature and components of the charge.
3. The support for charges should be adequate to allow the document to stand alone in the event of a subsequent review.
4. For an invoice to stand alone, an uninformed reader should be able to review the support and through the description understand what it is for and how the total amount was calculated. That means the invoice should specifically document:
  1. What the charge is for;
  2. How many units were consumed;
  3. Rate charged per unit.
Sales to External Parties
1. As stated above, Service Centers are primarily created to support the sponsored research of the University and typically will operate at or near break-even. The University does realize that for a Service Center to operate efficiently and keep costs down they may offer their services to external users, especially where there is excess capacity. However, it is important for the Service Center to have a mechanism in place to track costs to ensure that the federal government does not get charged rates that exceed costs.
2. The Service Center can charge rates in excess of their approved rates to non-federal – external users, provided that the revenue and any surplus stays in the Service Center and is factored into the future rates. This additional surcharge should only be used to offset the additional costs that the Service Center incurs as a result of dealing with external parties. The Service Center should continue to operate at a break-even point.
3. If sales to external parties are expected to become a substantial part of the Service Center business, then they should account for it separately from the Service Center. In this case, the Service Center will be required to demonstrate to the Office of the Vice President for Finance and Deputy Treasurer that they have the systems in place to properly divide expenses between the two accounts.
4. If the University, as a tax-exempt entity, carries on a trade or business that is not substantially related to the mission, then the University may be subject to UBI. Service Centers should be aware that sales to external parties may trigger this tax. Questions regarding UBI and sales tax can be directed to the Director of Tax Compliance.
5. Service Centers that intend to sell services to external parties must also comply with University policies concerning billings and cash receipts. The Service Center business manager should contact the University Cashier’s Office for additional information and obtain that Office’s approval for external billings and cash receipts processing. Such approval is required prior to receiving general ledger accounts for use.
Closing a Service/Recharge Center
1. A service/recharge center may be closed by timely notification to the Cost Accounting Department of the Office of the Vice President for Finance & Deputy Treasurer by the College Business Office or other appropriate administrators.
2. Departmental management is responsible for the proper disposition of a closed service/recharge center balance. This disposition must be coordinated with the College Business Office or other appropriate administrator and the Cost Accounting Department.
Recharge Operations
1. Departmental operations that provide goods or services, primarily to University departments, for a fee and have total annual direct costs of providing those goods and/or services of less than $20,000 are classified as recharge operations.
2. Rates/Application of Rates
  1. Billing Rates must be designed to recover no more than the direct cost of the goods or services being provided. The departments performing recharges must develop cost data supporting the unit costs charged.
  2. The rates must be developed based on the direct costs incurred in providing the service. For example, the rate for a fax machine or photocopier would include costs for the maintenance contract, paper, toner, etc. It would not include equipment depreciation, space-related costs or administrative costs. If direct costs include salary costs of appropriate personnel, the fringe benefit rate used must be the federal fringe benefit rate since it is possible that a user may be a federal award.
  3. The unit cost must be consistently applied to all internal users, regardless of funding source, and charges must be allocated to users based on actual use.
  4. Recharge operations must develop and maintain a method of accurately tracking units of activity. Units of activity, or usage, must be tracked and billed to all users. It is unacceptable for any user to receive services at a discount or at no cost. Further, as units of activity are used in determining the appropriate billing rate, the method of tracking units will become part of the documentation necessary to support the rate(s) structure.
  5. Recharges to a particular sponsored project or any other account may be applied only when there is a direct relationship to the purpose code being charged. When there is a clear cause/benefit relationship to the funding source, then it should be charged directly to that funding source. When there is not a clear relationship, then the charge may not be directly charged (particularly to sponsored projects). Instead, alternative funding sources (such as departmental purpose codes) should bear the costs.
  6. Administrative-type costs, office supplies, administrative personnel salaries, etc. are not eligible to be a direct cost to federal awards under federal regulations. If there is any doubt concerning how whether the recharge center activities may be charged as direct costs, please contact the Cost Accounting Department.
  7. It is the responsibility of the College Business Officer or other appropriate administrators to periodically review the rate calculations of recharge operations to ensure that rates do not exceed the direct cost of providing the service and that the total direct cost does not exceed $20,000. If the direct cost is projected to increase to over $20,000, a Minor Service Center must be established during the budget process for the next fiscal year.
3. Documentation Support
  1. For each service that is recharged to users, the department must maintain documentation detailing how the rate per unit has been determined.
  2. For example, photocopies are provided at $.05 per copy. The $.05 was determined through the following analysis:
    
    Paper $.01
    Toner $.01
    Lease & Maintenance Agreement $.03
    Total $.05
  3. At the department level, service providers are obligated to maintain, and produce upon request, detail support for the rates charged to users. This support is to include records of the expenses incurred for the operation charged. For the photocopier example above, vouchers and invoices for the costs of the paper, toner, and maintenance would be maintained in support of the rate calculation.
  4. All charges must be supported by a document/invoice, which details the nature and components of the charge. The support for charges should be adequate to allow the document to stand alone in the event of a subsequent review. For an invoice to stand alone, an uninformed reader should be able to review the support and through the description understand what it is for and how the total amount was calculated. That means the invoice should specifically document:
    1. What the charge is for (e.g. photocopying)
    2. How many units were consumed (i.e., pounds, hours, # of items)
    3. Rate charged per unit (i.e., $.05 per copy)
Record Retention
1. Service/Recharge Centers must retain financial documentation. Service/Recharge Center activities should be documented and records should be retained to support expenditures, billings, cost transfers, and rate changes for at least seven years.
2. However, if service/recharge centers charge federally supported projects with a project life longer than seven years, records should be maintained for the duration of the project in addition to the required audit period following the end of the sponsored agreement. Because some projects run over ten years, there is no simple “rule-of-thumb” for a holding period. If there is any doubt concerning how long records should be maintained, please contact the Cost Accounting Department.
3. Service/Recharge center charges are subject to audit as long as the grants or contracts they charge remain subject to audit. All service/recharge center activity must be documented, and records must be maintained to support expenditures, billings, and cost transfers. Each service/recharge center must retain the following:
  1. work papers documenting their rate calculation;
  2. justification of the selected unit of activity;
  3. documentation, including invoices, of actual costs of operations; and
  4. records documenting and measuring the total use of the services or products–billable and any non-billable.

APPENDIX A: University of Delaware – New Service Center Rate Documentation Form

APPENDIX B: University of Delaware – Annual Service Center Rate Documentation Form

APPENDIX C: Sample Rate Calculations

$3000,000 + $40,000	= $170 per hour
2,000

University Policies

Service Centers and Recharge Centers