university of colorado denver service centers policy summary
TRANSCRIPT
What is a Service Center?
• An organizational unit of UCD that provides a specific type of good or service – to other UCD departments;– to individuals or the general public; and is– supported primarily by fees charged to a
user’s departmental speedtype.
What is a Service Center?
• Rates charged by a Service Center are formulated to recover the costs of running the Service Center. – Salaries & benefits– Materials & supplies– Travel– Depreciation– GAR / GIR
Definitions
• Cost Study– Summary of cost data – Documents compliance with fiscal policy and
guidelines– Includes revenue, expense, and net asset
information related to providing the goods or services of the service center
– Calculated at least annually
Definitions
• Internal Customers– Goods/services charged to another
UCD speedtype– UPI & UCH Fund 80 speedtypes
• External Customers– General Public– Students, Faculty, and Staff– Agency Fund speedtypes excluding UPI
& UCH
Definitions
• Direct Costs– Costs that can be identified specifically with a
particular UCD activity or can be assigned to an activity with a great deal of accuracy• Salaries and benefits of those employees
directly providing a service in a Service Center
• Supplies
Definitions
• Indirect Costs– Costs that cannot be readily identified to
specific goods/services• Administrative salaries and benefits
• Indirect supplies
• Cost allocations
Definitions
• Non-Discriminatory Billing Rates– All internal customers should be charged for
goods/services at the same rate– Rates should not discriminate between
federally funded and non-federally funded activities
Fiscal Policy for Service Centers
Objectives of the Federal Government • Ensure compliance with federal regulations.• Consistent operational practices among the
various Service Centers at UCD.• Assure that UCD has adequate controls over
the operation of Service Centers.• Ensure that rates charged by Service Centers
be equal to the cost of providing those services over a long-term period.
References
• Office of Management and Budget (OMB) Circular A-21, “Cost Principles for Colleges and Universities” http://www.whitehouse.gov/omb/circulars/index.html
• Cost Accounting Standards
Board (CASB) regulations
General Guidelines
• Service Centers shall be budgeted and accounted for separately from other departmental activities.
• Budgets– Projected revenues and expenses for the
upcoming year– Projected net asset for the end of the
current fiscal year
General Guidelines
• Deficit cash balances should not occur.
• Profits or losses cannot normally be shifted to other goods/services.
• Cost studies are required for all service centers.
• Cost study review by the accounting office is required for service centers with revenues over $20,000.
Billing Rates
• Rates must be based on actual and reasonable costs and not rate structures of external businesses.
• Rates for internal sales must provide recovery only for allowable costs.
• Rates for external customers can be higher than rates for internal customers but never lower.
Billing Rates
• Rates must be:– predetermined based on a cost study– published– stated in measurable units of goods or
services– reviewed and adjusted at least annually to
minimize surpluses or deficits.
Unallowable Expenses
• Unallowable expenses must be funded by other resources.
• Service Center managers are responsible for ensuring that unallowable costs are not included in billing rates to internal customers.
Unallowable Expenses
• Entertainment Costs
• Interest
• Memberships
• Promotional Items and Memorabilia
Revenue
• Billing transactions should not precede the providing of goods/services.
• Progress billings may be made for jobs in progress but only to the extent of goods/services provided.
• External sales on credit should be booked as an Accounts Receivable at the time of the sale.
Revenue Account Codes• External Sales
– Use account code • 325100 (Miscellaneous Income)• 325106 (Sales to Gov Agency)• 325200 (ISU Sales to other Colo agency)• 325300 (ISU Sales to Public)• 325108 (Sales to Business)
• Internal Sales– Use account code 380100 (Service Center IN
Revenue)
• Sales to UPI– Use account code 335003 (Sales to UPI)
Capital Equipment
• What is capital equipment?– Life greater than one year – Cost greater than $5,000
Capital Equipment
• Capital equipment costs–Recovered through depreciation of the asset–Depreciation cost only included in cost study
•Include in rate calculation•Begin depreciating the asset the month it is put
into service (acquisition date)•Straight-line method•Standard useful life
–Renewal and replacement account
Capital Equipment
• Disposal of equipment not fully depreciated– Undepreciated cost less any salvage value to
be used in next rate setting calculation.
• Only Service Center equipment is to be purchased out of the renewal and replacement speedtype.
Transfers
• A transfer is the movement of cash between accounts.
• Transfers are generally limited for Service Centers.
• Transfers out are limited to calculated depreciation moved to a renewal and replacement speedtype.
• Transfers in are normally allowed only for start-up costs.
Net Asset Limitations
• Goal is to break-even over a long-term period:– Net assets, on average, should not exceed 60
days of operating expenses;– Service Centers that charge external customers
at a rate above cost may have a higher net asset;
– Surpluses and deficits should be absorbed into future rate calculations to achieve the overall goal.
Record Keeping
• Required for each sale– Identify customer– Goods or services provided– Rate charged
• Documentation on how billing rates were calculated and all supporting records.
• Maintain all records for at least 7 years.
Summary of Policies Applicable to Summary of Policies Applicable to Service CentersService Centers
Annual Sales Annual Sales>= $20,000 < $20,000
Annual Review of Rates YesYes YesYes
Cash Deficit Allowed Start-up OnlyStart-up Only Start-up Only Start-up Only
Cost Study Required YesYes YesYes
Comprehensive Finance Review YesYes NoNo
Equipment Expense Fund 72 OnlyFund 72 Only Fund 72 OnlyFund 72 Only
Exclude Unallowables from Rates to Internal Customers YesYes YesYes
Net Asset Limitation YesYes YesYes
Published Rates Schedule YesYes YesYes
What to Include in a Cost Study
•Detailed Calculation of Costs–Direct Costs
• Salaries• Operating Expenses• Supplies
–Indirect Costs• Overhead—GAR & GIR• Allocated costs (salaries, operating)
–Subsidy—if you have one, show it
•Price List–Published via web, pamphlet, poster
•Preferred Format—Excel
Useful Links• Search @ UCD website
– Policies and Procedures– Scroll down to Fiscal and Finance Policies– Information located under Internal Service Centers Policy
• Current SC Policy:http://www.administration.ucdenver.edu/admin/policies/fiscal/
IntServiceCtrs.pdf
• Exhibit B--Guidelines--How to do a Cost Study• http://administration.ucdenver.edu/admin/policies/fiscal/fp2-08b.doc
• Exhibit C--Template• http://www.administration.ucdenver.edu/admin/policies/fiscal/
CostStudyInstructions.xls
Contact:• Grace Reed
– 303.315.2260– [email protected]
• Matt Artley– 303.315.2056– [email protected]