 |
|||||||||||||||
 |
|||||||||||||||
 |
|||||||||||||||
|
4/15/86, partially revised 8/1/94
I. REFERENCES
University Contract and Grant Manual.
Business and Finance Bulletin A-47
Business and Finance Bulletin A-60
Office of Management and Budget Circular A-21
II. PURPOSE
This bulletin provides guidelines for establishing the costs of goods
and services which are to be recharged to extramural and University
funded activities by academic department support units. It also provides
standards to achieve compliance with University policies and Federal
government regulations for assessing costs to each user of those goods
or services and for assuring equitable treatment regardless of financial
sponsor.
III. DEFINITIONS
Academic Department-Any department of instruction and/or research
including Organized Research Units.
Academic Department Support Unit-Any activity organized within an
academic department to provide, and charge for, goods and/or services
primarily to that and other academic departments on the campus.
Income-Revenue generated from sales to non-University clientele.
Productive Hours-The number of hours per employee which annually can be
directly attributed to the provision of goods or services. This
excludes the hours allowed for vacation, holiday, sick leave, jury
duty, military leave, and clean-up activities.
Productive Rate of Pay-The effective labor billing rate for the sum of
wage and wage-related costs to be recovered, divided by the productive
hours.
Recharge-The assessment and collection by one University department of a
charge for goods or services furnished to another University
department/unit.
IV. GUIDELINES
Any academic department support unit which has recharges and/or income
of $200,000 or more in one fiscal year, except as provided in V. below,
shall have a specific fund number assigned for the activity and shall
recover its costs as described in Business and Finance Bulletin A-47,
and IV. A.-H., below. It is expected that units generating less than
$200,000 annually in recharges and/or income will adhere to the general
principles of costing and billing as set forth in this bulletin and
Business and Finance Bulletin No. A-47 in order to substantiate charges
made to Federal grants and contracts and other fund sources.
A. All readily identifiable costs associated with the furnishing of
goods or services, except for incidental administrative support such
as clerical and secretarial assistance or minimal supervisory
assistance that is not significant in time or dollar value, shall be
assigned and recorded in the specific fund account. Costs incurred
and assigned to the activity must be essential to the purpose for
which the activity has been established. These shall consist of
wages, wage-related costs, supplies, materials and equipment
depreciation. Non-current expenditures such as for equipment
acquisitions or facility modifications, may not be charged to current
operating funds.
B. Any inventoriable equipment assigned to the activity other than that
furnished by the Federal government shall be depreciated.
Depreciation costs are to be included as a cost element for rate
determination purposes. Depreciation shall be on a straight-line
basis unless it can be demonstrated that some other method is more
appropriate. A depreciation reserve fund to be used for equipment
replacements shall be established and credited with the amounts
charged to operations for depreciation expense.
C. Appropriate wage-related costs shall include provision for leave
benefits. Amounts generally shall be based upon the estimate of
actual costs of such benefits expected to be used during each year of
operations. However, a reserve may be established where it is
preferable to accrue vacation and sick leave benefits. Such reserve,
however, must be reviewed periodically and adjusted appropriately to
reflect actual experience in paying for such benefits.
D. Recharge rates shall be based on allowable costs. Rates shall be
stated in measurable units of goods or services. A separate rate
shall be established for each class of goods or services provided.
All users of goods and services must be charged at established rates.
The productive rate of pay shall be based on a reasonable estimate of
productive hours.
E. Recharge activity shall be operated on a no-gain/no-loss basis. Any
surplus or deficit occurring in any one year shall be corrected by
adjustment of rates in the succeeding year to achieve a break-even
balance at the succeeding year end. Every effort should be made to
ensure that year-end surpluses or deficits do not exceed one month of
the recharging unit's activity. Should the recharge activity have a
deficit, a business plan should be developed to reduce the deficit
within a reasonable period, i.e, three years. The adjustment of rates
will generally be based on estimates since actual performance data for
the year will not be available prior to the development and
publication of the succeeding year's recharge rates. In exceptional
cases when such an adjustment would create a severe fluctuation in
rates from one year to the next, achievement of a break-even balance
can be extended for a reasonable period beyond the succeeding year.
F. Budget allocations to users shall give consideration to increased
costs of recharge operations such as those resulting from merit,
range, and staff benefit adjustments and for price increases. Any
relief to users of recharge activities, such as a subsidy for
instructional use of computers, should be provided through a
central allocation of discretionary funds which will permit the
recharge activity to charge the established rate for goods or
services based on its full costs.
G. During the year, the cash balance of recharge activities shall
participate in the current fund Short-Term Investment Pool (STIP).
Distribution of the interest earned shall be in accordance with the
procedures set forth in Business and Finance Bullet-in A-60,
Short-Term Investment Pool (STIP)-Distribution of Income.
H. It is the University's policy not to sell goods or services to
outside consumers except where such goods or services are unique or
where such sales would not be in competition with commercial
sources. In this regard, attention is directed to University
Regulation #4 which provides that:
"University . . . facilities are not to be used for tests,
studies, or investigations of a purely commercial nature . . .
except when it is shown conclusively that satisfactory
facilities and such services do not exist elsewhere. Those
requiring such . . . services should apply to business
firms or to such public agencies as the State Division of
Mines, State Department of Agriculture, or the State Food and
Drug Laboratory, etc."
Sales to outside consumers as a part of the total operating program
of an individual activity shall receive appropriate approvals at
the campus level. The charge established shall recover full
University costs, both direct and indirect. Indirect costs shall
include appropriate amounts for campus overhead costs. Guidelines
for determination of such amounts to be recovered shall be provided
by the Office of the Senior Vice President-Administration. Funds
representing recovered indirect costs shall be retained by the
campus and shall be transferred out of the current operating fund
of the recharge activity as received and accumulated in a reserve
account. Allocation of the funds in the reserve account shall be
under the control of the Chancellor.
V. EXCEPTIONS
A. Exceptions to these guidelines are authorized where recharge
operations are primarily for instructional support and provide
services for which charges against Federal grants and contracts do
not exceed 15% of the total recharges of the activity, or where
income is received for providing a patient treatment outside of
University hospitals or clinics which is billed at a commonly used
patient fee schedule for professional services.
B. These guidelines do not apply to the major Department of Energy
Laboratories.
VI. SALARY INCREASES AND BENEFITS FUNDED BY GENERAL FUNDS
Until July 1, 1986, employee benefits, merit increases, and salary range
adjustments were provided for all budgeted salaries supported by the
General Fund. Beginning July 1, 1986, the Office of the President will
no longer provide benefits, merit increases, or range adjustments for
employees supported from General Fund recharges. Campuses should
increase the appropriate recharge budgets or reallocate existing campus
General Funds to fund any increases in the budgeted salaries of
positions supported from General Fund recharges.
|
|||||||||||||||
|
|||||||||||||||
|
Send comments or questions about this website to webmaster.
|
|||||||||||||||
