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Finance & Administration > FAPolicies > Grants and Contracts Accounting > Establishing / Maintaining a Service Center  
Establishing / Maintaining a Service Center
Section:4- Grants and Contracts Accounting
Policy Procedure:4-5.01
Subject:Establishing / Maintaining a Service Center
stablished Date:4/8/1999
Responsible Department:Grants and Contracts Accounting


The University must comply with the Office of Management and Budget Uniform Guidance (UG) as it pertains to service centers in section 200.468.  The University’s exposure from noncompliance with the federal regulations may involve reimbursement to the government, as well as adverse publicity; which could harm future award applications.  As a result of such, this procedure explains the guidelines for MUSC Service Centers in order to ensure compliant, consistent, and nondiscriminatory charging of materials and/or services to internal and external users. All centers must maintain a separate UDAK to account for budgets, revenues, and expenditures. Rates charged must meet Federal regulations and are subject to biennial review by Grants and Contracts Accounting.

Questions regarding establishment and maintenance of Service Centers should be addressed to Grants and Contracts Accounting (GCA) Cost Accountant Aszerdee Powell at or 843-792-6177.

General Guidelines

Service Center

a. Minor Service Center - $25,000 to $99,999 in annual operating expenses. Provides services and charges rates to internal users to support research activities.
b. Major Service Center - $100,000 or more in annual operating expenses or more than $75,000 in annual direct charges to Federally Sponsored Projects. Provides services to internal users and to external users to support research activities.  Major Service centers that provide services to the entire university community (Central Service Centers) resulting in annual operating expenses in excess of $1,000,000 have the option to recover all costs (including utilities, operation & maintenance, and rent) in the recharge rate.
c. Specialized Service Centers - $1,000,000 in annual operating expenses and involves the use of highly complex or specialized facilities.  Must recover all costs of utilities, operations/maintenance, and rent in the rates charged.
d. Auxiliary Service - Self-supporting service entity which may charge market rates, such as Parking Management, or Vending Services. Auxiliary services generally do not support University departments, and are not subject to these guidelines.


A. Establishing a Service Center:
1. The potential Center/Business Manager will initiate contact with GCA regarding the potential Center; including a description of the Center, and the services to be provided.

2. Upon GCA tentative approval, the responsible Center/Business Manager will use the worksheet provided in the “Forms” section below titled “New Center Rate Worksheet” to generate a proposal calculating the potential rate(s). The “Forms” section also includes “Appendix A” for budget guidance, and corresponding Instructions for completion of the worksheet (In-person training is available upon request).

3. The following components may be included in the rate calculations:

a. Salaries and wages of all personnel directly related to the center activity (e.g., lab technicians or machine operators).
b. Salaries and wages of administrative staff in direct support or management of a center (adequate justification supporting such is required).
c. Materials and supplies.
d. Other expenses such as rental and service contracts, equipment operating leases, and professional services.
e. Depreciation on equipment - Capital equipment costs may not be recovered through the rates except through straight-line depreciation over the standard useful life of the asset. Depreciation on Federally-funded equipment, depreciation on equipment cost-shared to Federal Sponsored Project, and depreciation on equipment already included in the F&A cost rates must not be included in user rate calculations.
f. Operations and maintenance/utility costs - These costs must be included for Specialized Service Center rates. The inclusion of these costs is optional for Major Service Centers (whom meet annual operating expenses guidelines); if not recovered through the user rates, then the University will recover these through the F&A cost rates.
g. 60 day working capital allowance.
***Additional information on rate components can be found in the “Appendix”***

4. The following components may not be included in the rate calculations:

a. Building Depreciation
b. Facilities expense (utilities, maintenance and custodial cost paid by the University and not recorded in the service facility operation account.
c. University and departmental overhead costs that are not charged to the service facility operation account.
d. Purchase price or value of equipment >$5000 (this should be depreciated)
e. Cost that are federally unallowable including:

1. Entertainment
2. Bad debt
3. Advertising
4. Public Relations
5. Alcoholic beverages
6. Contributions and donations.

5. The Business Manager submits the rate calculations to the Cost Accountant of Grants and Contracts Accounting for review.

6. The GCA Cost Accountant and Cost Accounting Manager will review the rates to ensure compliance with the applicable guidelines. Rates may require adjustment based on the review.

7. Upon receipt of an official approval letter from GCA, the responsible Business Manager will then use such to establish a separate non-sponsored UDAK for each new Service Center in accordance with Procedure 1-2.01.1: Establishing a UDAK (To be provided to GCA).

8. Expenditures may be initiated when the UDAK is established in the accounting system. All costs relating to a Service Center must reside in the center account.  Revenues may be generated and credited to the UDAK based upon detailed invoices or Intra-Institutional Transfer (IIT) documents which must provide the description of services rendered, number of units utilized, and the charge per unit. Billing documentation must be retained by the center for seven years for audit purposes.

B. Maintaining a Service Center:

1. Center Manager should evaluate the financial position and rates periodically throughout the year to assess under/over-recovery (see “Appendix” for additional Internal Controls & Responsibilities).

2. All centers are required to have their rates reviewed by GCA on a biennial basis. The Center/Business Manager will use the worksheet provided below in the “Forms” section titled “Established Center Rate Worksheet” to populate the information needed for review.  The corresponding instructions are provided in the “Forms” section as well. The Center Manager/Business Manager submits the worksheet to the Cost Accountant of GCA for review. 

3. If a review proposal is not obtained by the biennial review deadline, the Center/Business Manager will receive a Work-in-Progress proposal worksheet for initiation of the needed review.  The relevant Manager will then need to complete the worksheet as instructed in the attached correspondence (i.e., include projections, address inquiries, provide actual/projected units of output); and then provide such to the GCA Cost Accountant for further review.

4. The GCA Cost Accountant and the GCA Cost Accounting Manager will review the revised rates to ensure compliance with the applicable guidelines. Adjustments may be required based on GCA’s review.


New Center:
New Center Rate Worksheet

New Center Rate Worksheet Instructions

Sample New Center Rate Worksheet

Established Center:
Established Center Rate Worksheet

Established Center Rate Worksheet Instructions

Sample Established Center Rate Worksheet

Appendix-Service Center
Page last updated: 02/20/2017

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