This procedure explains the guidelines for MUSC Service Centers and Recharge 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. Charging rates must meet Federal regulations and are subject to review annually by Grants and Contracts Accounting.
Questions regarding establishment and maintenance of Service and Recharge Centers should be addressed to Grants and Contracts Accounting at 792-6177.General Guidelines
Extensive guidelines are provided in MUSC's Cost Accounting Standards - Guidelines for Service Centers and Recharge Centers as approved by the Board of Trustees in April 1999. The following types of operations are included in the CAS guidelines:
1. Recharge Center - A low-volume service center with less than $25,000 in operating costs residing within an academic department.
2. Service Center
a. Minor Service Center - $25,000 to $99,999 in annual operating expenses. Provides services and charges rates to internal users/departments to support research activities.
b. Specialized Service Centers - $1,000,000 in annual operating expenses and involves the use of highly complex or specialized facilities.
c. Auxiliary Service - Self-supporting service entity which may charge market rates, such as Parking Management, Transportation, or Vending Services. Auxiliary services are not subject to these guidelines.d. 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 University users and must recover all costs of utilities, operations and maintenance, and rent in the rates charged.
A. Establishing a Service or Recharge Center:
1. The responsible Business Manager will generate a proposal calculating the rates for each Service/Recharge Center. The Business Manager should use the Instructions and Service Center Rate Calculation Form in the "Forms" section of this policy.
2. The following components may be included in the rate calculations:
3. The Business Manager must use the following equation to calculate the center charging rate per unit of output (e.g., labor hours, machine hours, CPU time, or other reasonable measurement):Rate = Budgeted Expenses divided by Budget Usage Base
- Salaries and wages of all personnel directly related to the center activity (e.g., lab technicians or machine operators).
- Salaries and wages of administrative staff in direct support or management of a center (adequate justification supporting such is required).
- Materials and supplies.
- Other expenses such as rental and service contracts, equipment operating leases, and professional services.
- 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.
- Operations and maintenance/utility costs - These costs must be included for Specialized Service Center rates. The inclusion of these costs is optional for Minor and Major Service Centers and Recharge Centers; if not recovered through the user rates, then the University will recover these through the F&A cost rates.
4. The Business Manager submits the rate calculations to the Cost Accountant of Grants and Contracts Accounting for review.
5. 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.
6. The responsible Business Manager will then establish a separate non-sponsored UDAK for each new Service or Recharge Center in accordance with Procedure 1-2.01.1: Establishing a UDAK.
7. Expenditures may be initiated when the UDAK is established in the accounting system. 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 or Recharge Center:
1. Each Service/Recharge Center Manager should evaluate financial position and rates periodically throughout the year to assess under/over-recovery.2. All centers are required to have their rates reviewed by GCA on a biennial basis. The GCA Cost Accountant will provide the Service/Recharge Center Manager with a Work-in-Progress worksheet for the completion of such. The manager will need to complete the revision proposal as instructed in the relevant correspondence (i.e., include projections, address inquiries, provide unit of output info). You do have the option to provide a complete revised proposal before the initiation of contact by the GCA Cost Accountant.
3. After one year of operation, surpluses or deficits within +/- 10% of breakeven must be carried forward and used to calculate rates for the following year according to this formula: Rate = Budgeted Expenses +/- Prior Year Under/Over Recoveries within +/-10%) divided by Budget Usage Base
4. The GCA Cost Accountant and the GCA Cost Accounting Manager will review the revised rates to ensure compliance with the applicable guidelines. Such may require adjustment based on the review.
Service/Recharge Center Rate Calculation