1. NACCA - Leading Excellence in Research Costing Practices
Service Center Management From a Central Office Perspective Authors: Hank Kirschenmann – Attain LLC Kim Hoebel – Purdue University Chea Smith – Rutgers University
NACCA - Leading Excellence in Research Costing Practices
General Conference: 10/3 – 10/5, 2017

2. Service Center Management From a Central Office Perspective
Introductions – Panel Participants
Importance of Structured Program
Components of Program
- Policies
- Procedures
- Roles and Responsibilities
- Ownership of Program/Authority to Make Decisions
Operational Challenges
Real Life Challenges
Wrap-up

3. Introductions – Panel Participants

4. Panel Participants

5. Importance of a Structured Program

6. Importance of a Structured Program
Potential Audit Issues
Uniform Guidance Section (Specialized Service Facilities)
The costs of such services, when material, must be charged directly to applicable awards based on actual usage of the services on the basis of a schedule of rates or established methodology that:
Does not discriminate against federally supported activities of the institution, including usage by the institution for internal purposes
Is designed to recover only the aggregate costs of the services
Rates shall be adjusted at least biennially, and shall take into consideration over/under applied costs of the previous period(s)
Where the costs incurred for a service are not material, they may be allocated as F&A costs.
Possible pay-back to Federal Government
Possible adverse publicity for institution

7. Importance of a Structured Program
Potential Audit Issues (continued)
History of Federal Audits – DHHS/OIG
Early to Mid 90’s – 15+ Schools
Current Environment
Scope
Review of University Policies
Development and Application of Rates
Multiple Years (5) of Detailed Data
Number of Service Centers at Each School Selected for Detailed Review:

8. Importance of a Structured Program
Complicated Issues
Lack of Authority Given to Watchdog
Maximizing Recovery of Costs
New Item for Consideration: Direct Charging of Institutional Review Board Costs via Service Center

9. Components of Program

10. Components of Program Policy Procedures Roles and Responsibilities
Ownership of Program at Central Office(s)
Senior Level Position with Authority to Make Decisions

11. Components of Program– Typical Policy
Definitions: SSF vs. Service Center vs. Recharge Center
Policy Statement: Reference Uniform Guidance
Rate Components: Direct and Indirect (where appropriate)
Break-even over a Specified Time Period
Service Center Pricing
Billing, Documentation and Authorization
Accounting

12. Components of Program– Typical Procedures
Initial Budget Approval
Monthly Financial Reports
Quarterly / Annual Break-even Reports
Annual Budget Review
Capital / Depreciation Accounts
Subsidized Users
Multiple Services

13. Components of a Program – Typical Roles and Responsibilities
Department Business Manager/Budget Office
Responsible for financial position – annual budget submissions and cost analyses, rate schedules, break-even analysis.
Ensures compliance with institutional costing policy.
Initially approves service center budget
School and College Level Oversight
Provide funding for equipment purchases.
Support scientific endeavors of the service center and question operations when services become obsolete.
Hold service centers accountable for budgetary, financial, and regulatory compliance requirements.

14. Components of a Program – Ownership at Central Administration
Accounting or Post-Award Office
(Purdue: ______________, Rutgers: ______________,
UNC Charlotte: ______________)
Reviews budget for compliance relating to rate schedules:
Estimated break-even reasonableness
Structure of billing
Allowability of costs / special items of cost, i.e. capital purchases
Provides training for user community
Assigns facility costs to Specialized Service Facilities
Reviews special requests to Financial Officer, i.e. deficit carryovers
Internal Audit
Incorporate reviewing service center costs analysis, rate setting, and allowable cost testing in annual audit work plan

15. Components of a Program – Authority to Make Decisions
Senior-level position (i.e. Financial Officer)
Ability to deny some compliance, budget variances from policy.
Command diligence from Budget Office and the Restricted/Sponsored Funds Department, program watchdogs.

16. Operational Challenges

17. Operational Challenges
Convergence of Stakeholder Priorities:
Finance
Compliance
Operations

18. Operational Challenges
Invoice promptly, manage receivables, consider operations’ impact on cash requirements
Charge all users established rates, don’t discriminate against federal awards, account for subsidies properly when necessary
Compliance
Operations
Be solvent to stay in business, while meeting budgetary, operational, and compliance expectations
Do not offer free services, consider allowability of costs when incurring operational costs, don’t bill if service has not been performed.

19. Real Life Challenges

20. Real Life Challenges
Purdue
Rutgers/UNC Charlotte

21. Wrap-up: Questions and Experiences

22. To Continue the Discussion
Purdue
Rutgers/UNC Charlotte

23. To Continue the Discussion/Questions:
Hank Kirschenmann, Senior Manager
Phone: