1. Establishing and Managing a Recharge Center WHAT IS A RECHARGE CENTER?

2. Definitions The Carnegie Mellon policy states: “A service center is an operating unit whose primary purpose is to provide goods, services or group of services in support of the university's education and research mission. Service centers include auxiliary enterprises and recharge service centers (internal cost recovery units).” Cost Accounting Standards Disclosure Statement states: “Service centers are departments or functional units which perform specific technical or administrative services primarily for the benefit of other users within a reporting unit. Service centers include “recharge” centers and “specialized service facilities” defined in Sec J. of A-21

3. Examples of Service Centers Printing and graphics services Animal care facilities Facility management services Research core facilities Telecommunications

4. Identification in Oracle Recharge Function:740 Funding:055000 Auxiliary Function:700 Funding:050000

5. When do I need to set up a recharge center? Charging between departments Charging to Federal grants or contracts

6. Establishing a recharge center Who to contact Anne Marie Bosnyak, x8-1004, ab3t@andrew.cmu.edu What information should be provided Title and purpose Estimate of budget including the types of costs to be incurred Customer base Basis for charging Budgeted Rate Name of person responsible for the financial affairs of the center

7. Establishing a recharge center Financial Services responsibilities Review initial rate, give approval for set up Set up new organization in Oracle Set up non labor resources in GM, if applicable Department responsibilities Develop and monitor rate Keep list of pricing structure Maintain adequate accounting records Notify Financial Service of significant changes in rates or types of service

8. Developing recharge center rates General rules to follow: Costs must be separately accounting for Recover only actual costs of the recharge center No unallowable costs Non discriminatory pricing Users charged in proportion to the services rendered Break even policy +/- variances rolled into future rates Negative variances can be subsidized by department Surpluses should NOT be used to fund unrelated activities! Analyze and adjust rates yearly

9. Developing recharge center rates Information to collect or develop: Total cost of operations per year Types of service Activity basis for each service or product

10. Cost components Direct Personnel Fringe Benefits Supplies and Expenses Materials/supplies of recharge center Administrative operating costs of the center Professional consulting services Rental services (University Overhead – for auxiliaries)

11. Other cost considerations Unallowable costs See Section J, OMB Circular A-21 Subsidies Funds from schools or departments MUST be recorded as an income transfer Year end variances Maintain breakeven position over time Adjust rates yearly to reflect the over/under recoveries Mid year rate changes Notify Financial Services immediately Should be used only when necessary

12. Examples Calorimeter Departmental Computing

13. Miscellaneous departmental charge-outs Provide goods and/or services only to users within the department No recharge organization set up Examples Disbursement of copy charges within a department Purchases for students Accounting for charge-outs Should follow guidelines for recharge centers

14. Resources Carnegie Mellon Policy on Service Centers http://www.cmu.edu/policies/documents/ServiceCenter.html FMP Internal Charges Users Manual https://synergy.as.cmu.edu/~fmp/documentation/internal_ch arges_manual.pdf Office of Management and Budget A-21 (Section J – Unallowable Costs) http://www.whitehouse.gov/OMB/circulars/a021/a021.html