Financial Services

OUHSC Campus
OU TULSA Campus
OU NORMAN Campus

General Accounting

Recharge Centers

Definition of a Recharge Center:

Recharge Centers are units within OUHSC that charge for goods or services that directly support the sponsored mission of the University and recover costs through charges to internal and external users. All Recharge Centers are expected to recover no more than the aggregate costs of their operations through charges to users. Recharge Centers recover indirect cost expenses through the inclusion in the indirect cost proposal.  Auxiliary Enterprises market and sell their goods and/or services primarily to parties external to the University. In contrast, Service Units market and sell their goods and/or services primarily to parties internal to the University.  Unlike Departmental Recharge Centers, Auxiliaries and Service Units recover indirect costs through inclusion in the charge rate.  Auxiliary and Service Units are not covered by these guidelines.

Who Must Comply:

Any OUHSC college, department, unit or center operating a Recharge Center must comply. These guidelines apply to Recharge Centers that meet both of the following criteria: (1) are established to meet the needs of OUHSC research staff, and (2) receive less than 20% of revenue from external customers. Centers that do not meet these criteria may qualify as an auxiliary or service unit.

OMB Uniform Guidance Requirements:

See OMB Uniform Guidance § 200.468 Specialized service facilities for guidance on determining costs and rates for departmental recharge centers. Additional guidance may be found at NOT-OD-13-053: FAQs for Costing of NIH-Funded Core Facilities.  Recharge Centers are reviewed annually as part of the single audit required by Uniform Guidance, Subpart F Audit Requirements (§200.500).

1) Request for Establishment:  Colleges/Departments/Centers may propose the creation of a Recharge Center and recharge rates. The benefits of a proposed Recharge Center must be weighed against the benefits of obtaining similar goods/services from commercial or other University sources. In contemplating the creation of a Recharge Center, departmental management must consider a variety of criteria:

  • How is this proposed recharge center fee related to the instructional, research or public service mission of the University?
  • Does a demand (by more than one unit/entity) exist for the goods/services to be provided on a regular basis?
  • Does the level of recharging (sales) transactions, both quantity and dollar amount, justify the need for the Recharge Center?
  • Does another OUHSC unit already provide similar goods/services?
  • Does OU-Norman already provide similar goods/services?
  • Will the Recharge Center be competing with an entity in the private sector?

Recharge Centers recommended by the Vice President of Research must be approved by the responsible unit and the Controller’s Office.  The mission and purpose of the Recharge Center, the resources needed for its operation, its proposed operating policies, its proposed allowable direct cost budget, and its income forecasts must all be reviewed and approved.  The Senior Vice President and CFO or their designee is responsible for final approvals.

2) Internal & External Users: Although Recharge Centers primarily serve users internal to OUHSC, in some cases external entities may also use the service. All users should be charged directly for actual use of services at a pre-approved rate.  At a minimum, external users will be charged for the full direct costs of the Recharge Center operation. The University's full cost plus the appropriate indirect cost rate should be charged to external users.  At no time will an external customer be charged less than the federal government and internal users for the same service.The federal government must always be treated as the most favored customer.To ensure compliance with federal Unrelated Business Income Tax (UBIT) and OK sales tax laws, consult with Service Unit Accounting for guidance prior to contracting with external users.

3) Rate Establishment: Charges to internal users may not recover more than the cost of the service, and may not discriminate between activities under Federal awards and other activities. Special rates, such as for high volume work, are allowed. Such rates should be available and applied consistently to all users who meet the criteria. Rates may include costs for:

  • Technical Staff – Salaries, wages, and fringe benefits of technical staff dedicated to and directly supporting the Recharge Center. The costs of individuals benefiting more than one Recharge Center or activity should be allocated proportionally to each activity.
  • Materials and Supplies – Costs of materials and supplies necessary to operate a Recharge Center.
  • Capital Equipment Depreciation Expense – Capital equipment includes items of tangible personal property with a cost of $5,000 or more and a useful life of more than one year. Federal regulations allow the recovery of equipment depreciation for equipment purchased with University funds.
  • Miscellaneous Expenses – Rental and service contracts, equipment operating leases, and professional services utilized by the Recharge Centers should be included in the rate calculation.

Rates may not include:

  • Unallowable Costs – The costs that have been designated as unallowable for government funds may not be included in the calculation of rates for services since those services may be charged to a government grant or contract. (See Appendix A)
  • Departmental administrative staff who are not directly involved with the operation of the Recharge Center (ex. Payroll Clerk).  Staff that share both roles should be allocated appropriately.
  • Cost sharing – Any costs formally committed as cost sharing to any Federal sponsored project cannot be included in Recharge Center rates.
  • Depreciation associated with capital equipment purchased with Federal funds cannot be included in Recharge Center rates.
  • Reserves for anticipated future equipment repairs and replacement cannot be included in recharge center rates.

The University has developed worksheets to assist in the development of Recharge Center rates.  It is not required that the forms be used, but the rates submitted for review must be in a form easily reviewable and include all supporting documentation.

4) Rate Subsidization: Services provided to all users must be accounted for and charges must be based on total costs and actual usage. If an entity chooses to provide a service to a particular internal group of users at a subsidized rate, this cannot affect the annual rate calculations. The Recharge Center billing rate must be calculated for all users based on total Recharge Center expenses and total units of output. Subsidies are applied after the initial rates are calculated, so that the total cost of performing the service can be identified.

5) Surplus/Deficit: Since billing rates are calculated based on estimated costs and usage, it is not expected that income and expenses will net to zero in any one year. Billing rates should be designed to break even over a reasonable period of time, not to exceed 3 years. As a general guideline, annual surplus/deficit balances should fall within +/- 10% of expenses. Rates must take into consideration over/under recoveries from prior periods. Deficits may be offset by a transfer in from departmental discretionary funds with the approval of the Controller’s Office. Surpluses may not be transferred to another chartfield.

6) Billing Procedures: Billing must be based upon measured and documented utilization. All billing must be processed on a monthly basis at established Recharge Center rates. The user of the services is responsible for documenting the purpose of the charge and the allocability of the expense to thefundingsource.  All invoicing must be completed through Service Unit Accounting.  Billing templates are due to Service Unit Accounting by the 20th of each month.

  • Billing cannot occur until the goods or service have been rendered
  • Recharge Centers should provide appropriate supporting invoice documentation
  • The Recharge Center is responsible for the proper use of the object codes related to the recording of revenue and expense.

7) Accounting and Record-keeping: Separate chartfields must be established in the University’s accounting system to record the direct operating costs and revenues of each recharge center including, if applicable, capital expenditures. A SUAUX chartfield can be obtained from Service Unit Accounting once the Recharge Center rates have been approved.  Documentation to support billings and rate calculations, as well as documentation supporting the billing methodology, should also be maintained. It is the Recharge Center’s responsibility to maintain detailed records of all charges and answer inquiries in reference to those charges. Records should be retained for seven years.

8) Interim and Annual Reviews: Recharge Center business managers should evaluate their financial position and rates periodically to assess their position with respect to their break-even goals by category of goods and services.  Under special circumstances, rates will be adjusted through a mid-year reduction/increase in rates provided that mid-year rate adjustments are reviewed and approved.

At fiscal year-end, all Recharge Centers will be required to submit their financial statements and updated rates to Service Unit Accounting. Reports are due before May 31st of each year.  Financial statements will be reviewed for viability.  Those Recharge Centers that show little usage and/or significant losses will be referred to the Senior Vice President and CFO or designee for a determination on whether the Recharge Center should be closed.

9) Forms and Templates:  Listed below are various forms and checklists to assist departments in the setup, rate determination, invoicing and monitoring of the Recharge Center.

10) Additional Resources:

  • Appendix A – Schedule of Unallowable Costs
  • Appendix B – Depreciation Useful Life Schedule
  • Fringe Rates
  • F&A Rates

11) Contacts:

Questions regarding the allowability of costs and inclusion in billing rates and the review and approval process:

Kathy Riggs, Service Unit Accounting at x46333.

Stacey Risinger, Service Unit Accounting at x46335.

Questions regarding federal cost allowability:

Tamara Franklin, Assistant Controller at x46387.

APPENDIX A


Schedule of Unallowable Costs

  • Advertising
  • Alcoholic Beverages
  • Alumni Activities
  • Bad Debt
  • Commencement & Convocation Costs
  • Contingency (Reserves) Provisions
  • Country Club Memberships
  • Donations
  • Entertainment
  • Executive Lobbying Costs
  • Fines and Penalties
  • Fund Raising
  • Goods and Services for Personal Use
  • Interest
  • Lobbying
  • Student Activity Costs

APPENDIX B

Depreciation Useful Lives

Vehicles including trailers, boats, buses, cars, and trucks

  2-10 Years

University Developed Software & Software Licenses

  5 Years

Kitchen Equipment including grills, refrigerators, trayveyers, stoves, and dishes

 10 Years

Office Equipment including copiers, faxes, printers, pagers, cell phones, two way radios, computers, fiber optics, and hubs

 10Years

Scientific Equipment including surveying equipment, construction equipment, autoclaves, dishwashers, scales, sterilizers, diffractors, lasers, and microscopes

 10 Years

Farm Equipment including tractors, bailers, manure spreaders, wagons, hydraulic equipment, mowers, and welding machines

10 Years

Lab Furniture including tables, wet and dry lab sections, chemical cabinets, stools, and chairs

10 Years

Office Furniture including desks, chairs, bins, air conditioners, humidifiers, and non-collection art work

10 Years

Library Books

10 Years

Leasehold Improvements

10 Years

Buildings and major additions

 50 Years

Please verify any discrepancies with Asset Management