Recharge Centers

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.

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.

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.

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.

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.

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 20^th 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.

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.

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.

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

• Request for Recharge Center
• Recharge Center Setup Checklist
• Rate Determination Sheet – Testing Per Hour Rate
• Rate Determination Sheet – Testing Per Unit Rate
• Rate Determination Sheet – Service Per Hour Rate
• Annual Rate Review
• SUA Billing Template

Schedule of Unallowable Costs

Depreciation Useful Lives

Please verify any discrepancies with Asset Management