Rice University Research Policy No. 836-03

Service Center Policy

OVERVIEW
 

Service (recharge) centers are entities within the university established for the specific purpose of providing products or services to other areas within Rice University. Services may occasionally be provided to others. Because of government costing requirements, charges for services must be based on actual costs incurred; a service center may not generate a surplus. Also, allowable costs are defined by government regulations (OMB Circular A-21) and exclude some costs normally associated with service centers. Service center administrators should become familiar with the  Service Center Procedures document, which gives details of how this policy is administered.

SCOPE
 

This policy applies to all units within the university which regularly charge other cost centers within the university for goods or services provided. Areas which bill out small items (faxes, copying) at a flat rate are excluded, provided that all of the following apply:
 

1) billings do not exceed $5,000/year
2) no surplus is generated and
3) all users are billed at the same rate and on the same basis.
 

RATES
 

Rates charged must be based on actual direct costs incurred, excluding unallowable costs as defined by OMB Circular A-21. Equipment purchases (see Policy 809 , II. General Information, A. Definition of Equipment) may not be charged to a service center; however, a charge for equipment depreciation may be made each year to recover equipment costs over time. Equipment purchased with government funds may not be included in a service center rate calculation. Unless a longer break even period (maximum of five years) is authorized in advance, a service center must break even during each fiscal year. Break even is defined as having a surplus or deficit no larger than 5% of the service center's annual billings.

All revenues and related allowable costs (including salaries and fringe benefits) must be charged to the same fund, organization, and program. Allocations of various types of indirect costs which (administration, space, utilities, etc) may not be included in the calculation of service center rates are charged to other Rice funds.
 

OUTSIDE USAGE
 

Service centers may provide services only to other Rice departments, unless the Dean or Division Head has approved providing services to outside users and the Controller's Office has evaluated any potential tax issues.

Billing rates for charges which are to be paid by outside users must include indirect costs at the negotiated federal on-campus indirect cost rate. Members of the Rice community are "outside users" when they are not conducting Rice business.


Policy No. 836
Issued: October 3, 1996
Revised: February 8, 2003