Handbook of Business Procedures
June 19, 2012
June 19, 2012
Costing and Analysis
10.3.3. GENERAL INFORMATION ABOUT SERVICE CENTERS
The primary purpose for establishing a service center is to enable The University of Texas at Austin to charge and recover costs incurred for goods or services used and required in support of sponsored research programs or academic needs. A service center can provide services to internal and external users.
Service centers are established to obtain operational efficiencies, eliminate duplication of effort, and provide access to specialized skills. Departments or units are encouraged to utilize existing service centers before requesting to establish a new service center.
B. Items to Consider when Managing or Proposing a Service Center
- The service center’s activities are consistent with current philosophies and strategic planning initiatives.
- The service center results in an overall cost reduction, measured as an increase in cost effectiveness, a decline in overcapacity, or an elimination of redundant services.
- Services provided are required and play a significant role in the fulfillment of the university's educational, research, public service, and support functions, without regard to profit.
- The cost of providing the services better aligns with the benefits of the services, represents a significant improvement over the existing methodology, and does not create material inequities elsewhere.
- Services must be provided at a reasonable cost to the university and cannot be provided conveniently, adequately, or economically by another service center or external entity.
- Services cannot be offered to the university community or external entities solely as a means of creating additional revenue.
- If similar services or goods are currently available from an existing service center, then the proposed service center must be able to demonstrate it can provide the services or goods to users more efficiently or economically, or provide for safer delivery of the services or goods.
- What are the goods or services that are included or provided?
- Why is the proposed method better than the current method?
- What procedures will be established to monitor activity and ensure the ongoing cost effectiveness?
- Is the anticipated user base comprised of internal users only or a mixture of internal and external users?
- Is the demand for the services sustainable and ongoing? If the services are only going to be in demand for a short time (due to technological changes, etc.) a new center might not be justified.
- Is there an outside entity or vendor providing the same or similar service? Describe why using an outside entity/vendor would not be beneficial.
- Does the service center have support from the dean or vice president and anticipated users?
- Will the service center be a fully self-supporting operation or will some of the costs be subsidized?
- Will the department provide a departmental account to subsidize expenses to bring the service center to full operational level?
- Describe the alternative methods that were evaluated prior to proposing a service center and why they were rejected.
- The records, operations, rates, and practices of all service centers are subject to audit by federal, state, and internal auditors, and by the Office of Accounting.