askus icon

Handbook of Business Procedures

Date published: 
Last revised: 
Issued by: 

June 19, 2012
September 17, 2014
Federal Reporting

 

Part 10. Costing - Table of Contents


10.3.7. REQUESTING AND APPROVING A SERVICE CENTER

A. Preliminary Approvals

  • Review the items to consider when determining whether to propose a service center.
  • Download and complete the appropriate service center forms.
  • Obtain approval from the dean or vice president for the prospective service center proposal.

B. Rate Reviews of New and Existing Service Centers

All service center rate proposal packages must be submitted to Federal Reporting (email: oa.sc@austin.utexas.edu) for review and approval.

  • New service centers require additional reviews by the director of accounting and financial management and associate vice president.
    • All service centers regardless of anticipated income must submit a rate proposal for review to establish the service center. 
    • Federal Reporting working with the service center manager determines the service center type and designate the rate review basis (self-certification, biennial, or triennial).
  • Existing service centers with activity greater than $50,000.01 must submit rate proposals at the following times:
    • within their effective time periods (biennially or triennially), refer to section 10.3.6 Service Center Types and Review Basis in this manual
    • if new services or goods are added or removed
    • if significant changes are made to the rate methodology
  • Existing service centers with activity less than $50,000 must submit a self-certification at the following times:
    • on a biennial basis
    • if new services or goods are added or removed
    • if significant changes are made to the rate methodology

If an existing service center’s projected income is changing on a permanent basis, thus placing it within a new revenue threshold and review basis, refer to section 10.3.6 Service Center Types and Review Basis in this manual. Contact Federal Reporting at oa.sc@austin.utexas.edu to review and modify the service center designation. 

C. Significant Changes to Existing Service Centers

The criteria below are provided to assist you in determining what constitutes a significant change to an existing service center. Contact Federal Reporting at oa.sc@austin.utexas.edu if you need further clarification or assistance.

  • Changes impacting the distribution base(s) and/or cost pool expenses to calculate the rate(s).
  • The service center adds or expands services that were not previously approved by Federal Reporting.
  • Any change that may have a financial policy implication and/or cost accounting concern.
  • Elimination or merger of a service center.
  • A permanent increase or decrease in projected future income that places the service center within a new revenue threshold and review basis. Refer to section 10.3.6 Service Center Types and Review Basis in this manual.

D. Rate Proposal Package

Submit a complete rate proposal or self-certification package to Federal Reporting at oa.sc@austin.utexas.edu for review.

Once the rate proposal package has been properly reviewed by Federal Reporting, the service center manager is instructed to begin gathering the necessary rate proposal form signatures. After Federal Reporting receives a signed signature page, a rate approval memo is issued finalizing the rates. 

Service centers designated for department self-certification requires departments to internally update their rate proposal calculations but only submit the department self-certification form to Federal Reporting. A full scope Federal Reporting rate review may be required if there is a significant change in the rate methodology or addition of new rates.  If the service center is subject to an audit, the department is required provide Federal Reporting a copy of  the rate proposal showing how the rates were calculated and justifying the rates presented in the self-certification form.

E. Service Center Approval Criteria

  • Proposal meets the approved thresholds.
  • The services or goods are in demand by multiple users.
  • Activity will be ongoing and is not a one-time distribution of expenses.
  • Activity does not interfere with normal department functions.
  • Goods or services are not currently offered by an existing service center at the university.
  • Redundancy or duplication of goods or services does not occur.
  • Services are identifiable (e.g., machine shop, glass blowing) and not general.
  • Rates are stated in measurable units of goods or services.
  • Does not compete with outside vendors if services are offered to external entities.
  • Proposal is in concert with the mission of the university and/or the goals of department.
  • Rates are based on actual or historical costs.
  • Rates are structured to break-even annually.

 

 

Part 10. Costing - Table of Contents