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Handbook of Business Procedures

Date published: 
Last revised: 
Issued by: 

June 19, 2012
September 17, 2014
Federal Reporting

 

Part 10. Costing - Table of Contents


10.3.8. SERVICE CENTER ADMINISTRATION

A. Records Retention Requirements

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 and Financial Management. Service centers must adhere to the following requirements for records retention:

  • Retain all costs, projections, and any other information used to develop rates to substantiate charges in the event of an audit. 
  • Maintain billing records to identify funding sources charged for services or goods, budget group numbers, internal versus external users, service or good rendered, number of units sold, rate charged, total amount billed, etc.
  • Record retention procedures must comply with The University of Texas at Austin Record Retention Schedule (UTRRS). Refer to the schedule or contact Records Management Services at recordsmgmt@austin.utexas.edu or (512) 232-5657 for complete details.   

B. Accounts

  • If the proposal is approved, Federal Reporting will forward the new account request form submitted by the department to Financial Accounting Services (FAS).
  • If equipment depreciation is included in the cost pool expenses, the new account form must include a request to open a 96-subaccount – Equipment Maintenance and Replacement to capture equipment depreciation returned to the service center via the approved billing rates and depreciation schedule.

C. Billing

  • Service centers must consistently and accurately bill all users.
  • Advanced billing for services or products is not allowed.
  • Users must be billed once services are rendered and no more than three months after services are provided.
  • Service centers must maintain a record of all billings to users to substantiate charges on all accounts in the event of an audit by federal, state, and/or internal auditors.
  • External service center rates are based on total operating costs, and the rate must include the 26.5 percent institutional surcharge used to cover institutional facilities and administrative expenses.

D. Balances

  • Balance reviews are conducted when rate changes are proposed, during the new fiscal year budget submissions, and when budget increase requests are made.
  • Service center managers must justify balances to Federal Reporting as part of the annual balance review process with the Budget Office.
  • Excess balances are reduced in the form of a rate reduction. Excess balances cannot be utilized to purchase equipment, consumables or other expenses, salary increases, salary supplements, tuition, or to offset losses in another service center.
  • Fiscal year-end balances resulting from budgeted salaries or expenses that did not occur cannot be transferred and/or utilized for purposes unrelated to the operations of the service center.
  • Deficits are eliminated by a rate increase or a transfer of adequate funding to the service center (approved by the dean and associate vice president, budget director, and director of financial services).
  • Any transfer of funds made to a service center is accounted for as contributed capital and documentation related to the transaction that identifies the source, amount, date, reason, and authorization for the contribution must be retained for audit by federal, state, and internal auditors and by the Office of Accounting and Financial Management.

E. Multiple Service Centers

A unit may manage more than one service center providing various services or goods. Each service center must be separately managed along with the expenses and income associated with providing the services or goods. Revenue from one service center cannot be used to offset losses in another service center. The expenses associated specifically with one service center cannot be paid by another service center.  

F. Transfers

The following rules govern transfers from service center accounts to other types of accounts.

  • Revenue from surcharges to external users must be transferred into the Institutional Portion of Service Center Income (19-0220-0696) account.
  • Transfers must have adequate justification and provide proper documentation for verification and validation.
  • Fiscal year-end balances resulting from budgeted salaries or expenses that did not occur cannot be transferred and/or utilized for purposes unrelated to the operations of the service center.
  • Transfer of funds to Designated Funds (19-accounts) or Plant Funds (36-accounts) must be approved by Federal Reporting (email: oa.sc@austin.utexas.edu).
    Note: Transfers to 36-Plant Fund accounts must obtain prior approval from Federal Reporting .
  • A surplus in the operating account cannot be transferred to a non-service center account.
  • 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 and Financial Management.

G. Overdrafts

Overdrafts are used to provide temporary spending authority for an account for various reasons. If the increase in spending authority is due to a change to an approved service center proposal, a transfer document must be processed in the FRMS Transfer System to increase the department’s budget. Generally, overdrafts do not automatically carry over to the new fiscal year.
The guarantee account associated with the service center must be used to cover deficits prior to requesting an overdraft. An authorized signer on the budget group (*DEFINE GG5 command) should send a written request via email to Federal Reporting at oa.sc@austin.utexas.edu.
Overdraft approval requests must include the following information:

  • approval by the unit’s department head or chair
  • forecast for remaining fiscal year income and expenses
  • statement as to whether service center rates will be adjusted to prevent future overdrafts
  • account number
  • amount requested
  • proposed expiration date
  • reason for the overdraft
  • date the overdraft will be covered
  • how the overdraft will be covered (e.g. new income, transfer from another account, commitment from institutional funds, etc.)

Requests are reviewed by Federal Reporting with final approval granted by the director of financial services and the associate vice president. Federal Reporting will send an email to notify the requestor of whether the request is approved or denied. Approved overdraft amounts are added to the pool balance of an account by Financial Accounting Services (FAS).

For more information, see the Handbook of Business Procedures, 2.6. Overdraft Approval.

H. External Users

Approval to provide services to external users for new service centers must be granted by the Office of the Executive Vice President and Provost. Rates must exclude all subsidies offered to internal users and include a 26.5 percent surcharge to cover institutional facilities and administrative expenses. Federal Reporting corresponds directly with the vice provost regarding approvals to external users.

 

 

Part 10. Costing - Table of Contents