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Finance & Accounting

BPM-204 Recharge Centers

Revised June 12, 2009

SCOPE

This policy applies only to Recharge Centers. It does not apply to Auxiliary Enterprise units.

RECHARGE CENTERS DEFINED

Recharge Centers are University units established for the specific purpose of providing products or services that might be purchased from commercial sources but are more economically and conveniently provided and can be better controlled by the University.

ESTABLISHING RECHARGE CENTERS

The Chancellor (President for UM) or a designee must authorize the establishment of each Recharge Center and is responsible and has the authority for the review and approval of the fiscal and programmatic aspects of all Recharge Centers.

Governing Principles

Each Recharge Center must be identified and established as a separate budget entity and must provide specified services/benefits to more than one department.

Each Recharge Center must perform a singular or sufficiently similar function with defined objectives and descriptions of services provided.

The services/benefits provided must be quantifiable in terms of goods and services.

A reasonable amount of activity is necessary for the establishment and continuation of a Recharge Center.

An individual must be designated responsible for the Recharge Center's operation to include:

  1. Administering the budget.
  2. Maintaining in accordance with University record retention schedules, cost and use documentation necessary to satisfy accounting, budgeting and auditing requirements.
  3. Generating billings with appropriate detail on a timely basis.

COSTS TO BE CHARGED TO RECHARGE CENTERS

Operating Costs

All operating costs which can be identified specifically with a Recharge Center must be charged. Such costs will normally include:

  • Salaries, wages and staff benefits
  • Travel
  • Materials and supplies
  • Operation and maintenance of facilities occupied
  • The appropriate equipment depreciation expense/use charge
Equipment Costing Over $5,000

Equipment costing over $5,000 must be purchased from plant funds designated for such purposes.

Specialized Service Facilities

Recharge Centers designated Specialized Service Facilities, as negotiated with U.S. Department of Health and Human Services, the cognizant audit agency for the University, must be charged all general and administrative expenses in addition to the costs detailed above.

RECHARGE RATES

Consideration for Establishing Rates

Recharge rates must be designed to recover not more than the total cost of providing the products or services over a long-term period.

It is not necessary that recharge rates be equal to the cost of providing the products or services during any one fiscal year as long as rates are reviewed periodically for consistency with a long-term plan and are adjusted as necessary.

Application Of Rates

All University users must be charged the same rate regardless of the source of funds.

NOTE: For purposes of this policy, grants and contracts are University users.

Subsidizing Recharge Centers

The University may subsidize the operation of a Recharge Center by transferring funds to the Recharge Center account to offset total operating costs. NET COSTS are then used for the rate calculation.