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Vice President FA

Service Center Compliance

This web page was developed as a resource to Service Center management to ensure compliance with OMB Circular A-21. OUS Policy on Service Center Working Capital Links Allowable Costs Unallowable Costs Service Center Fees Department Costs Rate Structure Review Discriminatory Pricing Record Retention Contributed Capital Year-End Guide for Service Centers If you have any questions or suggestions contact Martha Schumacher at 6-3524.

Links 
On this page we have included links to the other related web pages as reference material. 
OMB Circular A-21 web page

Allowable Costs
All allowable service center costs necessary to provide services to the university will be used in determining the service center's fee structure.  All costs necessary to provide the service are expected to be paid by the service centers.  If fees cannot be set at a rate sufficient to recover operating costs, the responsible department must transfer enough support dollars to fund the shortfall.  The department may not directly pay service center costs from other sources.  All support is accumulated and carried from year to year as contributed capital or until repaid.

Unallowable Costs
Unallowable costs, if any, paid by a service center are to be reimbursed by the responsible department, i.e. College, School, Division, or Home Department. 

These costs include:

• Advertising and public relations costs, except if related to recruitment of personnel for service centers, procurement of goods
• and services, and disposal of scrap or surplus material owned by the service center when such costs are charged or relate to
• the performance of federally sponsored agreements.
• Alcoholic beverages.
• Alumni activities.
• Bad debts.
• Commencement and convocation costs.
• Provision for contingencies, unless the event can be foretold with certainty as to time, intensity, and assurance of happening.
• Value of donated services.
• Entertainment costs.
• Lobbying costs.
• Fines and penalties, i.e. failure to comply with Federal, State, or foreign laws or regulations.
• Goods or services for personal use.
• Interest: 
  1. Any paid on borrowed capital
  2. Interest paid to other OUS units (internal interest).
  3. On equipment purchases under $10,000; over $10,000 allowable with Federal government approval.
  4. Exceptions? Contact the BAO Financial Services Department.
• Costs of meetings and conferences unless the primary purpose is the dissemination of technical information.
• Membership in any civic or community organization.
• Membership in any country club, social club, or dining club.
• Scholarships and student aid costs.

Service Center Fees

All revenues received by service centers should be for reimbursement of service center actual cost of operations.

Department Costs
If the University or the department elects to recover or allocate administrative or other costs to support service centers, the expenditures are paid directly from the service center. For the service center to pay department support costs, adequate documentation must exist. For example, time and effort reports, time records, or other cost allocation work papers, formulas, or recorded justifications are necessary to document personnel and other fiscal support provided by the administrative department.

Rate Structure Review
The service center's rate structure needs to be reviewed on a regular basis. The rates charged to customers of the Service Center should be for reimbursement of service center actual cost of operations. Each service center is allowed to have working capital up to 60 days of cash expenses or in a deficit of less than 5% of total annual expenses. See the OUS Policy 05.713 on Service Center Working Capital for more specific information. Rates must be adjusted if working capital does not fall within the allowable range.

To assist service centers with rate structure, the BAO Financial Services Department sends out a Compliance Calculation Worksheet every May. 

Discriminatory Pricing
All users of a service center generally pay the same fee for like services. A multiple rate structure (rate differential) may be used to reflect the exclusion of unallowable costs from charges to federally sponsored projects. Any amount charged to non-federal funds in excess of the federally allowable rate and which results in working capital becomes contributed capital.

The service center may add a service fee to non-institutional department users. This service fee must be separately identified in the university's official fee book, and accounted for apart from the service center's ordinary fee income. U of O's fee book is administered and maintained by the Office of Budget and Resource Planning.

Customers defined as "non-university users" are charged the current negotiated F & A cost rate, contact ORSA for specifics. This portion of income will be "Institutional Income" and recorded as designated by the Office of Budget and Resource Planning. If you do not have an Institutional Income/Expense fund, contact the BAO Financial Services Dept to have a new fund setup. Federal, Oregon, and other tax supported entities are defined as university users.

The F & A rate should not be added to the specialized service fee because Building Use, Operation, General Administration costs will be duplicated.

A class of users may receive service at a reduced fee if the reduction is subsidized from another source. The subsidy is deposited in the service center as ordinary fee income unless the resources are working capital.

Record Retention
Any transfer of support dollars must be fully documented, including identification of source, amount, date, reason and authorization. This documentation will be permanently maintained by the BAO Financial Services Department.

Contributed Capital

Service Centers should not have transactions using transfer account codes (i.e., 91001, 92001, etc.) If a Service Center needs working capital a non Service Center entity may contribute capital when appropriate. Contributed capital must be fully documented including identification of source, amount, date, reason, and authorization for the contribution by transferring funding from fund balance to the contributed capital account.  See Year-End Guide for Service Centers for details on contributed capital transactions.

A Service Centers that has contributed capital, and it needs to be paid back, should do so if the cash balance is large enough.  The Service Center's rate structure needs to be reviewed on a regular basis in order to accumulate enough cash to pay back contributed capital.