2115 - University Service Centers

Document purpose

To ensure compliance with Federal regulations for accurately developing and costing service center charges to federally sponsored projects.

effective

December 1986

revised

July 2019

Reviewed

May 2020

Responsible Office

Research Services

Approval

Research Services

Definition

A service center is defined as a department, or functional unit within a department, which provides goods or performs specific technical or administrative services for a fee and regularly charges fees to federally sponsored projects. Examples of service centers are cell sorting facilities, magnetic resonance imaging facilities, or animal care facilities.

The Policy

  1. Services provided are charged directly to all users, including sponsored agreements, based on the documented and actual use of the services, through a schedule of cost rates that do not discriminate against federally supported projects of the institution. Charges for services provided to sponsored projects should normally be made monthly, to accommodate accurate accounting and facilitate timely financial reporting of sponsored projects. Additionally, service centers must send invoices or make them available so that users have a detailed record of their charges.

  2. Charges for services rendered are to be structured to recover not more than the aggregate cost of the services. It is not necessary that the rates charged for services are equal to the cost of providing those services during any one fiscal year, as long as the rates are reviewed periodically and adjusted, at least every 2 years, with the intent to balance revenue with expenses over a period normally no greater than three years. Documentation supporting annual budgets and rate reviews must be maintained and made available in accordance with this policy.

  3. Research Services is responsible for monitoring the review and approval of all service center budgets and charge rates, in conjunction with the associated school-level management. Each service center must be separately budgeted each fiscal year. A copy of the annual budget and the proposed fees for services should be submitted to Research Services at the beginning of each fiscal year.

  4. Requests to open a new service center must be reviewed and approved by Research Services.

  5. Specialized service facilities (SSFs), are those which meet the following conditions:

    • Annual budgets exceed $2 million; and
    • Charge 50% or more of their costs to sponsored projects; and
    • Utilize highly specialized equipment, specialized materials and/or unique facilities.

    SSFs must also identify the location of the facilities (building, floor, and rooms) and associated capital equipment. Research Services is responsible for ensuring that indirect costs associated with these facilities are not included in the research F&A rate calculation.

  6. Consolidation of various types of services into one budget is not permissible, except under special circumstances. In those instances, Research Services must approve the consolidation, in writing, prior to budget submission.

  7. Variances (surplus or deficit) between annual costs and recovery can be carried forward into the next fiscal year. However, these variances must be incorporated into the calculation of the rates to be charged during the succeeding fiscal year. In certain circumstances, with Research Services approval, variances may be spread over longer periods.

  8. Service centers with true deficits or surpluses that exceed the greater of 15% of the annual expenditures, or $25,000 over three consecutive years, may be required to write off the excess deficit or refund the excess surplus at the discretion of Research Services, in consultation with the responsible school/center. If it is determined that there is a deficit which needs to be written off, it will be charged to the applicable school/center.

  9. It is strongly recommended to charge external users an amount that is at least equivalent to the internal rate plus the applicable F&A rate, for consistency and reasonableness.

  10. Costs charged to users through service centers must be allowable costs under Uniform Guidance regulations found in 2 CFR 200 and must comply with all other Penn policies, including Penn Sponsored Project policies.

The source of this document is Research Services.