RECHARGE ACCOUNTS

UNIVERSITY POLICY (Excerpted from http://www.uiowa.edu/%7Efusfm/recharge.htm)

Recharge Centers

Policy Statement

Recharge Centers are established for the purpose of providing goods and services to University customers. The Centers are expected to offer goods or services that are unique, convenient or not readily available from external sources. The Centers may not be subject to external market forces so initial approval and an ongoing review is needed.

Recharge Center Director - Manage the daily operations of the Recharge Center. Provide competitive rates and services while maintaining break-even margins and necessary fund balances. Prepare an annual budget and provide yearly, or more frequent, financial statements for the Center. Perform an annual review and rate analysis in time for customers to include any rate adjustments in their next year’s budgets. Maintain detailed records supporting charges to internal and external users. Process any charges for services provided to University customers and bill for services provided to external customers.

Establishing a Recharge Center

A written request to establish a Recharge Center must be submitted to the Business Office for review. The request must have been approved by the departmental executive officer and by the Dean of the College or appropriate Vice President of the unit. The request should include the following information:

• Description of the services to be provided to customers.
• Description of who else (in or outside the University), performs these services or sells these goods.
• Listing of the potential customers i.e... University departments, Federal grants and contracts, external users (ACT, VA Hospital, etc.)
• Estimated budget of the proposed recharge center.
• Copy of the proposed charge-out rates and the rate calculation.

Review and Approval of Billing Rates for Existing Recharge Centers

Annually, each Recharge Center will provide the Business Office with a report stating whether the Center continues to meet its mission statement objectives and the following:

• Financial statements showing balances and the net income or loss for the fiscal year to date and expected year-end results.
• The amount billed to Federal grants and contracts.
• The total volume of activity for the fiscal year to date.
• The calculation of proposed billing rates for the next year.

Record Keeping

The Recharge Centers should maintain detailed records supporting charges to University and external customers as well as information required for computing billing rates. These records should include the following:

• Name of person and department requesting the service.
• Master file keys for internal customers being charged for the service.
• Description and cost of the services being performed.
• Names and addresses of the external customers being billed for services.
• Total volume of activity for University customers, including Federal grants and contracts, and for external customers.
• Financial information necessary for computing billing rates.

 

DEPARTMENTAL POLICY

 

The following departmental policy is in effect beginning August 26, 2002:

 

As a general operating rule, University accounts run through our department should not carry deficits.  Recharge accounts used to fund laboratories or pay for work under contract (e.g. 260 accounts) can no longer have a deficit on monthly balance sheets of more than $5000 or 25% of its revenues, whichever is higher, per year (averaged over a two year period) without written permission from the DEO.  Revenues are defined as indicated by the General Ledger Decision Support System at UI Accounting Services.  In addition, (1) these accounts must not have deficits of >$1,000 for more than twelve consecutive months, and (2) all projects that expect to incur a deficit of more than $5000 or 25% of its revenues, whichever is higher, per year (averaged over a two year period) must be approved in advance by the DEO.  Such deficits may be authorized in writing by the DEO under special circumstances, if the need is established and documented, and an estimated repayment schedule is provided to the DEO.  Accounts that do not comply with this policy will be frozen or closed, and credit card charges will no longer be allowed.  Long-term deficits are the personal responsibility of individual faculty, not the department.

 

Each recharge center must provide the Department and the Business Office with the annual report that is required by the Business Office.  This should include a summary of billing rates and services provided.  This information should be compiled at the end of each fiscal year and submitted no later than September 1.  The faculty member responsible for the account must promptly respond to requests for information.

 

Ordinarily, the Department expects that all grants and contracts from external sources that are >$5,000 go through Sponsored Programs.  Recharge accounts should only be used for services that require billing customers such as University departments, Federal grants and contracts, and external users.  When establishing a recharge account, the DEO will not approve the request unless:

 

1)      the need for the account is adequately justified;

2)      a payback method is clearly documented;

3)      the services have scholarly purposes compatible within the department’s mission.

 

Only external grants that go through sponsored programs are used in assessing external grantsmanship as part of evaluations of faculty scholarly productivity.

 

This policy will be re-evaluated periodically by the Department Executive Committee.

 

August 21, 2002; June 13, 2006 (changed report due date from August 1 t o September 1)