Service Center and Recharge Center Fees Policy
Provide oversight and control over fees charged by University units that will ensure compliance with federal cost principles, consistency in accounting and costing practices, and flexibility to meet the needs of different operations.
University of Kansas units that charge a fee(s) for goods or services provided internally to other University of Kansas units.
The University of Kansas (hereinafter KU) has a variety of fees in which one unit of the University charges another. Examples include the Biostore internally selling office and lab supplies and chemicals to other units; and Animal Care Unit charging grants and unit for the costs of animal care. The common feature of these charges is that there is no additional income to the University by imposition of the fee – rather money is simply transferred from one unit to another.
Such charges are inherently different from those imposed on an external user such as a local business for use of University resources or charges to students for services rendered. All charges must be continuously and carefully scrutinized, and any fee that is charged to students, staff, or the public must follow the Approval of Charges to Students, Staff and the Public policy.
Any fee that is charged to a University unit (including grants or other sponsored projects) by another University unit is designated as a service center or recharge center fee. Service center or recharge center fees shall be instituted or revised following the procedures outlined in the Service Center and Recharge Center Fees Procedures and Recharge Center Procedures
The intent of the service center and recharge center process is to reimburse a unit for the actual cost of providing services beyond the state or University funded portion of their budget.
A unit is not allowed to recover costs more than once to perform the functions for which it exists. Rates developed as charges to external customers (e.g., students, faculty, staff, or the general public) shall also factor in the appropriate overhead rates. Exemptions to this policy may be made by the appropriate campus authority.
Auxiliary services (defined below) are not subject to this policy.
The University of Kansas Medical Center Campus: the Director of Accounting is the ultimate deciding authority.
University of Kansas Lawrence Campus: The Vice Provost for Finance is the ultimate deciding authority. University of Kansas Center for Research (KUCR) matters will be escalated through the Chief Financial Officer of KUCR.
A recharge center/RSC Program is an operating unit that exists principally to provide goods or services to other units or entities and recovers less than $10,000 in annual operating expenses unless the unit’s primary customers are sponsored projects or external customers.
Operating costs are recovered by charges (sales) to those units and entities receiving the goods or services. Recharge centers develop rates based on incurred (historical) cost and rates should be designed to break even over predetermined periods of time (not to exceed 12 months).
Example: Academic units charging for copier usage.
Recharge centers are still expected to use the same methodology established within this policy to establish their internal and external rates. Recharge centers require administrative approvals for the Medical Center Campus, but do not require administrative rate approval for the Lawrence Campus and KUCR. Recharge center rates are also expected to be reviewed by unit management as often as necessary to ensure compliance with this policy. Reviews should take place at least annually.
A service center/RSC Cost Center is an operating unit that exists principally to provide goods or services to other units and recovers more than $10,000 in annual operating expenses or the unit’s primary customers are sponsored projects or external customers.
Operating costs are recovered by charges to those units and entities receiving the goods or services. Service centers develop rates based on incurred (historical) cost and rates should be designed to break even over a reasonable time period (usually one to two fiscal years) (unless approved in advance by the appropriate campus authority).
Examples: Chemistry storeroom, Animal Care Unit
An auxiliary service is a self-supporting entity that exists principally to furnish goods or services for a fee to students, alumni, or faculty and staff acting in a personal capacity. Independent boards govern auxiliary entities, and rates are established and approved according to separate policies and procedures.
Examples: residence halls, campus dining, parking services, university health services
Auxiliary services generally do not support units. The general public may be served incidentally. Pricing for auxiliary services may be based on market rates, except when charging for service provided to federal awards. Federal awards must always receive the “most favorable price” charged by the auxiliary service for the good or service provided. Auxiliary services are not subject to this policy.
Internal users are organizations or individuals whose sources of funds are within KU or flow through KU (e.g., KU federal awards performed on or off campus). These include academic, research, administrative, and auxiliary units that purchase services in support of KU’s mission. Student organizations, even if their funds are held by KU, are not considered internal users.
External users are organizations or individuals whose sources of funds are not within nor flow through any campus at KU. External users include students and any members of faculty or staff acting in a personalor non-KU capacity. Other universities are also considered external users unless KU has subcontracted with them as part of a grant or contract, in which case they will be considered an internal user.
Service center and recharge center fees should be set to recover the actual costs of providing the goods or services. Units wishing to impose or change a service fee regardless of the amount must prepare a detailed justification and submit it through appropriate administrative channels. The proposal and justifications are sent to the appropriate campus office (KULC Financial Reporting Services; KUMC Control and Reporting; KUCR Fiscal Affairs) for initial review and approval by the appropriate campus office.
The unit and the appropriate campus office will (1) review the proposed fees to ensure the rates set for the charges are supported by the underlying cost structure; (2) evaluate any Unrelated Business Income Tax considerations; and (3) establish sales tax collections and submissions processes, as applicable. In addition, the appropriate campus office may contact groups likely to be impacted by the fee. If the appropriate campus office has approved the proposal, it will be sent onto the appropriate campus authority for final review and approval.
Proposal data should include, but not be limited to, the items listed below. Answers to the questions should be as full and precise as possible.
- How is this proposed service fee related to the instructional, research or public service mission of the University?
- Why is the fee being implemented or changed?
- Was this service/good previously provided?
- How was the amount of the fee determined? (Include specific calculations)
- What service/goods will be provided for that fee?
- How much money will the fee generate per year?
- How will the fee income be spent?
- Source of funds for capitalized startup costs?
- Who will be the likely customers and what is the anticipated fiscal impact on them?
- What is the overall benefit to the proposing unit?
- What is the cost/benefit to the University as a whole?
At a minimum, the appropriate campus office will review all service center fees every two years at KULC/KUCR and annually at KUMC. Existing fees will be allowed to continue unless, but not limited to:
- Requested by the unit to change the fee;
- Fund performance warrants a change in fee;
- Challenged and if, upon review, the Appropriate Campus Authority approves modification of the fee; or
- Other considerations for changes to a fee may apply as determined by the appropriate campus office.
Unrelated Business Income Tax - a tax on income from a trade or business, regularly carried on, that is not substantially related to the educational, research or public service mission of the university.
09/22/2023: Updated policy to All-University to align with campuses' current practices.
04/16/2021: Updated Contact, Approver, and owning unit sections from Comptroller to Financial Analysis and Reporting.
03/08/2019: Changed title VP for Administration and Finance to Chief Financial Officer and VP for Finance.
03/18/1991: First issued.