Cost Estimates

Only costs that will be incurred for service center operations may be included in the rates.

Service centers have the option of not including all costs in the rates. However, costs not included should be transferred off the service center operating budget to a non-federal budget, such as a reserve budget or departmental budget.

Any service center costs paid from non-recharge budgets should be separately identified. For example, a department might purchase equipment on its budget for the benefit of the service or recharge center. Centers have the option of including these costs in the rates. It is necessary to document these costs, even if they are not included in the service center rates, because the costs need to be excluded when Management Accounting & Analysis (MAA) prepares a Facilities and Administrative (F&A) rate proposal.

Unallowable costs per the Uniform Guidance should not be charged to the operating account or included in the rates to federal users.

Include a short explanation of any assumptions made and/or allocation percentages used in the proposal to determine costs for each service.

  • Salary & Benefits

    Salaries and benefits for those people working on the center can be included in the rate proposal. Refer to the salary and benefits page for more information.

  • Equipment

    The information included in the rate proposal should match the University's equipment inventory database, OASIS (authorization required). If changes need to be made to OASIS, contact the Equipment Inventory Office. Refer to the equipment page for more information

  • Other Costs

    Other costs include all non-salary and non-equipment costs, and should be listed by major category and amount. Examples of other costs include services, supplies, maintenance contracts, equipment insurance, etc.

  • Current Surplus or Deficit

    Include the current surplus or deficit from the latest quarter's financial report. Financial reports need to be up-to-date for rates to be approved. If the center has more than one internal rate, provide an explanation for how the surplus or deficit was distributed among the various rates. A surplus may be retained to generate a working capital reserve up to a maximum of 60 days of operating expenses. Include the calculation that shows how the 60 days of working capital was determined. Refer to the working capital page for more information.

Usage Estimates

For each good/service for which there is a separate rate, list the estimated usage for the upcoming year. For more information on calculating the estimated usage, refer to the usage estimates webpage.

Include a short explanation that describes how the estimate was derived and prior year(s) figures, if available.

Description of activities

Include a short description of the basic activities of the recharge center, especially if there have been any changes in the nature of the services provided or you are establishing a new center.

Questions to Consider

  • Can goods/services with common customers and similar costs be combined into one rate?
  • Are any new goods/services being offered? Will any current goods/services be eliminated?
  • What were the costs from the prior year for each rate or service?
  • What was the prior year usage for each rate or good/service?
  • Is an adequate description of the rate methodology included?