Service Center Procedures
Service center activities can result in charges, directly or indirectly, to federal grants and contracts. In connection with the receipt of these funds, UAB must comply with the United States Government's Office of Management and Budget (OMB) Circular A-21, Cost Principles for Educational Institutions (A-21).
OMB Circular A-21 Section J.44 deals specifically with service centers. It states:
Cost Accounting Standards
Research institutions must comply with the federal Cost Accounting Standards 501, 502, 505, and 506. The four standards pertain to:
Services - highly specialized, typical, or necessary functions provided by a unit to other units, principally within UAB. Often the services could not be purchased as effectively or efficiently from an entity external to the institution.
Service Center - an operating unit providing services or products to users for a fee. Service Centers are accounted for in Miscellaneous Unrestricted Accounts.
Major service centers - service center operations that:
Minor service centers - service center operations that:
Internal users - units within UAB (including academic, administrative, and auxiliary areas) that purchase services from other UAB units.
External users - legally separate organizations or individuals purchasing services which are not billed to a UAB account number. External users include students, faculty, or staff, if they are purchasing services in a personal capacity. The affiliated foundations and hospitals (such as Health Services Foundation and Children's Hospital) are external entities. Also, agency accounts (UAB accounts with a balancing segment beginning with a 9) are treated as external.
Non-discriminatory rates - all users are charged the same rate for the same level of services or products purchased in the same circumstances.
Rates charged to internal users must be non-discriminatory, and all users must be billed for services received. Rates should not differentiate between users of the same services within the UAB community (which includes federal and non-federal sponsored projects). The use of special rates, such as for high volume work, for less demanding non-scientific applications, or for priority of delivery, are allowed; but must be equally available to all users of that special service.
UAB may wish to provide a service to a particular internal group of users at a lower rate (e.g. computer time for students as part of the instructional program) than other users. In those cases, the difference between the rate charged to the subsidized user group and the normal rate for the services used by that group should be billed to a subsidy account representing the appropriate direct cost activity (the instructional budget in the case of computer time for students).
Service centers are only required to apply non-discriminatory rates to internal users of the center's services. Rates charged to external users may be higher (but not lower) than those charged to internal users.
Unallowable costs as defined by OMB Circular A-21 may not be budgeted or expensed in service center accounts and, therefore, cannot be included in the user rate calculations. Section J of OMB Circular A-21 (Appendix X) contains a list of unallowable expenses.
All service center activity must be documented and records maintained to support expenditures, billings, and cost transfers. Additionally, the service center is responsible for the maintenance of records of all service center charges and for answering inquiries concerning those charges. Service center charges are subject to audit as long as the grants or contracts that they have charged remain subject to audit. Each service center must retain the following:
Financial records and supporting documents pertinent to a service center's activity must be retained for at least seven years. If a litigation claim or audit is started before the expiration of this period, the records must be maintained until it is resolved or completed.