Recharge and Related Issues
Basic Core Financial Structure
University Rules for Recharge Operations
Incongruities
Dan PinkelNovember 6, 2007
Platonic Form of Core Metabolism
Mo
ney
Services
Core
Investigator
Simplistic Core Metabolism
Mo
ney
Services
Core
Investigator
Rat
es
SubsidiesPlanned
Emergency
EquipmentDonorsGrants
Funding
Approximate Core Metabolism
Ord
ers
Services
Core
InvestigatorUCSF
External
Rat
es
SubsidiesPlanned
EmergencyFor all users
Targeted users
EquipmentDonorsGrants
(special rates)
Funding
Mo
ney
Realistic Core Metabolism
Ord
ers
Services
Core
InvestigatorUCSF
External
Rat
es
SubsidiesPlanned
EmergencyFor all users
Targeted users
EquipmentDonorsGrants
(special rates)
Funding
Money?Billing
UCSF Accounting
Of Course There are Rules
http://www.finance2.ucsf.eduhttp://www.finance2.ucsf.edu/budres/policies/policies.html#recharge
Basic Operating Principles I
Cores are not businesses and should not compete supplying commercially available services.
Rules compliant with Federal Guidelines (OMB Circular A-21) since most of core income is from Federal sources.
Guiding concept – charges to a Federal project for a service must reflect ONLY the costs of providing that service. Therefore:
Rates can’t allow generation of “profits”, even to enhance core functions (buy widgets to provide new services), since funding was not approved for those future purposes. (Depreciation on equipment can be charged if it was purchased with non-Federal funds.)
Conversely a core should not run a deficit unless the “sponsor” of the core is happy to cover it.
Basic Operating Principles II
UCSF has established a rate approval process, and requires rates to be published.
Rate changes need to be approved prior to institution.
Rates are Direct Cost charges and do not incur indirect costs.
All UCSF investigators must be charged the same rate for the same service.
External users can be charged whatever rate can be agreed upon, as long as it is sufficient to cover the costs of performing the service – e.g. at least as much as internal users. Need signed agreements concerning liability and IP, and perhaps tax forms.
External users pay an overhead charge, currently 22%, which goes directly to UCSF central.
Core can put the “excess” fees received from external users in a discretionary account that must be used for core purposes.
Accounting is Required
Requirements depend on magnitude of yearly budget (under $50K, $50K to $500k, above $500K).
Justify Core expenses and revenue for a given year.
Protect the Core from whimsical actions of UCSF accounting system.
Setting Rates Required Guessing Utilization and Expenses for the Coming Year
Setting Rates Required Guessing Utilization and Expenses for the Coming Year
Work
Mo
ney
Cost
Incom
e
Fixed CostsMinimal Staff
Service Contracts
Profit
Loss
UCSF concerned reduce rates next year
Sponsor concerned increase rates next year
more subsidy
UCSF Rules May Need Adjustment to Meet Needs of Campus-Wide Coordination
Sources of subsidies may mandate restriction of rate reductions to users in certain areas of work, e.g. Cancer Center Support Grant requires its subsidy be directed to investigators pursuing cancer research.
Investigators that provide equipment (e.g. write shared instrument grants) should get consideration on rates.
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