The University of Montana supports a significant number of recharge facilities - both research and non-research - which provide fee-based services to the campus community at costs competitive to external providers. Such specialized service centers are broader in scope than departmental efforts to recharge vehicles or copy machine usage.
Specialized service centers typically have several customers (e.g., more than five):
- internal UM users (e.g., institutional funds, federal and non-federal grants and contracts, and other sources of funds administered by UM), and
- non-UM customers.
Some UM recharge facilities are laboratory-based core facilities, but a variety of non-research centers also exist. Montana Board of Regents Policy 1909 - Competition with the Private Sector directs that all such activities:
- must substantially support the teaching, research, or outreach mission of the University, and
- are reviewed annually to ensure the pricing of good/services is not focused on the generation of income and, conversely, does not unfairly compete/undercut the private sector.
Such facilities must:
- be fiscally-administered in discrete cost accounts, such as Designated sales & service accounts, in order to ensure consistent application of rate reviews and bill processing; and,
- conduct and document regular rate and performance reviews to ensure that all recharge facilities provide needed services to the campus community at costs that are competitive to - but do not undercut - external providers, and meet any additional requirements or regulations as appropriate.
- Develop a pool of direct costs that the department (lab, etc.) wishes to recover (salaries/benefits, supplies, other consumables). Include all purchasing costs so that the true cost of doing business is captured.
- Depreciation on equipment is not an allowable cost at UM because it is not UM practice to internally expense depreciation.
- Ensure that a comparable service is not available at UM at a lower rate.
- Costs paid directly by federal support may not be included in rate calculations.
- Track actual usage by project, not by PI.
- Develop and publish a schedule of rates that is based on actual usage (past and projected).
- Example: Estimated cost pool (less direct federal support,if applicable) / estimated number billable units = Price per service/item.
- Invoice for all use, internal (grant and non-grant) and external alike, via an aggregate per item/service cost:
- Avoid anything "annual" (fees, charges, maintenance, etc.) as this descriptor is ambiguous and lends itself to audit scrutiny.
- Avoid terms like Hosting, Maintenance, or Repair which indicate that this is a payment made to entities outside UM when, in fact, they are simply UM costs.
- UM is typically not allowed to make a profit, recoup the cost of equipment, or fund the acquisition of new equipment.
- Document, document, document.
For additional information, see 2 CFR 200.468 Specialized Service Facilities and FAQs for Costing of NIH-Funded Core Facilities (NOT-OD-13-053).
The costs associated with use of a recharge facility must be allocated on a consistent basis for all users and no external user may be charged a lower rate than an internal user paying via a federal grant, contract, or cooperative agreement. Thus, once the cost pool is developed and an aggregate per service/item fee is established, there should be a rate schedule published or otherwise available upon request for all users of a specified service.
Internal users paying with funds administered by UM - charge the cost of per service/item based on a documented cost recovery methodology (base fee):
- Grant and Non-grant funds - reflect the base fee (Ex: xx number of samples at $.xx).
External users - charge the base fee plus, at a minimum, the F&A OR Rate in order to:
- ensure that federally funded internal users (grant, contract, cooperative agreement) are not charged more than external users; and
- be compliant with BOR Policy 1909 prohibiting pricing that unfairly competes with the public market.
However, in situations where UM facilities would otherwise sit idle, incremental cost recovery may be desirable even if allowable F&A is not fully recovered from external users. Many University facilities carry fixed overhead costs that will be incurred regardless of how a facility might be used with an external customer base. In these rare situations with external users, units are allowed to partially recover F&A costs when the methodology is sufficiently documented.
Documentation and justification for rates paid by all users must be reviewed annually by the account owner, adjusted for projected use as necessary, and available upon request.
Recharge activities can neither be designed to generate revenue nor unfairly compete with the public sector, and must substantially support UM's teaching, research, or outreach mission.