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Policy and Procedure ManualChapter 340, Rates, Recharges and Sales Activities Responsible Department: Office of Resource Management and Planning This section outlines policy and procedures regarding the establishment of service agreements (formerly "direct cost agreements") between State-funded University departments or units and non-State-funded departments or units. Service agreements are established in situations where charges for a service cannot be readily calculated on a per-unit or per-hour basis, or where the service is not offered on a recurring basis to more than one customer. In situations where charges can be readily calculated in this manner, and where the service is offered on a recurring basis to more than one customer, the unit providing the service must establish a rate (see Section 340-15 for procedures). A. Non-State Funded Department or Unit--a University department or unit that is not eligible for State-funded administrative services and maintenance support. These units are identified in the Facilities Data System (FDX) report, which is prepared and updated annually by the Planning & Budget Office. They include auxiliary enterprises (for example, Residence Halls, Memorial Union, Parking Operations, University Airport), Associated Students (ASUCD) commercial activities that provide services to students and other members of the campus community, UCD Medical Center, University Extension, University Club, and agency accounts. B. Recharge--the assessment and collection by one University department of a charge for goods or services furnished to another University department. University policy calls for the cost of goods and services provided by campus units to be recharged to the benefiting activity. In situations where a rate cannot be readily calculated, the amount of the recharge is governed by a service agreement negotiated by the units involved. The following policies apply to service agreements between State-funded and non-State-funded units. A. Cost components Service agreements must recover the costs for providing the service. The types of costs included in the calculation vary depending on the type of enterprise involved. The guidelines for determining which types of cost to include in the calculation are provided in Section 340-15, Rates. B. Changes in costs during the fiscal year 1. Major program changes Service agreements represent an annual fixed price contract, not normally subject to adjustments for changes that occur after the July 1 effective date. As an exception, but only when mutual accord can be reached, either party to the agreement may ask for a revision in the level of service to meet unforeseen program demands or cancellation of programs. 2. Major changes in consumption or externally driven prices Service agreements must be based on specific workloads reflecting current operating experience (i.e., as of January when such data are examined and projected for the upcoming fiscal year). When an agreement is based on a commodity or campus service rate that is subject to consumption levels or external price changes (e.g., electrical kilowatt use or refuse pick-ups), the dollar values contained in the agreement will be considered budget estimates only. In such cases, actual consumption and prices dictate the costs to be charged, and both the provider and receiving unit must monitor annual costs.
Information regarding service agreements may be obtained from the Planning & Budget Office, 752-7585. VI. References and Related Policy A. UC Business & Finance Bulletins: 1. A-47, University Direct Costing Procedures, 7/1/84, revised 8/1/94. 2. A-56, Academic Support Unit Costing and Billing Guidelines, 4/15/86, revised 8/1/94. 3. A-59, Costing and Working Capital for Auxiliary and Service Enterprises. B. Policy & Procedure Manual: 1. Section 330-62, Basic Costing Policy. 2. Section 340-15, Rates. Copyright © 2006 The Regents of the
University of California, Davis Campus. All Rights Reserved. |
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