Service centers are established for the purpose of providing goods and services primarily to University customers. The centers are expected to offer goods or services that are unique, convenient, or not readily available from external sources. The sale of goods and/or services must be consistent with the University’s mission and the normal activities of the college/department associated with the organization.
The costs of service centers can be identified and billed to customers based on approved rates. The rates charged for goods and services are computed by the service centers and reviewed by the appropriate entity on an annual basis. The billing rates are set so that the service centers operate on a break even basis.
All service centers are subject to the basic cost principles set forth in OMB Circular A-21. Section J47 of OMB Circular A-21 deals specifically with service centers. The specific provisions are somewhat vague; only the principles for specialized service facilities are discussed there.
Reason for Policy
Application of the policy is needed in order to ensure that goods and services:
- Comply with government requirements (A-21, A-133). The government monitors, by routine audits, the University’s compliance with Federal regulations.
- Are sold at rates that recover the costs of providing the goods and services.
- Are being sold at reasonable rates when compared to external providers.