Recharge Standard Operating Procedures

SUBJECT:

Definition of a Recharge/Service Activity

SOURCE:

Cost Accounting, Financial Management Services

DATE ISSUED:

November 2015

DATE OF LAST REVISION:

N/A

RSOP NO:

1.0 

RATIONALE:

To aid fiscal officers, account managers and account supervisors in understanding which activities are subject to federal cost accounting standards.

RSOP:

Recharge/Service Center Activity:

       

A recharge/service center activity is an activity that furnishes goods or services to another Indiana University department for the convenience of the university and charges a fee directly related to, and not more than the allowable cost to provide the goods or services.

 

As a general rule, any internal transaction that records income to one university account and expense to another, using any KFS document type, effectively creates recharge center activity.

 

Fundamentally, a recharge/service center is managed as a self-supporting or subsidized activity that is to operate at breakeven. Recharge/service center rates cannot exceed allowable cost and cannot exceed the rate charged to an external customer for the same product or service.

 

Recharge/service center (internal) activity should be separated, at the account level, from external activity.

 

All recharge activity in excess of $100,000 must be recorded in a service center account (66).

 

All recharge activity regardless of the account or amount must comply with Federal OMB Uniform Guidance.

DEFINITIONS:

External Activity: An activity that furnishes goods or services to a non-Indiana University department. This includes sales to students, faculty and staff for non-IU business, or the general public.

 

Internal Activity: An activity that furnishes goods or services to another Indiana University department (account).

CROSS

REFERENCE:

 

OMB Uniform Guidance (PDF) "Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards"

RESPONSIBLE

ORGANIZATION:

 

Organizations that bill other Indiana University departments for goods or services