A. SUMMARY OF ADMINISTRATIVE PROCEDURE
1. Purpose: This policy outlines the process involved in developing Recharge Center rates within USNH for internal customers and federal grant accounts.
2. Definition of a Billing Rate: The internal billing rate is the dollar amount charged for each unit of goods or services provided and used for billing purposes, based on annual costs.
Example: Estimated Total Annual Costs / Total Estimated Billing Units = Billing Rate per Unit
3. Why is a Recharge Center rate policy necessary? It is good business practice to review rates and costs on a regular basis. USNH must use consistent operational costing practices to ensure compliance with federal regulations and cost accounting standards.
4. Responsibility: Departments are responsible for determining the Recharge Center rate, and for maintaining appropriate records.
B. GENERAL GUIDELINES
Federal Regulations Regarding Recharge Center Rates: All Recharge Centers, no matter how small, are subject to the cost principles and cost accounting standards outlined in OMB Circular A-21. In general, rates must be based on actual costs, applied consistently, and based on actual use of the services.
1. Recharge Centers should recover costs in the year in which they are incurred.
2. The same rate schedule should be used for all users. This schedule must not discriminate against federally funded accounts to the benefit of other users.
3. Rates must be reviewed periodically for consistency with long-term costs by department staff administering the Recharge Center.
4. Recharge Centers must exclude unallowable costs from their billing rates and the rates must include the actual costs of performing the service to all users.
C. DETAILED OPERATING PROCEDURES FOR RECHARGE CENTER RATE DEVELOPMENT
1. Determine direct costs of recharge center operations that are specifically identifiable with relative ease and a high degree of accuracy, such as:
a. Materials costs
b. Equipment lease or rental
c. Repairs and machine supplies
2. Accumulate or estimate total usage for each service (such as number of units) to establish the distribution base. All usage must be included.
3. Calculate cost-based rate for each service. Divide the total annual operating cost by the total estimated billing units to determine the billing rate per unit. For example, the billing unit for a recharge center that provides photocopies would be the annual number of copies.
4. Determine the rate that will actually be charged.
a. Federal users and other internal users must be charged no more than the cost-based rate. Excess revenue as allowed on non-federal external users only.
b. Discounts provided to non-federal users must not be subsidized by federal users. The subsidy must be quantified and excluded from future period billing rate calculations and the indirect cost rate.
c. If market prices are used, they should be compared to actual costs to ensure rates do not result in overcharges to federal users.
5. Document activities and maintain records for 3 years to support expenditures, rate calculation, published rates, usage statistics and billings, per OMB Circular A-21.