Keys to Successfully Developing and Managing Recharge Centers

@2014 National Council of University Research Administrators

Keys to Successfully Developing and

Managing Recharge Centers

National Council of University Research Administrators

@ 2014 National Council of University Research Administrators

Thongsy Singvongsa, CRAResearch Administrator, Preventive Medicine (Departmental)Northwestern University Feinberg School of Medicine in Chicago, IL

Nicole Nichols, MPA, CRAResearch Administrator, Internal Medicine – Oncology (Departmental) Washington University in St. Louis, MO

Keys to Successfully Developing and Managing Recharge Centers

Presenters:

@ 2014 National Council of University Research Administrators

What is a recharge center?Startup processRate DevelopmentTools or practices for best management

Agenda / Learning Objectives

Understanding what constitutes a Recharge Center / Activity

Develop a plan for a new centerCalculate rates & set pricesEstablish a specific fund/account just for

recharge activityManage the account per university & OMB

Circular A-21

The Recharge Process

A recharge center is a unit within an institution that provides a specialized service or good to internal users on a recurring basis by charging a fee. It is designed to be cost-efficient and not a profit-generating unit.

Recharge centers provide goods and services through a “charge-back” mechanism therefore, they are designed to recoup the costs of running the recharge center.

What is a recharge center?

Does another unit at university provide similar service?

Can an external vendor provide the same service for cheaper?

Do you have a vested interest & support from your department and constituents?

See handout from Wash U (Questions to Consider Before Setting Up a Recharge Process or Center)

Questions to Consider

Describe goods/servicesCustomer baseProjections of expenses/revenuesWho will cover deficits (if any)Support of housing department?

Develop a Plan

Process Flow (ideal)

Contact Central Office for

Guidance and Questions (Initial

Meeting)

Develop Business Plan

If approved, develop a rate

plan

If approved, establish a chart

of accounts (fund)

Provide goods/services once rates have been approved

Rates must be reviewed/approve

d on an annual basis

General Formula

Calculated for each product/service offered by center

Plan to operate at break-even with no significant surplus or deficit Depending on your institution, this could be a 3 or 5 year rolling

average, etc.

Developing your rate(s)

Expenses Incurred (+/- prior year surplus/deficit)Estimated Level of Activity (units)

Salary and Fringe*

Materials and Supplies

Equipment; depreciation (depends on your university policy – at Wash U, only allowed in Recharge Centers over $250K)

Equipment service contracts

Other Service Costs

Expenses included in the Rate Calculations

Dependent tuition benefit costs

Personnel salary funded on sponsored projects

Entertainment/alcoholic beverages

Space rental costs

Memberships

Bad debt

Fines or penalties

Other costs disallowed per OMB A-21

UNALLOWABLE Costs

Hours Used

Tests performed

Lab runs

Other Reasonable method

Determining Usage Basis

Should be done on a monthly basis or sooner

Should occur after the work is performed

Reconcile statements and accounts & follow-up with outstanding accounts

Billing

Document and calculate cost-based rate(s) and publish rate(s)

Adhere to federal cost accounting guidelines such as OMB A-21

Establish and maintain a separate account/fund to capture revenues and expenses

Track actual usage

Administrative Requirements

Bill customers on a timely basisReconcile and analyze surplus/deficit

position at least annuallyRetain records

Administrative Requirements (Cont…)

Questions?

Thongsy Singvongsa, CRAResearch Administrator, Preventive Medicine (Departmental)Northwestern University Feinberg School of Medicine in Chicago, ILEmail: [email protected]; Phone: 312-503-1832

Nicole Nichols, MPA, CRAResearch Administrator, Internal Medicine – Oncology (Departmental)Washington University in St. Louis, MO Email: [email protected]; Phone: 314-362-0698

Wash U Recharge website: http://research.wustl.edu/ComplianceAreas/RechargeCenters/Pages/default.aspx

THANK YOU!