1.0 - Definition of a Recharge/Service Activity
SOURCE: |
Cost Accounting, Financial Management Services |
DATE ISSUED: |
November 2015 |
DATE OF LAST REVISION: |
May 2019 |
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 providing the goods or services, and not more than the allowable costs.
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 with the intent 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 |