Service Center Fiscal Management

University of ColoradoDenver | Anschutz Medical Campus

Finance Office

What’s New?Due Date and Workshop

• Moved due date– Reduce conflict with budget deadlines– Allow time to review and approve before new year– Due February 1st

– Based on FY15 adjusted for July-Dec trend• Workshop cost study training

What’s New?Template Updates

• Add overview of goods or services provided.• Compare projected revenue and expense to

prior year.• Compare projected sales volume to prior year.• Clarify impact on fund balance.• Clarified utilization check and effect on staff

funding distribution.• Specify subsidy and support sources.• Add review and approval by DFA/Administrator.

What is a Service Center?

• Unit providing services or goods to other University departments.

• Supported by fees charged.• May serve public too.

Service Centers

• Internal Service Center & Core Lab Policy• OMB Uniform Administrative Requirements, Co

st Principles, and Audit Requirements for Federal Awards

• Allowable costs• Breakeven long-run • Accounted for in fund 28 (mostly)

Three Step Process

Gather dataOrganize data

Input data into cost model

COST STUDYStep 1: Gather Data

•Labor•Operating supplies & services•Overhead costs

–GAR 7.00% for FY16; 4.96% without salary.–GIR $20.00 per sq ft for FY16

•Equipment •60-days operating capital

COST STUDYStep 2: Organize Data

• Labor– Include benefits– Percent of effort in service center

• Can effort be redeployed as needed?– Productive time, administrative time– Grant subsidy

• Operating supplies and services– Identify costs to specific product or service

• Capital equipment– PO # or Tag #– Include non-federal depreciation

COST STUDYStep 3: Enter Data in Model

• Select template model (not prescriptive)• Allocate costs appropriately

– Top down or bottom up– Depends on number of services and ability to

redeploy slack time to other projects.– By unit of sale (e.g. hour, piece, service)– Affects utilization check figure

• Calculate rate for various services

Digging Deeper

Billing Rate RulesBillable Hours

WebSpace and GIRReserve

Grant Subsidy

Rate SettingRevenue Account Codes

Accounts ReceivableSales Recordkeeping

Deficits

Billing Rate Rules• Actual and reasonable costs• Unallowable costs:

– Bad debts, entertainment, fundraising, internal interest– Capital equipment (depreciation only allowed)– Full list see OMB regulations

• Rates must be:– based on a cost study– published– stated in a measurable unit– reviewed and adjusted at least annually– non-discriminatory between federal & non

• Rates for external customers may be higher

Billable Hours• Purpose• Blend interchangeable employees’ rates• Time Shrinkage

– 40 hours/week x 52 weeks/year = 2,080 hrs.• Less holidays• Less vacation time• Less sick leave time• Less meeting time, break-time• Less administrative duties

Web Space & GIR• Why is Web Space important?• What is the relevance of Web Space and GIR?• Web Space Data Entry Window• Off-campus no GIR• Web Space opens May 1 (tentative)• Deadline August 31 for research groups

– SOM, SDM, CON, SSPPS, CSPH, & OLAR• Deadline June 30 for all others

– DDC & CSA

Reserve

• Operating capital• Build into rates• Prevent deficits• Smooth rates• Maximum allowed 60 days

Subsidy

Using iLab• Calculate full cost.• Calculate percentage core

grant can support.– Accurate demand forecast is

critical• Split charge in iLab between

– Core grant– Research grant

• Preferred accounting method: keeps all costs together.

Not Using iLab• Subsidy often from core

grant, but may be other funds.

• Calculate break-even without subsidy.

• Then deduct subsidy for member rates.

• List subsidy ST on cost study.

• Expense subsidy portion of costs directly to core grant.

Rate Setting

• Beware of excessive optimism estimating demand

• Compare to market• Reality check• If no market, maybe survey.

• Compare to prior year rates

Revenue Account Codes• Internal Sales

– 380100 Service Center IN Revenue– 380101 IN Sales to Grants/Contracts

• Sales to UPI F80– 335003 Sales to UPI

• External Sales – 325100 Misc Revenue Operating– 325106 Sales to Gov Agency– 325200 ISU Sales to other Colo agency– 325300 ISU Sales to Public

Timely Billing

• Require speedtype before rendering service.• No approval necessary before internal billing:

– Receiving the service in exchange for the speed-type is implicit approval to charge them.

• Journal internal billings at least monthly.• Issues:

– Improves cash flow– Timely grant billing

• May use MOU for larger, ongoing deals.

Accounts Receivable

• Evaluate credit-worthiness of client– Exhibit A

• Record outstanding receivable every month – Via Journal Entry– Via PS AR module– Account codes:

• Debit 013100 AR Miscellaneous• Credit 325100 Misc Revenue Operating

• Age of receivables– 30 days past due: Follow-up– 60-days past due: Send to collection agency

• Cut-off services

Sales Recordkeeping• Required for each sale

– Identify customer– Date – Goods or services provided– Rate charged

• Needed for next cost study• Maintain all records for at least 7 years

Deficits

• Build working capital to avoid deficit, but…• Can expenses be moved off the Service

Center ST to clear the deficit?– Unrestricted: transfer in– Restricted: move expense but document

thoroughly.• Document subsidy sources

iLab• Ordering• Billing• Costing• $3,416/year: small core (<$100,000 yr rev)• $5,693/year: regular core (>$100,000 yr rev)• 1% of revenue: large core (>$550,000 yr rev)• Site license• Implementation fee (50% of annual fee)• Lori.Workman@ucdenver.edu 303-724-1296

Core Facilities• Section in Service Center policy

• NIH FAQ for NIH-Funded Core Facilities

• 2015 NIH Workshop on Enhancing Efficiencies– Resource support to research and clinical investigation– Increasing coordination between and among CTSA,

Cancer Center Support Grants, and other cores– A need for core identification for grant applications– Core strategic planning: governance, practice, reporting

• Implications for CU Anschutz– Identification of core facilities– Importance of using webspace, revenue accounts, support

Policy & Template

Service Center Web Page– http://www.ucdenver.edu/about/departments/finance/Pages/ServiceCenter.aspx

Policy Web Page@ UCD website Faculty/Staff Policies & Guidelines Filter by Fiscal/Finance Category; Finance & Administration Department; AMC & DC

Campus Policyhttp://ucdenver.edu/faculty_staff/employees/policies/Pages/default.aspxScroll down: Internal Service Centers & Core Lab Policy - Exhibit A -- Guidelines -- How to do a Cost Study- Exhibit B -- Template

Workshop

Questions?• Accounting Help

– 303-724-9610– Finance.ServiceCenter@ucdenver.edu– Kristina Mendez, Erin Tatman, Kelly McIlvride

• Shaun McMullin, Deputy Controller– 303-724-9611 shaun.mcmullin@ucdenver.edu

• Jonathan Lurie, Senior Cost Analyst– 303-724-9617 jonathan.lurie@ucdenver.edu