UC Berkeley Recharge Centers Policy and Procedures

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Overview

  • Policy Issued: Unknown
  • Effective Date: October 1st 2022
  • Revision Date: September 7th 2022
  • Supersedes: Revision of May 2020
  • Next Review Date: Prior to November 2026
  • Responsible Executive: UC Berkeley CFO and Vice Chancellor of Finance
  • Responsible Office: Office of the CFO and Vice Chancellor of Finance

Contact

Hervé Bruckert, Assistant Director of Composite Benefit and Recharge Rate Processes

Email

hbruckert@berkeley.edu

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Policy Statement

The Recharge policies and procedures establish a mechanism for defining, establishing, operating and decommissioning recharge centers along with developing, requesting, reviewing and approving new recharge rates.

Scope of Policy

The recharge policies and procedures have been established to provide consistent operational practices amongst the various recharge units, to ensure compliance with both university accounting policies and government regulations and equitable treatment of all users regardless of funding source.

Why We Have This Policy

Recharge center policies and practices must reflect government regulatory costing principles such as those contained in the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards as well as the university accounting policies. Recharge center policies and practices have been established to provide consistent operational practices among the various recharge units, and to ensure compliance with both government regulations and the university accounting policies.

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Contents

  1. Purpose
  2. Procedures
    1. What is a Recharge Center?
    2. Establishment Criteria
    3. Period of Review
    4. Deficits/Surplus
    5. Allowable Costs to be Recovered in Recharge Recovery Rates
    6. Capital Equipment, Depreciation, and Equipment Reserves
    7. Recharge Center Inventory
    8. Rate Development
    9. Rate Submission and Approval
    10. Billing
    11. External Customers, Account Codes for Recharge Income, Surcharges, and Sales Tax
    12. How to Establish a New Recharge Center
    13. Sustainable Practices
    14. Closure of Recharge Operations
    15. Recharge Forms
    16. Records Retention
  3. Responsibilities
  4. Consequences of Policy Violations
  5. Related Documents and Policies
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1. Purpose

These policies and procedures establish a mechanism for defining, establishing, operating and decommissioning recharge centers along with developing, requesting, reviewing and approving new recharge rates. Recharge rates are established to allow units to recover from extramural and university funded activities the costs for goods and services provided. The recharge policies and procedures have been established to provide consistent operational practices amongst the various recharge units, to ensure compliance with both university accounting policies and government regulations and equitable treatment of all users regardless of funding source.

Recharge center policies and practices must reflect government regulatory costing principles such as those contained in the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards as well as the university accounting policies. Recharge center policies and practices have been established to provide consistent operational practices among the various recharge units, and to ensure compliance with both government regulations and the university accounting policies.

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2. Procedures

A. What is a Recharge Center?

Recharge centers are units that provide specific, ongoing services to a number of campus units or projects, and recover the cost of providing these services from the unit served on a “rate basis”.  (If there is only one user, then other accounting procedures are normally used).

Recharge centers develop rates to consistently and equitably recover the costs of the recharge operations such as salaries, benefits, equipment depreciation, material and supplies. Recharge units are expected to operate on a break-even basis. Please refer to section D for further guidance.

Recharge centers should not be set up to provide goods or services that are readily available from outside sources. However, a recharge center may be established if there are overriding economic, ethical, contractual or other institutional issues to support the need for the university to provide this service.

The following are not recharge centers or recharges and are not subject to recharge policies and procedures:

Units which primarily serve members of the campus community as individuals, such as parking or housing services, which are classified as auxiliary or service enterprises. These charges are recorded as income of the university and are not defined as recharges. The rates set by these organizations are not subject to review by the recharge committee. Central campus charges to auxiliary enterprises for administrative overhead costs are also excluded from this document. Contact General Accounting (gao@berkeley.edu) for a list of current auxiliaries.

  1. Recharges are generally not permitted for normal and customary services of units within General or Departmental Administration, Institutional Services, and Student Services, e.g. central accounting and budgeting services.
  2. Units which provide a one-time distribution of expense. A recharge service is an ongoing activity.
  3. This policy does not address those financial transactions considered to be expenditure adjustments from a chartstring originally charged. The handling of these expenditure transfer actions is described in UC Policy BFB-A-47 Direct Costing Procedures (PDF).

The following are also not recharge centers, but are subject to section D and section L of the recharge policy:

Pass-through activities. Activities in which one unit, without recovering its own costs for providing the service, collects a series of third party costs and periodically transfers those costs to another unit. While these are not recharge units, these activities are covered by recharge policy for the calculation and application of tolerances, definition and elimination of large deficits and surpluses (section D), and the closure of operations (section N).

Example of Recharge vs. Non-Recharge Activity

Acceptable Recharge Activity

Copy department:

  • Expenses incurred by a department providing full document handling and copy service. Costs of providing the service include salaries, benefits, supplies, and equipment depreciation. These costs are accumulated and a rate is set to recover these costs on a work order basis.
Activity that is Not a Defined Recharge Activity

Photocopy machine:

  • Two departments share a photocopy machine. They decide to share the cost equally for toner, paper, etc. In this case no recharge activity is taking place. It is an allocation of direct costs. If the costs are collected in one organization, the portion relating to the other department can be transferred to the other department using a financial journal.

B. Establishment Criteria

To be considered a recharge center, the proposed recharge activity must meet at least one and up to all of the following 5 criteria below:

  1. There exists a demand for this particular service by more than one department/unit/activity.
  2. Service will be provided on a regular and continuing basis.
  3. Service should be identifiable (e.g. glass blowing or machine shop) as opposed to general (e.g. general administration fee).
  4. Separate costs and budget can clearly be defined for these activities.
  5. Rates can be stated in measurable units of goods or services.

Guidelines

Recharge centers should operate within the following guidelines:

  • Rates for goods and services must be charged at the same rate to all users, except external and affiliates users and reflect the full cost of the operation, net of any approved subsidies. In establishing recharge rates, a recharge center cannot discriminate against any internal group of users. A recharge center must charge all internal users the same rate for the same level of services or products purchased under the same circumstances. Rates should not differentiate amongst internal users (please refer to section H). The use of special rates, such as for high volume work or less demanding non-scientific applications, is allowed, but must be equally available to all users who meet the criteria.The federal government does not prevent the unit from charging external users a higher rate than that charged to internal users. However, revenues from external users should be tracked separately. All users of the facility must be billed for services. External users of a center must not be charged at a rate less than that charged to internal UC Berkeley users.
  • Rates must be reasonable. Rates are considered reasonable if the nature of the costs and the related goods or services acquired or applied to provide the recharge service reflect the action that a prudent organization would have taken under the circumstances prevailing at the time the decision was made to incur these costs.
    • Considerations involved in the determination of the reasonableness of a rate are:
      • Whether or not the costs included in the recharge rate are of a type generally recognized as necessary for the operation of the recharge service;
      • The restraints or requirements imposed by such factors as arm's-length bargaining, Federal and State laws and regulations, and any other related terms and conditions in the normal course of business;
      • Whether or not the department concerned acted with due prudence in the circumstances, considering their responsibilities to the university and the Federal Government, and the public at large; and,
      • The extent to which the actions taken with respect to incurring these costs are consistent with established institutional policies and practices applicable to the work of the institution generally.
  • There must be a sound business case supporting providing these services and the manner in which we are providing these services. Alternative methods of providing these goods or services have been reviewed and the decision to provide or continue to provide these goods or services is in the best interest of the university and is in compliance with Federal regulations. If the services are readily available from outside sources, there must be overriding economic, ethical, contractual or other institutional issues that support the continued need for the university to provide these services.
  • The activity must operate on a break-even basis. For further guidance, please refer to section D.
  • Goods or services should not be provided to outside consumers except where they are specialized or unique and their existence is primarily to support the academic mission of the campus. Entities which are directly affiliated with the university and share common services with the university are defined as internal customers for recharge purposes. However, affiliates can be charged a surcharge up to the current campus Indirect Cost Recovery amount. The Recharge web page has a list of all affiliates.
  • The charges to external consumers must exclude subsidies and include, at a minimum, a surcharge to recover total calculated campus indirect costs. An exception to this rule can be requested by the recharge unit and submitted to the recharge portfolio lead. All charges to outside entities including surcharges should be recorded in the appropriate revenue account 4xxxx. The appropriate revenue account should be selected based on the goods being provided or service being performed. For example: Sales of telecommunication services to outside entities should be charged to account 48020. The internal departmental telecom recharges will be charged to account 59000.
    • Currently, surcharge funds are retained by the department. Please refer to section P for further information.

C. Period of Review

Even if a unit does not propose to change its recharge rates, all recharge units charging Contracts and Grants and all recharge units not charging Contracts and Grants but with a budgeted recharge income/revenue greater than $500,000 per year must self-certify during the yearly budget process. Please refer to section 5 with links to compliance checklist policies and examples.

All recharge units fitting the criteria described above are subject to detailed review.

The following criteria may initiate a review outside the yearly budget process:

  1. Large Surplus/Deficit (please refer to section D) with no approved plan for surplus or deficit reduction.
  2. Findings from an internal or external audit recommend a review.
  3. Additional services provided by the recharge unit.
  4. Unit employs a new/modified costing methodology for rate development or has undergone a significant change in business practices.

D. Deficits/Surplus

The recharge activity must operate on a break-even basis. It is acknowledged there may be seasonal fluctuations in the unit's operations. Hence the unit must operate within the surplus/deficit tolerances described below. If the unit exceeds these tolerance levels, i.e. a large deficit/surplus as defined in (i), they must take immediate action to establish a plan to rectify the situation and bring the unit within the acceptable levels of tolerance. All unaddressed out of tolerance deficits at fiscal year’s end will be subject to the provisions of the UC Berkeley Deficit Resolution Policy (PDF).

Definition of Large Deficit/Surplus

A large deficit/surplus is defined to be a general ledger balance where:

  • Balance greater than 1 month operating expense, where 1 month’s operating expense (tolerance) is calculated as a rolling 12-month average.
  • If the balance at time of review is distorted due to seasonal inflows of recharge revenues or outflows of expenses, an average balance can be calculated over the seasonal cycle. Requests for alternate balance calculations may be sent to the recharge committee (recharge_certification@berkeley.edu) through the control unit. Requests should discuss the need for an alternate balance calculation, propose an alternate calculation methodology, discuss the risks associated with the use of a standard balance calculation, and indicate whether an alternate balance calculation would apply to a specific time period.
  • If a recharge unit feels that they need to maintain a balance greater than 1 month operating expenses on an ongoing basis, they can submit a request to the recharge committee (recharge_certification@berkeley.edu) through their control unit justifying the need for an alternate tolerance calculation. Requests should include the reasoning for an alternate tolerance calculation, a proposed alternate calculation methodology, discuss the risks associated with the use of a standard tolerance calculation and indicate whether an alternate tolerance calculation would apply to a specific time period. If the unit does not agree with the decision of the committee, they can appeal to the Office of the CFO and Vice Chancellor of Finance. The recharge unit is subject to mediation by the Office of the CFO and Vice Chancellor of Finance for any items in dispute.

Deficits

If a unit has a large deficit (please refer to definition i.), it must develop a deficit reduction plan to clear the deficit. The plan should eliminate the deficit in as short a time as possible. The reduction period should not exceed 1 year when possible. This plan must be submitted through the Control Unit or Dean’s Office to the campus Budget Office for routing to the Vice Chancellor of Finance and/or the Chancellor, as appropriate. Any large deficit at June 30 for which an approved deficit reduction plan is not in place will be subject to the UC Berkeley Deficit Resolution Policy (PDF).

Surplus

If a recharge unit has a large surplus (please refer to definition d.), the unit cannot raise its rates unless a detailed review is conducted and a rate increase is approved.

If a recharge unit has a large surplus, they must provide the committee within 3 months of notification with a plan to clear the surplus. The plan should eliminate the surplus in as short a time as possible; the reduction period should not exceed 1 year. This plan must be submitted to the Recharge Committee (recharge_certification@berkeley.edu) through the Control Unit or Dean’s Office as appropriate and must include the Vice Chancellor or Dean signature.

E. Allowable Costs to be Recovered in Recharge Recovery Rates

Generally, all costs directly associated with the recharge unit’s operation should be charged to the recharge unit. However, costs which are unallowable for government costing purposes may not be charged.

The OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards defines direct and indirect costs for purposes of accounting for federal funds. Under the Uniform guidance, recharges are considered direct costs to users. Direct costs are those costs that can be specifically identified with an activity, or costs that can be directly assigned to such activities relatively easily with a high degree of accuracy. No recharge activity shall be approved which shifts indirect costs, to direct costs as defined in the Uniform guidance document.

Allowable Costs Which Can be Included in Rate Development

  • Salaries and benefits of personnel directly related to the recharge activity
  • Supplies and reasonable general support costs
    • For example: telephone charges and office supplies
  • Equipment depreciation (straight-line basis) and depreciation of capitalized improvements, excluding equipment purchased by federal funds or those claimed as cost sharing on a federal project
  • Maintenance and repair/alterations costs
    • Defined as regularly recurring disbursements to keep property in an efficient operating condition and, therefore, not capitalized
  • Installation charges and allowable lease and loan costs
    • Please refer to section F "funding of recharge capital assets" for further information on allowable lease and loan costs

Unallowable Costs Which Cannot be Included in Rate Development

  • Federally unallowable:
    • Bank card fees - 57323
    • Bad debts - 57356
    • Legal fees - 57332
    • Fines and penalties - 57330
    • Entertainment - 57006
    • Membership - 57353
    • Donations and contributions - 57351
    • Advertising costs - 56611
    • If you are including interest on capital leases in your recharge proposal 57320 - 57322 (not operating lease expense), please refer to section F for allowability
  • Costs of capitalized improvements, including renovation costs or significant alterations or structural changes to plant assets which increase the usefulness, enhance the efficiency, or prolong the life of the property
  • Internal interest charges
  • Administrative full costing assessments
  • Equipment purchases (unless useful life is one year or less)
  • Exceptional charges that did not occur through the normal course of business
    • For example: costs related to non-recovery of recharge income due to the department not billing recharge customers in accordance with the university recharge billing policies

A recharge unit should not normally include charges for its use of space - building depreciation cost component, utilities, nor the university’s general and administrative costs as these are funded from other sources. However if the unit incurs additional specialized costs such as leasing cost for offsite facilities which are not funded from other university resources, these can be included in the rate and costs of the unit. These specialized space costs should be disclosed on the self-certification form.

F. Capital Equipment, Depreciation, and Equipment Reserves

Capital (inventorial) equipment are stand-alone items with a useful life greater than 1 year and value greater than $5,000. Capital equipment assigned to the recharge activity cannot be charged directly to a recharge center. The equipment should be depreciated and the depreciation expense should be included as a cost in the rate development and charged as an expense to the recharge center, except as follows:

  • Equipment funded by the Federal government or is identified as cost sharing to a federal project
  • Equipment funded by an award under a private contract and the contract is not completed
    • If the contract is completed and there is remaining life in the asset, the unamortized balance remaining at the end of the life of the asset can be depreciated and included in the rate calculation
      • For example: the asset has useful life of 5 years but 3 year life of the award, then the asset may be depreciated for the remaining 2 years

All recharge unit equipment must be entered into Berkeley Equipment Tracking System (BETS). This system is used for both financial and government reporting purposes. All recharge center assets regardless of funding source must be properly identified in BETS. All assets whose depreciation has been included in rates must be identified in BETS by selecting the recharge flag button.

Funding of Recharge Capital Assets

Federal guidelines do not allow the purchase cost of equipment to be charged directly to the recharge center. Purchases of equipment must be funded from other sources including equipment reserves, gift funds or other unrestricted fund sources.

Interest associated with the purchase of such assets (e.g. interest component of a capital lease) is allowable when it satisfies the following criteria:

  • Interest must be paid to outside third parties
  • The equipment must have been received on May 8, 1996 or after
  • For acquisitions prior to May 8, 1996, the purchase price or capitalized cost must be $10,000 or greater

Donated equipment is considered to be the equivalent economically of a cash donation which is subsequently used to purchase equipment. When a recharge center receives an equipment donation, the use of the equipment may be depreciated through the recharge center. The donated asset must be properly identified in BETS as a recharge center asset.

Depreciation

Depreciation is an accounting term which recognizes that a capital asset’s value is spread out over its useful life. The asset is “consumed” over an extended period of time, typically several years. This period is called the useful life of the asset.

The recharge unit should use the useful lives established by the university to calculate depreciation for all equipment assets acquired on or after July 1, 2000. Please refer to the UCOP Equipment Useful Life Indices for Depreciation EULID (XLSX).

Depreciation must be charged in the fiscal year of acquisition. We recommend charging depreciation commencing in the month in which the equipment was acquired. If an asset’s acquisition date and the date it is placed in service are significantly different (period greater than 10% of the asset’s useful life), please contact the Recharge Committee (recharge_certification@berkeley.edu) for guidance on booking depreciation expense. If a recharge unit manages a large number of assets and there are a large number of acquisitions each year, to minimize the administrative burden of tracking the date of acquisition and service dates on the large number of assets, the recharge unit has the option to adopt a "half year" convention in the first year of purchase. If a unit adopts this convention it must be uniformly applied to all assets identified within the recharge unit. Under the "half year" convention the asset is depreciated for six months in the year it is acquired regardless of the actual date it was purchased.

Example

For equipment acquired in October 2015 with a three year useful life and a value of $6,000; under the half year convention depreciation entries for the asset would be $1,000 in FY15-16, $2,000 in FY16-17 and FY17-18, and $1,000 in FY18-19.  Using the actual month the asset was placed in service, depreciation for the same asset would be recorded as $1,500 in FY15-16, $2,000 for FY16-17 and FY17-18, and $500 in FY18-19.

The department should make the following financial entries at least on a quarterly basis to record the depreciation expense and transfer from current to non-current funds.

Please note: CF1 and CF2 can be used and are optional. They have not been included in the following example.

Debit:

  • Recharge depreciation expense (account 54251, Fund 6xxxx, Org zzzzz, Program xz)

Credit:

  • Contra depreciation expense (account 54252, Fund 76xxx, Org zzzzz, Program xz)

Credit:

  • Interfund balance (account 23502, Fund 6xxxx)

Debit:

  • Interfund balance (account 23502, Fund 76xxx)

The interfund balance entries will be automatically generated by the system.

Example

Dept A owns equipment with 5 year useful life at an original cost of $10,000. After 5 years the department replaces the equipment.

Please note: In this example, the Org, Program, and Fund used are only included as an example. Your own Org, Program, and Fund codes should be used in the actual entry.

Record recharge depreciation expense.

In year 1, the following financial entries are made:

  • Department records depreciation expense (a/c 54251) and contra expenditure entry (a/c 54252) for: Recharge Fund (6xxxx) and (76xxx), Org (21551), Program (72). In this example the department does not use flex field or program
  • Department records financial fund transfer to equipment replacement reserves (this entry reduces the fund surplus arising from rate charged after taking into account depreciation versus actual expenditures excluding depreciation charged in the expenditure accounts)

Debit $2,000:

  • Depreciation Expense (account 54251, Fund 6xxxx, Program 72, Org 21551)

Credit $2,000:

  • Contra Depreciation Expense (account 54252, Fund 76xxx, Program 72, Org 21551)

These entries are repeated each year until the asset is fully depreciated, the asset is disposed of, or the asset is no longer in use.

Prior to fiscal year 2019-20, Tempbudg journals were used in combination with a financial journal to transfer funds from current to non-current funds. Starting in fiscal year 2019-20, a single financial journal is used for this transfer.

Equipment Threshold Change Effective July 1, 2004

Effective July 1, 2004 the equipment capitalization threshold was raised from $1,500 to $5,000. Any equipment received on or after July 1, 2004 costing less than $5,000 and having a useful life of less than one year must be expensed in the year of acquisition. Recharge center assets received prior to July 1, 2004 with an acquisition cost between $1,500 and $5,000 may continue to be included in recharge rates as depreciation until the asset has been fully depreciated.

Additional information regarding depreciation and more examples of depreciation entries can be found in the depreciation document on the Recharge web page.

Reserves

Through the entries above, an equipment replacement reserve fund is established. The equipment replacement reserve (fund 76xxx) should be used to "fund" the future replacement of expended assets needed for the recharge operation. Use of the equipment replacement reserve fund for other recharge unit expenses is by exception only and subject to approval. Requests for alternate uses of equipment reserve funds may be sent to the appropriate Control Unit or Dean’s Office and should describe the proposed use of the reserve fund including the dollar amount to be used. The request should also discuss the unit’s future capital needs and how they will be met in the absence of a fully funded equipment replacement reserve. The Control Unit or Dean’s Office will approve or deny the request then notify the recharge unit and the recharge committee. Use of reserves to cover operating deficits that exist at fiscal year’s end, however, will continue to be reviewed and approved through the campus’ deficit resolution process.

A decommissioned recharge unit may use its equipment replacement reserve fund to offset any recharge operational deficit. Balances in the reserve fund beyond deficit coverage may be retained by the department.

G. Recharge Center Inventory

If the recharge center supplies a product, e.g. printed stationery, the goods purchased for “resale” should be charged to an inventory G/L account. This is a balance sheet account in the range 14XXX. Recharge center managers should contact the General Accounting Office for more information on the accounting requirements and responsibilities for this type of account.

If the unit’s inventory exceeds $50,000 they must charge inventory to this 14XXX account. For units with smaller inventory balances it is recommended that they use this account if the timing of inventory purchases significantly affect the results of the operation throughout the year, i.e. before adjusting for the inventory balance, the recharge center is outside of the recharge break-even tolerance ranges.

If an inventory account is used, the recharge unit must perform a physical inventory of all goods at least once a year.

It is recommended that the inventory account be adjusted on a monthly basis to reflect purchases to and sales from this account. This will also allow a unit to monitor its operations more accurately. If this is not possible, the unit must at least once a year in June, make a year-end adjustment to reflect the correct year-end balance in this account. The balance in the G/L must be supported by inventory records which include the number and cost of products on hand.

Inventory should not be valued at the current replacement cost. Inventories must be valued at cost (using the average cost method) or net realizable value whichever is less. “Net realizable value” means the price at which one can reasonably expect an item to sell. For example, if an inventory becomes obsolete, it should not be carried in the accounting records at cost. It should be adjusted down to $0 or the salvage value of the inventory. “Cost” is the average of the cost per unit, net of discounts taken (but including taxes, shipping and handling). As new purchases are added to the inventory, a new average cost per unit is determined. As goods are taken out of the inventory, the value of the inventory is reduced by the average unit cost in effect. If the unit cannot value inventory under the average cost method, please contact General Accounting for further guidance on whether the unit’s preferred method is appropriate.

H. Rate Development

Rates for goods and services must reflect the full cost of the operation, net of any approved subsidies, and the same rates must be charged to all internal users. In establishing recharge rates, a recharge center cannot discriminate against any internal group of users. A recharge center must charge all internal users the same rate for the same level of services or products purchased under the same circumstances. The use of special rates, such as for high volume work or less demanding non-scientific applications, is allowed, but must be equally available to all users who meet the criteria.

The federal government does not prevent a unit from charging external users a higher rate than that charged to internal users. However, revenues from external users should be tracked separately. All users of the product/service/facility must be billed for services.

External users of a center may not be charged at a rate less than that charged to internal UC Berkeley users. Please refer to section K for surcharges to external consumers.

Rates must be reasonable. Rates are considered reasonable if the nature of the costs and the related goods or services acquired or applied to provide the recharge service reflect the action that a prudent organization would have taken under the circumstances prevailing at the time the decision was made to incur these costs.

Considerations involved in the determination of the reasonableness of a rate are:

  • Whether or not the costs included in the recharge rate are of a type generally recognized as necessary for the operation of the recharge service;
  • The restraints or requirements imposed by such factors as arm's-length bargaining, Federal and State laws and regulations, and any other related terms and conditions in the normal course of business;
  • Whether or not the department concerned acted with due prudence in the circumstances, considering their responsibilities to the university and the Federal Government, and the public at large; and,
  • The extent to which the actions taken with respect to incurring these costs are consistent with established institutional policies and practices applicable to the work of the institution generally.

1. General Rate Calculation

In its simplest form, or for a one product service center, a recharge center's rate is cost- based. Users are allocated a share of the recharge center costs based on their relative use of the recharge center’s products or services. A single, unitized cost rate (cost per unit of output) is used to recover the expense of providing a product or service. This rate is calculated by dividing the total budgeted cost for providing the product or service by the total projected level of activity for the budget period.

"Total budgeted expense" equals all costs directly associated with a recharge center’s operations.

"Projected Level of Activity" is the total estimated volume of work to be performed in a recharge center, expressed as labor or machine hours, CPU time, or units of products or services to be provided. This is the denominator to be used in the calculation of the recharge center rate, as shown below. The actual level of activity multiplied by the recharge center rate determines the amount to be charged to each user.

Rate equals:

Total Budgeted Expense (Plus Prior Year Deficit, or Minus Prior Year Surplus)

Divided by

Total Projected Level of Activity for the Budget Period

While most recharge center rates will be cost based for each specific service or product, a recharge center offering multiple related services or products may establish rates for a variety of services that, in aggregate, recover the total costs of the center. The center must be able to demonstrate it has made reasonable assumptions in allocating common costs which cannot be easily identified to a specific service or product within the center.

Rates are normally calculated on an annual basis. Adjustments may be made as needed during the year to accommodate changing circumstances and to ensure the unit remains within tolerance.

2. Alternative Rate Structures

Some recharge centers may experience special circumstances which call for rates utilizing an approach different from the general rate calculation.  Rate structures or pricing mechanisms may be used as described below, but only if the resulting rates are non-discriminatory with respect to specific classes of users, e.g., Sponsored Research Contracts and Grants.

1. Subsidized Rates

For various reasons, a department may wish to have its recharge center charge its users less than fully costed rates; and may choose to subsidize center operations with operating budget or other unrestricted funds. In these circumstances, a center should first calculate a fully costed rate in accordance with the “General Rate Calculation” discussed above. A percentage discount can then be applied to the fully costed rate to derive the desired subsidized rate to be used throughout the year. Subsidized rates must be consistently charged to all internal university center users. External users must be charged the fully costed rate(s). Please refer to section K for surcharges to outside users.

2. Stores Service Centers

A store recharge center rate is determined by dividing its administrative or operating costs by its projected cost of goods sold. Its rate is, therefore, a markup percentage on the cost of goods sold. If this method is adopted, the markup needs to fairly represent the operating and administrative services provided by the unit for the goods or services. If the cost of providing the operating and administrative services is similar for a $1,000 or a $100,000 order, then this method should not be used.

3. Time-of-Day

Recharge centers that have a wide fluctuation in usage during the day may establish a time-of-day rate structure. Higher rates may be charged during hours of peak use, "prime time," to provide incentives to reduce the demand for services during these times. This structure helps all users by improving performance during peak hours and encouraging the utilization of off-peak hours, thereby reducing the cost for additional equipment.

Recharge centers utilizing a time-of-day rate structure must show that all users have an opportunity to use the center during non-peak hours and that no particular user, especially Sponsored Research Projects, is disadvantaged by the proposed rate structure. This type of rate structure is used most frequently in computer and communications service centers and also with use of scientific equipment such as magnets for magnetic resonance imaging (MRIs).

4. Computer Shares

Computer facilities may charge users based on the computer "shares" concept. The computer capacity is divided into shares. Users purchase shares necessary to meet their computing requirements.

5. Volume Discounting

Sometimes economies of scale dictate that a large quantity of a product or service can be provided to a customer at a lower overall cost than the normal per unit rate. Such a volume discount is allowed as long as it is 1) disclosed and justified in the service center's proposed budget and rates; and 2) its effect is not discriminatory to a single type of customer, other than by amount of product or service provided.

6. Other

Other cost/rate structures to meet specific recharge center needs may be approved, but must be in compliance with the Federal Uniform Cost Principles.

I. Rate Submission and Approval

Self-certification forms and list of rates are required for all recharge activities involving contract and grants and for recharge activities not involving contract and grants but with greater than $500,000/year in recharge income/revenue:

  1. Annually in as part of the yearly budget process
  2. When a unit wants to change existing rate
  3. When a unit wants to add/delete rates
  4. When a department wants to establish a new recharge center

The forms must be forwarded to the recharge portfolio lead (recharge_certification@berkeley.edu) for the annual budget process and at any time of the year for times (2) to (4).

Delinquent forms put the recharge unit and the university at risk for audit findings and disallowances.

Rates for a new recharge unit or new rates within existing recharge units or rates subject to a detailed review will be centrally reviewed prior to posting to the recharge website.

All rates posted to the Recharge web page are considered "approved". Campus recharge units should only charge the rates posted to the Recharge web page.

It is the recharge unit’s responsibility to advise its customers of any rate changes. If discrepancies are found in the submission, the committee will determine if these errors are significant enough to warrant adjustment of prior billings. If the unit does not agree with the determination of the committee, they can appeal to the Office of the CFO and Vice Chancellor of Finance. The recharge unit is subject to mediation by the Office of the CFO and Vice Chancellor of Finance for any items in dispute.

All new rates must be approved by the Department Head and Control Unit prior to submission to the Recharge Portfolio Finance Lead, with the exception of units under the Executive Vice Chancellor and Provost (EVCP). In these cases the Dean must approve the rate, prior to submission.

Retroactive rate submission will not be accepted. In other words, a recharge unit cannot request a rate change with an effective date prior to the submission date.

If the recharge unit has fallen below the threshold of $500,000 annual activity and does not engage in Contracts and Grants activities, the unit can exempt itself from the self-certification process by sending an email to its Control Unit or for units under the Executive Vice Chancellor and Provost, the Dean's Office, advising of the change.  If in agreement, the Control Unit/Dean’s Office will forward the information to the recharge portfolio lead (recharge_certification@berkeley.edu) advising that the unit no longer meets the criteria for a recharge center. The recharge unit and its rates will then be removed from the list of centrally monitored recharge units.

Units with less than $500,000 in recharge income and with no Contracts and Grants activities, although exempted from the review process, should follow the recharge policies and procedures as their "best practice" operating regulations. Similarly, all pass-through activities are exempted from the review process but are subject to section D and section N of recharge policy.

J. Billing

Please refer to the Recharge Billing Policies and Procedures page.

Recharge income from internal customers should be coded to account 59000. The recharge income account 59000 should only be used for recharge activities managed by recharge centers.

For example: Sales of telecommunication services to outside entities should be charged to account 48020. The internal departmental telecom recharges are made to account 59000.

Internal campus department recharge activity (debit transactions) will be recorded to new 590xx expense accounts, please refer to list below. The offset recharge credit transaction should be recorded to an existing account 59000 – Internal Recharge Income.

When allocating costs to capital projects (197xx accounts), please use account 57342 Misc Exp-Contra-Capitalized as the offset, instead of account 59000 - Internal Recharge Income.

Internal Recharge Expense Accounts

BFS AccountDescriptionDetails
59001 Recharge - IT/Phone/Data Services To record internal campus recharge expenses of IT/Phone/Data services.
59002 Recharge - Building Maintenance To record internal campus recharge expenses for building maintenance.
59003 Recharge - Lab Animal Supplies To record internal campus recharge expenses for lab animal supplies.
59004 Recharge - Lab Animal Expenses To record internal campus recharge expenses for lab animal expenses.
59005 Recharge - Fabricated Equipment (OH) Less than 5k To record internal campus recharge expenses for fabricated equipment costs less than $5,000, subject to overhead (OH) assessment.
59006 Recharge - Supplies To record internal campus recharge expenses for supplies other than lab animals.
59007 Recharge - Participant Support To record internal campus recharge expenses for participant support.
59008 Recharge - Travel To record internal campus recharge expenses for travel related costs.
59009 Recharge - Other Expenses To record internal campus recharge expenses when a specific account category is not available.
59011 Recharge - IDC Exempt Exp (Non-OH) To record internal campus recharge transactions which are exempt from indirect cost (IDC) or overhead (OH) assessment.
59012 Recharge - Fabricated Equip (OH) Greater than 5k To record internal campus recharge expenses for fabricated equipment costs greater than $5,000 that have non-UC title and will be delivered to the government, subject to overhead (OH) assessment. Replaces account 54232 for internal recharges.
59013 Recharge - Fabricated Equip (Non-OH) Greater than 5k To record internal campus recharge expenses for fabricated equipment costs greater than $5,000. Title is retained by the university and equipment has a life expectancy of more than 1 year. These costs are not subject to overhead (OH) assessment. Replaces account 54231 for internal recharges.

Intercampus Recharges and Funding Transfers

Intercampus recharge transactions and funding transfers between UC Berkeley and other campuses and/or UCOP will be recorded to 98xxx intercampus recharge debit or credit accounts (please refer to the Intercampus Recharge Accounts table below). When transferring costs to another UC campus, you must use the Intercampus Recharge Credit account for the corresponding campus (please refer to the example below). For recharges to ANR units at other campuses you will need to use account 98512 - Intercampus Recharge Credit ANR. When transferring funding to another UC campus, you must use the Intercampus Recharge Debit account for the corresponding campus.

Please note: there is no change to the 235xx intercampus financial control balance sheet accounts.

Intercampus Recharge Accounts

BFS AccountDescription
98002 Intercampus Recharge Debit UC San Francisco
98502 Intercampus Recharge Credit UC San Francisco
98003 Intercampus Recharge Debit UC Davis
98503 Intercampus Recharge Credit UC Davis
98004 Intercampus Recharge Debit UC Los Angeles
98504 Intercampus Recharge Credit UC Los Angeles
98005 Intercampus Recharge Debit UC Riverside
98505 Intercampus Recharge Credit UC Riverside
98006 Intercampus Recharge Debit UC San Diego
98506 Intercampus Recharge Credit UC San Diego
98007 Intercampus Recharge Debit UC Santa Cruz
98507 Intercampus Recharge Credit UC Santa Cruz
98008 Intercampus Recharge Debit UC Santa Barbara
98508 Intercampus Recharge Credit UC Santa Barbara
98009 Intercampus Recharge Debit UC Irvine
98509 Intercampus Recharge Credit UC Irvine
98010 Intercampus Recharge Debit UC Merced
98510 Intercampus Recharge Credit UC Merced
98011 Intercampus Recharge Debit UC Office of the President
98511 Intercampus Recharge Credit UC Office of the President
98012 Intercampus Recharge Debit UC Agriculture and Natural Resources (ANR)
98512 Intercampus Recharge Credit UC Agriculture and Natural Resources (ANR)
Example

UC Berkeley initiating intercampus financial journal to recharge/transfer costs to UCSF:

UC Berkeley ChartstringsDebitCredit
1-23520 UCSF Financial Control - 69995 - 00800 $500
1-98502 Intercampus Recharge Cr. UCSF - UCB fund - UCB dept ID - FC ($500)

K. External Customers, Account Codes for Recharge Income, Surcharges, and Sales Tax

External Customers

Goods or services should not be provided to external consumers except when they are specialized or unique and their existence is primarily to support the academic mission of the campus. Charges to external consumers must include a minimal surcharge using the calculated Indirect Cost Recovery (ICR) rate as a markup to recover total campus indirect costs. The primary reason recharge centers exist is to share resources and provide services for internal users.

Inappropriate external use of recharge center facilities can result in significant negative consequences to the university.

Situations may arise, however, where the unique nature of a recharge center's products or services and other factors justify allowing external users limited access to those products or services. Providing goods or services to external users also results in additional accounting and monitoring for the operations. If goods or services are provided to external consumers, charges to external consumers must include a surcharge to recover campus total indirect costs.

Prior to providing goods or services to external consumers, recharge centers need to have a business contract signed by both parties in place. The Business Contract department at UC Berkeley will work with your department to create a contract aligned with the product or services offered.

For Business Contract creation, please refer to the Business Contracts and Brand Protection website.

Requests for an exception to the rule to include a surcharge to recover total campus indirect costs should be submitted to the recharge portfolio lead at recharge_certification@berkeley.edu.

An external user is an entity or person over whom the university has no fiduciary responsibility regardless of the user’s relation to the university’s mission (e.g. students, staff and faculty acting in a personal capacity, other universities (non-UC), commercial entities, and public at large). However the university has identified the following organizations which are directly affiliated with the university: Alumni House, UC Foundation, International House, MSRI, UC Affiliated DOE laboratories (Berkeley, Livermore, and Los Alamos), other UC Campuses, the Faculty Club and Women’s Faculty Club. A full list of affiliates is on the recharge website. These entities are defined as internal customers for recharge purposes and are generally not subject to surcharge. However, recharge units are allowed to charge a surcharge to affiliated entities up to or less than the current Indirect Cost Recovery (ICR) rate. Auxiliary units and self-supporting units are not subject to surcharge as they are considered to be campus entities.

Recharge units creating invoices for external customers (including affiliated entities) will record the transaction in the BFS Billing/AR (BFS: AR) system. An 'Invoice' is an official demand for payment that may only be issued from the central BFS: AR system. The transaction should be entered within three (3) business days of recognition that a receivable situation has occurred. The receivable is an asset to the campus and must be reflected accurately and timely on the university’s financial records. More information on invoicing external customers (including affiliated entities) in the central BFS: AR system can be found on the Non-Student Billing Operating Guidelines web page.

For billing external customers, please refer to the Non-Student Billing Operating Guidelines web page.

Account Codes for Recharge Income

All charges to outside entities should be recorded in the appropriate revenue account 46xxx or 48xxx. The appropriate revenue account should be selected based on the goods being provided or service being performed.

Surcharges

Charges to external consumers must include a surcharge to recover the total calculated campus indirect costs (ICR). As noted above all charges to external entities including surcharges should be recorded in the appropriate revenue account 46xxx or 48xxx.

At the time of billing, the unit should code surcharges to fund 60050 if the revenue accounts used are in the range 46xxx, and fund 66350 if the revenue account used is in the range 48xxx. This will ensure the recharge fund only reflects recharge income and recharge expenses and the balance are not distorted by surcharge income.

Currently, surcharge funds are retained by the department and are unrestricted.

Administrative Full Costing (AFC)

Central campus will charge an administrative full costing fee on external funds received from the sales and services of educational activities, auxiliary enterprises, agency activities, service enterprises, and other operating revenue.

UC Berkeley Administrative Full Costing Policy (PDF)

Sales Tax

For most recharge transactions sales tax does not apply.

  1. Sales tax is not assessed on recharge sales to internal customers.
  2. Sales tax is also not applicable if there is no exchange of tangible personal property, i.e. only services are involved.
  3. Sales tax is not applicable if the tangible goods are bought for resale by the external consumer.

Any tax imposed will be a cost passed on to the recharge center user. Any sales tax collected becomes a university liability. Sales tax is assessed on cost of goods sold, the recharge center charge (mark-up) and surcharges.

L. How to Establish a New Recharge Center

  1. Review all sections of this document.
  2. Ensure the operation meets the criteria of a recharge unit.
  3. Discuss the proposal with the control unit to ensure it is in accordance with the missions of the unit and the university. Discuss the proposal with the recharge portfolio lead to understand roles and responsibilities for the new recharge unit. A proposal to establish a new recharge center must contain the following information:
    1. The recharge unit’s name.
    2. A description of the product(s) or service(s) to be provided, and the potential users (internal and external).
    3. An explanation as to how the recharge center rate(s) will be determined including:
      1. Detailed annual expense budget, by G/L code (including FTE with salary data) for the proposed unit;
      2. Description of the activity base, its appropriateness, and the projected level of activity for the first year of operation;
      3. The rate calculation(s) using the proposed budget amount(s) and the projected level(s) of activity for the first year of operation.
    4. The name, title, email and phone number of the individual delegated responsibility by the department chairman, or administrative equivalent, for the unit’s financial affairs.
    5. Submit a list of all of the capital assets already purchased that will be used in the recharge center. The list should contain a description, PO number and BETS property tag.
    6. The signatures of the department chairman and Dean, or their administrative equivalents, indicating the department's acceptance of the financial and operational responsibilities of the recharge center.
    7. Determine the appropriate revenue / recharge income accounts that are relevant to the operation, please refer to section K.
  4. Obtain the approval of the recharge committee for the establishment of the recharge unit.
  5. Identify the recharge income and revenue fund(s) to be used; fund 19900 cannot be used to record recharge income. Where possible, the unit should use an existing recharge income and revenue fund and differentiate the operations using org. code, project, and flexfield. Surcharge income should be coded to fund 60050 if the revenue accounts used are in the range 46xxx, and fund 66350 for revenue accounts in the 48xxx range. This will ensure that the recharge operation fund only reflects recharge income and expenses and that the operating fund balance is not distorted by surcharge income.
  6. Set up a new fund. Departments with no existing recharge activities can request the set-up of a new recharge fund to track new recharge activities generating a yearly recharge income above $1 million. The generic recharge funds 66360 – generic recharge – other sources and 66060 – generic recharge – edu activity should be used for recharge activities below the $1 million threshold. Departments with current recharge activities and associated recharge funds are encouraged to use existing recharge funds and various CF1 to capture new recharge activities within the department but can also request the set-up of a new fund for activities generating a yearly recharge income above $1 million. In both cases, for such requests, the recharge fund number request form should be emailed to the recharge lead at recharge_certification@berkeley.edu for review and approval by the recharge committee.
  7. Set up DeptId. This is the key identifier to distinguish the recharge activity. Departments should try to use their org. code structure to capture their unique recharge activities. The department may use different org codes to record different types of recharge activity within their recharge operation.
  8. CF1 + CF2. The unit should consider whether they need to use CF1 and CF2 to distinguish and track different types of services within the defined org. code and fund structure for the recharge operation. The unit should develop a structure that enables them to easily monitor and manage the different recharge activities. The unit also needs to consider aspects of materiality when deciding if or how a CF1 needs to be set up. Cost / benefit analysis of setting up and using these fields’ needs to be taken into account and monitored during the life of the recharge unit.
  9. Submit recharge self-certification checklist and rate development forms to Control Unit/Dean's Office for approval prior to commencing operations. The Control Unit will forward the documents to the recharge portfolio lead. (recharge_certification@berkeley.edu).
  10. Provide the recharge portfolio lead with recharge contact name, email address and phone number if different from the contact name provided on the self-certification. Note: this person will be the main contact for information on recharge policies, procedures and changes in these policies and procedures. It will be their responsibility to ensure these items are acted on and communicated throughout the department. They will also be a contact for general questions from other campus units on recharge operations in the department and will be the contact name on the recharge website.
  11. Set up recharge billing and financial journal process to ensure that valid chartstring information is received from customers and that customers are billed accurately and on time, and provided with supporting documentation for the charges. The recharge unit assumes any risk associated with nonpayment of goods and services when goods and services are provided in advance of valid customer billing information. Please refer to the Recharge Billing Policies and Procedures.
  12. If the unit will be using capital equipment to provide services, identify assets, determine assets lives and depreciation schedule. Review appropriate entries required to record depreciation, please refer to section F. Consider frequency of booking depreciation entries and identify appropriate reserve funds to record description entries.
  13. If the unit will be using inventory, ensure you comply with section G. You will be required to make an inventory adjustment at least once a year.
  14. Set up procedures to review recharge activity on a regular basis, preferably monthly, but at least on a quarterly basis. The review should include monitoring rates, recharge surpluses, deficits, and ensuring the center complies with Federal and university policies and procedures.

M. Sustainable Practices

Recharge centers are expected to comply with the University of California Sustainable Practices Policy.

In addition, to help meet our target of carbon neutrality by 2025, vehicles, equipment and tools purchased should be powered by electricity instead of gas or natural gas. When such sustainable investments in electric cars, trucks, equipment and tools cannot be made, the recharge committee should be notified via the recharge lead at recharge_certification@berkeley.edu.

N. Closure of Recharge Operations

Within 10 days of deciding to close a recharge operation, please email your Control Unit or Dean’s Office (for units under the Executive Vice Chancellor and Provost) and the recharge portfolio lead (recharge_certification@berkeley.edu), advising of your decision. In addition, please advise when the operation will close and how you intend to account for any remaining surplus or deficit. On receipt of this information, we will make all appropriate changes to the recharge web page.

When a recharge unit ceases to operate, the remaining balance must be treated as follows:

Surplus Balances

If the surplus greater than 1 months operating costs, the balance will be refunded back to the unit’s recharge customers on a pro-rata basis, within 30 days of closure. The refund will be allocated on the basis of charges made to these customers in the last 12 months. If the surplus less than 1 months operating costs, the balance is retained by the sponsoring unit and moved to an appropriate chartstring.

Deficit Balances

If the unit closes with a deficit balance, the balance must be transferred financially to an appropriate chartstring within the department. If it is not moved by the fiscal year’s end, the entire deficit balance will be subject to the terms of the deficit policy without the application of a tolerance. A decommissioned recharge unit may use its equipment replacement reserve fund to offset any recharge operational deficit. Balances in the reserve fund beyond deficit coverage may be retained by the department with Central Budget Office approval.

O. Recharge Forms

Self-Certification and Checklist Form

Self-Certification and Checklist Form: Recharge Form and Template (XLSX)

Self-certification forms, list of rates, and back up to rate calculations are required for all recharge units involved with Contract and Grants and for recharge units not involved in Contracts and Grants but with greater than $500,000/year in income/revenue:

  1. Annually as part of the yearly recharge budget process
  2. When a unit wants to change existing rate
  3. When a unit wants to add/delete rates
  4. When a department wants to establish a new recharge center

The forms must be forwarded to recharge_certification@berkeley.edu by the deadline for the annual certification process and at any time of year for times (2) to (4).

If the recharge unit has fallen below the threshold of $500,000 annual activity and does not engage in Contracts and Grants activities, the unit can exempt itself from the self-certification process by sending an email to its Control Unit or for units under the Executive Vice Chancellor and Provost, the Deans Office, advising of the change. If in agreement, the Control Unit/Dean’s Office will forward the information to the recharge portfolio lead (recharge_certification@berkeley.edu) advising that the unit no longer meets the criteria for a recharge center. The recharge unit and its rates will then be removed from the list of centrally monitored recharge units.

Rate Development Templates

If your proposal meets the criteria requiring review by the recharge committee, described in section B, please complete the appropriate rate development template in the Certification Checklist Form found on the recharge website in addition to the self-certification form.

All the above forms, correctly authorized, should be submitted through your Control Unit / Dean’s Office to recharge_certification@berkeley.edu.

P. Records Retention

Recharge center charges are subject to audit as long as the contract or grants which they charge (either directly or indirectly) remain subject to audit requirements. Recharge centers are also subject to periodic review by the university’s Audit and Advisory Services department and by external auditors, to evaluate compliance with established university policies and accounting practices. Therefore, recharge center activities must be adequately documented and records maintained to support expenditures, billings, rate development and cost transfers. Each recharge center must, at a minimum, retain the following records:

  1. Documentation to support the proposal and establishment, along with the approval for the recharge center: 5 years after the unit is decommissioned.
  2. Documentation as to how the rate(s) were calculated: support for rates in existence for the last 5 years.
  3. Supporting documents related to expenses incurred, please refer to UC Policy BFB-RMP-2: Records Retention and Disposition: Principles, Processes, and Guidelines (PDF) for payroll, AP vouchers, invoices, journals etc.
  4. Records supporting the amount and basis of billings (recharge income): 5 years.
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3. Responsibilities

A. Department

Campus departments are responsible for the overall operation of their recharge centers. Responsibility for recharge center operations is delegated to the Recharge Center Director/Manager to monitor operations and take corrective actions as needed. The recharge department’s responsibilities include the following:

  1. Ensures recharge center operations comply with all university recharge policies and procedures.
  2. Ensures recharge center operations comply with appropriate university payroll, reimbursement, accounting, and personnel policies and practices.
  3. Reviews the recharge center's income (both internal and external sources), expenses, balances and rates throughout the fiscal year; and sees that expenses and/or rates are adjusted as necessary.
  4. The department administrators and recharge center manager must also ensure the service center's budget is reviewed by and coordinated with the department's budget. The forecast should be updated in Calplanning on a quarterly basis to reflect the latest projections and take into account actual recharges income and recharge expenses recorded to date.
  5. Ensures that recharge center personnel charges, supplies and other expenses are charged to the correct chartstrings.
  6. Ensures the annual recharge certification form is prepared and submitted to the control unit on time.
  7. Ensures the annual budget submission is prepared and submitted to the control unit budget office on time.
  8. Ensures rate change submissions and the related certification form are prepared and submitted to the control unit on a timely basis.
  9. Ensures rates are reasonable. The rates are considered reasonable if the nature of the costs and the related goods or services acquired or applied to provide the recharge service reflect the action that a prudent organization would have taken under the circumstances prevailing at the time the decision was made to incur these costs. There must be a sound business case that supports providing these services and the manner in which they are provided. Alternative methods of providing these goods or services have been reviewed and the decision to continue to provide these goods or services is in the best interest of the university and is in compliance with Federal regulations.
  10. Reviews services provided on a regular basis, at least annually, to ensure that the services provided are necessary and are not readily available from outside sources. If they are readily available from outside sources, ensures that there are overriding economic, ethical, contractual or other institutional issues to support the continued need for these services.
  11. Ensures recharge center billings are accurate, timely, and adequately documented. The billing rates should be consistently charged to all users of the service except for external customers and affiliates. Subsidized rates must not be charged to one set of users e.g. unrestricted funds versus sponsored research funds. Assumes any risk associated with nonpayment of goods and services when goods and services are provided in advance of valid customer billing information.
  12. Ensures the approved rates are used for all recharge center billings.
  13. Ensures the recharge center operates within the recharge tolerance range, and in accordance with its budget.
  14. Ensures a plan is developed and forwarded to the recharge portfolio lead when the department's review reveals that the unit is out of tolerance.
  15. Ensures recharge center records are kept in good order for review and audit.
  16. Ensures all recharge center equipment is included in BETS.
  17. Conducts periodic review of personnel effort charged to recharge chartstring. Ensures that the percent of salaries charged corresponds to actual time spent on recharge center work.
  18. Ensures the dean, chair, director or department head is kept informed of all recharge center matters.
  19. Reviews ledgers for unallowable costs posted to the recharge center’s chartstrings throughout the year. Promptly transfers any unallowable charges to an appropriate chartstring outside of the recharge operation.
  20. Establishes and maintains cash sale controls as appropriate.
  21. Comply with the University of California Policy on Sustainable Practices.

B. Control Unit (Division level)

  1. Approves all recharge rate changes prior to submission to the recharge portfolio lead.
  2. Reviews and approves annual recharge self-certification forms.
  3. Oversees and assists in the formation of new recharge center.
  4. Oversees and assist in the monitoring of all recharge centers within the control unit, including unit operating balances. Ensures they are in compliance with the university recharge policies and procedures.
  5. Reviews services provided by the recharge centers on a regular basis, at least annually, to ensure that the services provided are necessary and are not readily available from outside sources. If they are readily available from outside sources, ensures there are overriding economic, ethical, contractual or other institutional issues to support the continued need for these services.
  6. Oversees and assists in the decommissioning of recharge center.
  7. Reviews and concurs with surplus/deficit reduction plans.

Please note: for all units under the Executive Vice Chancellor and Provost (EVCP), the Dean or equivalent must review, approve, oversee and assist in the above processes.

C. Recharge Committee

  1. Acts in an advisory capacity to recharge units and campus departments in reviewing recharge disputes. If based on advice from the committee the item still cannot be resolved, the item will be forwarded to the Office of the CFO and Vice Chancellor of Finance for mediation. The Office of the CFO and Vice Chancellor of Finance’s decision is binding.
  2. Acts in an advisory capacity for developing the university recharge policies and procedures.
  3. Approves the establishment of all new recharge units.
  4. Evaluates any discrepancies identified in rate submissions and determines whether discrepancy is significant to warrant adjustment of prior billings.
  5. Reviews all deficit reduction plans.
  6. Reviews and approves all surplus reduction plans.
  7. Reviews recharge balances quarterly and monitors progress made on reduction plans until the surplus/deficit is within tolerance.
  8. Reviews and approves requests for an average balance calculation over a seasonal cycle.
  9. Reviews and approves requests for tolerance levels greater than one month’s operating expenses.
  10. Reviews and approves yearly recharge rates developed during the campus budget process. As required, the Committee may elect to escalate the approval or denial of a rate to the Office of the CFO and Vice Chancellor of Finance.

D. The Office of the CFO and Vice Chancellor of Finance

  1. Provides the Chair to the Recharge Committee and ongoing staff support to the recharge committee.
  2. Provides support for ongoing fiscal review of the university’s recharge operations.
  3. Provides general accounting assistance to the recharge units, such as fund set up, accounting for depreciation, and financial reporting issues.
  4. Provides assistance on tax issues such as unrelated business income tax, sales tax, etc.
  5. Performs review of rate proposals and self-certifications.
  6. Administers rate proposal process, including posting of approved recharge rates to the recharge website.
  7. Provides ongoing training to the Campus community.
  8. Maintains and updates the recharge policies, procedures and rate schedules.
  9. Acts as primary contact for federal agencies, auditors and other outside entities relating to issues arising from the university’s recharge operations.
  10. Provides binding mediation on all recharge disputes between the recharge unit and its customers.
  11. Provides approvals or denial of recharge rate requests which have been escalated to the Office of the CFO and Vice Chancellor of Finance by the Recharge Committee.
  12. The office has been delegated the responsibility by the Chancellor to ensure the university complies with the recharge policies and procedures of the university.
  13. Reviews and approves all deficit reduction plans.
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4. Consequences of Policy Violations

The recharge center’s director/manager, financial analyst and division finance leader will be notified of noncompliance with the university policy, federal laws and/or statutes for sponsored research and have 60 days to ameliorate the issue and operate within the policy.

The Dean or Vice Chancellor responsible for the recharge center will be notified in the event the recharge center is noncompliant after the 60-day period described above.

The recharge committee may also opt to remove the recharge center and its associated rates from the recharge website. Failure to fulfill the responsibilities in this policy may result in additional policy violations and resulting consequences, including pursuant to university policies on personnel, business contracts, and contracts and grants.

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5. Related Documents and Policies

OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

Regents Policy 1111: Policy on Statement of Ethical Values and Standards of Ethical Conduct

University of California Business and Finance Bulletin A-47 Direct Costing Procedures (PDF)

University of California Business and Finance Bulletin A-56 Academic Support Unit Costing and Billing Guidelines (PDF)

University of California Business and Finance Bulletin A-59 Costing and Working Capital for Auxiliary and Service Enterprises (PDF)

University of California Contract and Grant Manual

University of California Sustainable Practices Policy

UC Berkeley Business Contract Policy (PDF)

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