HBP Part 10.3.1. Purpose

Handbook of Business Procedures

Date published: June 18, 2012
Last revised: March 29, 2019
Issued by: Federal Costing

10.3.1. PURPOSE

The purpose of this document is to establish the mechanism for defining, establishing, and closing service center (hereinafter referred to as “center or centers”) activities and for developing, requesting, and implementing rates for these activities. These procedures provide for consistent operational practices among the various center activity units, to ensure compliance with both University of  Texas at Austin accounting policies and government regulations, including the Office of Management and Budget (OMB) Part 200 – Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards (hereinafter referred to as “Uniform Guidance” or “UG”) and Cost Accounting Standards (CAS) to ensure equitable treatment of all clients regardless of the funding source.

A center provides goods or services at approved rates that are essential in supporting The University of Texas at Austin’s academic and research functions.

The primary purpose for establishing a center is to allow the university to recover costs incurred for goods or services used and required. A center can provide services to internal and external users. A center must meet the following criteria:

  • Operate on a break-even basis.
  • Act as an ongoing activity, not a one-time distribution of expenses.
  • Comply with both university accounting policies and federal guidelines published by OMB, Uniform Guidance §200.420 - §200.475, General Provisions for Selected Items of Cost.

Internal charges for goods or services to sponsored projects must not be greater than the actual costs of those goods or services, and federally sponsored projects must not be charged more than other users, internal or external.

Contact Federal Costing to determine how services and/or centers below the $50,000 threshold should be classified and operated.



Part 10. Costing - Table of Contents