HBP Part 10.3.7. Requesting and Approving a Service Center

Handbook of Business Procedures

Date published: June 19, 2012
Last revised: March 29, 2019
Issued by: Federal Reporting


A. Preliminary Approvals

  • Review the items to consider when determining whether to propose a center.
  • Download and complete the appropriate center forms
  • Obtain approval on the center concept from the dean or vice president for the prospective proposal.

B. Rate Reviews of New and Existing Service Centers

All center rate proposals must be emailed to Federal Costing for review and approval.

  • New centers regardless of anticipated income must submit a rate proposal for review to establish.  
    • Including additional reviews by Accounting & Financial Management leadership.
    • Federal Costing determines the center type and designate the rate review basis (self-certification, biennial, or triennial). New centers with anticipated income of less than $50,000 may continue to require full rate reviews until Federal Costing designates it as a self-certification.
    • If the center is proposing external rates, the Office of the Executive Vice President and Provost will also review the proposal. This review and approval is coordinated by Federal Costing, centers must never send rate proposals to the Vice-Provost.
  • Existing centers with activity greater than $50,000.01 must submit rate proposals at the following times:
  • Existing centers with activity less than $50,000 must submit a self-certification on a biennial basis. Federal Costing will require a full center review in the event of continued deficits or surplus balances.

In the event of an audit or open records request, the center will be required to provide all documentation to justify rates in the self-certification form.

C. Significant Changes to Existing Service Centers

The criteria below are provided to assist you in determining what constitutes a significant change to an existing center. Email Federal Costing for further clarification or assistance.

  • Changes impacting distribution bases and/or expenses.
  • The center adds services/goods that were not previously approved by Federal Costing.
  • Any change that may have a financial policy implication and/or cost accounting concern.
  • Elimination or merger of a center.
  • On-going deficit or surplus balances.

D. Rate Proposal Package

Email a complete rate proposal or self-certification form to Federal Costing for review.

Once the rate proposal package has been properly reviewed by Federal Costing, the center manager is instructed to begin gathering the necessary rate proposal form signatures. After Federal Costing receives a signed signature page, a rate approval memo is issued finalizing the rates.

Centers designated for self-certification requires departments to internally update their rate calculations but only submit the department self-certification form to Federal Costing. A rate approval memo will not be issued by Federal Costing. If the center is subject to an audit or open records request, the department is required to provide Federal Costing a copy of the rate proposal showing how the rates were calculated and justifying the rates presented in the self-certification form.

E. Service Center Approval Criteria

  • Proposal meets the approved thresholds.
  • The services or goods are in demand by multiple users.
  • Activity will be ongoing and is not a one-time distribution of expenses.
  • Activity does not interfere with normal department functions.
  • Goods or services are not currently offered by an existing center at the university.
  • Redundancy or duplication of goods or services does not occur.
  • Services are identifiable (e.g., machine shop, glass blowing) and not general.
  • Rates are stated in measurable units of goods or services.
  • Does not compete with for-profit entities if services are offered to external entities.
  • Proposal is in concert with the mission of the university and/or the goals of department.
  • Rates are based on actual or historical costs.
  • Rates are structured to break-even annually.



Part 10. Costing - Table of Contents