Handbook of Business Procedures

10.3.8. SERVICE CENTER ADMINISTRATION

A. Records Retention Requirements

The records, operations, rates, and practices of all centers are subject to audit by federal, state, and internal auditors, and by the Office of Accounting and Financial Management. Centers must adhere to the following requirements for records retention:

• Retain all costs, projections, and any other information used to develop rates to substantiate charges in the event of an audit.
• Maintain billing records to identify funding sources charged for services or goods, budget group numbers, internal versus external users, service or good rendered, number of units sold, rate charged, total amount billed, etc. 
• Record retention procedures must comply with The University of Texas at Austin Record Retention Schedule (UTRRS). Refer to HBP Part 20, Records Management or email Records Management Services. 

B. Accounts

• Federal Costing will coordinate the establishment of new center accounts and billing formats within Accounting and Financial Management.

C. Billing

• Centers must consistently and accurately bill all users.
• Advanced billing for services or products is not allowed.
• Users must be billed once services are rendered and no more than three months after services are provided.
• Centers must maintain a record of all billings to users to substantiate charges on all accounts in the event of an open records request or audit by federal, state, or internal auditors.
• External center rates are based on total operating costs, and the rate must include the 26.5 percent institutional surcharge used to cover institutional facilities and administrative expenses.

D. Balances

• At a minimum, balance reviews are conducted when rate changes are proposed, during the new fiscal year budget submissions, or when budget increase requests are made.
• Center managers must justify balances when requested by Federal Costing.
• Excess balances are reduced in the form of a rate reduction. Excess balances cannot be utilized to purchase equipment, consumables or other expenses, salary increases, salary supplements, or to offset losses in another center.
• Fiscal year-end balances resulting from budgeted salaries or expenses that did not occur cannot be transferred and/or utilized for purposes unrelated to the operations of the center.
• Deficits are eliminated by a rate increase or a transfer of adequate funding to the center.

E. Multiple Service Centers

A unit may manage more than one center providing various services or goods. Each center must be separately managed along with the expenses and income associated with providing the services or goods. Revenue from one center cannot be used to offset losses in another center. The expenses associated specifically with one center cannot be paid by another center.

F. Transfers

The following rules govern transfers from center accounts to other types of accounts.

• Revenue from surcharges to external users must be transferred into the Institutional Portion of Center Income (19-0220-0696) account.
• Transfers must have adequate justification and provide proper documentation for verification and validation.
• Fiscal year-end balances resulting from budgeted salaries or expenses that did not occur cannot be transferred and/or utilized for purposes unrelated to the operations of the center.
• A surplus in the operating account cannot be transferred to a non-center account.

G. Overdrafts

Overdrafts are used to provide temporary spending authority for an account for various reasons. Overdrafts are not approved to increase spending authority due to an approved center proposal, instead, the center must process a transfer document to increase spending authority. Generally, overdrafts do not automatically carry over to the new fiscal year.

The guarantee account associated with the center must be used to cover deficits prior to requesting an overdraft. An authorized signer on the budget group  should send a written request via email to Federal Costing.

Overdraft approval requests must include the following information:

• Approval by the unit’s department head/chair and CSU Business Officer
• Forecast for remaining fiscal year income and expenses
• If center rates will be adjusted to prevent future overdrafts
• Account number
• Amount requested
• Proposed expiration date
• Reason for the overdraft
• Date the overdraft will be covered
• How the overdraft will be covered (e.g. new income, transfer from another account, commitment from institutional funds, etc.)

Federal Costing will review requests and notify the requestor of whether the request is approved or denied. Approved overdraft amounts are added to the pool balance of an account by Financial Accounting and Reporting (FAR).

For more information, refer to HBP, part 2.6, Overdraft Approval.

H. External Users

Approval to provide services to external users for new centers must be granted by the Office of the Executive Vice President and Provost. Rates must exclude all subsidies offered to internal users and include a 26.5 percent surcharge to cover institutional facilities and administrative expenses. Federal Reporting corresponds directly with the vice provost regarding approvals to external users. External users are entities or persons over whom The University of Texas at Austin has no fiduciary responsibility, regardless of the user’s relation to the university’s academic or research mission. External users include IHEs other than The University of Texas at Austin, for-profit entities, nonaffiliated not-for-profit organizations, other state agencies, students, and members of faculty or staff acting in a personal capacity.

Part 10. Costing - Table of Contents