Recharge Centers

A recharge center is designed to recover only the aggregate costs of providing goods or services and the costs must be:

• Allowable
• Allocable
• Identifiable
• Consistently applied
• Reasonable
• Must not include unallowable costs refer to 2 CFR, Part 200 Uniform Guidance, Subpart E -Cost Principles, Sections 200.400 –200.475

Example of allowable vs unallowable costs:

• A recharge center rate is an approved rate for providing goods or services per measurable usage unit to recover the true costs of producing goods or services. The suggested formula to develop a rate: Cost/Usage = Rate
• A recharge center must have a measurable usage unit and billing rates.
• A recharge center must have identifiable costs that comply with and meet government requirements.
• A recharge center’s charging rates do not discriminate between federally and non-federally supported activities, including university internal activities.
• A recharge center’s rates must be based on the actual and allowable costs to provide goods and/or services. Actual cost is the most the rate is allowed to recover.
• A recharge center is expected to break even over time.
• Rates must be reviewed and approved regularly (regular basis means no less than every other year, i.e. biennially)
• Surplus from a recharge center cannot be used to fund unrelated activities.
• Rates must be adjusted when incoming funds exceed expenses (surplus balance), or else refunds must be issued.
• Guidance is different for external user rates.

1. After a department or unit has confirmed their eligibility to establish a recharge center, please fill out the ISP and Internal Catalog Request Template and send it to askfinance@virginia.edu.
2. As the ISP and Internal Catalog Request Template is reviewed, a rate development proposal will also need to be submitted via askfinance@virginia.edu for review and approval.  
3. Once the rates and ISP request are approved by Business Assets & Cost Recovery, the department chair or activity head and the appropriate dean or vice president will also need to approve it by completing form 15-70.
4. The approved rates will need to be entered and submitted under the catalog rates section in Workday as the new recharge center is set up.
5. Once the catalog rates are approved in Workday, departments or units can start billing out to other schools or units.
6. Keep all approved documentation including the ISP and Internal Catalog Request Template, rate development, and form 15-70 for record tracking.

The departmental fiscal administrator of the activity is responsible for timely billing, proper accounting of revenues/recoveries and expenditures, account reconciliations, review of rates, and records retention.

A. Overview

All new or expanded services and activities that are subject to this procedure must successfully complete the review and approval process before offering their services to University departments, faculty, staff, and students or, in some cases, to the general public. If the new or expanded activities are put into operation before final approval is given under this procedure, then the department will be responsible for absorbing any commitments, obligations, or expenses incurred prior to approval of the proposal. See Procedure 15-70 for instructions on how to Gain Approval to Charge for Goods, Services or Other Fees.

B. Billing

1. Timing of Transaction Billing: Recharge Centers must submit invoices for their services to customers at least monthly. If the order is not complete, partial billing should be done for the portion of goods or services that were provided. The description should state that the billing is for a partial order. The amount billed must be based on actual usage. When practical, goods and/or services should be billed in the fiscal month in which they are provided.

2. Correcting a Billing Error: When customers contact the recharge center about a billing correction, the recharge center is responsible for making the correction in a timely manner. Corrections should use the Worktags originally charged, or alternate Worktags provided by the customer if the original Worktags were used in error. The recharge center should also provide a detailed explanation in the comments section, referencing the original invoice.

3. External Billing: External users are customers that cannot be charged by using Worktags. External users can include faculty, staff or students who purchase goods and/or services in a personal capacity, rather than as a University employee, as well as users outside of the University. Billing to external users must be done at least monthly. In addition to the direct costs of the service recovered in the approved rates, the charges to external users may include an amount for University indirect costs, based on the appropriate current F&A rate. Billing to non-University users may be accomplished through the FDM Accounts Receivable module or the activity’s own accounts receivable system. Upon initial approval, if the service provided to the external users of a recharge center was determined to be taxable, unless the customer provides proof of tax-exempt status, sales tax must be added to the total invoice.

C. Accounting:

1. Break Even: Rates of a Recharge center must be based on the actual, allowable costs to provide the goods and/or services. Recharge centers are expected to break even over time. Any actual “profit” or over-recoveries should be generated from external customers.

2. Unique Cost Center: Recharge centers must accumulate all their activities in a unique Cost Center. This Cost Center is required for all recharge centers and should only include expenses necessary to operate the recharge center, including salaries, wages, fringe benefits, supplies, etc., as well as the income (internal recoveries or external revenues) generated from that good or service.

3. Accounting To be Used for Internal Customers: Recharge Cost Centers should record internal recoveries from UVA customers (customers with Worktags) in Revenue Category “RC0110 Recoveries RCG”. Spend Category “SC0211 Services Internal Service Provider” should be used when entering catalog rates in Workday to record goods or services provided by recharge centers.

4. Accounting to Be Used for External Customers: External revenue of recharge centers should be recorded in Revenue Category “RC0050 Sales and Services” and Ledger Account “4600: Nonauxiliary Sales and Services”.

D. Reviewing and Updating Rates:

Rates for a recharge center must be based on the actual, allowable costs to provide the goods or services. All recharge center managers must review their rates at least biennially. More frequent updates to rates are encouraged when the service provider knows that existing rates are creating either a significant deficit or a significant surplus. Contact askfinance@virginia.edu for help with approval of new rates. All new or updated rates must be approved by Business Assets & Cost Recovery.

E. Record Retention

All records relating to a Recharge Center must be retained according to policy IRM-017: Records Management by the Recharge Center. This includes requisitions or logs indicating who ordered the items, the date of the order, and the Worktags to which the expense should be charged, records or logs of usage of each good or service, records of billings to each user, and any other relevant documentation. These records are subject to federal audit. None of these records should be disposed of or destroyed without the approval of Business Assets & Cost Recovery.