University Rates

Policy
Effective:  04/15/07
Revised:  04/15/07

Responsible Office: Controller
The University Billing Rate process is required of departments or divisions that provide goods or services to internal and/or external customers on a recurring basis. Annual billing rates and changes to existing billing rates must be submitted to the Controller’s Office following the steps listed in the “Billing Rate Procedure”. Any new billing rates or significant changes to existing billing rates must be submitted to the Controller’s Office and approved by the Administrative Council.

Discussion
The University Billing Rate process is designed as a mechanism for communication, review and approval of University department billing rates for use in budgeting and effective planning. As rates are being developed department or business office staff should communicate with University customers any significant changes. All rates must be documented with a cost or market basis.

When rates are established for goods or services that may be charged to federal programs, government cost principles, as defined in Office of Management and Budget Circular A-21, must be followed. Circular A-21 helps ensure the federal government bears its fair share of total costs.

Legislative appropriations and student fees provide a level of support for the Educational and General (E&G) and Public Service Activities (PSA) of the University. These resources are used to pay salaries, operating costs and build many of our facilities. It is not appropriate for E&G and PSA units to recharge other similar funded units for services and space.

Billing rates that result in a major change in philosophy or have a significant impact on campus users will be forwarded to the Administrative Council for review and resolution.

Billing rates will be posted on the Controller's website for all users.

This policy does not apply to general student fees that require the Administrative Council and the Clemson University Board of Trustees approval.

Procedure
Effective:  04/15/07
Revised:  04/15/07

Annual Scheduled Submission and Approval Dates
To provide adequate time for users of services to plan their budgets, rates should be submitted, approved, and posted based on the following schedule:
November 1 - Telecommunications, Motor Pool, Utilities and Facilities Shop rate charges must be submitted to the Controller’s Office for review and posting.
December 15 –Rates are posted to the Controller’s website.
April 1 - Other billing rate charges for departments not specifically listed above must be submitted to the Controller’s Office for review.
May 15 –Rates are posted to the Controller’s website.

Billing Rate Review and Approval Routing Process
Approval for annual and interim billing rates should be obtained using the following steps:

1. Each Department is responsible for annually calculating and preparing rates for review by their Business Officer and/or Dean or Department Head. A template will be made available each year and will be located at P:/CUBSRPT/Billing Rates FYxxxx departments and within the appropriate folder.
2. A Departmental or Business Office staff member is responsible for assuring that a discussion is held with internal University customers prior to rate approvals for any anticipated billing rate changes.
3. After final calculation and review each Business Officer should submit the rates to the Controller’s Office by the established deadlines listed below. Proper justification should be part of the submitted information for any rate changes or rate additions.
4. After review by the Controller’s Office and, if necessary, approval by Administrative Council, the rates will be posted to the central website.

Submission Guidelines
For existing rates, a template will be made available at P:/CUBSRPT/Billing Rates FYxxxx departments and within the appropriate folder.

• A blank template will be provided by the Controller’s office and will be available at P:/CUBSRPT/Billing Rates FYxxxx departments/Blank Copy FYxxxx . This template can be used by any area that does not already have an existing template.
• Any rates that are based on and justified by current market values will generally not require Administrative Council approval. These types of rates will be posted after the Controller’s Office review.
• A Departmental or Business Office staff member is responsible for assuring that a discussion is held with internal university customers prior to rate approvals for any anticipated billing rate changes.
• Other helpful information for establishing a billing rate can be found under “Billing Rates” on the Clemson University Controller's Office website.
• Detailed documentation should be available, upon request, of the costs and revenue estimates that were used as a basis for the proposed rate. Periodic reviews will be completed by the Controller’s Office.

Additional questions regarding billing rates can be directed to the Controller’s Office.

Guidance
General Discussion
The University Billing Rate process is designed as a method for communication, review, and approval of University department billing rates for use in budgeting and effective planning. As rates are being developed, department or business office staff should communicate with University customers concerning any significant changes. All service center/billing rate activity must either support or relate to the University’s mission.

Rates are developed in order to recover some or all of the federal allowable costs associated with providing a particular recurring good or service. (Because Clemson is an institution that receives federal funds we are required to consistently apply federal costing regulations and guidelines.)

All rates must be justified and documented with a cost or market basis. The requirement is to match revenues and expenses over a break-even period. Usage of a break-even period permits the development of more stable billing rates, and avoids significant billing rate increases and decreases.

Carry Forwards
All operating revenues and expenses associated with running the service center should be accounted for within the unique operating unit/project. A carry forward is the surplus or deficit resulting from the over or under estimating of billing rate expenses or units (calculated on a fiscal year basis). Generally, a positive carry-forward should be equal to no more than 2 months’ worth of operating expenses. Operating surpluses should not be transferred out to subsidize other activities.

Changes to Rates
Billing rates that result in a major change in philosophy or have a significant impact on users (as determined by the Controller’s Office) will be forwarded to the Administrative Council for review and approval. If questions or concerns arise during the Administrative Council’s review, the Controller’s Office will be in contact with Business Officers to discuss possible resolution.

Donated Equipment
The fair market value of donated equipment may be recorded in a service center’s account. Annual depreciation can be determined by dividing the fair market value at the time of the donation by the remaining useful life of the equipment.

*** Equipment originally purchased by a federal project or grant cannot be included in any billing rate.

Equipment
Only depreciation on equipment recorded in a service center’s account can be included in a billing rate. The purchase price is not allowed to be recovered through a billing rate; a capital asset purchased for more than $5,000 must be depreciated over its useful life.

External Users
Separate rates can be established for goods and services that will be offered to external users (non-CU users).

Internal Users
When rates are established for goods or services that may be charged to federal programs (internal users), government cost principles, as defined in Office of Management and Budget Circular A-21, must be followed. Circular A-21 helps insure the federal government bears its fair share of total costs.

Mid-Year Submissions
Submitting billing rates at times other than the dates stated in the billing rate procedures may be considered under the following exceptions:

• beginning a new and necessary service;
• changing due to a significant change in cost; or
• resulting from departmental or service center changes/restructuring.

Changes that result in a major change in philosophy or have a significant impact on users (as determined by the Controller’s Office) will be forwarded to the Administrative Council for review and approval.

New Submissions

• Submission - Any billing rates that have not been previously submitted or approved must be reviewed by the Controller’s Office prior to implementation. These will be forwarded to the Administrative Council for review, discussion, and approval. If questions or concerns arise during the Administrative Council’s review, the Controller’s Office will be in contact with Business Officers to discuss possible resolution.
• Calculation – The costs to be included in a new billing rate must not have been included in the current facilities and administrative cost recovery rate calculation. If you are unsure, contact the Controller’s Office for assistance in determining which costs are appropriate to include in the rate calculation.

Posting/Publishing Rates
Approved billing rates will be posted on the Controller’s website for all users.

Student Fees
General student fees that require the approval of the Administrative Council and the Clemson University Board of Trustees are approved through a separate process coordinated by the Office of Budgets and Financial Planning.

Subsidies
In certain instances, the Provost, budget center, or department may determine that it is appropriate to provide funding to a service center to subsidize all or a portion of the charges to users. Such subsidies are utilized to either reduce one or more of the service center rates charged to all users or to provide reduced rates to a particular group of users (i.e., students). Subsidies should be officially recorded through a non-mandatory transfer to the service center.

In the absence of subsidies, service centers are operated as break-even entities. All operating revenues and expenses associated with running a service center should be properly accounted for within the unique operating unit/project.

Submissions
All billing rates must be submitted to the Controller’s Office for review following the established billing rate procedures and timeline.