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Process Overview

To request a new recharge center contact David Munro in Grant & Contract Accounting.  Some general criteria for a recharge center are:

  • Centrality to institution mission
  • Dollar volume/volume of transactions
  • Nature of product/service (unique or specialized)
  • Demand exists
  • Defined unit of measure possible
  • Clearly defined financial plan 

The first step will be to define your business plan and build your rates – these will be captured on the Request for Recharge Center forms.  Consider the following when defining your business plan and building your rates. 

  • Define Product/Service
  • Estimate Customer Usage
  • Determine Measure Usage (ex. Labor hours, machine hours, # of samples # of tests performed, unit of measure such as milligram or liter, any unit of measure that is appropriate for the activity)
  • Determine Operating Costs – develop an operating budget
    1. Allowable Costs (such as but not limited to salaries and wages, fringe benefits, materials & supplies, outside services, repairs & maintenance – see OMB Uniform Guidance for additional details)
    2. Unallowable Costs (such as but not limited to advertising, marketing, selling costs, bad debt or uncollected billings, equipment > $5000, donations, gifts, contributions, fines, penalties, internal interest, memberships, reserves, salaries over federal salary caps, replacement costs – see OMB Uniform Guidance for additional details)
    3. Matching Concept – When expenses are appropriately matched to the revenue sources, there is a good “match” and the fund number will reflect a more meaningful accounting to provide good management information.
    4. Costs must be reasonable, allocable, allowable
  • Allocate Costs to various Product/Service
    1. Calculate Rate
    2. Breakeven Concept – Rates are generally calculated based on projections of operating expenses and volume of the services and the goal is to calculate a rate at which revenues reasonably offset expenses.  No significant surplus or deficit should be resulted.
    3. If there is a subsidy (Ex. some of the NIH Core Facilities have subsidies), the subsidy needs to be reflected in the calculation of rates.
    4. A surplus at the end of the fiscal year cannot be more the 2 months of operating expense and any surplus cannot be transferred and used for unrelated activity it must be reflected in the rates for the upcoming year
    5. After the initial year the carry-forward surplus/deficit should be reflected in the rate
    6. Costs of one product/service cannot be funded by or included in the rates of another
    7. All internal customers must be charged the same rate for the same service
    8. Rates will be reviewed and approved in Grant & Contract Accounting with input from the Controller
    9. Rates will need to be reviewed and re-approved annually
    10. Rates need to be published for customers to access.  (The history of these rates need to be maintained for audit purposes)

 After your Recharge Service Center has been setup and you begin doing business the following are responsibilities of the Service Center Managers

  • Bill customers monthly (January’s activity should be billed no later than the end of February) – via the Interdepartmental Billing or SSI processes – see the Accounting webpage for details
  • Billings to customers must be based on their actual usage of goods and/or services that is measurable and based on benefits received. Advanced billings are unallowable. 

The following are responsibilities of Grant & Contract Accounting and Accounting 

  • Annual review of surplus/deficit 
  • Annual review of rates

External customers are typically handled in a Local Fund Service Center and their rates should include overhead rates


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North Dakota State University
Phone: +1 (701) 231-8357 / Fax: (701) 231-9414
Campus address: SGC 100
Physical/delivery address: 1919 University Dr N, Fargo, ND 58102
Mailing address: NDSU Dept. 3130 / PO Box 6050 / Fargo, ND 58108-6050
Page manager: Grant and Contract Accounting

Last Updated: Friday, May 15, 2015 3:40:56 PM
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