Frequently Asked Questions

Getting Started

A service center is an operating unit that provides services, typically within the Emory community. Users are charged for actual usage of services at a rate based on direct costs.

A recharge is a way to charge internally (i.e., between units/departments) when the costs of providing goods/services are recovered through recharge rates. Additionally, recharges are typically not institution-wide.

Submit a service center rate proposal at least two months prior to when the activity begins. The template and checklist we offer are resources that can greatly assist you in this process.

Please refer to our Effort Calculation tutorial which can be found in the Rate Proposals - Tutorials section.

There are a few general scenarios that suggest the need for a rate change:

  • Consistent over/underrecovery (recovering too much or too little money)
  • There is a change in the unit type used to calculate the rate (i.e., from per hour to per test)
  • There has been a change in how the costs are allocated

You should also analyze actual activity from the prior year in order to effectively assess whether your rates seem accurate.

Submit a service center rate proposal to the Cost Accounting team as soon as you've confirmed the need to change your rate. Be sure to check out the template and checklist we offer as resources.

A rate renewal is required two years after your previous rate approval date.

Although the preference is for rates to be submitted after a core activity is approved, in some cases they can be submitted ahead of time. Please contact us for more details.

Unallowable Costs

Including unallowable expenses in your rate calculation is against policy and can lead to a compliance issue.

Rates cannot be approved until the unallowable expenses are removed from the calculation.

Capital equipment cannot be charged to a service center but the equipment's depreciation can be charged. A depreciation schedule should be included in your submission whenever new equipment is added to your activity. Additionally, rates should be revised if the equipment cost(s) impact the activity.

Keep in mind that you can use a separate speedtype to purchase new equipment. This provides transparency and ease for accounting and/or reconciliation purposes.

Equipment depreciation should not be included if all or part of the equipment was paid for by the federal government or if it is already included in the F&A rate.

Administrative effort should not be included in your rate calculation if it is not directly related to the service center activity.

For example, a Department Administrator's time most likely would not be factored into the rate(s) since it's unlikely for any or a portion of their time to be allocated to a specific activity. However, if any of their effort can be directly attributed to the activity, it should be factored into the rate(s).

Billing

Service center revenue should post to account 8XXXX under fund 2614. Typically, the speedtype/smartkey and project number should remain consistent.

Internal customers include other Emory departments and campuses.

External customers include institutions outside of Emory, faculty, staff, students, non-federal entities, and industry clients.

If you provide service to entities outside of Emory, you should collect sales tax.

If the operations include providing a service, procedures should be established for the purpose of tracking time. This ensures that you are billing for the work accurately. Examples include performing time studies or using timesheets to capture how much effort is related to the service being offered.

Other

Normally a service center should break-even so there wouldn’t be a balance to transfer. If a deficit was built from overcharging internal customers with rates that were too high, it wouldn’t be appropriate to address the deficit with capital from another service center. However, if the balance resulted from charging higher rates to external customers, it can be used to cover another service center’s deficit.

Software that costs over $5K is capitalized and therefore should be depreciated. Since the useful life for software is 10 years, the depreciation start date would be the date actual usage of the software began and those costs would be straight-lined over that period of time (with partial months being prorated). This avoids a large increase in your rate(s).

An example that includes partial month prorating is below:

Total cost of software/equipment is $405,000.

Useful life for software/equipment is 10 yrs aka 120 mos (10 yrs x 12 mos per yr).

Usage of software/equipment began on 2/18/21 so the depreciation duration will be 2/18/21 – 2/17/31.

Note: Usage begins within the month, not at the beginning, so both the first and final mos of depreciation will be prorated.

How to calculate the monthly expense for full months (Mar 2021 – Jan 2031):

  1. $405,000 / 10 yrs = $40,500 per yr
  2. $40,500 / 12 mos = $3,375 per mo
  3. $3,375 x 119 mos = $401,625.00 in total

How to calculate the monthly expense for partial/prorated months:

(Feb 2021)

  1. 2/18/21 - 2/28/21 (11 days out of 28 days)
  2. $3,375 / 28 days = $120.54 per day
  3. $120.54 x 11 days = $1,325.89 in total

(Feb 2031)

  1. 2/1/31 – 2/17/31 (17 days out of 28 days)
  2. $120.54 x 17 days = $2,049.11 in total
  3. $401,625.00 + $1,325.89 + $2,049.11 = $405,000.00

Remember to make sure your depreciation total is equal to your total cost.