Service Center & Recharge Operations

Recharge Operations are departmental units that have direct costs less than $50,000 in a fiscal year. Service Centers are operational units that have direct costs greater than $50,000 in a fiscal year. Since a recharge operation is a departmental unit their fund balance at the end of the year rolls up with the other department accounts. A service center can also include indirect costs (depreciation) in their rate, but is not allowed on recharge operation accounts.  Service centers have a functional area of 1250 - Other Aux; Recharge Operations functional area are based off the purpose of their work.

Please refer to BPM E-50-5 Section V. Procedures, A. Establishing New Cervice Centers/Recharge Operations.  Some key questions to consider before starting the process are:  Are your services unique and for the benefit of all campus users?   Is your primary customer internal to the University?  Do you want to make a profit, because service centers and recharge operations must break-even each year (no profit).  Also refer to the Service Center & Recharge Operations Rate Calculation Manual for more information.  Feel free to reach out to RFS or your AFO if you have questions. 

No fee is charged to be a service center or a recharge operation.

A minor service center has total annual direct costs exceeding $50,000 but not more than $500,000 and can include equipment depreciation expenses in their rate.  A major service center has total annual direct costs exceeding $500,000 and can include equipment and building depreciation and maintenance and operations costs in their rate.

The budget family attribute distinguishes the type of account as follows:

            23        Recharge operation

            22        Minor service center

            21        Major service center

Also, all service center account numbers begin with the 10438xxxxx series.  Recharge operations will be either 1012 or 1013 series accounts.

Federal guidelines do not allow the purchase cost of capital assets to be recovered thru service center rates.  Capital purchases should be made using renewal and replacement accounts.

Only capital assets (55XXXX - g/l accounts) can be purchased with your renewal and replacement account. Capital assets are defined by University policy outlined here BPM E-12-1

Service centers are allowed to recover depreciation costs in their rates but recharge operations are not.

Service centers should strive for break-even, however, it is recognized that variances may occur that prevent this from happening on an annual basis.  The University allows a surplus or unsubsidized deficit of 10% of annual operating expenses.  Carry-forward balances within this 10% threshold must be carried forward to the next year and used in the calculation of rates for the following year.

A subsidy from a general fund account will be needed to bring the service center account balance under 10% of expenditures.