BILLING RATE CALCULATION, SUBMISSION, AND APPROVAL GUIDELINES
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.
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 Comptroller’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 Comptroller’s Office will be in contact with Business Officers to discuss possible resolution.
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 can NOT be included in any billing rate.
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.
Separate rates can be established for goods and services that will be offered to external users (non-CU 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.
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 Comptroller’s Office) will be forwarded to the Administrative Council for review and approval.
- Submission - Any billing rates that have not been previously submitted or approved must be reviewed by the Comptroller’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 Comptroller’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 Comptroller’s Office for assistance in determining which costs are appropriate to include in the rate calculation.
Approved billing rates will be posted on the Controller’s website at http://www.clemson.edu/finance/comptroller/rates/billingrates/ for all users.
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.
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.
All billing rates must be submitted to the Comptroller’s Office for review following the established billing rate procedures and timeline.