From Vice Chancellors Feitelberg and Reese - Revised Recharge Committee charter

April 7, 2014

To:                   Campus Community
 
From:              Daniel Feitelberg, Vice Chancellor, Planning and Budget
Michael Reese, Vice Chancellor, Business and Administrative Resources
                       
The Recharge Committee reviews departmental recharge rates that are charged to other campus departments. The rate review process includes evaluation of financial profit and loss statements (to ensure compliance with applicable Business and Finance Bulletins, which require rates to be based on actual costs of goods and services), and for compliance with federal requirements and Cost Accounting Standards (CAS). As such, broad campus representation is essential.
 
In order to align the Recharge Committee with recent organization changes, the Chancellor approved modifications to this committee's charter.  For example, because the committee representative from Contracts and Grants Accounting now reports to the Division of Research, we have increased the representation from this division accordingly. In addition, the Committee will be co-chaired by a representative of the Division of Planning and Budget and Division of Business and Administrative Services.
 
Effective Jan. 15, 2014, the Recharge Committee will be co-chaired by the Interim Assistant Vice Chancellor, Business Financial Services/Controller and the Interim Director, Campus Budget Office.
 
The revised charter, shown below, asks the committee to determine and communicate the process, including clear deadlines, for the establishment of recharges and fees that become effective at the commencement of each fiscal year.  This process shall include deadlines for the Recharge Committee to recommend recharges and fees to the Chancellor; the schedule for the Chancellor to approve, amend and/or reject such recommendations; for the communication of approved recharge rates for the next succeeding fiscal year to campus units; and the inclusion of such rates into the proposed campus budget.
 

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RECHARGE COMMITTEE
 
Committee Charge
The Recharge Committee reviews departmental recharge rates that are charged to other campus departments. The rate review process includes evaluation of financial profit and loss statements (to ensure compliance with applicable Business and Finance Bulletins, which require rates to be based on actual costs of goods and services), and for compliance with federal requirements and Cost Accounting Standards (CAS). As such, broad campus representation is essential.
 
Governance Structure
The Recharge Committee is comprised of twelve (12) members, as follows:
 
€      Two (2) members appointed by the Vice Chancellor, Planning and Budget.  One of the members will be designated as the co-chair of the committee.  At least one appointee shall represent the Finance Group;
 
€      Two (2) members appointed by the Vice Chancellor, Business and Administrative Services.  One of the members will be designated as the co-chair of the committee.  At least one appointee shall represent the Office of the Controller;
 
€      Three (3) members appointed by the Provost/Executive Vice Chancellor.  No more than one member may be appointed from each school and at least one member must be from the faculty;
 
€      Two (2) members appointed by the Vice Chancellor, Research.  At least one appointee shall represent the Office of Contracts and Grants Accounting;
 
€      Two (2) members appointed by the Vice Chancellor, Student Affairs.  At least one appointee shall represent an auxiliary enterprise;
 
€       One (1) member appointed by the Vice Chancellor, Development and Alumni Relations; and
 
€      One (1) member appointed by the Chair of the Academic Senate.  One member must be faculty.
 
Staff support for the Committee will be determined by committee co-chairs.  Service on the committee or the provision of staff support to this committee shall not be compensated.
 
General Charge of the Recharge Committee
 
1.    To determine and communicate the process, including clear deadlines, for the establishment of recharges and fees that become effective at the commencement of each fiscal year.  This process shall include deadlines for the Recharge Committee to recommend recharges and fees to the Chancellor; the schedule for the Chancellor to approve, amend and/or reject such recommendations; for the communication of approved recharge rates for the next succeeding fiscal year to campus units; and the inclusion of such rates into the proposed campus budget.
 
2.    To analyze campus activities and recommend the most appropriate funding mechanism.  These mechanisms include recharges or direct fees for service, an administration fee, or centralized ³utility² funding.
 
3.    To establish the process by which proposals to establish new recharges and fees and/or amend existing recharges and fees shall be proposed to the Recharge Committee.
 
4.    To review proposals to establish new recharge and fee activities to ensure that there is a broad and significant demand for the specialized service to be provided, and that recharge and fee rate components meet guidelines for Federal and non-Federal rates as outlined in the establishment criteria listed in Business and Finance Bulletins A-47, University Direct Costing Procedures; A-56, Academic Support Unit Costing and Billing; A-59, Costing and Working Capital for Auxiliary and Service Enterprises; BUS-72, Establishment of Auxiliary Enterprises; and OMB Circular 21, Cost Principles for Educational Institutions.
 
5.    To perform a review of rates and prices charged by existing recharge activities, fees for service and administrative fees, to ensure that they are based on actual costs of goods and services, are applied uniformly, and evaluated in the context of alternative methods and costs of accomplishing objectives, as stated in the above financial documents.
 
6.    To consider all requests for recharge and fee rate increases or new rates in light of the requirement that recharge activities cover actual costs, bearing in mind also the probable budgetary effect on user departments and the appropriateness of state funded subsidies. The Committee will recommend approval or disapproval; however,
 
7.    The Recharge Committee does not provide formal oversight of recharge or fee for service operations, including the investigation and resolution of issues such as quality, service provision, cost effectiveness, or customer service concerns of recharge operations.
 
Why the Recharge Committee Review of Recharge and Fee Rates is Important
 
€      Campus compliance with regulations.
€      Federal Audits and Campus Audits.
€      Representation of Campus Managers from campus functional areas to review the reasonableness and appropriateness of the recharge.
€      Determine the appropriateness of the recharge.
€      Review of the impact of the recharges on campus units.
€      Inclusion of new and revised rates into the budget for the next succeeding fiscal year.
 
Committee Staff Responsibilities
 
Staff to the Committee will assist the Committee to ensure:
 
€      Components of recommended recharge and fee rates are allowable;
€      Recharge and fee proposals meet the criteria for a recharge/fee for service operation;
€      Expenses are well documented and actual expenses match campus financial schedules;
€      Backup materials are thoroughly reviewed (Depreciation, Salary Schedules, Assumptions);
€      Expenses are based on actual costs of services and goods provided;
€      Recharge and fee costs comply with Federal and other regulations;
€      Accumulated reserves are appropriate and are utilized in a manner consistent with their intent;
€      Prepare notification letters for the unit proposing the recharge activity after final adoption of the budget to inform the proposer of the Chancellor's final budget decision.