Financial Administration

Program and Subprogram Codes and Definitions - Attachment 2

Distribution of General Support Services Costs and Distribution of Academic Computing Costs

Specific instructions with respect to chargeback of Physical Plant costs exist in FAP - Physical Plant Services Chargebacks (F25). Specific instructions with respect to chargeback of support costs to Auxiliary Enterprises exist in FAP - Auxiliary Enterprises Support Services Chargebacks (F42). In other areas of institutional support, the decision to establish a chargeback system for a particular service is an institutional prerogative--FAP - Internal Services Chargebacks (F24) provides instructions on "Accounting for Interdepartmental Transactions" but does not address which specific types of general support services must be charged back to users or detail the elements of cost to be included in the rate base. The decision on whether to charge users a fee for a particular service depends largely upon its relative importance, how the service is organized and delivered, and whether the benefit of additional budgetary control outweighs the cost of operating the chargeback system.

In order to achieve comparability of program cost data among institutions, it is essential that similar types of costs be reported subject to similar cost distribution policies. For each of the services named below, the costs described should be distributed to major programs for purposes of budgetary presentation and expenditure reporting; all other support services should be included under the program which is descriptive of the service provided and not reflected as a cost to the user of the service. Unless an actual fee-for-service chargeback system based upon individual transactions is mandated by one of the existing systemwide policies, a summary transfer of the budgeted costs for each named support service may be made to each major program. This transfer, which should be reflected as a sales credit, should be based upon an appropriate cost study. The accounting records for expenditure data should, by fiscal year closing, reflect the summary distribution of actual costs to each benefitting major program; if the final expenditure total (and the relative distribution of costs) does not differ significantly from the budget, the budgeted amount may form the basis of the transfer which is made in the accounting records.

Salary, supplies and capital costs should be distributed to major programs for each of the following support services: duplicating, printing, clerical, telephone, fleet and administrative data processing. Direct mailing costs (excluding salaries) should also be distributed to major programs. In addition, an appropriate charge for the use of academic computing services should be made to the Research and Public Service programs; the decision to charge instructional departments for academic computing services is an institutional prerogative.