A service center is any organizational unit, or activities within units, that charge for goods or services provided primarily to other internal university operations or units, but also potentially to users external to the University. Any unit or activity established for the purpose of, or participating in, supporting internal or external research objectives through billing to federal or federal flow-thru funds for goods or services provided may be a service center. Examples include, but are not limited to, computer services, copy services, lab analysis services, research animal care services, etc. If your operations meet these criteria, click here to view the Service Center Policy.
|Service Centers-Not Reviewed (USR)||Generates less than $10,000 in federal charges and does not claim depreciation.|
|Service Centers-Reviewed (SRC)||Generates more than $10,000 in federal charges, claims depreciation on capital items or at the discretion of the service center committee.|
|Specialized Service Center (SSC)||Generates more than $1,000,000 in annual charges or that generate significant charges to federal grants AND provide highly complex or specialized services.|
Units requesting a new service center cost center account must complete the following:
- A New Cost Center Request Form, available on SAPPHIRE.
- New Service Center Request
- Budget Schedule, templates available here.
- Depreciation Schedule, if applicable.
This information will be reviewed by Accounting and the Office of Sponsored Programs. Upon review and approval the service center revolving cost center will be established. For more information,click here to view the service center policy.
How do I determine if my customer is external or internal?
- Internal customers include UNL departments and other campuses (UNMC, UNO, UNK, UNCA). If you are billing a cost object, then it is considered a charge to a University department, not an individual, and should be considered internal.
- External customers include institutions outside of the University of Nebraska System, Industry Clients, non-federal entities, faculty, staff and students. This revenue is subject to the University 5% Administration Fee.
- External revenue should be posted to GL 45XXXX and split between the service center (break-even amount) and the reserve (above break-even amount).
- Internal revenue –posting is determined based on the cost object you are billing from. If you are billing from a :
- 23xxxxxxxx - charges should be posted on a 48xxxx.
- 22xxxxxxxx - charges should be posted on a 59xxxx.
How do I record yearly depreciation on my service center?
Whenever you transfer the depreciation over to the reserve cost center based on the depreciation in your rate schedule, use the 599212 on both the parent and the child reserve cost center.
How do service centers handle the internal vs. external sale of equipment?
The State of NE and the University require that all assets be offered for sale internally before being sold externally. This policy is in place for the best interest of the overall University as we are not here to be making money off each other but to be helping each other in the overall goals of the University. If it is found that there is not a need internally for an asset, then the item may be sold externally. These types of sales are accounted for differently.
If internal sales exceed the remaining book value of the asset, the excess revenue received on the asset must be placed back into the Service Center's operations in order to offset the future rates.
Whenever equipment is sold, the value of the equipment should come back to the GL account it was purchased against rather than as revenue. If it is an internal sale, it would come back to the overall service center parent where it would be used to offset the next year's rates. If it is an external sale, it would come back to the service center reserve cost object to be used to purchase future assets.
Note: These procedures for the sale of equipment internally do NOT apply to those items that were initially purchased by the Federal Government. This equipment will NOT be allowed to be sold internally at a rate higher than its book value. Equipment that was purchased with Federal funds should be marked as such on SAP therefore helping departments and accounting know that this item requires special procedures.
How do I record inventory for resale on my service center?
Inventory for resale by service centers should be acquired in such a manner that costs are minimized. Since bulk purchasing can result in significant price reductions, the quantity to purchase should be carefully evaluated using historical sales activity. Quantities expected to be in inventory in excess of fourteen months should be evaluated to ensure that the costs to acquire and to carry the inventory do not exceed the savings of purchasing the item in bulk. Bulk purchases may be made when the evaluation indicates that they are cost effective.
Service centers with purchases of inventory in excess of $5,000 must perform a physical inventory of these goods at fiscal year end. A copy of the inventory report should be forwarded to Accounting where a journal entry will be prepared to transfer the cost of the year end inventory from the expenditure accounts to the correct inventory asset account.
How do I record prepaid revenue or expenses on my service center?
At the end of the year, any outstanding prepaid revenue or expenses with outside vendors, including students, outside companies, etc., should be identified and sent to Accounting. A journal entry will be prepared to transfer the cost of the year end revenue or expense from the revenue or expense account to a prepaid asset account.
Do I need to collect sales tax on my service center activity?
If you provide services to entities outside of the University, you need to collect sales tax. Click here for more information.
Do I need to keep track of time charged to my service center?
If your operations are billing out for services performed, it is necessary to establish procedures to track your time. This is very important in order to show what expenses are incurred for the work you are doing. You may base your rates on the time you work or on a per unit basis. In either case, you need time sheets to provide the necessary documentation of the time you spent performing the services. The time that is documented on the time sheets should be properly charged to your service center cost object. It is also important to keep time sheets if your payroll is split-funded between two or more cost objects to document that you are actually devoting the same percentage of time to the service center as is being charged to the service center cost object.