Operate a Service Center

Internal Customers:

• Include UNL departments and other campuses (UNMC, UNO, UNK, UNCA).
• If billing a cost object, it is considered a charge to a University department, not an individual, so is identified as an internal customer.

External Customers:

• Include institutions outside the University of Nebraska System, industry clients, non-federal entities, faculty, staff, and students.
• Revenue is subject to a 5% University Administration Fee.

External Revenue:

• Post to GL 45XXXX.
• Split revenue between:
  • Service center (break-even amount).
  • Reserve (above break-even amount).

Internal Revenue:

• Posting is determined based on the cost object that is being billed. If billing from:
  • 23xxxxxxxx: Post charges to 48xxxx.
  • 22xxxxxxxx: Post charges to 59xxxx.

1. Transfer depreciation to the reserve cost center based on depreciation schedule in your rate schedule
2. Use 599212 on both the parent and the child reserve cost center

Sales Procedure

1. The State of Nebraska and University policy require assets to be offered for internal sale first. (This policy promotes sharing resources within the University, prioritizing shared goals over internal profit.)
2. If an asset is not needed internally, then the item may be sold externally.
3. Whenever equipment is sold, the value of the equipment should come back to the GL account it was purchased against rather than as revenue.

Internal Sales:

• 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 to offset the future rates.
•  If it is an internal sale, it would come back to the overall service center parent where it would be used to offset 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.

• Revenue exceeding the remaining book value of the asset, the excess revenue on the asset must offset future rates within the service center.

External Sales:

• Sales proceeds should be credited to the service center reserve cost object for future asset purchases.

Special Note for Federally Funded Equipment:

• Federally funded equipment cannot be sold internally at rates exceeding book value.
• Such equipment is flagged in SAP for tracking and compliance.

• Minimize costs by evaluating bulk purchasing against historical sales activity.
• Avoid excess inventory (over 14 months).
• Conduct physical inventory for purchases exceeding $5,000 at fiscal year-end:
  • Report inventory to Accounting.
  • A journal entry will transfer year-end inventory costs to the correct inventory asset account.

• Identify outstanding prepaid revenue or expenses with outside vendors at year-end.
• Submit to Accounting for journal entry to transfer amounts to a prepaid asset account.

• Service Centers must collect sales tax for services provided to entities outside the University.
• See more information about collecting taxes.

• Establish procedures to track time for service-based operations.
• Use timesheets to document:
  • Expenses incurred for services.
  • Allocation of time for split-funded payroll between cost objects.
• Time tracking is essential for rate calculations and compliance.