Provided below is a checklist for you to use as you start the process of information gathering to determine the requirements to establish a particular recharge process or dedicated center. Once you have worked through the checklist, collected the applicable information, and reviewed the various referenced policies and procedures, the University Cost Analysis Office is available to answer questions and to discuss next steps.
University Cost Analysis Office Contacts
Manager, Cost Analyst:
Questions to Consider Before Setting Up a Recharge Process or Center
When a service or product will be made available, predominately to internal Washington University customers, but potentially also to external non-WashU customers, a consistent process should be followed in development of the rate schedule, income and expense management, and annual reporting. Consideration of these Checklist questions, and gathering of the pertinent information to answer these questions, will help facilitate the establishment and management of an efficient and compliant financial management process.
- What is the overall purpose of the center or facility that will be providing services/products?
- What specific service or product will be offered? What is the measurable unit of output that can be easily and accurately measured and tracked?
- What will the customer base be? Is there a market for such service/product?
a. Estimate internal (WashU) number of customers – what is the percent of total customers and what type of funding do they have?
b. Estimate external type and number of customers – what is the percent of total customers?
c. What other service providers (both internal and external) are available to your anticipated customer base?
d. Will your RC/SSF pricing be competitive with pricing of other service providers?
- What is the expected volume of use by customer type (internal/external)?
- What is the current capacity of the RC/SSF to provide the defined service/product in light of available:
e. Other resources
- What are the total annual costs required to operate this RC/SSF to provide the defined service/product?
a. Labor/personnel (salary and fringe)
b. Non-personnel (materials and supplies, service contracts)
c. Equipment (cost > $5,000)
d. Identify fixed costs vs. variable costs
- Will the RC/SSF:
a. Incur significant start-up costs (labor, supplies, consulting) to become operational?
b. Be required to acquire equipment of significant cost (greater than $100,000) with a useful life of more than five years to become operational?
c. Expect to incur significant operating deficits during early years of operation?
- How will the RC/SSF operations be funded? Identify current and proposed internal and external revenue sources.
a. Regular (monthly) billings to customers
b. Sponsored project (grant or contract) support
c. School or department funds
- What is the break-even point for providing the service/product?
- If any of the operations will be funded by a grant or contract during the life of the RC/SSF, what are the specific program income requirements pertaining to the particular funding agencies?
- Is there a need to provide a subsidy to any customers/user groups based on?
a. center affiliations/membership
b. targeting a user group (e.g., junior faculty)
c. costs too high to recover full cost billing rate from customers
- What additional institutional (dean/school overhead) and departmental (administrative) fees need to be added to the service cost for external (non-Washington University) customers?
- What is the estimated amount of annual billings?
a. Under $250K (Minor Recharge Center)
b. $250K – $1M (Major Recharge Center)
c. Over $1M (Specialized Service Facility)
- What is the estimated life of the RC/SSF?
a. Same as sponsored project (grant or contract) support
b. Other measurable time period
c. As long as RC/SSF is self-sustaining
d. As long as there is a demand for services even if the RC/SSF must be subsidized by school/department
- Which staff member(s) will be responsible for non-financial management – personnel, database management, procurement of equipment, supplies, materials, licenses, data safety and monitoring?
- Which staff member(s) will be responsible for financial management – invoices, accounts receivable, program income monitoring and quarterly/annual reporting?