University Policy Office

2.01—Special Fees and Use Charges

Effective: 09/05/2006
Senate Proposal: No
Responsible University Officer: Vice President for Finance
Responsible Office: Financial Services and Operations

Policy Statement

University departments may charge a special fee or use charge for a service, instrument, or laboratory used by a department or group within the University community.


Policy Requirements

Departments charging special fees and use charges must:

  • Maintain a log of use and charges for auditing and rate review purposes.
  • Review the use charges (rates) biennially and adjust if necessary. Base the review on the prior period activity and send the request forms to the Use Charge Committee for review and approval.
  • Process Interaccount Bills on a monthly basis using approved rates.
  • Retain the rate justification forms for seven years after approval.
  • Retain logbooks for seven years after the date of service.

Estimated (or actual) revenue for the proposed rate must exceed $5,000 per year. A rate may be approved if the $5,000 threshold is met in one of the two previous years. If the rate being proposed fails to meet the $5,000 threshold for two (2) consecutive years a rate will not be approved.

If the $5,000 threshold is not met, equipment may be grouped into a single rate if a process/sample passes through each piece of equipment in the group on a regular basis. The expenses to operate all grouped equipment will be combined and divided by the combined use. All users of this grouped facility will be charged the grouped use rate.

Reason for Policy

Departments have special fees and use charges to enable them to recover operating expenses relating to instrument or laboratory use by sponsored projects, and by another department or group within the University community.

Federal regulations prohibit discriminatory pricing between federal and nonfederal funded activities, including use by the institution for internal purposes. All University users must be charged the same rate for the same service.

Related Policy Information

When the intent of an agreement (confirming order) with an external entity is to solely provide instrument or laboratory use, the external entity should be charged the approved use rate plus Facilities & Administrative (F&A) costs.

Federal regulations prohibit universities charging commercial enterprises, such as consulting services, a rate that is subsidized.

Exclusions

The following can not be included in the use charge rate calculation:

  • Replacement cost of the instrument(s).
  • Depreciation and the cost of instrument(s) because these items are included in the University F&A cost rate, except in the case of Specialized Service Facilities, whose use rates should include depreciation.
  • Use rates for printers or copiers will only be approved under extenuating circumstances.

Contacts

Financial Services and Operations 7-2242

Definitions

Special Fees and Use Charges - A set amount (rate) charged for instrument or laboratory use being charged to a sponsored project or external entity by a department or group within the University community.

Department - An academic department, college, or school, an institute or center, or an administrative department.

Specialized Service Facility - A unit providing a service that typically requires the use of highly complex or specialized facilities or equipment and generating annual revenue in excess of $1 million.

Biennially - Every two years or every other year.

Accessory - An item that is not required for the instrument/equipment to carry out its original function.

Responsibilities

Department - Develop an hourly or natural base rate; maintain a log of use and charges for auditing and rate review; process interaccount bills for use charges/fees on a monthly basis; and review use charges/fees (rates) biennially and submit proposed rates and rate revisions for approval.

Dean/Department Chair/Director or higher in supervisory chain of command - Review and approve proposed charges/fees.

Controller - Review all initial rate requests and rate revisions.

Financial Services and Operations - Establish use charge index.

Procedures

In support of this policy, the following procedures are included:

Forms and Instructions

In support of this policy, the following forms/instructions are included:


Adoption Date

11/21/2003 Approved by CFO

Revisions

02/15/2019 Processed minor revisions.
6/26/2018 To reflect current university titles and practice, Responsible University Officer to "Vice President for Finance" and changed Responsible Office to "Financial Services and Operations." Changed contact to "General and Auxiliary Accounting—906-487-2242"
04/10/2017 Transfer of policy page from HTML to CMS. Business and Finance numbers renamed from "2.2000" to "2. Business and Finance". Specifically from "2.2001—Special Fees and Use Charges" to "2.01—Special Fees and Use Charges".
05/16/2016 To reflect change from specific OMB Circular A-21 language to more encompassing "Federal Regulations".
05/03/2012 To reflect current University titles and practice, MTU is now Michigan Tech and the email address for questions is now hbwebmaster.
05/12/2008 Deleted Amortization Schedule Form and updated Special Fees and Use Charge Rate Justification.
09/05/2006 Special Fee and Use Rate Justification and Calculation form prepared every two years rather than every year; an annual balance equal to 5% of use credits is allowable; extraordinary expenses for repair parts or per diem service may be amortized up to 4 years; effective 9/2008, a use rate will be approved if the use credits generated annual is $5,000 or greater.
05/26/2005 Changed equipment to service/instrument/laboratory and included special fees and use charge rate calculation example.