1410 University Service Providers

Policy Sections

1410.1 University Service Provider Operating Committee

1410.2 Registration and Annual Renewal

1410.3 Accounting and Billing

1410.4 Rates and Charges

1410.5 Sales to External Users

1410.6 Audit and Record Retention

This policy applies to all Yale Units providing goods and/or services internal and/or external to Yale.  Such Units are considered University Service Providers (“USPs”) and must comply with this policy, as well as applicable federal laws and regulations.

Note that revenue generated from a USP is not considered program income.  Program income must be treated in accordance with Policy 1308 Program Income Associated with Sponsored Projects.

Yale Units providing goods and/or services internal and/or external to Yale must receive approval from their lead administrator and must register as a USP prior to providing such goods and/or services for the first time.  All USPs, once approved and registered, must submit an annual renewal for the duration of their operations.

It is expected that all USPs comply with proper University accounting practices, business practices, rate and charging practices, and federal laws and regulations.

As a provider of goods and/or services that may be supported with federal funding, Yale must assure that the goods and services are appropriately charged according to usage and that USPs only recover the actual costs of the goods and services provided.  This policy establishes the principles supporting Yale’s USP activities by ensuring:

• consistent and appropriate accounting and effective business practices are applied among USPs;
• consistent oversight of all USPs; and
• compliance with relevant regulations, including federal costing regulations such as 2 CFR Part 200, Subpart E (specific to Specialized Service Facilities (“SSFs”), §200.468), as applicable.

Customer Rate

The rate (price) a USP offers to customers for provision of a good or service.

External Users

Non-Yale individuals and/or entities that purchase goods and/or services from USPs.  External Users include faculty, staff, or students who purchase the goods and/or services in a personal capacity.  Entities with agency accounts at Yale are not considered to be External Users.

Fully-Costed Rate

The total allowable costs divided by the estimated volume of providing a good or service that results in revenues equal to allowable costs. 

Rate Schedule

The USP’s documentation of its annual Fully-Costed Rates and Customer Rates for each good or service it provides.

Unit

A Yale organizational entity.  Units may include, but are not limited to, departments, centers, institutes, or a subdivision of such entities.

University Service Provider (“USP”)

A Unit that provides goods and/or services in support of Yale’s academic and research mission.  USPs recover their costs through charging their users (internal and external).

USPs are categorized into one of five classifications, as defined below:

• Specialized Service Facility (“SSF”): A type of USP that charges users for personnel and/or other administrative costs related to the provision of goods and/or services that directly support the research, education, or patient-care missions of the University.  Goods and/or services provided by an SSF may be directly charged to sponsored awards, in accordance with the terms and conditions of the award.  An SSF utilizes highly complex or specialized facilities (e.g., computing facilities, wind tunnels, reactors, animal care operations).  This definition of SSFs is derived from the definition provided in 2 CFR Part 200, Subpart E, §200.468.
• Recharge Center (“RC”): A type of USP that charges users for personnel and/or other administrative costs related to the provision of goods and/or services that directly support the research, education, or patient-care missions of the University.  Goods and/or services provided by an RC may be directly charged to sponsored awards, in accordance with the terms and conditions of the award.  RCs are categorized as such in that they do not meet the criteria of an SSF.
• Cost Allocation Unit (“CAU”): A type of USP that aggregates and distributes goods and/or services obtained from external suppliers, but it does not charge internal users for personnel and/or other administrative costs related to the provision of goods and/or services.  Goods and/or services provided by a CAU may be directly charged to sponsored awards, in accordance with the terms and conditions of the award.  Note: a Unit that aggregates and distributes goods and/or services obtained from external suppliers exclusively to users within its own Unit is not considered a CAU and is not subject to this policy.
• Auxiliary Services Unit (“ASU”): A type of USP that charges users for personnel and/or other administrative costs related to the provision of goods and/or services in the ordinary course of business as administrative operations that are not directly related to the research, education, or patient-care missions of the University.  ASUs are not included in the University’s facilities and administrative (“F&A”) rate for sponsored activity.  Depending on the nature of the services, goods and/or services provided by an ASU may be directly charged to sponsored awards in accordance with the terms and conditions of the award.
• Other Service Providing Unit (“OSPU”): A type of USP that charges users for personnel and/or other administrative costs related to the provision of goods, services, and/or space.  OSPUs are included in the University’s F&A rate for sponsored activity and, therefore, do not directly charge sponsored awards for the goods, services, and/or space provided.  OSPUs include, but are not limited to, the following operations: Units providing facilities services, utilities services, and security services.

Policy Sections

The University Service Provider Operating Committee (“USP Operating Committee”) is a standing committee responsible for oversight of, and compliance with, this policy and associated regulations and documentation.

The USP Operating Committee includes representation from the following organizations and committees: Controller’s Office; Office of Research Administration; Office of Financial Planning & Analysis; Yale School of Medicine; Office of the Provost; Tax-Exempt Bond Compliance Committee; and designated representatives of USPs.

The USP Operating Committee is chaired by a Controller’s Office representative and convenes at least quarterly, unless otherwise determined by the chair.

Yale Units providing goods and/or services internal and/or external to Yale must receive approval from their lead administrator and must register as a USP prior to providing such goods and/or services for the first time.  All USPs, once approved and registered, must submit an annual renewal for the duration of their operations.

Refer to Procedure 1410 PR.01 University Service Providers: Registration and Annual Renewal for detailed processes regarding USP registration.

USPs must establish a unique account in the Chart of Accounts (“COA”), distinct from other departmental accounts.  USPs must use their unique account to record all revenues and expenses pertaining to the USP’s activities.     

USPs must maintain accounting systems and practices that comply with University accounting policy, as documented in the Accounting Manual.

USPs must develop and maintain appropriate billing practices.  USPs must submit bills for their services at least monthly based on actual usage.  Refer to Procedure 1410 PR.03 University Service Providers: Accounting and Billing for detailed processes regarding USP accounting and billing.

All USPs must offer all internal users the same pre-determined Customer Rate for the same level of goods or services purchased in the same circumstances (excluding any discounts offered, at the discretion of the USP (refer to Procedure 1410 PR.02 University Service Providers: Rate Calculations for details regarding discounts)).

Specialized Service Facilities and Recharge Centers

On an annual basis, SSFs and RCs must develop a goods and services Rate Schedule for their users.  At its discretion, the USP Operating Committee may request more frequent Rate Schedule development.  SSFs and RCs that certify as a part of their registration or annual renewal that they will not charge sponsored awards during the current year of operations are exempt from this requirement.

The development and submission of the Rate Schedule must be in accordance with Procedure 1410 PR.02 University Service Providers: Rate Calculations and 2 CFR Part 200, Subpart E (specific to SSFs, §200.468), as applicable.  SSFs and RCs must submit their Rate Schedule for central monitoring, as detailed in Procedure 1410 PR.02 University Service Providers: Rate Calculations.

Customer Rates must be equal to or less than the USP’s Fully-Costed Rate for that good or service.  The USP must obtain prior approval from its lead administrator to establish a Customer Rate that is lower than its Fully-Costed Rate.  USPs may use alternate Customer Rates in certain circumstances, such as for high volume work or off-hour usage, but the alternate Customer Rates must be equally available to all users.

Note: Some SSFs and RCs, in addition to their primary goods and/or services, also offer users goods and/or services obtained from external suppliers.  If an SSF or RC aggregates and distributes goods and/or services obtained from external suppliers, but it does not charge internal users for personnel and/or other administrative costs related to the provision of goods and/or services or impose any additional charges, it is expected to indicate these goods and/or services on its Rate Schedule but is not required to provide a cost buildup for these goods and/or services (as the rate for each good and/or service is a passthrough from the external supplier’s pricing).

Refer to Procedure 1410 PR.02 University Service Providers: Rate Calculations for details regarding USP Rate Schedules.

Cost Allocation Units

CAUs, while not required to develop a Rate Schedule, must establish Customer Rates for their goods and services that are equal to or less than the prices charged to the CAU by the external supplier(s) (note, however, that building in allowances for product loss (e.g., natural evaporation of bulk gas) is permitted).

Auxiliary Services Units and Other Service Providing Units

ASUs and OSPUs are not required to develop a Rate Schedule.

Yale Units wishing to provide goods and/or services to External Users must first register as a USP and must also provide such goods and/or services to internal users.  USPs must obtain approval pursuant to Procedure 2100 PR.02 External Sales Approval Process prior to providing goods and/or services to External Users.

Note: This requirement does not apply to Yale faculty members wanting to provide professional services to external parties under the auspices of Yale (meaning that Yale would be the contracting party and time spent performing these services would be considered in support of Yale and not part of the 1/7^th of a faculty member’s time that can be spent on non-Yale work).  Such circumstances are, however, subject to approval pursuant to Procedure 2100 PR.02 External Sales Approval Process.

USPs are subject to both internal and external audits, including audits performed by federal regulators.  USPs must adequately document and maintain their records in accordance with Policy 1105 Retention of University Financial Records, as well as Yale’s Record Retention Schedule.

Requests for exceptions to this policy must be approved in advance by the USP Operating Committee, in consultation with the cognizant Provost or Vice President, as appropriate.  The USP Operating Committee may also consult with General Counsel or an Officer of the Corporation, as appropriate.

Controller’s Office

• Responsible for implementing procedures and guidance to support compliance with this policy, federal laws and regulations, and other supporting policies and procedures affecting USP financial structures, including USP rates and charges.
• Chairs the USP Operating Committee.

Rate Reviewers

• Review submitted Rate Schedules for USPs under their authority.
• The appropriate Rate Reviewer for Yale School of Medicine (“YSM”) USPs is the YSM Associate Director, Costing, or designee.  The appropriate Rate Reviewer for non-YSM USPs is the Senior Financial Analyst, Compliance, or designee.

USP Directors

• Responsible for direct oversight of the USP, including the completion of the USP registration and annual renewal processes, USP accounting and billing practices, and USP rate development, as required by policy and in accordance with the accompanying procedures.

USP Lead Administrators

• Review and approve registration and annual renewal requests for the USP(s) under their authority.
• Review and approve anticipated Fully-Costed Rates and Customer Rates for the USP(s) under their authority for each fiscal year, including Customer Rates that are lower than Fully-Costed Rates and alternate Customer Rates (e.g., for high volume work or off-hour usage).

USP Operating Committee

• Responsible for oversight of and compliance with USP administration standards established by this policy, in support of federal laws and regulations.
• Reviews and, as appropriate, approves requests for exceptions to this policy.