Specialized Service Facilities

This page provides a concise overview of WashU’s Specialized Service Facilities. It does not replace the full policy. To review all requirements, definitions, and procedures, please access the official policy here.

Specialized Service Facilities Policies and Procedures

Responsible Office: Office of the Controller
Effective Date: revised January 2024

I. SCOPE

Specialized Service Facilities are a category of internal service providers (ISP) within the Workday environment. Specialized Service Facilities are highly specialized internal service groups that support the university’s research community.

A service qualifies as an SSF if it meets both of these criteria:

  • It provides complex, specialized services that the university can’t readily purchase from an external vendor.
  • It generates more than $2 million in annual billings.

Because Specialized Service Facilities frequently charge federal research grants, they must follow federal rules under Uniform Guidance (2 CFR 200.468).

II. ESTABLISHING A SPECIALIZED SERVICE CENTER

Specialized Service Centers must be approved through the Establishing an ISP process and designated as a Specialized Service by the ISP Steering Committee.

Each Specialized Service Center must:

  • Establish new operating accounts to record revenues and expenses in Workday.
    • A Specialized Service Facility can have multiple ISPs and cost centers for different product/services; however, it must roll up to the same BU (business unit).
    • It’s recommended that Specialized Service Facilities request unique spend categories for their products or services.
    • Use a designated Revenue Category within Workday Ledger Account 49500 for internal billing.
  • Submit an initial Rate Schedule to the Cost Analysis Office prior to operation.
  • Submit an Asset Listing, which includes Workday Business Asset descriptors with annual depreciation expense, to the Cost Analysis Office prior to operation.

III. ESTABLISHING AND REVISING RATES

Specialized Service Facilities operate on the WashU fiscal year basis, with rates based on budgeted projections of operating expenses (direct and indirect costs) and projected levels of activity or products to be provided. 

RATE REQUIREMENTS
  • An annual rate schedule must be prepared and supported with documentation.
  • Rates must:
    • Include all services or products normally offered
    • Be designed to recover only the actual costs (direct and indirect) of providing the products or services. 
    • Not discriminate against federally supported activities
  • Higher, market‑based rates may be charged to users outside the WashU community.
  • Failure to submit required rate documentation within 60 days of the fiscal year start to the Cost Analysis Office will result in suspension of charges to sponsored projects until compliance is achieved.
  • Equipment depreciation may be included only if the equipment was not purchased on a federal award. The cost of capital equipment purchases cannot be included in billing rates. 
  • Specialized Service Centers wishing to include non‑allocable costs in rates for non‑federal customers must prepare separate rate calculations for federal and non‑federal users.
COMPONENTS OF RATES

The first step to developing rates for products/services is to identify the various cost elements. For additional examples and more detailed explanations for identifying cost elements visit the OVCR website. Internal rates (charged to WashU departments and sponsored projects) must include direct and indirect costs.

Allocable Direct Costs

  • Salaries and fringe
  • Materials and supplies
  • Service and maintenance contracts
  • Travel required for center operations
  • Equipment depreciation (if equipment was not purchased on a federal award)

Allocable Indirect Costs

  • Equipment Depreciation
  • Building Depreciation
  • Operations and Maintenances
  • External Interest Expense

Non‑allocable costs must not be recovered from federally funded projects, though they may be recovered from non‑federal or external users with a separate rate calculation.

Non-Allocable Costs

  • Capital equipment purchases (purchases > $5,000)
  • Reserves or contingency funds
  • Financial allocations/prorations
  • Other non-allocable costs (as defined by UG):
    • §200.438 Entertainment costs (SC229, SC199, SC226, SC248, SC524, SC525)
    • §200.431 Dependent Tuition benefits for family members other than the employee. (Ledger 57040)
    • §200.439 Equipment and other capital expenditures
    • §200.455 Organization costs (incorporation fees, management consultants, attorneys)
    • §200.459 Professional Service costs (professional fees and consulting other)
    • See RPT6163 for current unallocable spend categories.
SURPLUS & DEFICIT MANAGEMENT

Specialized Service Facilities must review their rates annually and adjustments should be made as needed, taking into consideration surpluses and deficits from prior years. 

  • Deficits tied to major equipment or significant start‑up costs must be recovered within the useful life of the equipment or the life of the project as approved by the Cost Analysis Office.
  • Deficits not related to major equipment or start‑up costs must be recovered within five years.
  • Deficits that are subsidized by the owning department or school do not need to be recovered through future rates.
  • Surpluses from sales to WashU accounts (including federally funded activities) must be corrected through rate adjustments within three years or before the center closes, whichever comes first.
  • A surplus planned to recover deficits generated as the result of significant equipment or start-up costs (see preceding paragraph) need not be recovered by adjusting charge rates until such deficits have been fully recovered.  
  • Surpluses from external sales do not require rate adjustments. Specialized Service Centers must keep accounting records that separately track surpluses and deficits from external users.

IV. OPERATING THE SPECIALIZED SERVICE CENTER

This section outlines the core financial and administrative requirements for operating a recharge center. For detailed guidance, templates, and examples, refer to the Recharge Center Guidelines on the OVCR website.

ADMINISTRATOR RESPONSIBILITIES

The Specialized Service Center administrator is responsible for:

  • Comply with policies and procedures
  • Develop and administer annual budget
  • Prepare schedule of rates and maintain supporting documentation
  • Submit rate schedule and supporting documentation to the Cost Analysis Department on an annual basis  
  • Generate and distribute invoices for service activity provided to users
  • Maintain sufficient and accurate documentation for recharge center activities
  • Communicate and provide recharge center information to division/department/school management, as necessary
  • Support data requests, audit requests, and other reviews that may occur

All documentation must be retained by the department and be available for review upon request.

RECORDKEEPING & AUDIT READINESS

Specialized Service Centers must be able to respond to audit requests and demonstrate sound financial controls. Administrators must retain the following records for five years:

  • Documentation supporting rate calculations
  • Documentation supporting usage or activity projections
  • Billing records showing services provided to each user
BILLING REQUIREMENTS
  • Internal customers must be billed using the Internal Service Delivery (ISD) invoice in Workday.
  • External customers must be billed using the Customer Accounts module in Workday.
  • Advance billing is not permitted. Centers may only bill for services performed or products delivered.
  • Estimates may not be used as the basis for billing.
  • All users must be billed consistently.
  • Invoice at the time the service or product is provided. Services covering a period of time should be billed monthly, or at least quarterly.
  • Documentation supporting all billings must be retained for audit purposes.
ANNUAL REVIEW & OVERSIGHT

Cost Analysis will provide financial statements no later than October 31st for the previous FY.

  • Centers should provide an explanation of any surplus
  • Centers must provide the following annually:
    • Asset Listing (with depreciation)
    • Rate Schedule
    • Rate Calculations

V. HELPFUL WORKDAY REPORTS

  • RPT6780 – Specialized Service Facilities Financial Statements
  • RPT6163 – Unallocable Spend Categories List

VI. Federal Policies

The government monitors, by routine audits, WashU’s compliance with federal regulations regarding recharge centers. WashU Specialized Service Policy helps assure that WashU consistently applies sound cost accounting practices and complies with the regulations. To minimize the consequences of non-compliance with regulations, it is important that recharge centers comply with all policies.