Research Service Center Business Plan September 2013

Encourages the development of collaborative relationships among faculty around research and academic interests related to the missions of the institution. UTHealth enables academic departments, schools and the university to establish research service centers (“RSC”) for specific purposes in pursuit of our missions. HOOP 209 EVPARA Procedures Encourages the development of collaborative relationships among faculty around research and academic interests related to the missions of the institution. UTHealth enables academic departments, schools and the university to establish research service centers (“RSC”) for specific purposes in pursuit of our missions. HOOP 209 EVPARA Procedures UTHealth’s Expectations of Research Service Centers

 RSC must provide goods or services for a fee on a continuing basis to internal users.  May provide services to an external user to a lesser extent.  Any RSC exceeding the $1million operating revenue would be considered a Specialized Service Facility (“SSF”) and may require approval by the UTHealth federal cognizant agency in addition to local requirements.  RSC must provide goods or services for a fee on a continuing basis to internal users.  May provide services to an external user to a lesser extent.  Any RSC exceeding the $1million operating revenue would be considered a Specialized Service Facility (“SSF”) and may require approval by the UTHealth federal cognizant agency in addition to local requirements. The qualifying criteria for a Research Service Center

 SSF proposals require review and approval by Academic & Research Affairs and Finance & Business Services.Academic & Research AffairsFinance & Business Services  A RSC is required to recover its annual operating costs when setting recharge fees on a break-even basis over two fiscal years.  The Dean or Chair/Director must designate what type of funds can be used each fiscal year to pay for annual operating losses and unallowable costs.  SSF proposals require review and approval by Academic & Research Affairs and Finance & Business Services.Academic & Research AffairsFinance & Business Services  A RSC is required to recover its annual operating costs when setting recharge fees on a break-even basis over two fiscal years.  The Dean or Chair/Director must designate what type of funds can be used each fiscal year to pay for annual operating losses and unallowable costs. Qualifying criteria for a Research Service Center continued...

 The business plan that includes a current budget with a two year forecast should be submitted to Jodi S. Ogden, MBA, CRA, Assistant Vice President, Sponsored Projects Administration – for initial establishment.business plan  An updated business plan including the previous fiscal year history, current fiscal year projected and a two year forecast must be provided during the annual budget process timeframe established by Budget & Financial Reporting and/or related school deadlines; whichever comes first.  The business plan that includes a current budget with a two year forecast should be submitted to Jodi S. Ogden, MBA, CRA, Assistant Vice President, Sponsored Projects Administration – for initial establishment.business plan  An updated business plan including the previous fiscal year history, current fiscal year projected and a two year forecast must be provided during the annual budget process timeframe established by Budget & Financial Reporting and/or related school deadlines; whichever comes first. Who do I send the completed business plan to?

Internal Users –  A RSC may not discriminate against any internal group of RSC users.  RSC’s are required to charge all internal users the same rate for the same level of services or products. External Users –  The RSC must charge an external user a higher rate than internal users for similar services. Internal Users –  A RSC may not discriminate against any internal group of RSC users.  RSC’s are required to charge all internal users the same rate for the same level of services or products. External Users –  The RSC must charge an external user a higher rate than internal users for similar services. Research Service Center Pricing

Billing & Rates -  RSC users are invoiced for goods and services. The charge is minimally composed of all related direct costs which may include depreciation of capital equipment and indirect costs. Subsidized Users –  If the user has a subsidy available to pay for received services, they will only be allowed from non-federal, non RSC funds. Billing & Rates -  RSC users are invoiced for goods and services. The charge is minimally composed of all related direct costs which may include depreciation of capital equipment and indirect costs. Subsidized Users –  If the user has a subsidy available to pay for received services, they will only be allowed from non-federal, non RSC funds. Research Service Center Pricing continued...

Rental Service Centers are required to:  Maintain a working capital reserve in its designated fund equal to the total expenses for the two highest operating months of the previous fiscal year.  Pay off all prior year losses.  Fund the RSC equipment depreciation for the fiscal year that will be deposited into a RSC equipment replacement fund.  Use the remaining balance to adjust rates for internal users. Rental Service Centers are required to:  Maintain a working capital reserve in its designated fund equal to the total expenses for the two highest operating months of the previous fiscal year.  Pay off all prior year losses.  Fund the RSC equipment depreciation for the fiscal year that will be deposited into a RSC equipment replacement fund.  Use the remaining balance to adjust rates for internal users. Rental Service Center Surplus/ Loss

 A RSC may be closed if after two years it has not generated at least $30,000 of annual revenue or does not operate consistently in compliance with UTHealth RSC policy. The Academic and Research Affairs and the related Dean or Chair/Director of the department will review. Closing of Rental Service Center

 Business Plan Review – Sponsored Projects Administration will review each RSC business plan annually. Any department that has changes to services or pricing during the review must submit a revised business plan for review and approval. Business Plan Procedures

 All direct costs related to a RSC must reside in fund (35xxx) and should be included in the rate calculation. Costs included are as follows:  Salary, Wages & Fringe Benefits – Personnel directly related to the RSC only.  Materials and Supplies – Required costs to operate the RSC only.  Other Expenses – Includes non-capital equipment, rental and maintenance contracts, operating leases and purchased services.  Unallowable Costs (bad debt expenses, alcohol, etc.) – Must be excluded from internal rate calculations.  All direct costs related to a RSC must reside in fund (35xxx) and should be included in the rate calculation. Costs included are as follows:  Salary, Wages & Fringe Benefits – Personnel directly related to the RSC only.  Materials and Supplies – Required costs to operate the RSC only.  Other Expenses – Includes non-capital equipment, rental and maintenance contracts, operating leases and purchased services.  Unallowable Costs (bad debt expenses, alcohol, etc.) – Must be excluded from internal rate calculations. Financial Compliance (Direct Costs)

 Capital Equipment Depreciation – Defined as an item with a purchase price over $5,000 with useful life over one-year. May not be recovered through RSC rates; however the depreciation may be recovered.  Facilities and administrative costs are not assigned to RSC’s and cannot be recovered.  Capital Equipment Depreciation – Defined as an item with a purchase price over $5,000 with useful life over one-year. May not be recovered through RSC rates; however the depreciation may be recovered.  Facilities and administrative costs are not assigned to RSC’s and cannot be recovered. Financial Compliance (Indirect Costs)

 RSC’s are subject to periodic review by the UTHealth Audit & Advisory Services department and by extneral federal auditors to evaluate compliance with established UTHealth policies and accounting practices.  Activities must be documented and records maintained to support all revenues and expenditures as well as compiance with applicable regulations. All financial and compliance documents should be retained for a period of seven years.  RSC’s are subject to periodic review by the UTHealth Audit & Advisory Services department and by extneral federal auditors to evaluate compliance with established UTHealth policies and accounting practices.  Activities must be documented and records maintained to support all revenues and expenditures as well as compiance with applicable regulations. All financial and compliance documents should be retained for a period of seven years. Audit and Record Retention

New Service Center Instructions (created during current fiscal year) Complete the worksheets found in the following tabs: Current Year – If the service center has an established fund, go to Service Center Financials and download the “current” income statement. Highlight columns labeled “Current Year”, “Prior Year” and “Net Change” only then paste that information into the “Current Year” tab. You will not need any of the monthly detailed information when copying to the appropriate tab. This will allow the revenue and expense categories to automatically link directly to the “summary” sheet.Service Center Financials Revenue – Populate the revenue tab with the estimated revenue. Include detail on how the estimate was derived. This data will help to calculate projections. Personnel – Populate the faculty, A&P, classified and other salaries. Make sure to only include the portion that is being paid from the service center account. This data will help to calculate projections. Projections – Enter the estimated non-personnel expenses for the next two fiscal years. Equipment – Enter any depreciable equipment for the service center. The user may obtain a complete listing from Capital Asset Management (CAM) if necessary. If the UT asset tag numbers are available, enter that information into the “equipment” tab and send the completed list to CAM. They will provide the required information needed to complete the “equipment” tab.Capital Asset Management Summary – The information from the populated tabs B-E should be linked to the appropriate cells on the summary page. If there is no data available for prior or the current year, leave the columns blank. Add descriptions in the “notes” column to indicate where data was retrieved. Established Research Service Center Instructions Prior Year – Go to the Service Center Financials and download the “August Prior Year” income statement. Highlight columns labeled “Current Year”, “Prior Year”, and “Net Change”. Then paste that information into the “Current Year” tab. You will not need any of the monthly detailed information when copying to the appropriate tab. This will allow the revenue and expense categories to automatically link directly to the “summary” sheet.Service Center Financials New Service Center Instructions (created during current fiscal year) Complete the worksheets found in the following tabs: Current Year – If the service center has an established fund, go to Service Center Financials and download the “current” income statement. Highlight columns labeled “Current Year”, “Prior Year” and “Net Change” only then paste that information into the “Current Year” tab. You will not need any of the monthly detailed information when copying to the appropriate tab. This will allow the revenue and expense categories to automatically link directly to the “summary” sheet.Service Center Financials Revenue – Populate the revenue tab with the estimated revenue. Include detail on how the estimate was derived. This data will help to calculate projections. Personnel – Populate the faculty, A&P, classified and other salaries. Make sure to only include the portion that is being paid from the service center account. This data will help to calculate projections. Projections – Enter the estimated non-personnel expenses for the next two fiscal years. Equipment – Enter any depreciable equipment for the service center. The user may obtain a complete listing from Capital Asset Management (CAM) if necessary. If the UT asset tag numbers are available, enter that information into the “equipment” tab and send the completed list to CAM. They will provide the required information needed to complete the “equipment” tab.Capital Asset Management Summary – The information from the populated tabs B-E should be linked to the appropriate cells on the summary page. If there is no data available for prior or the current year, leave the columns blank. Add descriptions in the “notes” column to indicate where data was retrieved. Established Research Service Center Instructions Prior Year – Go to the Service Center Financials and download the “August Prior Year” income statement. Highlight columns labeled “Current Year”, “Prior Year”, and “Net Change”. Then paste that information into the “Current Year” tab. You will not need any of the monthly detailed information when copying to the appropriate tab. This will allow the revenue and expense categories to automatically link directly to the “summary” sheet.Service Center Financials Audit and Record Retention

Exhibit A - Summary

Exhibit B – Rate Schedule

Exhibit C - Personnel

Exhibit D - Projections

Exhibit E – Equipment

Period Ending Income Statement

August Prior Year Income Statement

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