Allowable and Unallowable FSEA Costs

Directive Statement

Costs that are allowable and may be recovered in the recharge/service center billing rates must meet the following criteria:

  1. Are reasonable and necessary to provide goods and/or services by the recharge/service center.
  2. Conform to any limitations or exclusions set forth in cost principles in the Uniform Guidance or other applicable cost standards established by federal agencies or the university.
  3. Are consistent with applicable university policies and procedures.
  4. Are accorded consistent treatment for the same type of cost in like circumstances.
  5. Are not included as a cost or used to meet cost sharing or matching requirements of any federally-financed program in either the current or a prior period.
  6. Supported by adequate documentation the cost was incurred.

Cost Accounting regulations (commonly referred to as Uniform Guidance) identify certain expenses that are not allowed to be included in the recharge/service center rate calculation.

Fee-for-Service Educational Activity (FSEA) should not incur unallowable costs unless other sources of funds (e.g. surcharges from external customers) are available and charged.

  • These costs must be a necessary business expense for the center, e.g., advertising
  • Costs determined to be unallowable should not be recovered from internal users nor expensed on a center’s Chartfield.  Only costs expensed on the operating account can be included in the internal rate(s).

Reason for Directive

Fee-for-Service Educational Activities (FSEA), no matter the size, are subject to the cost principles set forth in the U.S. Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 2 C.F.R. §200 Subpart E §200.468 (“Uniform Guidance”).

Fee-for-Service Educational Activities (FSEA) must develop a rate structure that is maintained and published, keeping in concordance with the required cost principles set forth in the Federal Uniform Guidance.  Non-compliance with the regulations could result in fines or disallowed costs by the government or sponsors and could harm the reputation of the University.

Who must comply?

All UF departments with fee-for-service educational activities.

Procedures & Best Practices

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