What’s the Difference?
Service Centers, SSFs, and Auxiliaries: What’s the Difference?
In business and institutional accounting (like universities), the distinction between an Auxiliary Unit and a Service Center comes down to the customer base and profit goals. Service centers sell goods/services primarily internally to other departments at a strict break-even cost. Auxiliaries act like standalone businesses, serving students, staff, and the public for a fee, and are allowed to generate a surplus.
Service Centers and Specialized Service Facilities (SSFs), provide services for a fee that support the daily operations of an organization. In some cases, Service Centers may be referred to as referred to as ‘recharge centers’. The primary customers are internal departments, grants, and research teams. Services Provided may include shared core facilities (genomics, imaging, flow cytometry); animal care facilities, laboratory services, printing, or computer support. In terms of pricing and revenue, Service Centers must operate on a strict break-even basis. Fees are calculated to recover the actual cost of labor, materials, and equipment. They cannot make a profit and revenue earned can never be used for unrelated purposes. These activities are heavily regulated by accounting standards to ensure internal users (particularly federal grants which are directly charged) are not overcharged and that costs are allocated properly.
UMCP Institutional definitions and criteria:
Service Centers:
- Generate revenue between $50,000 and $1,000,000 dollars per year.
- Rates are designed to recover only the direct costs of operations
- Rates are reviewed and approved by the Office of Cost Accounting and renewed no less than every two years.
- Policy Guidance: SPAC Cost Accounting Service Centers and 2CFR200 Subpart E: Cost Principles
- Workday Account type: 83- Internal Recharge Center
- Workday Revenue Category for Internal Sales: Internal Sales Education and General - RC00194 - 0699
Specialized Service Facilities (SSFs):
- Generate revenue above $1,000,000 dollars per year or generate significant charges to Federally sponsored agreements either as a direct or indirect costs.
- Rates are designed to recover the full direct and indirect costs of operations.
- Rates are reviewed and approved by the Office of Cost Accounting and renewed every year.
- Common examples include computer centers, animal facilities, wind tunnels, major reproduction facilities, motor pools, and telecommunication systems.
- Policy Guidance:
- Workday Settings:
- Account type: 82 - Specialized Service Center
- Revenue Category for Internal Sales: Each SSF will have its own unique revenue category assigned
Other Activities:
- Where revenue activities are expected to be less than $50,000 per year, costs should be directly charged to sponsored projects whenever possible. Examples include:
- adding labor allocations for time and effort spent on a sponsored award
- charging the purchase cost of supplies directly to a sponsored award
- reimbursements via journal where reasonable, allocable, allowable, necessary and appropriately documented.
- ISP Accounts should not be requested unless a rate proposal has been approved by the Office of Cost Accounting.
Auxiliary Units (Auxiliary Enterprises)
- Auxiliaries are self-supporting entities that provide goods and services primarily for personal use.
- Primary Customers: Students, faculty, staff acting in a personal capacity, and incidental walk-in traffic from the general public.
- Common Examples: Campus dining halls, residence halls, bookstores, parking facilities, and athletics.
- Pricing & Revenue: They charge fees and are expected to be fully self-supporting without state or general fund subsidies. Unlike Service Centers, Auxiliary Units are permitted to generate a profit to fund reserves and broader institutional goals.
- Workday Settings:
- Account Type: 81- Auxiliary Unit
- Revenue Category for Internal Sales: Internal Sales Auxiliary - RC00324 - 0899