blog posts System Government Costing's Monthly Fact and Reminders Nov 15, 2023 1:00 pmAccounting and BudgetingBuying and ContractsFY 24Consistent charging of services is very important when operating a 3E service center. All customers must be charged, with no customer receiving free service. Internal customers must pay the same rate for the same level of service. For example, if customer A uses a machine for 4 hours and customer B uses it for 8 hours, charging both customers the same fee would result in customer A paying the same rate for a different level of service. Grants and sponsored projects are considered internal customers as funding from these sources flow through a University C-FOAP. Federal regulations indicate that rates cannot discriminate between Federal and non-federal activities, therefore Federal users cannot subsidize non-federal users. All users must pay at least the same rate as the Federal government. You cannot charge the Federal government more even if they are willing to pay more.In addition, rates charged to external customers cannot be lower than the rates charged to internal customers and must include the appropriate Facilities & Administrative (F&A) rate. When sponsored projects are charged, F&A is assessed on the service charges which hit the project. Therefore, in order not to discriminate against sponsored project customers, service centers are to charge external customers the fully costed rate increased by the F&A rate appropriate to the activity. Also, the pricing of such items in the public market can be considered and included when setting and charging rates to external customers if the rates are not lower than the University internal rates increased by the appropriate F&A rate.ContactIf you have questions about calculating compliant rates feel free to consult System Government Costing’s “Who to Ask” list to find an expert who can help.