Service Center Regulations
Contact: Controller's Office, (205) 996-1277
Service center activities can result in charges, directly or indirectly, to federal grants and contracts. In connection with the receipt of these funds, UAB must comply with the United States Government's Office of Management and Budget (OMB) Circular A-21, Cost Principles for Educational Institutions (A-21).
OMB Circular A-21
OMB Circular A-21 Section J.44 deals specifically with service centers. Its provisions, while somewhat vague, are explicit in two concepts:
- recipients of federal funds are not to recover more than cost,
- they are not to discriminate between federal internal users and other internal users in prices charged for services. The concept of non-discrimination, however, does not preclude the institution from charging external users higher rates for services.
Cost Accounting Standards
Research institutions must now comply with the federal Cost Accounting Standards 501, 502, 505, and 506. Essentially, these standards promote consistency and uniformity in cost accounting. The four standards pertain to:
- 1. consistency in estimating, accumulating, and reporting costs;
- 2. consistency in allocating costs incurred for the same purpose;
- 3. treatment of unallowable costs;
- 4. cost accounting period.
Each of these standards is implicit in this procedures manual.
Government Oversight
In general, the Department of Health and Human Services (DHHS) is responsible for monitoring UAB's compliance with federal regulations through its auditors in the Office of Inspector General (OIG) and its negotiator from the Division of Cost Allocation (DCA). Examples of compliance issues would be rate setting methodology and treatment of unallowable expenditures. If UAB were ever found to be in non-compliance with federal regulations, it could be required to reimburse the government and could have future award applications jeopardized.