Health Sciences Recharge Activities

What is a recharge?

A recharge is a charging mechanism for products and services provided by departments and organizational units within the University. Recharging moves resources/expenses from one funding source to another without increasing the total funding for the campus.

The entities which provide the products or services on this basis function as a non-profit business and recharge in order to recover the costs of providing those products or services.

What is a core resource facility?

Core Facilities are shared research resources which provide access to instruments, technologies, services, and expert consultation and training to researchers. Health Sciences hosts over 80 Core Resource facilities.

Under what circumstances is it ideal to establish a recharge?

A recharge is created when a product or service is found to have eminent value to the university’s mission while fulfilling an unmet administrative, operational, or research need.

In general, a recharge should be established if the services offered will be ongoing and available to a diverse group of customers and if the recharge can generate enough revenue to cover its expenses consistently.

What services does the VC Office offer to help?

The Office of the Vice Chancellor for Health Sciences offers expert-level consultation, guidance and oversight to the entire Health Sciences community in the following ways:

• Consultation for recharge rate development and costing policy
• Quarterly financial reconciliations and monitoring to all recharge entities
• Vetting and review of all new activity proposals and rate modification requests

A full listing of core resources organized by departments under Health Sciences is available by drilling into the following link.

• List of Health Sciences Recharge Activities by Department (A-Z)

Are there practical considerations to have in mind before engaging in this process?

Absolutely! While there are numerous factors to consider, we encourage departments and PI's to give great consideration to the following:

• Evaluate the uniqueness and the need for the services you would like to offer
  • New recharge activities are evaluated partly on whether they address an unmet need on campus or if they contribute uniquely to the research mission in a way that neighboring services are unable to.
    
    It is important to note that services which are duplicative of existing activities are generally not allowed as they can generate untoward competition and can artificially depress rates between entities.

• Cognizance toward the longterm viability, customer demand and risk factors involved to maintain an activity
  
  • Due to their non-profit nature and interaction with restricted funding sources, recharge activities are subject to strict financial controls and costing guidelines which may make the ongoing cost of running an operation untenable if the market demand for services cannot be supported by adhering to the fair pricing, legal and policy requirements parcel to the implementation of your rates.
    
    It is important to fully evaluate the anticipated demand for services relative to the costs and budgeted pricing which would be required to support an operation.

• Engagement with your home department
  • The financial risks and management of a recharge are a responsibility for your home department to assume ownership of. Work your ideas through your business officers to ensure that sufficient staff and financial resources are available to reliably and successfully support an activity and that the incorporation of the proposed activity can be endorsed by all involved stakeholders. 

How are rates developed?

• Recharge rate development is a budgeting exercise. Rates are developed by determining what services you plan to offer, determining the volume of your customer base between internal and external customers, analyzing and forecasting the total anticipated costs of running your activity, and finally, distributing those costs and customer volumes between the proposed service lines.
  
  Effective Fiscal Year 2025, The Office of Costing Policy & Analysis requires the Excel template linked below to facilitate rate budget development for recharge activities across the UC San Diego campus.
  
  For guidance on how to utilize this template, please contact the VC Office to schedule a 1:1 consultation at smportillo@health.ucsd.edu
  
  
•  UC San Diego Recharge Rate Development Template

How should departments submit rates for review and approval?

• All rates for both new and existing Health Sciences recharge activities must be reviewed by the Office of the Vice Chancellor for Health Sciences for a proposal review. Submission and review steps are detailed as follows:
  1. Department prepares and submits its new proposal or rate modification to: smportillo@health.ucsd.edu
  2. VCHS will conduct a "functional review" to ensure that the proposal document adheres to approved costing methodologies, all expenses and depreciation are accounted for, and collaborates with the department to ensure the document meets the best standard possible to ensure the activity's continued success.
  3. Once fully approved by the VC, the proposal document and supporting correspondence is packaged and submitted by VCHS to the Office of Costing Policy & Analysis (CP&A) via a SNOW ticket.
  4. Dependent on the activity's evaluated risk, CP&A may conduct any combination of administrative, financial and compliance reviews of the proposal package, and will communicate directly with the department contacts to address any additional operational and financial queries about the activity prior to rendering a decision.
  5. Once a decision is rendered, CP&A will advise on the approval status of the proposal, the date range any approved rates would be effective, and subsequent setup steps required in the event your activity is new.  

When does pricing need to be updated?

• As best practice, rates should at least be reviewed and updated within 2 years after the last rate approval.
  
  However, the Office of Costing Policy and Analysis (CP&A) may grant rate approvals for varying lengths of time depending on the evaluated financial risk of the activity. Upon review of an activity's rate proposal, CP&A will take into account the total amount of anticipated annual expense the activity will generate, the volume of anticipated billings to federal funding sources and the historical financial performance of the activity to determine its associated risk level and length of time rates may be approved effective.
  
  Below are decision matrices which illustrate how activities are generally evaluated against these factors:

What if a service being offered is a one-off occurence to an entity outside the university?

• Services which are of a one-time or infrequent nature, and not provided on a recharge basis are recommended to be facilitated through a service agreement.
  
  Health Sciences Business Contracting (HSBC) specializes in negotiating service and training agreements with industry, educational, and non-profit entities to assist Health Sciences faculty and departments collaborating with outside entities.

What are a department's responsibilities once a recharge is established?

• Generate customer invoicing, recharge your UC clients and record external revneue monthly to ensure accurate profit & loss (P&L) reporting
• Monitor accounts receivable (AR) aging to ensure cash receipts are applied to external customer invoices
• Perform monthly reconciliation of financial activity, review balances and P&L performance and deficit trends
• Conduct an annual review of rates to ensure your cost model is optimally supporting the activity's ability to maintain break-even conditions

How often should revenue be recorded? Are there knowledgebase resources to guide departments through these processes?

• To ensure that sponsored projects are debited timely, and departments can conduct accurate trend analysis for a recharge activity's monthly and annual profit & loss (P&L), it is recommended that recharges and invoices are generated on a monthly basis, and transaction entries recorded to the general ledger prior to the monthly campus ledger close deadlines.
  
  Please see the below resources for the university's ledger close calendar, as well as step-by-step guidance on how to recharge, how to utilize the Oracle contract billing module, as well as reporting resources to assist with tracking accounts receivable. 
  
  
  • University Ledger Close Dates 
  • How to Recharge Through the RMP App
  • How to Process an Intercampus (UC-to-UC) Recharge
  • How to Create a PPM Contract in Order to Bill External Customers
  • BAH Accounts Receivable Report Panorama

What reports are available to help monitor the financial position of a recharge activity?

• Recharge-specific reports are now available across the UC San Diego campus through the BAH portal. Below are a list of available reports which can assist recharge financial managers with reconciling their operations:
  
  
  • Recharge Operations Dashboard
    • Used to query project-fund level balances and a profit and loss summary by parameters including: recharge operating license number, financial unit, project and fund.
  • Recharge Billing Summary
    • Used to help recharge administrators understand which departments are driving their recharge income and compare upcoming recharge postings with historical data to ensure consistency.
  • Recharge Managers Commonly Used Reports
    • A dashboard containing links to other commonly available reports which can be used to validate transaction detail between the general ledger and PPM subledger.
  • Accounts Receivable Panorama
    • Contains reporting modules which can assist with tracking unidentified cash receipts and Oracle contracts and invoices with open receivables.

What if a recharge activity falls into an operating deficit?

• Deficits can be a worrisome indicator of financial distress in an activity resulting from many factors, including a contraction in customer volume, and increased or unanticipated operating costs exceeding the activity's annual budget. If a deficit trend is observed in a recharge, your department will need to:
  
  
  • Ensure that all anticipated revenue transactions have been properly recorded to the activity.
  • Analyze the severity of the the deficit trend and forecast the impact on the recharge's ability to maintain break-even operating conditions.
  • Determine if the deficit can be ameliorated by an adjustment to the activity's rates, or if the deficit is structural. 
    
    
    • If the deficit can be resolved through a routine rate adjustment: engage with the VC Office to discuss a rate adjustment strategy which can ensure the recharge activity is aligned toward a healthy state within an allowable timeframe.
    • If the deficit cannot be resolved through a routine rate adjustment: immediate engagement with the VC Office will be required to discuss a resolution plan.

What steps are required to formally close out a recharge activity if operations have ceased?

1. Reconcile all accounting for the activity, and confirm that all remaining staff effort and recurring expenses to the recharge have either ceased, or have been allocated elsewhere.
2. Confirm and document any remaining balances in the recharge's primary operating fund, depreciation and equipment reserves. 
3. Contact Steve Portillo in the Office of the Vice Chancellor for Health Sciences to confirm that the activity has ceased, and provide a financial summary of the activity which confirms the remaning balances across the recharge funds.
   • Upon VC confirmation, a SNOW ticket will be opened with the Office of Costing Policy & Analysis confirming the final balances for the activity and the intent for closure.
   • Upon confirmation, Costing Policy & Analysis will advise toward coordination of settling the remaining balances in the recharge back to the home department.
   • Upon approval, the recharge's operating license will be be permanently deactivated and the activity logged as permanently closed.

Office of Costing Policy and Analysis

In the recharge arena, the Office of Costing Policy and Analysis serves as a collaborative partner to the VC Office (VCO) in areas related to costing compliance oversight and oversight of the rate review process for departments. The Office of Costing Policy additionally develops and maintains all campus-level recharge policies, revises overhead rates for non-university customers, and can assist departments in refining their costing practices.

Departments are welcome to reach out to the Office of Costing Policy for consultative services related to management and strategic planning for their recharge activities by emailing recharge@ucsd.edu

For rate development and submission: departments should begin their work with the VC Office, as we are required to maintain record of the vetting and review process for all activities.

Policies and Additional Resources

The costing policies which undergird the establishment and financial management of recharge and core resource facilities are presented in following resources published by federal agencies, the UC Office of the President, and UC San Diego.

Please visit the below resources for additional supporting information on recharge governance.

• Office of Costing Policy and Analysis: Recharge Community Sharepoint
  • UC San Diego Health Users: Login with your Campus AD domain @ucsd.edu
  • Request access by emailing: recharge@ucsd.edu 
• PPM 300-87: Sales & Service of Educational Activities: Recharges by Academic Support Units and, Sales & Services to External Entities Policy
• BFB-A-47 Direct Costing Procedures
• BFB-A-56: Academic Support Unit Costing and Billing Guidelines