BRIEF

Policy Summary

Lawrence Berkeley National Laboratory (Berkeley Lab) recharge centers provide specific scientific facilities (e.g., the Advanced Light Source), technical capabilities (e.g., Engineering Shops), or general services (e.g., Telephone Services) to multiple users where subscribers have discretion over the amount of service used. This policy provides guidance for all Berkeley Lab recharge centers with a common framework for the equitable and accountable distribution of user charges, which are based on the costs of the facilities, goods, and services provided.

Who Should Read This Policy

All Berkeley Lab employees that provide or utilize recharge centers.

To Read the Full Policy, Go To:

The POLICY tab on this wiki page

Contact Information

Indirect Budget Manager, Office of the Chief Financial Officer (OCFO)

POLICY

A. Purpose

The purpose of this policy is to provide all Lawrence Berkeley National Laboratory (Berkeley Lab) recharge centers with a common framework for the equitable and accountable distribution of user charges, which are based on the costs of the facilities, goods, and services provided.

B. Persons Affected

All Berkeley Lab employees that provide or utilize recharge centers

C. Exceptions

None

D. Policy Statement

1. A Berkeley Lab recharge center provides specific scientific facilities (e.g., the Advanced Light Source), technical capabilities (e.g., Engineering Shops) or general services (e.g., Telephone Services) to multiple users where subscribers have discretion over the amount of service used.
2. A recharge center is appropriate when the costs of the provided services/facilities would not be equitably distributed on a broader or more general allocation base. Therefore, recharges are not appropriate when adequate cost distribution can be better realized through a broader allocation base, and/or when users of the service have no control or discretion over the service provided due to regulations, Berkeley Lab policy, or other constraints.
3. Recharges are appropriate when the following conditions and/or circumstances are present:
   1. Provides a more precise allocation of costs to users based on the benefits received.
   2. Encourages optimal use of a service or resource.
   3. Assists in the evaluation and control of the cost of a service.
   4. Assures equitable costing that complies with Cost Accounting Standards (CAS).
4. Research and development activities are not appropriate for recharges.
5. Recharges shall not include costs which are considered unallowable under the terms of the Federal Acquisition Regulations (FAR) or Contract 31.
6. Criteria for development and application of recharge rates are as follows:
   1. Costs of providing the service for a fiscal year are identified, estimated, and reviewed. Options for gaining greater cost efficiencies and alternative methods of service delivery should both be considered as cost-control mechanisms.

   2. Demand for the service (i.e., the estimated user [distribution] base) should be projected based on the best available forecast data. The distribution base selected should be a reasonable measure of the benefits users receive from the service and should result in an equitable allocation of the service's costs to its users (i.e., users are charged for what they get). In addition, the estimated base volume should reflect the anticipated actual usage of the service rather than the number of units of the service available or service capacity.

   3. If a measure of the benefits users receive is unavailable or impractical to ascertain, a measure of the output of the recharge center's activities is acceptable. In addition, where a single unit of output will not reflect the proportional consumption of resources in circumstances where the level of resource consumption varies materially among the units of output produced, the output measure should be modified or more than one output measure should be used.
7. The hierarchy below lists of three allocation measures appropriate for recharge centers in descending order of preference:
   1. A measure of activity or resources consumed (e.g., labor hours, machine hours, or square footage).
   2. An output measure (e.g., number of printed pages for a print shop, number of purchase orders processed by a purchasing department, or number of machines maintained).
   3. A surrogate for consumption (e.g., number of personnel, labor, or total dollars or square feet of the unit receiving the service).
8. The preliminary rate is to be developed on a break-even basis for Berkeley Lab users. The objective is to establish rates that will recover exactly the costs of providing the services or products. Every effort will be made to ensure that at fiscal year-end, cumulative recovery equals cumulative costs of providing the services or products. Recharge managers are required to monitor execution throughout the fiscal year. If a material variance is forecasted, rates and/or budgets will be appropriately revised to allocate the variance. Additionally, recharge center managers are required to submit rate-change proposals to the Budget Office for review and approval prior to implementation.
9. Estimated costs for the fiscal year and the projected distribution base volume must be developed in an auditable manner that incorporates best available data and considers prior-year cost/recovery variance. Any rate that has consistently over- or under-recovered costs must be evaluated during the formulation stage to address the chronic cause for these variances.
10. The recharge center should be established on the basis that it must assign costs accurately (i.e., one recharge center cannot subsidize another recharge center). It is not acceptable to plan or transfer any over-/under-recovery in one cost center to another cost center.
11. It is the responsibility of the organization that sponsors the recharge rate to assure that, where appropriate, the rate charged for the service offered to Berkeley Lab is competitive within local commercial markets. If the level of the proposed rate cannot be justified and supported from a good business perspective, the sponsoring organization must consider options for improving the cost structure or consider suspension of the service in favor of utilizing an outside vendor.
12. The costs of administering the recharge (development of the rate and distribution of user charges) should not be of such magnitude to negate the benefits received from the more precise distribution of the recharge center's costs. To this end, automated systems should be used to the maximum extent practical in distributing costs to users.
13. Rate Execution and Monitoring
    1. Recharge costs are allocated using pre-established rates. Rates are based on forecasted costs for the applicable fiscal year.
    2. Preliminary recharge rates are developed on a break-even basis, with the objective of establishing a rate to recover the exact total of costs in the cost pool at fiscal year-end. If a material variance exists between cost and recovery at fiscal year end, the area will revise the rate and/or budget to appropriately allocate the variance. Revised rates are retroactive to the beginning of the fiscal year.
    3. Establishment of recharges, as well as forecasts, and revisions of predetermined rates for the applicable cost accounting period(s) are prepared by appropriate division staff. The implementation of the rates is coordinated and executed through the Office of the Chief Financial Officer (OCFO) Budget Office and the Controller’s Office.

E. Roles and Responsibilities

Managers, supervisors, and employees must adhere to the provisions of this policy.

^* In the context of this policy, financial stakeholders may include area/division business managers or other area/division operations staff to whom area/division management has given accountability for financial matters. This may also include Office of the Chief Financial Officer (OCFO) staff matrixed to the area/division.

F. Definitions/Acronyms

G. Recordkeeping Requirements

None

H. Implementing Documents

None

I. Contact Information

Indirect Budget Manager, Office of the Chief Financial Officer (OCFO)

J. Revision History

DOCUMENT INFORMATION

Source Requirements Documents

• Cost Accounting Standards Board (CASB) Disclosure Statement, Lawrence Berkeley National Laboratory
• Cost Accounting Standard (CAS) 402, Consistency in Allocating Costs Incurred for the Same Purpose
• CAS 418, Allocation of Direct and Indirect Costs

• DOE Order 522.1, Pricing of Departmental Materials and Services