Revised: July 1997
A Physical Plant operation provides routine and special services to an institution’s facilities. The UW-System uses standardized procedures to charge services back to benefiting departments. These procedures are periodically reviewed in order to facilitate consistent and effective implementation.
- The chargeback of Physical Plant services shall be budgeted and accounted for in accordance with UW System Administrative Policy 320 (SYS 320), Internal Services Chargebacks (formerly F24).
- The chargeback for administrative costs for Auxiliary Enterprises shall be provided in UW System Administrative Policy 316 (SYS 316), Auxiliary Enterprises Support Services Chargebacks (formerly F42).
- In order to establish uniformity throughout the UW System, chargebacks to the benefiting activity shall be made for:
- Physical Plant nonroutine or special services performed for general operation activities. See Attachment for special services related to facilities operation and maintenance.
- All physical plant services provided to self-supporting operations.
- To generate comparable financial data, the accounting procedures set forth are to be followed by each institution for charging back physical plant services.
However, an alternate method of calculation may be permitted if it produces a comparable result as the standard calculation. Use of an alternate method must be documented and have prior approval of the UW System Vice President for Finance or designee.
- The hourly chargeback rate for personal services and fringe benefits will be determined as follows:
- Personal services will be determined by the estimated or projected gross average rate for nonbuilding trades personnel and by the gross average rate for each building trade or group of building trades, to be computed by the individual institution.** The gross average rate is the average of the current salaries in a given category (e.g., carpenters, maintenance mechanics, masons).
- Add to the personal services figure the fringe benefits based on estimated fringe benefits computed at the System or campus level, as appropriate.
- Divide the combined amount by the productive hours. Productive hours are defined and computed in terms of an institutional average as total hours (2,080) less vacation time (amount generated), personal and regular holidays (amount generated), union business (estimated), sick leave (average usage), training time (estimated), and estimation time (estimated). Institutional judgment shall prevail when unusual circumstances occur.
- Salary and Fringe Benefit Services Rate Computation Illustrated
+ Fringe Benefits
= Total Salaries and Fringe Benefits
÷ By Productive Hours
= Chargeback Rate
- The chargeback rate should be applied to all time attributed to a particular job, including job breaks for travel and other related activities. For example, assume a worker’s daily time is distributed as follows:
- 4 Hr. Self Supporting Activities
- 2 Hr. Academic Department Special Services
- 2 Hr. General Physical Plant Operations
- 8 Hr. Total
Six hours would be charged back using the rate calculated above. The remaining two hours would be supported by the Physical Plant operating budget. Employe job breaks for travel and other related activities may be charged to jobs as they occur or shared proportionately by all jobs performed that day. Note that all eight hours must be recorded to one or more of the above three categories.
- The chargeback rate should be reviewed and adjusted as necessary, but at least annually.
- Costs of materials and supplies for special services performed for general operation activities and all services provided to self-supporting activities will be charged back. The cost of small items kept in inventory, e.g., nails, screws, bolts, etc., may be charged back through the use of a burden rate.
- All equipment which is institutionally owned or rented from an outside vendor will be charged to the benefiting activity, if appropriate, as well as any contracted services.
The benefiting activity will code all charges to the most appropriate object class code (e.g., chargeback costs for salaries, fringes and supplies for construction of book shelves for an administrative office will be coded to the object class code for office furniture and equipment).
- Physical plant will record offsetting accounting entry as a sales credit.