FAQs

What are allowable expenses that I should include when calculating a service rate?

Question:

What are allowable expenses that I should include when calculating a service rate?


Answer

Typical normal operating expenses are:

  • Salaries and wages (base salary) of individuals providing the service, producing the goods, or those administering the service center. Including raises if anticipated for upcoming year and vacant positions to be filled in the immediate future.
  • Materials and supplies.
  • Maintenance and repair of equipment assigned to the service activity.
  • Full cost of “non-capitalized” equipment in year incurred.
  • Annual depreciation expense of “capitalized” equipment.
  • Service Contracts (e.g. maintenance agreement).
  • Professional Services.
  • Special conferences or training included related travel, etc., must be specifically related to the operation of the service center.
  • Inventory-related costs where applicable (cost of goods sold).
  • Over- or under-recovery of the service activity adjusted fund balance.

*Note: in order to include expenses in a rate calculation, the expenses must be directly charged to the Banner fund type 3E self-supporting fund.


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