Overview of Stanford University Service Center Policies & Practices
DOR-1125
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1.3 What Is a Service Center?
A Service Center is a facility or research lab within Stanford schools or departments which operate as “businesses” that are self-sustaining. They provide on-going products or services that support the university’s teaching and research functions. It provides cost savings to users internal to Stanford and a necessary service to users external to Stanford to recover the cost of operations annually through charges to its users that are based on an approved budget and approved rate. Rates are generally formulated to recover the costs of operations such as salaries, benefits, equipment depreciation, materials, and supplies. Most service centers must operate on an annual fiscal year break even basis. Stanford has approximately 80 service centers
1. General Accounting Practices
A service center is an ongoing activity. It is not a one time distribution of expense. It is not an expenditure allocation PTA, where actual expenses are distributed among benefiting units each month. (See below for a comparison of service centers vs. expenditure allocations.)
The cost of running the service center facility or providing the product is charged to users on a "rate" basis. Rates are generally formulated to recover the costs of operations such as salaries, benefits, equipment depreciation, materials, and supplies expense.
A service center recovers the cost of its operations through charges to its users. Dissimilar services operated by the same department, a computer facility vs. a copy center vs. a machine shop, must be established as separate service center entities, with separate accounts, budgets, and rates.
2. Annual Breakeven
Most service centers operate on an annual fiscal year break even basis, with rates based on budgeted projections of operating expenses and projected levels of activity or demand for the services or products to be provided during the budget period. Organizationally and for accounting purposes, service centers fall into one of two categories at Stanford University: "academic" or "administrative."
