There may be many reasons why you would need to modify an existing rate or create a new one. The important thing is to remember that rates are based on current costs and conditions.
As factors change, so should your rates and every new or modified rate must be approved by your Control Unit/Recharge Committee.
Here’s Why. The following examples are all good reasons you may need to modify or create a rate.
Current Rate Isn’t Fair
By policy, Rates can only include costs that directly support an activity.
A New Need
Unit Directors and staff should always be paying attention to their customers. Look for new opportunities to provide services.
Here are some questions to ask at your next Unit meeting. Try to include different perspectives including Unit Managers, Superintendents, Directors and customers.
- What does our department do?
- What is our mission?
- What service can we provide to the UC and or general public?
- How are our staff spending their time and resources?
- How can we cover the cost of service?
Match Rate with Services
Different services may require separate recharge rates. Separate goods and services should carry unique rates. Identical goods and services must carry identical rates for any and all campus and affiliate customers.
Not Covering Costs or Overcharging
Recharge Units are not in the business of making money OR losing money. On one hand, rate must cover the cost of service, or risk running deficit and losing funding. On the other hand, rates are not meant to be sources of income for a Unit. If you anticipate an increase or decrease in expenses that will affect your current rate or total estimate rate expenses by more than 5%, you may need a new rate.
You’re Told to
If carrying a large deficit or surplus, you will be required to follow an approved plan for reduction which may require a change in rate.
Following a review of your Unit accounting policies by Financial Services, you may be required to make changes which involve a change in rate.
Next: But it is it a Recharge Activity?