Service centers generate significant direct charging to externally sponsored grants and contracts. Service centers also must be appropriately treated in the University's Facilities and Administrative cost rate calculation. As such, service centers involve significant compliance risk to the institution. As a result, there is a significant amount of oversight and accounting that is unique to these types of operations. The purpose of this document is to provide guidance to administrators of service centers and specialized service facilities by detailing how to properly establish, maintain, and account for these operations in accordance with federal regulations and University policies.

Guidance for this document comes from many sources. Primarily, service centers are regulated by OMB Circular A-21, specifically section J.47. Circular A-21 was interpreted by a 1994 report issued by the Department of Health and Human Services' Office of Inspector General entitled "Summary Report of Audits of Recharge Centers at 12 Universities." Additionally, service centers may generate activity that is regulated by the IRS rules pertaining to Unrelated Business Income Tax and state sales tax. Also, all things must be accounted for according to Generally Accepted Accounting Principles and, as a state institution, we must abide by state budget regulations and controls.

• Service Center Policy
• Service Center Manual - (Printable PDF Version‌)

Service centers and specialized service facilities are organizational units or activities that provide goods and services primarily to internal University operations and secondarily to external users, and charge the users for these services.

Academic and administrative offices may engage in the direct sale of goods and services to external users only when those goods or services are directly and substantially related to the mission of the University. The University of Maryland, Baltimore differentiates between its service centers and specialized service facilities as follows:

• Specialized Service Facility: Centers whose annual amount of internal billings exceeds $1,000,000
• Service Center: Centers whose annual amount of internal billings is between $100,000 and $1,000,000

The guidelines included in this manual only apply to service centers and specialized service facilities. This manual does not apply to other revenue-generating or cost-transfer activities. Operations that are established purely to provide clinical services are not service centers and therefore not covered by this manual.

Organizational units or activities whose internal billings are less than $100,000 are not covered by this manual and will not be set up as service center chartstrings. However, these units should:

• Bill according to actual usage of their services
• Bill at rates calculated to recover no more than the cost of the goods or services provided
• Bill all users of their services equally
• Bill all users of their service after the service is performed 
• Maintain logs to document these cost allocations (billings).

If these units project that their operations will grow to exceed the $100,000 annual billing threshold, they should submit a service center proposal.

In the following, the term "service center" refers to both specialized service facilities and service centers, unless otherwise noted.