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Core Facilities Guidance & FAQs

General

What is a core?


Research Service Centers, also referred to as recharge centers or core facilities, are formally approved, centralized, shared research resource entities that provide access to instruments, technologies, and services, as well as expert consultation and other resources to scientific and clinical investigators that are normally beyond the technical or financial capability of individual Principal Investigators (PIs).

In general, Research Service Centers recover their cost, or a portion of their cost, by providing services in return for user fees that are charged for services. A Research Service Center’s primary purpose is to support University researchers; however, services may also be provided to external users. External users are defined as entities governed and administered independently from the University and may include other academic institutions.

To be considered an official Research Service Center, core facility, or recharge center, rates must be formally approved and reviewed by the UNC Office of Sponsored Programs (OSP) every two years. Formal approval from OSP is required whenever a new rate is added, revised, or removed.

What is the difference between a core/shared resource and a “recharge” or Research Service Center?


In order for a core to be considered an official Research Service Center, or recharge center, rates must be formally approved and reviewed by the UNC Office of Sponsored Programs (OSP) every two years. Formal approval from OSP is required whenever a new rate is added, revised, or removed.

How do I establish my core as an official recharge/Research Service Center?


Contact Research Core Development at ### and we will assist in starting the process of becoming an official Research Service Center.

I would like to officially close a core/RSC. What do I do?


Contact Research Core Development at ### and we will assist in beginning the process of closing the core/RSC.

I would like to discuss opportunities to improve a core’s financials- what do I do?


Contact Research Core Development at ### - we work directly with core management to identify opportunities to improve business processes and increase financial performance of core operations.

What is a fund balance?


There are two different terms related to fund balance – “book fund balance” and “actual fund balance”.

Book fund balance is the difference between recorded revenues and expenditures from the time the RSC was first established to the present. (Sales minus expenses.)

Actual fund balance is the book fund balance adjusted for timing differences between when services provided are billed (revenue recognition) and when customer payments are received (accounts receivable collection). (Sales for which payment has been received minus expenses.)

A surplus is identified by a credit fund balance (revenues are greater than expenses)

A deficit is identified by a debit fund balance (expenses are greater than revenues).

Breakeven is achieved when the operating account’s fund balance results in zero after all outstanding revenues and outstanding expenditures have been recorded and posted to the financial system as of a given point in time.

The actual fund balance may contain a surplus equal to or less than 60 days of working capital.

External sales revenue and depreciation contained in approved recharge rates should result in a planned surplus.

What is an open-access core vs. a member-only core?


Cores may be open to all users or may be restricted to only certain groups of users. For example, a core may provide services to all internal and external users or may only provide services to users within a specific department. Below are the classifications for cores related to users:

  • Open to internal and external users
  • Limited Access Core Facilities: Core facilities that exist to serve a restricted group of investigators associated with a specific grant, or to support investigators within a specific department or center.

    • Open only to UNC users
    • Open only to members
    • Closed (only departmental users)


Collaborative Core: Research-oriented cores that have special expertise and equipment that do not fit unit pricing. In many cases, investigators accomplish their work by collaborating with members of the core. These may be open-access, fee for service, or may instead operate with a different model such as expenses paid directly by PI grants. Typically, collaborative cores are not official recharge centers.
Recharge Rates

Who is responsible for reviewing recharge rates?


Rates should be formally reviewed at least annually at the department level and every two years by the Cost Analysis and Compliance (CAC) unit in the Office of Sponsored Programs (OSP). OSP maintains a rate review cycle and will contact you prior to your formal review.

Written approval by OSP is required whenever a new rate or fee is added, revised, or deleted. Contact OSP CAC at RSCSupport@unc.edu for a rate review or to add or modify rates.

RSC rates charged should be designed to achieve a break-even operation over a long-term period, usually two years.

I would like to add a new rate or modify a current rate for an existing RSC, what do I do?


Contact OSP CAC at RSCSupport@unc.edu to add or modify rates. OSP CAC will perform a streamlined review of new or modified rates- a full rate review may not be necessary. Written approval by OSP is required whenever a new rate or fee is added, revised, or deleted.

The Rate Development Worksheet I use does not have enough rate columns- what do I do?


Contact OSP CAC at RSCSupport@unc.edu to request additional rate columns on the RDW.

Can a core charge a rate lower than the approved recharge rate(s)?


Rates should be designed to achieve a breakeven operation over a long-term period. OSP recommends charging the applicable approved rates for all services, including charging the breakeven rate for internal users and sponsored agreements.

A core may choose to charge a rate lower than the breakeven rate. However, the department will be responsible for paying the difference between the approved rate on the Rate Development Worksheet and the lower rate charged to customers.

What is the difference between member subsidy and non-member subsidy worksheets?


The difference between the member and non-member subsidy worksheets is that the member subsidy RDW contains additional sections on the “ReOp1-Main Worksheet” tab and the “ReOp7-Subsidies” tab to identify pertinent information related to calculating discounted rates for a specific group of customers that require the products or services of the RSC. If the RSC does not have a specific subset of customers that receive a discounted rate, the non-member subsidy Rate Development Worksheet should be used.

What are the different rates and when should I use them?


The rate to be charged for a particular service is based on the customer:
Internal Breakeven Rate (RDW rate a): also known as the “breakeven rate”.

  • Breakeven Rate = Total Estimated Annual Direct Cost / Total Estimated Annual Usage


Subsidized Internal Rate (RDW rate b): Internal Breakeven Rate less subsidized amount. May be charged to specific groups within UNC who are allowed a reduced rate (for example: within the department, school/college, etc.).
Internal Other Rate (RDW rate c): Internal Breakeven Rate less specific member subsidized amount. May be charged to specific groups within UNC who are allowed a reduced rate (for example: within the department, school/college, etc.).
Minimum External Rate (RDW rate d): Internal Breakeven Rate + F&A. This rate or the market rate, whichever is higher, should be charged for all non-academic external users (for example: GSK, Merck, Pfizer, Tessa, etc.)
Academic Rate: Internal Breakeven Rate + F&A. Also known as the Minimum External Rate. This rate should be charged for all external academic institutions (for example: UNCG, Duke, NCCU, Baylor). This includes UNC System institutions.

Examples:

  • A UNC PI wants a budget for a study sponsored by NCI or another federal sponsor. The Internal Breakeven Rate should be used.

  • A researcher at Duke wants to utilize your core and would like to pay by purchase order. The Academic Rate (also known as the Minimum External Rate) should be used.

  • A UNC PI wants a budget for a study sponsored by Merck. The External Rate should be used (higher of Minimum External Rate or market rate).

Can office supplies be included in the rate calculation process?


No, office supplies are unallowable and cannot be included in the rate calculation within the Rate Development Worksheet.
Internal vs. External Users and Revenue

Can a core provide services to non-UNC users?


Yes. While Research Service Centers/cores are established primarily to meet the needs of the University research community, there are circumstances in which services may be provided to external entities.

You should assess the core’s capacity to serve a new or expanded user base to ensure there is personnel time and instrumentation time available to handle the added business. Service for external users should not negatively impact usage by UNC users.

Are UNC Health and other UNC campuses external users?


Yes. UNC Health and other UNC campuses are external users.

I would like to offer services to an external entity. What should I do?


A service agreement should be in place before beginning any work with an external user. The agreement should define the scope of work, deliverables, cost of services, payment, etc.

The Industry Contracting Group within OSP will work with you to create a fillable template service agreement for your core, which can then be used for any external entity, industry or academic/non-profit.

See Industry Agreements – Core Recharge Service Center Agreement here: https://research.unc.edu/sponsored-research/resources/industry-contracting.

What rate can I charge an external entity?


See #14 above for rate information. Questions about when to use a specific rate? Contact CAC at RSCSupport@unc.edu.

Can I charge a lower rate to an external entity in order to get their business?


You may not charge a rate lower than the rate charged to internal users (Internal Breakeven Rate). If the RSC elects to charge a rate lower than the external minimum rate, the department will be responsible for paying the difference between the approved external minimum rate on the Rate Development Worksheet and the lower rate charged to the customer.

Should I record revenue from external users differently than revenue from internal users?


Yes!

  • Sales from external users should be recorded using account code 441911.

  • Sales from internal users should be recorded using account code 441845.

  • Above-Cost External Revenue is exempt from breakeven requirements if it is documented appropriately.

How do I know if I have an external revenue operating surplus?


External revenue is comprised of two components: break-even portion of external revenue and above-cost portion of external revenue. Both components of external revenue must be monitored and separately documented by the operating unit.

Break-Even External Revenue: The break-even portion of external revenue is defined by the applicable internal rate multiplied by the quantity of service output supplied to the external user:

  • Break-Even External Revenue = Approved Internal Rate * Quantity Supplied


Above-Cost External Revenue: The above-cost portion of external revenue is determined by multiplying the service output provided to the customer by the difference between the approved external rate and the applicable internal rate.

  • Above-Cost External Revenue = External quantity * (External Rate – Internal Rate)


If the external rate used is the Internal Breakeven Rate plus F&A, Above-Cost External Revenue can be calculated as

  • Above-Cost External Revenue (F&A) = External Revenue / (1 + F&A Rate)


The External Revenue Operating Surplus is not subject to rate carryforward adjustments and can be set aside to be used by RSC management solely for the benefit and improvement of the RSC’s operations.
Equipment

Use of accumulated depreciation funds requires prior written approval from OSP CAC. If you would like to explore options for utilizing an accumulated depreciation balance, contact OSP CAC at RSCSupport@unc.edu.

Can the cost of equipment be included in a recharge rate?


Equipment cannot be directly charged to the RSC, but in some circumstances the cost may be recovered via accumulated depreciation. Identifying the original funding source for the equipment is critical before any consideration of including the cost recovery in a recharge rate.

Equipment purchased directly with federally sponsored funds cannot be included in a recharge rate. Much of the research performed at UNC is federally funded. If equipment was purchased using federal funds, the government has already paid for the full cost of the equipment. Therefore, including equipment depreciation in the rates charged to federally funded researchers would be double-billing the government.

If the equipment was not purchased directly with federally sponsored funds and if the equipment is used solely for recharge services, then 100% of the cost recovery (depreciation) can be included in the associated service rate(s). If the equipment is shared between recharge services and other usage, only the percent of usage by the recharge facility can be included in the rate structure. There must be a means for accurate documentation of the levels of usage, either by usage log per instrument or another method.

What is depreciation and how is it calculated?


Because capitalized equipment lasts longer than one year, it would not be appropriate to include the full cost of the equipment in the rates for a single year. This would be overcharging the users in that one year and undercharging users in each successive year the equipment was in service.

Therefore, the cost of equipment should be expensed in equal portions over the entire span of useful life. This allows revenues produced by the use of the equipment to appropriately align with the expense of the original purchase. This is referred to as depreciation: we are using up a portion of the equipment over multiple years, so the cost is also spread over multiple years.

Each year’s cost is the depreciation expense for that year. The total amount of depreciation expense recorded to-date is accumulated depreciation.

Depreciation expense (straight-line method) is calculated as follows:

  • Purchase Price / Useful Life = Annual Depreciation Expense

    *Other factors may influence depreciation expense, such as salvage value, timing of purchase during the year, etc.

If depreciation expense is included in a rate, how should I keep track of it?


Depreciation expense for a given piece of equipment must be applied to only those rates which utilize that specific instrument. Revenue derived from the depreciation expense must be tracked and accounted for as a component of the overall recharge fund balance.

Because recharge accounts are cost recovery systems, there are limits on the amount of carry forward balance that should be accumulated. Depreciation is exempt from this calculation since it is associated with a long-term expense, but you must have supporting documentation showing the amount of accumulated depreciation so that it will be allowed to carry over from year to year and not be considered surplus revenue from normal operations.

OSP CAC will assist with the calculation of accumulated depreciation during the rate review process.

When properly tracked, the accumulated balance of collected depreciation funds can be applied to the purchase of new equipment for the core, which is not normally an allowable expense for a recharge operation. Use of accumulated depreciation funds requires prior written approval from OSP CAC. If you would like to explore options for utilizing an accumulated depreciation balance, contact OSP CAC at RSCSupport@unc.edu.

iLab

CrossLab iLab Core Facility Management is a web-based software solution for facilitating service requests, customer and project management, as well as billing and invoicing. iLab software can help core staff save time and money by streamlining lab administrative processes and developing better metric tracking and data collection. More information is available here: https://www.agilent.com/en/service/laboratory-services/lab-operations-management/core-facilities-management opens in a new tab.

How can I demo iLab and learn more about getting started?


Contact the SOM Business Office at coresupport@med.unc.edu.

Documentation Requirements

When do I need to keep documentation for expenses?



  • If a pass-through rate is used, or if bundled rates are used, documentation must be retained in order to support how the amount charged was calculated.

  • This documentation will be necessary to support costs in case of audit.

  • Documentation should include invoices or receipts for the supplies purchased to satisfy the customer’s request. These costs should align with the amount invoiced to the customer.
Financial Reporting

To facilitate the Rigor, Reproducibility, and Transparency in Research Initiative at UNC, the SOM Office of Research Technologies (Word) opens in a new tab has prepared a template for use on each core’s website.

SOM ORT offers guidelines, support, and resources for core facilities to consider on the SOM Office of Research Technologies Core Facilities Website opens in a new tab.

For well-done examples of RRT statements, see the Microscopy Services Laboratory opens in a new tab (Department of Pathology/LCCC; Pablo Ariel, Director) and the UNC Flow Cytometry Facility opens in a new tab (LCCC; Ramiro Diz, Director).

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