Charge Out Rates

Units must request permission to establish a charge-out rate (also known as a recharge rate) prior to charging a fee for a service. For example, a chemical characterization laboratory may want to offer its services to researchers throughout Penn State. In some cases, departments may want to charge the cost of these services to internal (general) funds. In other cases, the costs may be charged against external grants and contracts. Departments may not simply establish their own rates, however reasonable they may seem. In order to assure fairness in pricing, all such requests must be submitted for approval, in accordance with Penn State Policy AD15.

The Office of the Corporate Controller must verify that appropriate fringe and F&A rates are being applied to the rate structure of any costs charged against external grants and contracts:

"These rates must be approved to assure that the cost basis used to develop the fee is appropriate and that the federal government will be not overcharged for the services provided" (AD15).

The Corporate Controller also must ensure that the services being provided do not compete unfairly with the commercial sector:

"Policy FN14 prohibits services to an outside audience (non-University related or commercial), unless the service is commercially unavailable within the region of a campus and has the prior written approval of the Corporate Controller. In such a case the unit must provide clear rationale why the University should be providing this service to the commercial sector. In general, services being provided which are also provided commercially must be fully-costed, including the application of fringe and overhead" (AD15).

Questions regarding charge-out rates should be directed to the Office of the Corporate Controller (814-865-1355).