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 FN27.

The Office of Budget and Finance 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. 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. The Office of Budget and Finance must also ensure that the services being provided do not compete unfairly with the commercial sector. As a rule, Penn State should not provide 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.

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