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Chargeback policy changes improve process

John Snyder, a senior telecommunications technician, works in the Telecommunication's switch room on campus,one of the first departments on campus to successfully implement the new University Chargeback Policy
You might call it the “chargeback turnaround.” The word chargeback once signaled confusion, frustration and budgetary difficulties for many departments on campus. However, the Chargeback Policy approved nearly a year ago has changed that with practices that bring clarity and, in many cases, savings, to the campus.

Following a comprehensive review during the 2002-03 academic year by a quality team of all campus chargebacks, recommendations were made to standardize chargeback practices.

“The core of the whole issue was, we’re charging ourselves for a lot of things. Are we charging more than we need to? Or are units not charging enough and operating at a deficit?” said James Van Voorst, associate vice president for administration. “We don’t want one unit to absorb $1 inappropriately, or one department to charge $1 inappropriately.”

The team’s sponsors, Anthony Ferrara, vice president for administration, and Mary Ann Swain, provost and vice president for academic affairs, then established a Chargeback Review Committee representing all divisions and headed by Van Voorst. All chargebacks require approval from the committee – units can’t simply set their own chargeback rates.

The committee defined what an internal user subject to chargebacks is and streamlined the rate review process, creating a manual that outlines all chargeback procedures.

“Our basic tenet is that you pay for the service,” Van Voorst said. “Everyone will know what to expect, they’re comfortable that rates are being looked at and at what’s behind the numbers. It’s open, angst goes down, it’s made for some efficiencies and there are benefits all around.”

The first campus offices to establish new chargeback rates were University Police and Telecommunications. According to Van Voorst, these pioneering departments provide clear examples of why the review was needed. For example, when an event required University Police officers to work overtime, it was impossible to accurately estimate what the overtime charges would be due to contractual obligations associated with assigning overtime. The actual overtime charges would vary based upon the actual salaries of the officers volunteering for the assignment.

“That’s changed now,” said Van Voorst. “Based on information provided to us by University Police, we developed a melded rate of $50 an hour. The cost is now up front and justifiable.”

Don Rauschmeier, director of Telecommunications, looked forward to the review process for his operation.

“This whole exercise really helped us a lot in understanding our budget,” he said. “For the most part, reaction has been good. The rates were changed and it’s more the users paying for what they need now. Our rates are more defendable that in the past and it takes some of the burden off of us to explain. The committee signed off on our rates.”

Though not all chargeback reviews will result in decreased rates, as a result of these particular reviews, there are now substantial savings to users, said Van Voorst. With the successes experienced by University Police and Telecommunications, the committee is now coming to closure on new rates for the University Print Shop, Physical Facilities rehabilitation and alterations and the Copy Center.

“This process is working because there was planning on the front end by the original quality team,” said Van Voorst. “It all came out of a process that included views from all constituents involved in chargebacks. That’s making it work.”

The Chargeback Policy, divisional representatives on the committee, forms and approved and pending chargeback rates can be found here
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Last Updated: 10/14/08