This policy outlines the establishment and ongoing chargeback process at Ryerson University.
A chargeback occurs when one department provides a product or service to another department and seeks to recover the cost (direct & indirect costs) of the good or service on a per-use basis at an established price, or at a price based on an established standard pricing method.
This policy applies to all departments and faculties, but does not include units that operate in a retail capacity, e.g. University Business Services ("UBS"), Ryerson Image Centre, etc. Billings to external companies are not covered under this policy. (see Accounts Receivable Policy.
Costs that can be specifically identified with a good or service provided by a chargeback operation. These costs may include the salaries, wages and benefits of university faculty and staff directly involved in providing the good or service, as well as other direct costs such as materials, supplies, equipment rental or depreciation.
Indirect (Overhead) costs:
Indirect costs are defined as the costs of the infrastructure support for the activity. This may include administrative support, facilities, communications, systems and custodial/maintenance support.
1. All chargebacks must meet the following criteria:
Transparent – it must be clear what the charges are for, how they were calculated, and where the posted rates may be found. Details must be fully documented and available on their Ryerson web site.
Fair and Consistent Pricing – all clients must be charged on the same basis, including
consistency in estimating, accumulating and reporting costs, and
consistency in allocating costs incurred for the same purpose.
Approved – Departments must attain approval from the Macro Planning Group before a new chargeback capability is initiated.
Timely – Chargebacks must be submitted to Financial Services for processing within thirty (30) days following the month in which the service is completed.
Auditable - financial, statistical and other records are the responsibility of the department issuing the chargebacks and must be retained for five years from the end of the fiscal year.
2. HST is not applicable to internal chargebacks.
VI. Roles and Responsibilities
· Department providing the service must ensure that
· The chargebacks are in compliance with the criteria above,
· Provided to Financial Services in the appropriate format to be easily entered into the University’s General Ledger, and
· A process has been established to resolve disputed charges.
· Department(s) receiving the service must verify the good or service has been received.
· Financial Services is responsible for the timely posting of all chargebacks to the General Ledger.
· Macro Planning Committee – approval of the introduction of a new chargeback for goods/services and annual changes in rates.
This policy falls under the jurisdiction of the Vice President, Administration and Finance. The interpretation and application of this policy is the responsibility of the Chief Financial Officer.
VIII. Next Review Date
This policy is subject to review every three (3) years.