SUBJECT:

New Differential Income Rates for Sales/Services to Outside Customers

Campus units that provide goods and services on a recharge basis are required to charge full cost (both direct and overhead costs) when selling to non-University customers. This is accomplished by adding a differential (overhead) rate to the direct charge. See PPM 300-40, Section V.A.2.d.(2), and Supplement 1.

The campus recently negotiated new campus overhead rates for sponsored projects, and the differential rates need to be adjusted accordingly. The new rates are as follows:

APPROVED DIFFERENTIAL RATE
(Effective as of September 1, 2004)

On-Campus Service Centers            45%

Off-Campus Service Centers            23%

Ship-Use/MPL Service Centers       16%

These new rates are posted in Supplement 1 of the Policy. All other provisions of PPM 300-40 remain unchanged.

Please do not hesitate to contact us if you have any questions.

Bill Brophy
Director of Financial Analysis
858-534-6517

Laurie Martin
Senior Accountant
858-534-4562