Vanderbilt University Medical Center Office of Research. Guidelines for Research Shared Resources and Core Facilities. Cost Center Operations

Vanderbilt University Medical Center Office of Research Guidelines for Research Shared Resources and Core Facilities Cost Center Operations Implemented: July 2008 Revised: February 2010

Table of Contents Rationale... 3 Overview and General Information... 4 Definition of Research Shared Resources and Core Facilities... 4 Oversight of Institutional Cores... 5 Institutional Shared Resources Oversight Committee... 5 Core Advisory Committees... 7 Survey of Core Users... 7 Mechanism for Institutional Support of Cores... 8 Considerations for Setting User Fees... 9 Recovery of Allowable Costs... 9 Labor Charges - Hourly Rate Determination... 10 Non-Vanderbilt Users... 10 Vanderbilt Scholarship System... 10 Custom Pricing... 11 Role of the Office of Research... 11 Federal Cost Guidelines... 12 Equipment Depreciation... 13 Establishing New Recharge Centers - General Operations... 14 Requirements for Approval... 14 Budget and Funding Requirements... 14 Staffing and General Operations... 14 Funding Support for Cores... 14 IDS Recovery... 15 Annual Reporting Requirements... 15 Office of Research - Financial Oversight... 15 Charging/Payment Process... 16 Payment Methods... 16 Charge Verification... 16 Order Upload... 17 Disputed Charges... 17 Charging non-vanderbilt Users... 17 Tracking Accounts Receivable (A/R)... 17 Receipt of Payments... 18 M&D General Ledger Recordkeeping... 19 Summary... 20 2 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Rationale The purpose of these guidelines is to provide a framework for the fiscal and administrative operations of Vanderbilt University Medical Center research core facilities that will: Enable investigators and administrative staff to budget for and monitor recharge center expenses and revenue. Allow for more consistent administrative and accounting practices across all VUMC Research Shared Resources/Core Facility cost centers. Ensure compliance with federal regulations and Vanderbilt policy. These guidelines do NOT apply to specialized service centers or specialized service facilities having operating costs greater than $1,000,000 per year, or to operating units such as Hospital, Dining, Bookstore, etc., that provide goods and services to external/individual users on other than an incidental basis and that are not considered service centers for purposes of this policy. Recipients of federal research funds must comply with regulations pertaining to the operation of Research Core Facilities. Requirements are set forth in several federal regulatory documents including OMB Circular A-110, A-133, and A-21, as well as financial and grant management standards included and described in the NIH Grants Policy Statement and Vanderbilt University Policy. These requirements are also summarized throughout this document, particularly in the Considerations for Charge Development and Federal Guidelines sections. NOTE: This policy, other policy and procedure documents, forms and additional information related to core management can be found on this website: www.mc.vanderbilt.edu/cfuis 3 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Overview and General Information Vanderbilt s Shared Resources and Core Facilities necessarily encompass a broad range of services, technology and expertise. The multidisciplinary scope of VUMC cores prevents needless duplication of scientific resources within federally funded research centers and program projects, enabling focused development of technology that serves all Vanderbilt research efforts across the spectrum of biomedical science. As a guiding principle, all Vanderbilt faculty, their trainees, and their staff may utilize these shared resources, regardless of department affiliation. Definition of Research Shared Resources and Core Facilities Research shared resources and core facilities (also known as cores) generally operate as VUMC recharge cost centers. Each core is organized to provide user services that facilitate research activity; the recharge cost center model offers an efficient mechanism for recovering direct costs associated with providing these services. User fees are charged back to an investigator s grant or contract fund. Scientific services offered by cores to the research community typically include specialized products, expertise, state-of-the-art equipment and/or technology. By definition, cores are not dedicated to the work of a single research group or department, but should maintain equitable access to all investigators and be open for new business. Successful operation requires actively involved scientific and managing directors who interact with researchers and staff across a range of disciplines. As a rule, each core should have significant annual activity in total charges to restricted and/or unrestricted funds, with an upper limit of $1,000,000 per year*. Each core should also have dedicated space and personnel with offices and laboratories sufficient to provide defined services. NOTE: For the purposes of these guidelines, any recharge cost center that bills user fees to Vanderbilt investigators grants, institutional funds or other sponsored projects is considered a core. All core service fees charged back to users are subject to review and require the approval of the Office of Research. Departmental Research Core Facilities, or Departmental Cores, typically operate as outlined above. However, they may provide preferential access to investigators within the department, although some provide limited services to other Vanderbilt users. Program Supported Research Core Facilities are specifically supported. The program or institutional center typically subsidizes user fees that may be lower than the actual direct cost of the service. Institutional Research Core Facilities, while based in a center or department, serve a broad institutional user base. Because of the widespread utility of such resources, the institution may directly support these cores, enabling development of new technology, purchase of high-end equipment, or retention and/or recruitment of technical personnel. Support may be provided following institutional review of the core and justification of utility and feasibility. Regular financial operations and scientific oversight of these cores remain under the control of the parent center or department and the core s advisory committee. NOTE: Status as an institutional core is reviewed and recommended by the Institutional Shared Resources Oversight Committee, and determined by the Associate Vice Chancellor for Research. *Annual activity is defined as matched revenue and expense over the course of a given fiscal year, beginning July 1 and ending the following June 30. A core that exceeds the $1,000,000 limit will be converted to a specialized service center. Contact the Office of Research for more details. 4 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Oversight of Institutional Cores Research shared resources and core facilities are key components of VUMC s research enterprise. In general, core services must be consistent both with the mission of VUMC and the service goals of the shared resource/core facility; services provided must be unique and/or not widely available from outside or commercial sources. Training and education are considered an integral part of core service; as with all core services, these costs must be charged back to an appropriate source. All service fees must be reasonable and competitive when compared with other institutions or commercial companies offering similar services. Equally important, user fees must be documented and published so that users can confidently compare costs when choosing to use core services. Shared Resources Oversight: Associate Vice Chancellor for Research Shared Resources Oversight Committee Home Center or Department Core Advisory Committee Core Facility Vanderbilt strives for a common management philosophy that supports high quality scientific investigation, alignment with VUMC s programmatic vision and strategic investment in new technologies and shared resources. While each core offers a unique profile of expertise, services and/or products to Vanderbilt investigators, a unified approach to scientific accountability is achieved via two major mechanisms: active Oversight and Advisory Committees facilitated by the Office of Research, and surveys of users implemented and posted by the Office of Research. Institutional Shared Resources Oversight Committee Executive oversight of core facilities is accomplished through office of the Associate Vice Chancellor for Research and the work of the Institutional Shared Resources Oversight Committee (ISROC). This committee reviews institutional status for each core, provides a framework for institutional support of core facilities, and advises on membership for individual core advisory committees. The Oversight Committee also receives proposals for new core facilities, considers new or ongoing investment in existing cores, and receives reports from individual core advisory committees. Based on this review and in the context of the Medical 5 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Center s strategic plan for the research enterprise, the ISROC makes recommendations for institutional support of core facilities to the Vice Chancellor for Health Affairs. In addition, the ISROC reviews proposals for S10 Shared Instrumentation grants to be submitted by Vanderbilt investigators. To ensure that submitted proposals are unique and appropriately supported by the institution, the ISROC reviews proposed plans for resource sharing, arbitrates potentially overlapping submissions and makes recommendations for matching fund commitments. Members of the Institutional Shared Resources Oversight Committee are nominated by Center Directors and Department Chairs, and appointed by the Associate Vice Chancellor for Research. The Oversight Committee is composed of: 2 Core Directors 4 Major users 2 Department Chairs or designee 2 Center Directors or designee 1 member of Core Managers Advisory Group 1 junior faculty member at large ex officio members: Associate Vice Chancellor for Research (Basic Science and/or Clinical-Translational Research as appropriate) Associate Vice Chancellor for Health Affairs Assistant Director for Research Core Facilities Members will serve two year terms, except core directors and core managers, who will serve one year terms. General review (and scoring if necessary) of proposals will be accomplished by virtual mechanisms (email distribution, website functionality to be developed). Real sessions will be scheduled quarterly and are organized around the three primary oversight objectives of the ISROC. The general yearly meeting schedule is as follows: June -July Annual review of institutional shared resources. October- November Finalize annual review. Review of formal proposals (submitted September 1) for investment and/or new development of institutional research shared resources. January - February Review of new ad hoc proposals for investment and/or new development of institutional research shared resources. Review proposed submissions for the NCRR S10 Shared Instrumentation Grant program. March - April Finalize development proposal review. 6 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Core Advisory Committees Advisory committees are established for every core organized through the Office of Research. By joint decision of the core director and the Office of Research, composition of the committee is designed to allow for representation by major users and experts, and be balanced for crossdepartmental/center members. Advisory committees meet at least annually to ensure that faculty and center directors have a voice in the development of new services and that cores are responsive to investigators. Cores actively supported by the same Center or that share a common user base may have shared advisory committees, at the discretion of the Institutional Shared Resources Oversight Committee. Core advisory committees report findings and recommendations to the Oversight Committee. The annual core advisory meetings focus on core science, services and research utility, but also include a review of core finances, business plan, and fee structures. The committee also considers additional input from any research center providing financial support to the core, and make recommendations for improvement in existing or development of new core services. Annual review by advisory committees also provides a mechanism to recommend termination of core operations (in whole or in part as necessary), for example when usage has diminished or the same high quality service becomes available through commercial sources at lower cost. Members of the core advisory committee are selected by the ISROC, as advised by centers, departments, cores and the Office of Research. Each committee is be composed of: Sponsoring Center Director(s), Department Chair(s) or designee(s) No more than 4 major users No more than 2 investigators with expertise in core technology/science Assistant Director for Core Facilities - ex officio The core scientific and managing directors present a progress report to the committee, including detailed information on resources, usage, services and fees, business plan, resolution of issues raised in previous advisory committees, anticipated problems and plans for future development, and results from user surveys. Finally, the core prepares a summary report from the Advisory Committee, to be submitted to the ISROC annually no later than May 31 each year. Survey of Core Users In order to provide high quality service, cores must be responsive to users. Mechanisms to allow for surveys of users are achieved by a variety of proactive formats. At least annually, working with the Office of Research, the core director solicits faculty feedback via on-line surveys, town hall meetings, or other direct input strategies. Information gathered is provided to all users, either by distribution or by publishing on the core s website. Feedback is also be presented in summary form to the core s advisory committee. This facilitates an ongoing dialog with users regarding the scientific direction of shared resources, and enables accurate assessment of the core as an institutional resource. 7 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Mechanism for Institutional Support of Cores NOTE: Proposals received by September 1 will be reviewed during the Fall ISROC meeting. Re-investment in an Existing Core Requests for institutional support should be submitted to the ISROC by September 1 each year to ensure timely consideration for budget planning. Proposals may be 3-5 pages including tables and figures, and should include discussion of the following: Aims Background: may include mission, history, leadership, existing services Rationale for re-development Benefit to VUMC Investigators Implementation Plan: may include description of personnel roles; feasibility for cost recovery Specific Request for Institutional Support Proposal for Development of a New Core Proposals requesting institutional support to develop new core facilities should be submitted to the ISROC by September 1 each year to ensure timely consideration for budget planning. Proposals are may be up to 10 pages including tables and figures, and should be submitted in the following format: Aims Background: Describe need for science/technology, potential core services and mission Rationale for development: Include preliminary data. Benefit to VUMC Investigators 3-year Implementation Plan: management plan; proposed annual budget; feasibility for cost recovery Equipment and Itemized Startup Costs Other Support: describe institutional commitments (e.g. development, research center support); program project support; other grant support Specific Request for Institutional Support 8 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Considerations for Setting User Fees In general, the federal government stipulates that the direct cost of services provided by cores should be charged back to core users. Charges should be based on actual usage and may not discriminate between federally and non-federally funded users within the institution. In other words, every Vanderbilt investigator, regardless of funding source, should pay the same rate for the same service. Core facilities are expected to be revenue neutral: all costs for providing service must be offset by matched revenue received in the form of user fees. Small surplus or deficit variances that are less than 25% of annual operating expenses are allowed. However, these will be reviewed at year-end for appropriate matching of costs and revenue and adjusted as necessary. The most appropriate adjustments will include moderate price increases or decreases going forward into the next budget period. In addition, an operating surplus should also be used to develop new technology, make infrastructural improvements or purchase annual service contracts that will generally benefit all users of the core. More significant variances, defined as greater than 25% of annual operating expenses, will be reviewed on a case-by-case basis by the Office of Research. Table 1 lists typical expenses subject to review in these cases. In general, variances should not be allowed to grow from year to year. Refer to the Federal Cost Guidelines section of this document for more details. NOTE: All core service fees charged back to users are subject to review and require the approval of the Office of Research. Table 1 - Expenses Subject to Review by the Office of Research Salary/Fringe for all core staff Supplies Service Contract(s) Anticipated Small Equipment Needs (less than $1,000) Anticipated Equipment Needs (greater than $1,000 but less than $100K) Recovery of Allowable Costs Typically the costs associated with running a core are recovered through user fees. User fees must be based on the annual, actual direct costs required to perform the service(s) only, excluding accumulated inventory or unallowable expenses. Typical allowable direct costs may include: labor (salary and fringe for staff) operating supplies and materials service contracts for core equipment depreciation on non-federally purchased equipment (see Supplies and Equipment) In core facilities, equipment replacement is often accomplished via federal shared equipment grant mechanisms. However, depreciation on such equipment or other federally purchased equipment is not an allowable direct cost. In order to ensure compliance, it is important for any equipment-related costs to be reviewed and approved by the VUMC Office of Research. NOTE: it is not appropriate to bank funds for expenses that may be incurred in future years. 9 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Labor Charges - Hourly Rate Determination Personnel providing core services should have some effort assigned to the core cost center. The basis for developing an hourly rate is a 1500-hour core service year. This considers that core personnel will spend time engaging in continuing education or training related to core activity or performing general service tasks not allocable to a specific user or group of users, that generally benefit all core users. Non-Vanderbilt Users In addition to typical direct costs, cores providing services to both Vanderbilt users (internal) and non-vanderbilt users (external), must add a surcharge to allow minimum indirect cost recovery. External academic users are defined as investigators at other federally funded research institutions or non-profit academic institutions. These users must be charged an additional 20% for indirect administrative cost recovery. NOTE: Veterans Administration and Meharry investigators are treated as internal users for cost recovery purposes. External commercial/for-profit users are defined as investigators working for commercial or for-profit companies must be charged at minimum an additional 60% for indirect cost recovery. In addition, it is recommended that a standard contract be used to establish these and other basic terms for payment. Refer to the Research Core Services Agreement document, or contact the Office of Research for clarification and assistance. NOTE: Substantial changes to the Research Core Services Agreement will require the additional assistance of the Office of Grants and Contracts Management. Vanderbilt Scholarship System Cores are often based in research centers (RCs) or program projects (PPGs), which often designate funds to support personnel and other direct costs associated with providing core services. In order to ensure that such support to each core appropriately translates directly into benefits for RC or PPG member investigators, Vanderbilt has developed a system of credit known as Scholarships. Instead of the discounted pricing system previously used by many cores, members receive credits from their RC or PPG for use of specific supported cores that best serve their own research efforts. These core credits, or scholarships, are issued to members annually and ensure increased compliance with federal policy while offering substantial benefit to RC or PPG members. The scholarship mechanism requires precise and accurate accounting to ensure that a) the pool of credit for each core is directly related to center or program support, and b) that the use of each credit is accurately tracked. Each RC or PPG identifies its own appropriate pool of support and determines the level of distribution to the core(s) and sub-allocations to member investigators. The Office of Research works with each contributing RC or PPG to review and verify that the total pool of credit represents actual direct support of the core(s), and streamlines the distribution and use of scholarships through the Core Facilities Usage and Invoicing System (CORES). When determining service rates, each supported core should consider that all user fees represent the full allowable direct cost of the service. No discounted fees are allowed; all users pay the same list price using a Vanderbilt cost center, scholarship credit or other institutionally approved voucher. NOTES: Each scholarship is linked to specific core support, and may not be transferred between 10 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

cores. The total amount of any RC or PPG scholarship pool cannot exceed the sum of direct support to a given core. The RC or PPG may choose to distribute less than the sum of direct support to a given core, or to distribute nothing. The Office of Research can provide guidance and assistance in distribution of scholarships Custom Pricing There are cores that offer project-level services where the final rates paid by the user vary depending on the scope of the project and the data or results produced. Because of the complex and variable nature of these services, it is not possible to define the level service or determine a simple rate to be charged and posted in the Core Ordering and Reporting Enterprise System (CORES). Cores planning to offer project-level services should contact the Office of Research to develop defined service units that can be built into a rate charged to the user in CORES as work is completed. Documentation of both the standard service units and of the development of specific project pricing must be retained outside of the CORES application for review and audit purposes by the core management. NOTE: As with all other billing activity, custom work should be billed using the CORES application. This is the system of record for all recharge activity. Managers should reference project numbers and documentation when entering charges in CORES. Role of the Office of Research In general, the determination of appropriate costs to be considered in setting user fees will be made by the Office of Research and the Department of Finance. Working together, each are responsible for approving requests to establish new cores. The Office of Research works with the core leadership and/or business manager to monitor fund balances and operations expenses on a regular basis, review and approve user fees and to resolve problems. As utilization of a core changes, the Office of Research also works directly with core personnel to make the necessary adjustments to services offered and fee schedules. These adjustments may be made yearly, with changes published and implemented using CORES. Financial data related to the recharge center/core, including pricing strategies, operating expenses, and revenues should be provided upon request to the Office of Research and the Department of Finance. 11 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Federal Cost Guidelines In general, all costs recovered by research shared resources and core facilities must be allowable, allocable, and reasonable. Both Vanderbilt and Federal policies are summarized here. For more complete information, refer to the Vanderbilt University Service Center and Direct Cost policies, and the United States Federal Government Office of Management and Budget (OMB) Circular A-21. Allowable Direct Costs These are costs that are directly identifiable with the core and will normally include expenses such as those listed in Table 2. These should be considered when developing charges for all cores. NOTE: this list is not inclusive; contact the Office of Research for guidance. Additional references: Vanderbilt Direct Cost Guidelines Direct Charge Reference Circular A-21 Table 2 - Allowable Direct Costs Salaries, wages and fringe benefits Materials and supplies Travel Annual service contracts Cost of goods/services sold (adjusted for ending inventory balance) Other (must be specified; subject to review) Table 3 - Unallowable/Excluded Direct Costs Debt principal payments and internal interest Fund Transfers Advertising Alcoholic beverages Bad debts Contributions and donations Entertainment Fund Raising Public Relations Unallowable/Excluded Direct Costs Facilities and administration (F&A) costs are generally not allowed. One exception is equipment depreciation, which is allowed as outlined in the Supplies and Equipment section. Table 3 lists examples of the costs excluded by federal regulations (see Section J, OMB Circular A-21) from the calculation of billing rates for shared resources/core facilities. Since unallowable and/or excluded costs are not recovered through billing rates or chargeable to the service center budget, funding for such costs may only be obtained from other VUMC resources. NOTE: unallowable/excluded costs are not limited to those listed in Table 3; contact the Office of Research for guidance or refer to Vanderbilt and Federal policies for complete information. 12 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Supplies and Equipment Supplies are defined as any items, consumable reagents, small equipment or other product purchased for less than $3,000, for the purposes of Vanderbilt and Federal policy. Supplies are an appropriate operating expense to be considered in calculating rates. Capital equipment is defined as an item with a purchase price of $3,000 or more and a useful life of more than one year. Biomedical research equipment is typically assigned a useful lifetime of 5 8 years. Refer to Vanderbilt s Asset Capitalization Policy for further guidance. Federal guidelines do not allow core user fees to be structured to build reserves for anticipated capital equipment purchases or replacements; it is not appropriate to charge current users for costs associated with future periods. However, federal guidelines do allow for the recovery of depreciation expense associated with the asset. When considering depreciation in cost determinations, the following guidelines apply: Equipment Depreciation Calculated and Charged to Cores Capital equipment purchases may not be directly charged to the core s operating cost center (3-04-xxx-8xxx). Instead, these equipment purchases will be made from a separate cost center established in the plant fund range (8-04-xxx-xxxx). If necessary, each core will be assigned a separate plant fund cost center to track equipment purchases. In practice, actual annualized equipment depreciation expense will be charged on the core s operating cost center (3-04-xxx-8xxx), and credited to the plant cost center (8-04-xxx-xxxx) monthly. The funds accumulated in this 8-04 cost center may then be used for new equipment acquisition. The depreciation expense on the 3-04 cost center should be considered when establishing core service charges. Notes: The equipment depreciation rate is determined by Department of Finance. The core may be asked to assist by providing updated inventory information. All proposals for including asset depreciation in core cost determinations are subject to review and approval by the Office of Research, working in conjunction with the Department of Finance. Federally-Funded Equipment Depreciation of equipment purchased by the federal government, whether or not title has reverted back to the University, cannot be included in the user rates. Where the University has specifically agreed to cost share a piece of equipment in a federal award, the depreciation of the University-funded portion is also unallowable in the rates. Table 3 Allowable Costs associated with Equipment Depreciation Full depreciation on equipment purchased from unrestricted or institutional funds Partial depreciation on equipment purchased from a combination of unrestricted, institutional funds and restricted, federal funds Partial depreciation on equipment purchased on unrestricted, institutional funds and cost-shared on restricted, federal funds Full depreciation on equipment purchased from restricted, federal funds Allowable cost to recover within core service charges The portion related to the unrestricted fund contribution to the purchase is an allowable cost to recover in core service charges Unallowable/Excluded Cost Unallowable/Excluded Cost 13 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Establishing New Recharge Centers - General Operations Requirements for Approval Development of a new core must be approved by either the center director or chair of the department in which it will be based and, in cases of shared resources associated with specific sponsored projects, the PI of the grant program. Contact the Office of Research develop a business plan prior to submitting a request to open a new core. Necessary forms may be obtained from the Office of Research or the Department of Finance. The Office of Research will also assist in the development of the core business plan. Requests submitted for approval should include: appropriate departmental/center approvals a detailed business plan space requirements equipment staffing needs projected costs Once the business plan has been approved, a cost center creation form may be submitted to the Office of Research for final approval and routing to the Department of Finance. The home department or center agrees to back-up or guarantee funds to cover any deficits that may arise from operation of the core cost center. Budget and Funding Requirements Cores must be uniquely identified by a center number (3-04-xxx-8xxx format) for easy identification in the VUMC Ledger and Management Reports. All core expenses, including personnel, supplies, equipment depreciation, as well as income generated from user-fees must reside in the core s operating cost center.. As stated in Considerations for Setting User Fees, each core is expected to operate under a revenue-neutral model. For start-up cores, break-even must occur within the first three years of operation in accordance with the approved business plan. Staffing and General Operations Each core should designate a responsible Scientific Director, Operations Manager, and/or an Administrator or Business Manager responsible for the efficient, successful operation of the core. The manager acts as the agent of the director/pi in administrative and operations matters and is responsible for proposing initial prices/rates and subsequent adjustments, and monitors the fund balance. The manager also ensures that the core follows applicable sponsor and VUMC policies, that services are delivered and charged to users, and that payments are collected. Each core is required to publish a schedule of rates and services, providing this information on-line and in print. Funding Support for Cores In the unusual event that a core is unable to charge a rate that will cover all direct costs, the core may request supplementary funds to allow the facility to remain competitive and affordable. Any request for supplemental or subsidized funds must be approved by the Office of Research, 14 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

following a careful analysis and review of the business plan and performance of the core facility. Funding requests will be reviewed and approved at the discretion of the Office of Research. See the Oversight of Institutional Cores and Mechanism for Institutional Support of Cores sections for additional information. IDS Recovery Revenue received from external customers is subject to internal overhead allocations, known as IDS taxes. External users are therefore charged a higher rate to cover the IDS taxes. If external revenue is expected, the core business officer should notify the Department of Finance to establish system prorates to ensure that the appropriate taxes are automatically assessed on all external revenue received. This notification is normally made through the budget process, but if external revenue was not budgeted, the Department of Finance should be notified as soon as possible upon monthly review of the ledgers so the correcting entry can be made. Annual Reporting Requirements Each core facility/recharge center must complete an annual financial report of the fiscal year (July through June) by the following September 30. The financial report should include: Annual Report Form: modified Exhibit C A copy of the final June accounting ledger (MD90) Summary usage statistics for the year for all users list users separately The billing rates used during the period of the report Identification of any issues that require financial attention Office of Research - Financial Oversight The Office of Research is responsible for approving requests to establish new research cores, approving prices, rates and scholarship amounts. The Office of Research will maintain records of key documents, including correspondence, rate development summaries, and current service and price lists. Each core facility should maintain copies of all records for audit purposes, retaining these records for 8 years at minimum. Annual review of core finances, including an updated budget and continued statement of contribution to the institution, will be required for all cores. Summarized data and feedback will be provided upon request to the VUMC Office of Research. The Office of Research will also facilitate the invoicing process and upload of charges to the Department of Finance at the end of each billing cycle. Each core should submit the following information to be set up in CORES (Core Ordering & Reporting Enterprise System): Name of core facility Names and specific roles of lab director, manager and other staff, including VUNet IDs and Vanderbilt employee numbers Contact information and core location List and description of approved services and fees Additional information can be found on the Office of Research Shared Resources website. 15 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Charging/Payment Process Users should be charged and invoiced on a monthly basis as service is provided. Billing in advance is not allowable; all billing must be in arrears. All charges to users whether internal (Vanderbilt) or external (non-vanderbilt) should be billed using CORES. Contact the Office of Research for assistance and training in using CORES. The Office of Research may establish cut-off times for monthly billing to ensure that charges can be reviewed and posted to the General Ledger (G/L) in a timely manner. The importance of timely charging each month cannot be overstated; it allows for proper monitoring by core staff, users, administrators, and research management. It also facilitates proper accounting practices, timely error correction, allows for on-time filing of FSRs to sponsors, and reduces the need for retroactive cost transfers. Core managers are responsible for accurately logging usage of core facilities, and entering charges in a timely manner. In addition, core managers are responsible for charge verification and charging non-vanderbilt users consistent with guidelines in the following sections. Payment Methods All cores should use the Core Ordering and Reporting Enterprise System for billing. The use of 1180s (paper billing) for core billing is not appropriate. Vanderbilt investigators may purchase core products and services using any of the following: Vanderbilt cost center number cost center numbers are authorized by the administrative home department for the cost center. Managers and core users may not authorize cost centers for billing core charges. Scholarship voucher scholarships are assigned to individual investigators by research centers for use of specific cores and are non-transferrable. See the Vanderbilt Scholarship System section of this document for more information. StarBRITE voucher vouchers are awarded to individual investigators by the Vanderbilt Institute for Clinical and Translational Research (VICTR) for use of specific cores and are non-transferrable. These vouchers are keyed to the VICTR cost center. See the StarBRITE website for more information. Non-Vanderbilt investigators may purchase core products and services using their institutional procurement card at the point of service. Payments to accounts receivable may be made by procurement cards, check or electronic fund transfer (EFT). Charge Verification Charges for services should not be pre-billed or pre-paid. Authorization of the charge by the user (PI or designee) and validation of a valid Vanderbilt cost center number, scholarship number or VICTR award (StarBRITE voucher) number should be done by the core manager at the point of first contact and service. Documentation to support the charge must be retained by the core responsible individual as well as the user of the service. Both charges against internal users' cost center numbers and credits to the core cost center must be prepared using the Office of Research core invoicing system (CORES). Core managers are responsible for submitting charges to be processed by Office of Research as part of the G/L closing process for each month. NOTE: Vanderbilt users may not pay core service fees using procurement cards, petty cash, personal credit cards or other personal funds. 16 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Order Upload The CORES application supports order entry by upload of a tab-delimited file. Core managers who wish to use this form of order entry must contact the Office of Research for assistance in developing a systematic process to ensure accurate and timely order entry. As with all order entry processes, core managers are responsible for ensuring accurate upload of core order entries. Managers should follow up and resolve error messages generated during the upload process, making corrections in a timely manner. Disputed Charges Charges entered into the CORES application are invoiced at the end of each month. Upon invoice notification, the investigator or administrator for a given cost center has the option of disputing a charge. Core managers should follow-up on disputed charges by contacting the individual who has initiated the dispute. Appropriate actions include providing a refund in the case of a billing error, or directing the user to his/her department for assistance in transferring the charge to a different cost center by journal entry. Managers should keep a record of followup action for each disputed charge, either by retaining email correspondence or maintaining a log of disputes and action taken. Charging non-vanderbilt Users Credit Card Transactions: Charges against external users may be billed directly to the external entity procurement card in CORES. Note that the standard surcharges (20% for academic users or 60% for commercial users) for non-vanderbilt users will cover the 2-3% credit card transaction fees.. Contact the Office of Research if you plan to bill external user credit cards. Invoiced Receivable Transactions: For all other external user transactions, core managers are responsible for Billing the charges in CORES in a timely manner Ensuring that CORES - system generated invoices are forwarded to the accounts payable department at the external users institutions Ensuring that payment is made Invoiced charges will result in a receivable entry on the core s operating cost center. This receivable will be reversed when payment is received. Tracking Accounts Receivable (A/R) In addition to billing, core managers and/or administrators are responsible for the tracking, collection and oversight of external sales. Managers should actively follow up with external users in monthly increments to ensure prompt payment, and monitor the general ledger monthly for postings of payment received and appropriate reversal of receivables. Managers are also responsible for updating the Accounts Receivable (A/R) module in CORES in various ways. In some cases, managers may receive credit card payments to outstanding invoices using the A/R module in CORES; these payments can be processed within the A/R module. This module should also be used to update aging invoices in the system by recording the receipt of other external payments. NOTE: The A/R module should not be used to manage billing to any Vanderbilt cost center, scholarship voucher or VICTR-StarBRITE voucher. 17 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Receipt of Payments Payments from non-vanderbilt users must be received to the appropriate lockbox address shown below. Checks should be made payable to Vanderbilt University Medical Center. Checks only should be sent to: Attn: Susan Meyn Assistant Director, Research Core Facilities c/o Vanderbilt University Medical Center Department of Finance Dept AT 40303 Atlanta, GA 31192-0303 FedEx payments should be sent to: Mellon Financial Corporation Lockbox 40303 1640 Phoenix Blvd., STE 110 College Park, GA 30349 Wire Transfers should be sent to: Mellon Financial Corporation 500 Ross Street Pittsburgh, PA 15262-0001 ABA Routing: 043-000-261 Account: Vanderbilt University Medical Center Account Number: 5979 Swift Code: MELNUS3P 18 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

M&D General Ledger Recordkeeping Order entry in the CORES application generates standard ledger entries, processed at the end of each month. In general, corrections should be made prior to the end of the fiscal year if improperly coded. Cores that have program income should contact the Office of Research to arrange for these accounts to be correctly established in CORES. NOTE: Scholarship voucher transactions do not generate ledger entries; these transactions are retained within the CORES application only. Internal user transactions - All Payments: Debit Account 60425 - Research Core Charges will be used to record service fees charged to the user s Vanderbilt cost center. Credit Account 80425 - Research Core Charges will be used to record the internal user fee income on the core s 304 cost center. External user transactions: Credit Card Transactions Payments at Point of Service Debit Account 10225 FIRSTTN MEDICAL CTR will be used to record debit to the institution s cost center. Credit Account 44995 Misc Revenue will be used to record the credit for payment received on the core s 304 cost center. Invoiced Transactions Receivable Debit Account 13155 A/R will be used to record debit to the core s 304 cost center. Credit Account 44995 Misc Revenue will be used to record credit to the core s 304 cost center. NOTE: When payment is received, the associated receivable amount debited to 13155 will be reversed by the Department of Finance. Credit Card Transactions Payments to Accounts Receivable Credit card transaction: Debit Account 10225 FIRSTTN MEDICAL CTR will be used to record debit to the institution s cost center Credit Account 44995 Misc Revenue will be used to record the credit for payment received on the core s 304 cost center. Clear receivable account: Debit Account 44995 Misc Revenue will be used to record debit to the core s 304 cost center Credit Account 13155 A/R will be used to record credit for payment received on the core s 304 cost center. 19 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s

Summary Vanderbilt University Medical Center cores operate in a unique environment. The use of the CORES application for billing and the scope of biomedical research support provided by VUMC cores make it necessary to outline specific procedures and requirements for VUMC core operations. These guidelines are intended as a supplement to Vanderbilt general policies relating to service center operations and direct costs. All Vanderbilt University Medical Center shared resources/core facilities should adopt and adhere to these guidelines, to ensure consistent operations in compliance with both federal and Vanderbilt policies. The VUMC Office of Research is available to provide business planning, additional policy guidance and invoicing support services to all shared resources/core facilities. References: VUMC Office of Research Shared Resources http://www.mc.vanderbilt.edu/root/vumc.php?site=coremanagers Vanderbilt University Service Center Policy http://www.vanderbilt.edu/ocga/images/vupolicies/vupolicies_r12_c2_f12.gif Vanderbilt University Guidelines for Charging Direct Costs http://www.vanderbilt.edu/ocga/vupolicies/directcost/directcost.htm Office of Management and Budget (OMB) Circulars http://www.whitehouse.gov/omb/circulars/ Vanderbilt University Medical Center Office of Research Susan Wente, PhD Associate Vice Chancellor for Research Susan Meyn - Assistant Director, Office of Research CCC-3322 MCN (2103) 322-0470 s.meyn@vanderbilt.edu www.mc.vanderbilt.edu/cfuis Questions regarding invoices, center number maintenance or assistance with CORES: CoresEmail@vanderbilt.edu Vanderbilt University Department of Finance (Medical Center) contact information: Offices: 800 Crystal Terrace (8480) Steve Todd, Associate Director 322-3293 steve.todd@vanderbilt.edu Paula Yarbrough, Associate Director, Grants and Contracts 322-2794 paula.yarbrough@vanderbilt.edu 20 V U M C O f f i c e o f R e s e a r c h C o r e G u i d e l i n e s