Pass-Through Activities
Pass-Through Activities in which one unit, without recovering its own costs for providing the service, collects a series of third-party costs and periodically transfers those costs to another unit. No value is added to the product other than conveniece. The cost/rate transferred represents only the invoiced or direct cost of the product or services. Pass-Through Activities, by definition, will always break-even. External users may not be included in Pass-Through Activities.
- Pass-Through Activites are activites where goods and services are purchased by a University department and charged to another University department at invoice cost, without markup for recovery of other costs.
- It is never permissible to "pass-through" University costs to external users at invoice costs. A non-university differential must always be applied to "pass-through" transactions with external customers.
- To establish a Pass-Through Activity, departments must follow recharge procedures to ensure to exclude federally unallowable costs, charging users based on measurable usage, charging all users, and breaking even.
- Departments should charge for pass-through costs within 45 days of when the goods or services were provided.
General Inquiries please email recharge@ucmerced.edu
