Facilities Chargebacks

Considerations for Implementing Chargebacks for Facilities Services

Topics: Administration and Finance, Facilities and Operations

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Summary

Traditionally, many institutions have paid for facilities work through a centralized funding model in which the facilities department receives a set budget to perform maintenance, improvements, and other facilities work across campus on an as-needed basis.

Centralized funding is straightforward to implement, but it can create destructive incentives. Because academic departments have “free” access to facilities work, they may submit requests for wasteful or unnecessary upgrades. As a result, the facilities department may receive far more requests than it can complete, leading to ever-increasing funding needs and long waits for important tasks.

To address these problems, some institutions are shifting to a chargeback model in which the facilities department bills individual units for the cost of all work they request.

This research brief outlines the possible advantages and disadvantages of chargebacks, and explores how institutions can implement facilities chargebacks.