Start Charging Back
By implementing a chargeback system, in-plants can save money, justify new equipment and prove their worth.
By Mike Llewellyn
IF YOU THINK balancing your checkbook is a chore, try managing the budget at the 52-employee Houston Independent School District in-plant. Steve Blakely, director of administrative services, says watching over the cash is a lot less difficult than it could be, though.
That's because the in-plant charges back for every service it offers. Blakely says it's tough to imagine doing business without a fee-for-service system in place. It might come as a bit of a surprise, then, to learn that Administrative Services is relatively new to charging back.
"We've done it in stages," explains Blakely. "The first operation we converted to chargeback was the printing operation [which includes the offset facility and the copy center]. We recommended to convert it back in 1993, but the administration didn't want to go in that direction."
Five years later, though, in 1998, the Texas state controller's office did a random audit of the school district and recommended the in-plant initiate an "internal service fund"—a chargeback system by a different name.
"It often takes a third party to convince your management to see your point of view," says Blakely, laughing.
Selling a chargeback system to a parent organization is the first and biggest hurdle to overcome. But once that system is in place, in-plants benefit from increased cost savings and a more knowledgeable client base. Plus, it's the best way to show a parent organization the importance of having an in-plant.
'We Couldn't Operate Without One'
At the 14-employee North Dakota Central Services Division, Director Linda Belisle says that without a chargeback system, the 40-year old in-plant would not be in business.
"We couldn't operate without one," she says. "As a government agency, we have to generate our own revenue."