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New F&A Waiver Strategy. Tentative! Pending final approval at this time!. Current F&A Challenges. Large amounts of foregone F&A restrict institutional capabilities Institutional risk exists due to inconsistent treatment F&A Waiver process needs to be streamlined
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New F&A Waiver Strategy Tentative! Pending final approval at this time!
Current F&A Challenges • Large amounts of foregone F&A restrict institutional capabilities • Institutional risk exists due to inconsistent treatment • F&A Waiver process needs to be streamlined • $1.87M waived in first four months of FY08 • 76 requests • ~50% for projects under $50K direct costs/yr • Spread across all fund sources
Peer Positions • F&A Waivers not granted to for-profits (UC all campuses, Stanford, Michigan, Washington, MIT, Michigan State, Purdue) • F&A Waivers not granted to foreign entities (UC all campuses, Stanford, Penn State, MIT, Michigan State, Purdue)
Minnesota F&A Rates are Competitive • U of Washington 56.0% • UC San Diego 54.5% • UC San Francisco 54.0% • UC Los Angeles 54.0% • UC Berkeley 53.5% • U of Illinois 53.0% (UIC at 57%) • U of Michigan 52.0% • U of Minnesota 51.0% • Ohio State 50.0% • Wisconsin 48.5% • North Carolina 46.0% (FY08 under negotiation)
Proposed New Strategy F&A Waiver Requests • SPA • PI Transfers • Non-profits with • published policy • Special governmental • programs • Projects which move • from off-campus to • on-campus. Administrative Waivers Strategic Waivers Regular Waivers • Deans • Small Project Waiver • (<$50K direct cost/yr) • Other Reductions • above minimums • VPR • Waivers or reductions • below minimums Tracked Tracked
Proposed F&A Rate Minimums (awards over $50K direct costs/year) • Federal ……………………………… Federally negotiated rate* • Foreign government ………………... Federally negotiated rate* • For-profit …………………………… 34% • State of Minnesota ………………….. 0% (for now) • Non-profit/foundations ……...…….. Published policy or 10% TDC** • Corporate affiliate programs ……….. 10% TDC • Industry-funded clinical trials …… 26% TDC * or as approved by SPA ** Use published policy if it exists, otherwise, 10% TDC
Waivers No Longer Available for: • Projects that did not receive institutional endorsement prior to submission to Sponsor • F&A waivers or reductions of rates negotiated by PIs with Sponsors If reduced F&A is needed in these instances, the Unit must set up a cost-sharing account to pay the difference between the Sponsor- approved rate and the federally negotiated rate or approved minimum for this type of project.
Potential Reasons to Approve Waivers • Seed grants which may attract larger awards • Hardship for new PI • Awards which include equipment or building funds • Community relations or library projects • Student services projects (or increase funding to pay for students) • Capped awards • Department committed to undertake the research regardless of external funding (e.g., any dollar gained is better than nothing) • Small cost • Junior faculty or incoming faculty member • Enhance cultural/artistic activities (small projects only) • Only available source of funds in an area • Strategic partnerships
Potential Reasons to Disapprove Waivers • Precedent setting • Grounds on which the waiver might be justified to other faculty whose projects carry full overhead • Consistency with similar sponsors or programs • Large total cost to the University • Any IP rights granted to the sponsor • Past history of PI requesting waivers • Profit-making entities • Foreign entities
F&A Waiver Process Improvements • Eliminate formal waiver process for projects less than $50K/year –dean’s signature on PRF will signify approval • SPA has created a list of agencies with pre-approved rates (based on policy); proof of agency policy is no longer required to accompany PRFs when submitting to these entities • SPA has new “Foregone F&A calculator” to help Deans and SPA better understand and track foregone amounts • Waiver requests must be submitted in advance (4 business days for regular waivers, 7 business days for strategic waivers) • Can’t make the deadline? Submit with full F&A!
Approval Timelines Timeline Still under Consideration! Regular Waivers • Day 1: Info to Dean(s) • Day 2: PI notified by Dean of approval/disapproval • Day 3: PI/Dept adjusts proposal if needed & submit to SPA • Day 4: SPA proposal review Strategic Waivers • Day 1: Info to Dean(s) • Day 2-4: Dean(s), VPR, Chair, PI, SPA confer • Day 5: PI notified of approval/disapproval • Day 6: PI/Dept adjusts proposal if needed & submit to SPA • Day 7: SPA proposal review
Proposal for New Waiver Strategy Rollout Proposed for April 1, 2008 • Streamlined waiver approval process implemented • Dean’s approval for small waivers implemented • SPA endorsement for administrative waivers implemented • No waivers granted for proposals submitted without endorsement • Reductions for for-profits and foreign governments beyond pre-set minimum level requires VPR approval • Other F&A minimums considered “targets” • PIs informed that they may not negotiate F&A rates Proposed for January 1, 2009 • F&A minimum levels for all categories implemented