Lunch & Learn Facilities & Administrative (F&A) Costs

1. Lunch & LearnFacilities & Administrative (F&A) Costs Presented by: Roberta McManus

2. Agenda • F&A Costs • F&A Proposal Process • F&A Cost Recovery and Distribution • Cost Accounting Standards (CAS) Exemption

3. OMB Circular A-21…compliance guide

4. What are F&A Costs? “those that are incurred for common or joint objectives [of the University] and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity or another institutional activity”

5. OMB Circular A-21F&A Rate Components F&A Rate ComponentExamples General Administrative Costs Central administrative offices (Payroll, accounting, purchasing) Department Administration Academic Departments/Colleges Sponsored Administration SRAS, SRS, OVPR, LAR Operation & Maintenance Repair & maintenance, utilities, grounds, police Building and Equipment Depreciation Standardized asset classifications and lives Interest Costs on Building & Equipment Third Party Interest Costs Libraries Central/Campus and College Libraries * NOTE: Admin “capped” @ 26% Administrative * Facilities

6. F&A Rate Formula & Concept Allocated Organized Research F&A Costs Organized Research Direct Costs (“BASE”) Concept: As “base” increases rate will decrease (if no increase in F&A costs) Research Rate Proposed to Federal Auditors =

7. Why Should We Care? • FSU incurs “real” costs to support performance of work on sponsored agreements • F&A Rates applied to grants generated $27M (FY2010) in reimbursements • Cost recovery mechanism – not a “tax” on grants • Costs that sponsors will reimburse based on a calculated rate developed and negotiated, per A-21

8. F&A Proposal Process…it takes a village!

9. FSU F&A Proposal • Proposal team • Consultants • Goal to educate/train SRAS staff • FSU staff • Helen McCann – Business Analyst • Qiong (June) Wu – Cost Analyst • Judd Enfinger – Controller’s Office • Iris Chung – Controller’s Office • Katie Martindale – Budget Office • Lori Pinkerton – Facilities • Dan Dayhoff - Facilities • Specialized software is used to prepare the proposal • Comprehensive Rate Information System (CRIS) • Data analysis • Generates proposal • WebSpace • Space Survey

10. F&A Proposal Process • Base year FY 2010 • Start with audited financial statements • Identify/treatment of unallowable & excludable costs • Determine direct costs – “BASE” • Determine F&A costs & related pools • Conduct Space Survey – very important! • Distribute F&A costs to “Major Functions”

11. F&A Proposal Process • Calculate Rates • Submit Proposal • Due 12/31/2010 • Extension to 6/30/2011 • Negotiate with Cognizant Agency • Department of Health and Human Services (DHHS)

12. Space Survey • Purpose • Document building room usage • Allocate facilities costs • Provide productivity analysis • Space survey tool WebSpace • On-line • Integrates with F&A proposal analysis software • Enables management of survey process and results

13. Space Sq Ft Space Sq Ft Space Sq Ft Space Sq Ft FTE &S&W MTDC F&A Allocation Building Depreciation Space Sq Ft Interest Space Sq Ft NUMERATOR Operations & Maintenance Space Sq Ft Facility Pools Allocation Method Equipment Depreciation Space Sq Ft Library FTE & SW DENOMINATOR Admin MTDC Organized Research Instr & Dept Research Other Sponsored Activity Other Inst. Activity

14. F&A Recovery and Distribution…giving back!

15. F&A Rate Application • As previously discussed, a Rate Agreement must be approved by cognizant agency (DHHS) prior to applying rates • Multiple Rates are allowed: • On Campus – comprised of both facility and administrative costs • Off Campus – comprised of administrative costs only (26%) • Separate functions – rates for instruction, organized research, and other sponsored activity • Other – separate rate for NHMFL at FSU • The actual charge to the sponsored project is calculated by multiplying the F&A rate and the distribution base

16. FSU Provisional F&A Rates

17. FSU F&A Recovery

18. F&A Bases • Federal base • Modified total Direct Costs (MTDC) • Excludes: • Equipment • Rent • Tuition • Scholarships/Fellowships • Non Federal base • Total Direct • Excludes • Tuition

19. Example Calculation TDCMTDC Salaries $10,000 $10,000 Benefits 2,000 2,000 Materials and Supplies 2,000 2,000 Tuition 1,0001,000 Equipment 5,000 5,000 Total Direct Costs $20,000 $20,000 F&A Base $19,000 $14,000 F&A Rate 5% 47% F&A Amount 950 6,580 Total Project Cost $20,950 $26,580

20. F&A Costs Recovered • Accounting for F&A in OMNI • F&A process run nightly • Posts F&A to projects • PI can obtain F&A waiver to reduce F&A rate from OVPR • Accumulates “revenue” into the Sponsored Research Trust Fund (SRTF) • Policy to administer SRTF • http://www.research.fsu.edu/contractsgrants/srad.html • Distribution priority • Operating costs for research administration • SRAD fund distribution • Quarterly (NHMFL and Rent differentials) • Annual • 1/3 to OVPR • 1/6 to CRC • 1/8 to Deans • 3/8 to Departments

21. SRAD Funds • Must support other research or sponsored training programs • Appropriate uses (examples) • Graduate research assistant salaries • Equipment for research lab • Travel costs to conference to present paper • Animal use care per diem • Inappropriate uses (examples) • Graduate teaching assistant salaries • Classroom supplies • Tuition costs for faculty’s advanced study degree • Food for holiday party

22. OMB Circular A-21Cost Accounting Standards…charging F&A as direct costs?

23. A-21 Cost Accounting Standard (CAS) CAS 502- Consistency in allocating costs incurred for same purpose All costs incurred for same purpose, in like circumstances, are either direct costs only or indirect costs only.

24. CAS Exemption • In exceptional circumstances it may be appropriate to charge F&A costs directly to a sponsored project • If the nature of a sponsored project requires an extensive amount of administrative and/or clerical support or goods/services significantly greater than the routine level provided by an academic department, then the effort is deemed an exceptional circumstance and such costs can be accounted for as direct • CAS exemption must be approved in advance of charges normally classified as F&A being charged directly to a project • Complete CAS form • http://www.research.fsu.edu/contractsgrants/forms.html • Submit to Director, Sponsored Research Services

25. Coming Soon…. • Lunch & Learn series • Proposals to Receive a Subcontract – May 4 • Cost Sharing – May 18 • Year end activities – calendar on Controller’s website soon!