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The F&A Humpty Dumpty – Putting the Pieces Together ( Insights for the Departmental Administrator ). National Council of University Research Administrators Region VI-VII Meeting April 2005. Session Panelists.
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The F&A Humpty Dumpty – Putting the Pieces Together(Insights for the Departmental Administrator) National Council of University Research Administrators Region VI-VII Meeting April 2005
Session Panelists Gary Chaffins - Director, Office of Research Services & Administration, University of Oregon Stuart Laing – Manager, Cost Analysis Office for Research and Sponsored Projects Administration, Arizona State University
Facilities & Administrative Costs Topics • F & A rates - Huh? • Departmental Involvement -You mean I’m involved? • F&A Recovery – Is it worth the effort?
Facilities & Administrative Costs • The “Rate” is really multiple rates added together; example: • Research rate components: On Campus Off • Building use 2.7 points • Equipment use 3.6 points • Operations & Maintenance 15.3 points • Library 2.4 points • General Administration 6.2 points * 6.2 • Department Administration 14.9 points * 14.9 • Sponsored Project Administration 4.4 points * 4.4 • Student Services Administration .5 points * .5 • Total 50.0 points ** 26.0 * Administration components are “capped” at 26%. ** Points a.k.a. percent.
Facilities & Administrative Costs • Key “Rate” Components Heavily Dependent on Department Information. • Research rate components: On Campus Off • Building use 2.7 points • Equipment use 3.6 points • Operations & Maintenance 15.3 points • Library 2.4 points • General Administration 6.2 points * 6.2 • Department Administration 14.9 points * 14.9 • Sponsored Project Administration 4.4 points * 4.4 • Student Services Administration .5 points * .5 • Total 50.0 points ** 26.0 • Total from Key Department data 36.5 points14.9
F&A Cost Pools Allocation Bases F&A Costs Allocated To Distribution Base F&A Cost Rates Building and Equipment Depreciation Space Space Space Space Interest Instruction and Departmental Research MTDC Instruction and Departmental Research / = % Operations and Maintenance Space Space Organized Research MTDC Organized Research / General Administration MTC = % MTC Other Sponsored Activities MTDC Other Sponsored Activities Department Administration MTDC / = % Sponsored Projects Administration MTDC Library1 Pop/FTE Other Institutional Activities Student Services2 Instruc FACILITIES & ADMINISTRATIVE COST CALCULATION – OVERVIEW Cross Allocations 1 Population including students/FTE of employees 2 Generally allocated to the Instruction function
Departmental Involvement and Impact • Department personnel usually provide basic data for Rate preparation through: • Space utilization reports • Equipment inventories • Expense classification/allocation • Activity/Effort Report processing
Space Utilization Reports • Space is not the final frontier, but probably the most important statistic used in the F&A rate. • The following cost pools use space as their allocation method. • Building Depreciation • Equipment Depreciation • Operations and Maintenance • Interest
Space Utilization Reports • It is critical that the departmental space coordinator know their department space, how generally how it’s used, and how it should be coded. • No single person should decide how each room is being used, but the space coordinator should walk the space and talk to the occupant.
Space Utilization Reports • A room that is 100% Organized Research (OR) with 1,000 square feet would equate to 1,000 square feet of OR space. • Care should be taken not to code rooms incorrectly, one issue - 100% Organized Research Labs. Instruction does go on in labs.
Equipment Inventories • Equipment used by the university is depreciated depending on the capitalization threshold. • Equipment being depreciated is calculated into the F&A rate proposal. • It is critical that each piece of equipment be mapped to a room, so depreciation can be allocated to the activities conducted in that room.
Expense classification/allocation • How can you assist in this process? • Each expense during a “Base Year” is used to calculate the F&A rate. • It is critical that each expense be coded correctly in your financial system. • Cost transfers must be completed by June, 30. Critical correct cost on correct account.
Activity/Effort Reporting • Not only is this a hot topic in the eyes of A-133 Auditors and Federal Sponsors, but it is used in the F&A rate. • You must include in the base (OR, Instruction, Other) all the MTDC Expenditures and Cost Share. • PI Effort used as Cost Share is documented on the Effort Reports.
Activity/Effort Reporting • Certifying Effort validates the expense to the sponsored account. • Some Institutions still use Effort reports as a method to calculate the DA cost pool. You might think of switching to the DCE
A Point is a Point • A point is a percent of the F&A rate. So 50% is 50 points. • A point to a University can range from $200K to well over $1M per year worth of recovery.
F&A Recovery • Institutions have unrestricted use of F&A recovery (except those listed in Exhibit A of A-21). • Pay for Buildings, Equipment, Cost Share etc. • Return portions to the Colleges and Departments to help cover Administrative costs.
Expense type: Salaries & Wages Fringe benefits Services Supplies Travel Equipment Subcontracts Interest Rent Utilities Direct F&A X X X X X X X X X X X X X X X X X X X X The Problem: Identify the Direct and the F&A Costs
Facilities & Administrative Costs (Order of Distribution) • Depreciation and Use Allowances Operation and Maintenance Expenses General Administration & Expense Departmental Administration Sponsored Projects Administration Student Administration and Services Library Instruction Organized Research Other Sponsored Programs Other Institutional Activities
