© Huron Consulting Group Inc. All rights reserved. Neither Huron Consulting Group Inc. nor any of its affiliates is a CP

1. East Carolina University April 20, 2010 © Huron Consulting Group Inc.All rights reserved. Neither Huron Consulting Group Inc. nor any of its affiliates is a CPA firm.

2. Agenda • Introduction • Background for Preparing a F&A Cost Rate Proposal • Overview of the F&A Cost Rate Proposal Process • Space Inventory • The F&A Cost Rate Proposal • Components of the F&A Cost Rate • Questions and Answers For additional information about the ECU F&A proposal process – Please contact Kathleen Hall, Office of Grants & Contracts, hallka@ecu.edu 2

3. Current Status • ECU needs to submit its F&A cost rate to be submitted to the Division of Cost Allocation, Department of Health and Human Services by December 31, 2010. • Current negotiated rates: • Organized Research 43.5% • Organized Research – Off Campus 26.0% • Vicinity 27.7% • Instruction 48.0% • Other Sponsored Activities: 43.5%

4. Rate Goals/Objectives • What’s your rate and where does it need to be? • What is the rate impact? • What’s your effective recovery rate? • Will current costs support your current rate? • DCA rate thresholds (regional) • How many years?

5. Universities are Complex • Large very complex billion dollar organizations • Highly regulated • Highly competitive • Diverse priorities • Different types of businesses • Retail Operations • Landlords • Basic Research • Education • Health Care • Welfare agency (financial aid) • Banking • Professional and Amateur sports - not for profit • Sophisticated systems are needed to manage the business 5

6. General Support Partners • The Players • Provost/Dean • VP for Finance • VP for Research • Director of Sponsored Programs • Budget Committee • Director of Facilities/Facilities Planning • Director of IT • Department Administrators • Huron Consulting Group • Space survey • Final space review • Calculate and Submit F&A cost rate proposal • Provide Negotiation Assistance • Periodic analysis during proposal preparation • Additional resources • Senior Management • Top level support throughout the process is best practice • Proposal is challenging and time-consuming—should be an institution-wide priority • Requires participation and input from all levels of the organization 6

7. Essential Data Elements for FY2010* • Financial • All financial activity by fund, org/dept, program, account, amount • Additional information – grant title, agency, F&A Rate, on/off campus designation • Financial statement classification • Payroll • Entire payroll activity by person, title, employee class, fund, org/dept, program, account, amount • FTE (if available) • Fixed Asset • Building/Infrastructure – bldg number/name, total cost, annual deprecation amount, fund, org/dept, sponsor • Equipment – asset tag, annual depreciation, fund, org/dept, room, sponsor • Space • Physical data – bldg number/name, dept number/name, room type code, room type, assignable square feet, floor plans *sample list of requested data elements 7

8. Overview of the F&A Cost Rate Proposal Process April/May June - December December 31, 2010 TBD ~ 6-9 months Space Inventory Calculate F&A Cost Rate Submit F&A Cost Rate Negotiation • Space Inventory • Conduct interviews of personnel in research-intensive areas • Document and record results of space usage for research rooms • Obtain results of space survey on remaining rooms • Calculate and submit the F&A rate proposal • Gather data required; incorporate into cost model • Prepare draft F&A rate proposal • Review draft proposal with ECU management • Finalize and submit proposal 8

9. Overview of the F&A Cost Rate Proposal Process April/May June - December December 31, 2010 TBD ~ 6-9 months Space Inventory Calculate F&A Cost Rate Submit F&A Cost Rate Negotiation • Provide Negotiation and Audit Support • Prepare negotiation strategy • Prepare for DCA site visit, if necessary • Support the negotiation of F&A rates 9

10. What is the purpose of the study? • The space survey is used to help develop ECU’s facilities and administrative (F&A) cost rate proposal. • This rate is negotiated with the federal government and allows ECU to recover the costs associated with supporting the research mission. • The space survey classifies rooms based on the activities performed in the rooms. • Space surveys are used to allocate the following F&A costs to research, instruction, and other functions: • Operations and Maintenance (utilities, maintenance, etc.) • Building Depreciation • Interest • Equipment Depreciation

11. The F&A Cost Rate “Let’s see now, what can I do to get this rate to what I think it should be.”

12. FACILITIES & ADMINISTRATIVE COST CALCULATION – OVERVIEW 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 Instr Cross Allocations 1 Population including students/FTE of employees 2 Generally allocated to the Instruction function

13. Facilities and Administrative Costs • Facilities costs: Relate to the space in which the awards take place. • Cost to Construct Building • Cost to operate building (ex- heat, power, custodial, repair, etc.) • Interest expense • Library • Equipment • Campus Infrastructure • Administrative costs: Include the expenses associated with the overall administration on campus as well as the costs of administering sponsored projects. • President’s Office • Legal • Human Resources • Sponsored Programs • Pre-award and Post-award Staff • Department Administrators • Financial Officers • Clerical and Support Staff • Data Management Professionals • Faculty Allowance Capped at 26% of MTDC (G.8)

14. Facilities and Administrative Costs • Facilities cost pools: • Building Depreciation • Interest Expense • Equipment Depreciation • Operations & Maintenance • Library • Administrative cost pools: • General Administration • Departmental Administration • Sponsored Projects Administration • Student Services Administration