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?
F & A Rates
What are they?
Facilities & Administrative Costs
• The “Rate” is really multiple rates added
together; example:
– Research rate components:
•
•
•
•
•
•
•
•
•
Building use
Equipment use
Operations & Maintenance
Library
General Administration
Department Administration
Sponsored Project Administration
Student Services Administration
Total
On
Campus
2.7 points
3.6 points
15.3 points
2.4 points
6.2 points *
14.9 points *
4.4 points *
.5 points *
50.0 points **
* Administration components are “capped” at 26%.
** Points a.k.a. percent.
Off
6.2
14.9
4.4
.5
26.0
Geez… this session is
going to be worse than I
thought!
Facilities & Administrative Costs
• Key “Rate” Components Heavily Dependent
on Department Information.
– Research rate components:
•
•
•
•
•
•
•
•
•
•
Building use
Equipment use
Operations & Maintenance
Library
General Administration
Department Administration
Sponsored Project Administration
Student Services Administration
Total
Total from Key Department data
On
Campus
2.7 points
3.6 points
15.3 points
2.4 points
6.2 points *
14.9 points *
4.4 points *
.5 points *
50.0 points **
36.5 points
Off
6.2
14.9
4.4
.5
26.0
14.9
Is it getting Better?
FACILITIES & ADMINISTRATIVE COST CALCULATION – OVERVIEW
Cross
Allocations
F&A
Cost Pools
Allocation
Bases
Space
Building and
Equipment
Depreciation
Space
Space
Space
F&A Costs
Allocated To
Distribution
Base
Space
Interest
Operations and
Maintenance
General
Administration
Space
MTC
Instruction and
Departmental
Research
Organized
Research
F&A Cost
Rates
/
MTDC
Instruction and
Departmental
Research
=
%
/
MTDC
Organized
Research
=
%
/
MTDC
Other
Sponsored
Activities
=
%
MTC
Department
Administration
Sponsored Projects
Administration
Library1
Student Services2
MTDC
Other
Sponsored
Activities
MTDC
Pop/FTE
Instruc
Other
Institutional
Activities
1 Population including
students/FTE of employees
2 Generally allocated to the
Instruction function
Nope…
Departmental
Involvement and
Impact
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
Are you lost yet????
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 A133 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
Any questions so far?
F&A Recovery – Is it worth the
effort?
Simple Answer…..
YES!!
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.
The Problem: Identify the Direct
and the F&A 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
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
F&A RecoveryThe Institutional
Perspective
Now’s The Time For Some
Real Discussion…...