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East Carolina UniversityApril 20, 2010

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Agenda

1. Introduction

2. Background for Preparing a F&A Cost Rate Proposal

3. Overview of the F&A Cost Rate Proposal Process

4. Space Inventory

5. The F&A Cost Rate Proposal

6. Components of the F&A Cost Rate

7. Questions and Answers

For additional information about the ECU F&A proposal process – Please contact Kathleen Hall, Office of Grants & Contracts, hallka@ecu.edu

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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%

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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?

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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

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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

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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 elements7

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Negotiation Submit

F&A Cost Rate

Calculate

F&A Cost Rate Space Inventory

April/May June - December December 31, 2010 TBD ~ 6-9 months

• 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

Overview of the F&A Cost Rate Proposal Process

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Negotiation Submit

F&A Cost Rate

Calculate

F&A Cost Rate Space Inventory

April/May June - December December 31, 2010 TBD ~ 6-9 months

• Provide Negotiation and Audit Support

–Prepare negotiation strategy

–Prepare for DCA site visit, if necessary

–Support the negotiation of F&A rates

Overview of the F&A Cost Rate Proposal Process

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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

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“Let’s see now, what can I do to get this rate to what I think it should be.”

The F&A Cost Rate

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FACILITIES & ADMINISTRATIVE COST CALCULATION – OVERVIEW

Space

Space

Space

MTC

Cross Allocations

Building andEquipment

Depreciation

Building andEquipment

Depreciation

InterestInterest

Operations andMaintenance

Operations andMaintenance

GeneralAdministration

GeneralAdministration

DepartmentAdministrationDepartment

Administration

Sponsored ProjectsAdministration

Sponsored ProjectsAdministration

Library1Library1

Student Services2Student Services2

F&A Cost Pools

OtherSponsoredActivities

OtherSponsoredActivities

Instruction andDepartmental

Research

Instruction andDepartmental

Research

OrganizedResearch

OrganizedResearch

OtherInstitutional

Activities

OtherInstitutional

Activities

F&A Costs Allocated To

MTDCOther

SponsoredActivities

MTDCOther

SponsoredActivities

MTDCInstruction andDepartmental

Research

MTDCInstruction andDepartmental

Research

MTDCOrganizedResearch

MTDCOrganizedResearch

Distribution Base

%%

%%

%%

F&A Cost Rates

Allocation Bases

Space

Space

Space

MTC

MTDC

MTDC

Pop/FTE

Instr

=

=

=

1 Population including students/FTE of employees

2 Generally allocated to the Instruction

function

1 Population including students/FTE of employees

2 Generally allocated to the Instruction

function

/

/

/

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• 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 AllowanceCapped at 26% of MTDC (G.8)

Facilities and Administrative Costs

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• 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

Facilities and Administrative Costs