Transcript Presentation

Facilities & Administrative Costs (F&A)
• F&A Rate Process and Timeline
• F&A Definitions: Direct, Indirect, and Unallowable Costs
• FY2011 F&A Rate Proposal & Negotiations
• Collections & Distributions
Intro to A-21: Facilities & Administration Rate
The A-21 Timeline
3/1/11
• Begin Space & Equipment Survey
6/30/11
• FY Ends; Complete & Scrub Surveys
9/15/11
• Books Closed; Data Downloads Begin
12/31/11
• Submit F&A and FB Proposals
1/15/12
• Begin Aux Admin Fee Study
03/12
• DCAA performs Audit
04/12
• DCAA Submits Audit Report to ONR
6/30/12
• Complete Negotiations; Sign Agreement
Space Survey Evolution
1999
2002 &
2005
2008
• ASPIRE
• Oracle
2011
• ASPIRE
What are F&A Costs?
• Institution-wide and/or department
overhead expenses not specifically
assignable to a project/activity, yet
essential to Michigan Tech’s research
activities.
• Michigan Tech’s $81 million of “real” incurred costs to support work
on sponsored agreements from the necessary human and physical
infrastructure.
• Costs sponsors can reimburse based on a calculated average rate
developed and negotiated in accordance with OMB Circular A-21.
• In a nutshell, this $81 million represents the university’s general
support for sponsored projects and the resulting expenses.
Intro to A-21: Facilities & Administration Rate
Common Misunderstandings
• The F&A rate includes profits (markup %)
• F&A costs are not real costs
• Inaccurate (either too high or too low) F&A
rates don’t have consequences
• The uncapped rate subsidizes the capped rate
Guidelines for Reimbursement
Circular A-21 outlines three fundamental criteria:
Intro to A-21: Facilities & Administration Rate
Unallowable Costs
• If in doubt, scrub it out
• Unallowable Direct Costs:
• Clerical salaries
• General office supplies
• Travel
• Unallowable Indirect Costs:
•
•
•
•
Fundraising and Alumni Activities
Advertising
Entertainment
Memberships
Intro to A-21: Facilities & Administration Rate
Composition of Direct Costs
PIs
Project-Related
Materials & Supplies
Cost-shared Salary
Subcontract
Costs directly
assignable
to one project
Costs
Project-Related
Travel
Research Associates
and Assistants
Lab
Techs
Fringe Benefits
Composition of Indirect Costs
Payroll/
Registrar (SAS)
Purchasing (GA)
Library
Pre/Post-award (SPA)
Not directly
assignable
to one project
Accounting,
Budgeting, HR (GA)
Deans’ Offices/
Departmental
Admin (DA)
Bldg/Equip
Depreciation
Utilities
(O&M)
Definition: F&A Components
F&A Rate Components
Examples
General Administrative (GA)
Central administrative offices
(Payroll, accounting, purchasing)
Department Administration (DA)
Deans Offices/Academic Departments
Sponsored Projects Administration (SPA)
VPR Office (Pre & Post-Award)
Student Administration & Services (SSA)
Enrollment Management
Building and Equipment Depreciation
Standardized asset classifications and lives
Interest Costs on Building & Equipment
MTU’s interest costs
State-paid interest on behalf of MTU
Operation & Maintenance
Repair & maintenance, utilities,
grounds, public safety
Libraries
Van Pelt Library
Intro to A-21: Facilities & Administration Rate
MTDC
(Modified Total Direct Cost)
• MTDC is the direct costs charged to an
index/project.
• It excludes:
–
–
–
–
Subcontracts over $25,000
Renovation costs & equipment
Participant support costs
Scholarships, fellowships, and tuition remission
Intro to A-21: Facilities & Administration Rate
F&A Cost Calculation
F&A Cost Pools
Allocation
Bases
F&A Costs
Allocated To
Distribution
Base
(Tech & MTRI)
MTDC Other
Institutional
Activities
Intro to A-21: Facilities & Administration Rate
F&A Cost
Rates
F&A Rate Formula & Concept
Indirect Costs
(Allocated Organized Research F&A Costs)
Direct Costs
=
(Sponsored Research Direct Costs +
Cost-Sharing = “BASE”)
Concept:
Changes to either the Numerator or
Denominator Affect the Rate
Intro to A-21: Facilities & Administration Rate
Research Rates
Proposed to
Cognizant Agency
Multiple F&A Rates Analyses
Calculation applied to 9 MTU activity areas:
– MTU Houghton on and off campus
– Michigan Tech Research Institute (MTRI) on and
off campus
– Other Sponsored Activities on and off campus
– Instruction on and off campus
– Other Institutional Activities on campus
Intro to A-21: Facilities & Administration Rate
General Modifications Criteria
• Facilities being constructed, renovated or purchased.
Identify
• Costs to be incurred after the base year.
Specify/Quantify
• New facilities to come on-line during the rate period.
Analyze Timelines
• New facilities to substantially impact F&A rate(s).
Determine % of Research
• Direct base costs to change materially from the base year.
Quantify & Timeline
Intro to A-21: Facilities & Administration Rate
ARRA’S Impact on MTDC
The University’s On-Campus Organized Research Modified Total Direct Cost (MTDC) has increased by only 3.6% since the
2008 proposal with most of that increase due to ARRA funds. There has also been a trend of increased space
requirements for the Organized Research activities.
Intro to A-21: Facilities & Administration Rate
Negotiations
Intro to A-21: Facilities & Administration Rate
F&A Rate: Base, Proposed, Negotiated
General & Administrative
Departmental Administration
Sponsored Project Administration
26% Admin Cap Adjustment
Administrative Subtotal
Building Depreciation
Equipment Depreciation
Interest
Operations & Maintenance
Library
Facilities Subtotal
On-Campus Capped Rate
On-Campus Uncapped Rate
Base
Proposed
Negotiated
13.5
14.6
14.2
-16.3
26.0
13.9
14.7
14.5
-17.1
26.0
13.7
14.4
14.3
-16.4
26.0
4.6
3.0
3.1
12.8
1.7
25.2
7.5
3.5
7.9
12.5
1.6
33.0
6.0
3.1
6.4
12.1
1.4
29.0
51.2
67.5
59.0
76.0
55.0
71.0
Intro to A-21: Facilities & Administration Rate
Past & Currently Approved F&A Rates
2012
2013-2016
56.0%
47.5%
57.0%
30.0%
55.00%
50.75%
52.25%
36.00%
69.0%
86.5%
57.0%
30.0%
71.00%
84.50%
52.25%
36.00%
Capped
Research*
MTRI
Instruction
Other Sponsored Activities
Uncapped
Research*
MTRI
Instruction
Other Sponsored Activities
*Research generates most of total F&A $ recoveries
Intro to A-21: Facilities & Administration Rate
MTU and Other Institutions
Cognizant Agency
Capped
Uncapped
U Michigan
HHS
55.5
55.5
MSU
HHS
53.5
53.5
Virginia Tech
ONR
61.0
65.0
Georgia Tech
ONR
52.7
59.8
Intro to A-21: Facilities & Administration Rate
Budgets to MTDC
Total Org. Research
Project Budgets
$87.4 million
Modified Total
Direct Costs
$47.6 million
Intro to A-21: Facilities & Administration Rate
MTDC to F&A Collections
MTDC
$47.6 million
Net F&A Collected
$18.4 million
Intro to A-21: Facilities & Administration Rate
Collections to Distribution
21¢
collected
in
F&A
Deans
2¢
Chairs
2¢
PIs
2¢
Centers
5¢
General Fund
10¢
Intro to A-21: Facilities & Administration Rate
What Did We Learn Today?
• How F&A costs are defined.
• How the Space & Equipment Surveys directly
impacts the F&A Rate.
• How the F&A cost rate is calculated.
• How the Project Payroll Certification
substantiates the A-21 proposed rates
• How the negotiation process works.
• How the effective rate (38.6%) is more
important than the negotiated rate (55%).
• How collected costs are distributed.
Intro to A-21: Facilities & Administration Rate
Resources:
Michigan Tech’s current A-21 proposal:
http://www.admin.mtu.edu/acct/dept/controller/FandA/FY2011
a21fanda.pdf
The F&A Rate agreement:
http://www.mtu.edu/research/references/factsfigures/pdf/predetermined_f_and_a_rates_fy13_16.pdf
Michigan Tech’s Disclosure Statement:
http://www.mtu.edu/research/references/pdf/disclosurestatement-fall-2011.pdf
Intro to A-21: Facilities & Administration Rate
Contact Information
Mike Hendricks
487 – 2155
[email protected]
Intro to A-21: Facilities & Administration Rate
Fringe Benefits Composite Rate Components*
Fringe Benefit
Expense Pool
=
Traditional &
Misc. Fringes
•
•
•
•
•
•
•
•
Social Security/Medicare
Retirement Contributions
Health Insurance
Workers Comp
Unemployment Insurance
RSVP**
Tuition Assistance**
Sabbatical Leave**
Divided by
Salaries Expense Base
* Computed annually
** Miscellaneous fringe benefits currently treated as salaries
Intro to A-21: Facilities & Administration Rate