Transcript East Carolina University April 20, 2010 © Huron Consulting Group Inc. All rights reserved.

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.
© Huron Consulting Services LLC. All rights reserved.
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, [email protected]
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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
– Organized Research – Off Campus
– Vicinity
– Instruction
– Other Sponsored Activities:
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43.5%
26.0%
27.7%
48.0%
43.5%
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
• Senior Management
• The Players
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Provost/Dean
VP for Finance
VP for Research
Director of Sponsored Programs
Budget Committee
Director of Facilities/Facilities Planning
Director of IT
Department Administrators
– Top level support throughout the process
is best practice
– Proposal is challenging and timeconsuming—should be an institution-wide
priority
– Requires participation and input from all
levels of the organization
• Huron Consulting Group
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–
–
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Space survey
Final space review
Calculate and Submit F&A cost rate proposal
Provide Negotiation Assistance
Periodic analysis during proposal preparation
Additional resources
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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
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*sample
list of requested data elements
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Overview of the F&A Cost Rate
Proposal Process
April/May
June - December
Space Inventory
Calculate
F&A Cost Rate
December 31, 2010 TBD ~ 6-9 months
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
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Overview of the F&A Cost Rate
Proposal Process
April/May
Space Inventory
June - December
December 31, 2010 TBD ~ 6-9 months
Calculate
F&A Cost Rate
Submit
F&A Cost Rate
•Provide Negotiation and Audit Support
– Prepare negotiation strategy
– Prepare for DCA site visit, if necessary
– Support the negotiation of F&A rates
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Negotiation
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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The F&A Cost Rate
“Let’s see now, what can I do to get this rate to what I think it should be.”
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FACILITIES & ADMINISTRATIVE COST CALCULATION – OVERVIEW
Cross
Allocations
F&A
Cost Pools
Allocation
Bases
Space
Space
Building and
Equipment
Depreciation
Space
Space
MTC
F&A Costs
Allocated To
Distribution
Base
Instruction and
Departmental
Research
/
MTDC
Instruction and
Departmental
Research
=
%
/
MTDC
Organized
Research
=
%
/
MTDC
Other
Sponsored
Activities
=
%
Space
Interest
Operations and
Maintenance
General
Administration
Department
Administration
Sponsored Projects
Administration
Space
MTC
MTDC
Organized
Research
Other
Sponsored
Activities
F&A Cost
Rates
MTDC
Pop/FTE
Library1
Other
Institutional
Activities
Instr
Student Services2
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1 Population including
students/FTE of
employees
2 Generally allocated to the
Instruction function
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)
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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
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