Transcript Preparing for a F&A Proposal Base Year

Preparing for a F&A Proposal Base Year
2011 NCURA Region VI & VII Conference
Presented By: Adrienne Clifton and Ginger Baker, MAXIMUS
Agenda
• Overview of F&A Calculation
• Preparing for a Base Year
• Negotiations
Overview of F&A
Facilities and Administrative Costs
• Costs that are incurred for common or joint
objectives and therefore cannot be identified
readily and specifically with a particular
sponsored project, instructional activity or any
other institutional activity. (OMB Circular A21, Section B.4)
Facilities & Administrative Costs
• Administrative components
– General Administration and General Expenses
– Departmental Administration
– Sponsored Projects Administration
– Student Administration and Services
• Administrative components are capped at 26%
of modified total direct costs (OMB Circular A21 G.8)
Facilities & Administrative Costs
• Facilities components
– Building Depreciation
– Equipment Depreciation
– Interest
– Operations and Maintenance
– Library
Facilities & Administrative Costs
• Order of allocation
– Building Depreciation
– Equipment Depreciation
– Interest
– Operations and Maintenance
– General Administration
Facilities & Administrative Costs
• Order of allocation (continued)
– Departmental Administration
– Sponsored Projects Administration
– Student Administration and Services
– Library
Facilities & Administrative Costs
• Bases represent an institution’s direct cost
activities:
– Instruction and Departmental Research
• Sponsored instruction and training
• Departmental research
– Organized Research
• Sponsored research
• University research
– Other Sponsored Activities
– Other Institutional Activities
Preparing for a F&A Proposal
Base Year
This is my base year, what do I do?
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Define your objectives
Review past problems
Identify resources
Plan
Get resources commitment
Start early
Major Problems
• Base / Space Relation
• Space Survey / Space Inventory
• Reclassifications
of
Financial
Statement
functions to F&A functions
• Rates are decreasing, lower Administrative
components also
• Time constraints
• Compliance with Disclosure Statement (DS-2)
Major Opportunities
• Special studies
• Interest
• New construction since last proposal
– Should be occupied
• Equipment by room
• Quality space survey
Where To Start
• Is the F&A Proposal due date realistic?
• Resources
– Internal resources
• Staffing
• Financial systems
– External
• Auditors
• Consultants
• Goals – Expectations for the rate
– Rate increase, maintain rate or minimize staff
effort
Define Base
• Define the base
– Financial Statement reconciliation issues
– Financial Statement reclassifications out of
Organized Research
– Financial Statement reclassifications that
are large amounts (i.e. into Operations and
Maintenance)
– Cost sharing
Need For Special Studies
• Library Study
– Requires full year of data
• Componentization Study
– The components of a building have different
useful lives and this results in accelerating
the recognition of depreciation.
– Requires change on Financial Statements for
building depreciation.
Interest
• Get it in the State Wide Cost Allocation Plan
(SWCAP)
• Get it by building
• Get it by department
• Get it by the total amount for interest
associated with Campus Wide Improvements
New Construction/Projection
• What new research intensive buildings are
coming on line?
• When will the building be completed?
• What departments are moving into that
space? What is happening to the space
they vacate?
• Will this building support new or existing
research?
Equipment
• Ideally, want to match 90% of equipment
to a valid building and room.
• Accurate inventory
• Well documented
• Split funded equipment
• Service Center equipment
Space Survey
• Best if done in the final months of the base
year (spring) or some schools are conducting
the survey after the base year ends
• Identify source and quality of base inventory
• Identify departments to survey
• Identify survey tools
• Identify resources
Space Survey
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Develop Survey Plan
Develop Survey Materials
Train Surveyors
Conduct Survey
Quality Assurance
Review Results
Anticipate Results
• Conduct a practice year
• Use partial year data to model results
• Make adjustments in the accounting
system before year end
• Review physical plant accounting
Results
• The more you can do before year end, the
better
• No surprises during the rate calculation
• Maximize rate calculation
• With cleaner data, you can spend more time
focusing on data analysis, instead of data
clean up
Review
• Are there significant percent changes in the
individual components of the rate when
compared with your last base year?
• What is the value of a point?
– How many Administrative dollars are required to
increase the Administrative component by one point?
– How many Facilities dollars are required to increase the
facilities rate by one point?
– How much Organized Research space is needed to
increase the rate?
Review
• What departments have large Direct Charge
Equivalent (DCE) ratios, why?
• Does your system coding facilitate the proper
identification of other expenses?
• Does the campus have a clearly defined
definition for Organized Research? Other
Sponsored Activities? OIA?
• Do you have a common consistent
understanding of University data?
Review
• What three things are you most comfortable
with?
• What three things do you have the most
concern about?
• Where are there possibilities for an increase in
the rate?
• If you were the government, where would you
look to decrease the rate?
Negotiations
• What is the submitted rate?
• What is the minimum rate the University
will accept?
• What rate can the University live with?
• What is the ideal rate the University would
like?
• What is the actual rate of recovery?
Negotiations
• How many years should you negotiate for?
• Do you have new research intensive buildings
coming on line? It is ideal to have a full year
of costs in your proposal.
• Do you need to change your off-campus
definition?
• Are you considering an equipment
capitalization change?
Post Analysis
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What did you do right?
What can you do better next time?
Would a practice year benefit you?
Document, document, document
Fix it before you start the next one!
Questions/Comments
• Adrienne Clifton
– 773-575-2599 (Mountain Time Zone)
– [email protected]
• Ginger Baker
– 702-994-2999 (Pacific Time Zone)
– [email protected]