Presentation on theme: "School of Medicine DUKE MEDICINE SCHOOL OF MEDICINE ORGANIZATION, TERMINOLOGY, AND FUNDS FLOW April 2010 Billy Newton Vice Dean for Finance and Resource."— Presentation transcript:
School of Medicine DUKE MEDICINE SCHOOL OF MEDICINE ORGANIZATION, TERMINOLOGY, AND FUNDS FLOW April 2010 Billy Newton Vice Dean for Finance and Resource Planning
School of Medicine DUKE MEDICINE 2 Topics for Discussion School of Medicine organization The “big picture”: financial structure of the School of Medicine The smaller picture: What types of funds do faculty members typically have? How are different kinds of funds handled in the accounting system? What exactly is “overhead”? Where to direct questions What does the term “Indirect Costs” mean? How is it calculated? What is the Duke indirect cost rate? How are indirects utilized?
School of Medicine DUKE MEDICINE 3 Some Terms We Will Talk About: Reserves Quasi endowment Overhead General Funds Allocated Funds Restricted Funds Direct Costs versus Indirect Costs Who the heck sets the Indirect Cost rate and where does that person live?
School of Medicine DUKE MEDICINE Duke University Organizational Structure Duke University Trinity College of Arts & Sciences School of Medicine School of Nursing Professional Schools Private Diagnostic Clinic (PDC) Separate for-profit partnership Provost Area Management Center Graduate School Central Administrative Management Center Duke Medicine Duke University Health System (DUHS) Separate 501c3 Non-profit University Finance Human Resources Facilities Athletics Etc 4
School of Medicine DUKE MEDICINE 6 Administrative Functions Exist at Multiple Levels University Central Admin Services - Accounting (General Ledger) - Budget - Payroll - Post award grant accounting - Gift records - Human Resources, including Benefits - Legal - Internal audit, compliance Department -Chair’s Office -Division -Lab School of Medicine Management Center -Finance, Planning -Pre award office -Human Resources -Compliance -IRB, IACUC -Medical Education admin
School of Medicine DUKE MEDICINE 7 Overhead is Allocated Based on Use University Central Admin Services Department School of Medicine Management Center Overhead allocated to School’s central budget based on statistics (budget size, headcount, etc.) Overhead allocated to departments based on discretionary and program expenditures (not on sponsored funding)
Basic Funds Flow University Central Budget School of Medicine Health System Medical Director services Unassigned income Allocated overhead Allocated overhead PDC 5b Academic Transfer (to depts) Space, Capital (to Building Fund) Services (to depts) Academic support 8 School of Medicine DUKE MEDICINE
School of Medicine DUKE MEDICINE 9 Basic Accounting Organizational Structure of the SOM General FundsCentral Reserves Allocated annually via budget process by the Dean Central – Dean’s Office Department/Center GeneralAllocated Externally Endowment FundsFunds Restricted Funds Grants Endowment Distributions Gifts 5b Investment Income Start-up Allocated by Chair ~70% of School of Medicine revenue
School of Medicine DUKE MEDICINE 10 Basic Accounting Organizational Structure of the SOM Central – Dean’s Office SOURCES: -Tuition -Indirects -Endowment Income -Gifts -Other USES: -Dept Support -Administration -Plant Ops -G&A Expense -Student Aid -Other SOURCES: - Health System Support - Portion of F&A - Philanthropy USES: - Chair Commitments, - New Buildings, - Program Investments, etc. General FundsCentral Reserves Allocated annually via budget process by the Dean
School of Medicine DUKE MEDICINE 11 Sources of School of Medicine General Funds (approximately $187 million of the $1.0 billion Total School expenditures)
School of Medicine DUKE MEDICINE 12 ( in millions) Total School of Medicine Expenditures
School of Medicine DUKE MEDICINE 13 Indirect Cost Rates n Research:56% MTDC (on campus) n NIH Training:8% MTDC n Clinical Trials:28% MTDC n DTMI:25% TDC Quick reminder on what indirect cost (or “Facilities and Administrative” percentage) really means: It’s not “profit” – it helps to cover facilities and administrative costs to administer research at Duke University
School of Medicine DUKE MEDICINE 14 Components of Our Rate: Exclusions: Equipment > $5k, patient costs, aid, etc.
School of Medicine DUKE MEDICINE 15 Duke NIH Trend (From NIH Information) Award Amounts Per Year (000s) $328.2 mil
School of Medicine DUKE MEDICINE 16 Duke School of Medicine NIH Ranking Over Time
School of Medicine DUKE MEDICINE 17 Comparison of Duke’s NIH Growth Rate to NIH Overall Growth Two year rolling average growth rate
School of Medicine DUKE MEDICINE 18 School of Medicine Finances on a More Detailed Level (i.e., so what does all this mean to you?) Externally sponsored research A fund code is established which links the grant to the department with you identified as PI. Part of your salary should be charged against this code, depending on your effort. Other than the indirect cost rate, there are no institutional “taxes” or overhead assessments.
School of Medicine DUKE MEDICINE 19 School of Medicine Finances on a More Detailed Level (i.e., so what does all this mean to you?) General Funds: The allocation of the central budget from the Dean to the Chair/Director. The allocation is fully flexible to the Chair. Allocation formula is: -% of indirect cost recovery to department -50% of median Chair compensation -Remuneration for faculty UME & grad student teaching effort -All space expense charged to the department
School of Medicine DUKE MEDICINE 20 School of Medicine Finances on a More Detailed Level (i.e., so what does all this mean to you?) Department and discretionary funds: Includes the PDC transfer (for clinical departments), gifts, start-up funding. Clinical departments are now assessed overhead at a rate of 10% of expenses on these funds to recover overhead charged to the School of Medicine by the University. Basic science departments, centers, and institutes are charged 2%.
School of Medicine DUKE MEDICINE 21 What Happens If I Bring In A Gift, And I Want It To Be Directed to My Research? 1.Is it really a gift or is it a grant? (F&A vs. overhead) 2.Does Development and Gift Records know about it? 3.How restricted is it? 4.Department should deposit funds into a gift code with you listed as PI Please consult with your departmental business manager. (FYI – the School of Medicine has over 17,000 fund codes!!)
School of Medicine DUKE MEDICINE 22 Finance/accounting:Start with your department or division business manager Grants:Your department’s grant manager and the Office of Research Administration. Where Do You Go With Questions On:
School of Medicine DUKE MEDICINE 23 If processes seem confusing, we want to know about it. We have a University-wide initiative focused on improving efficiency, especially in grants administration. And remember, there are worse places to be…
School of Medicine DUKE MEDICINE 24 THANK YOU FOR YOUR TIME Are there any questions?