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Departmental Research Administrators Workgroup (DRAW)

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1 Departmental Research Administrators Workgroup (DRAW)
January 17, 2012 deMarneffe 132

2 Agenda Announcements Revised Research Core Policy Updates on F12 New Processes – Natalie Nguyen NIH Updates – Raquel Espinosa McLean Balance Sheet Analysis FY11 – Raquel Espinosa

3 Announcements PI & Administrators Survey
Purpose: understand how tasks and responsibilities are assigned to staff and identify PI’s in need of grant administrator support. Due to issues we have extended the deadline to January 27th. Separate s were sent to Administrators and PI’s. If you or your PI have not received it, please let us know!

4 Feel free to invite administrative staff!!
JE Training Course Feel free to invite administrative staff!! When: 01/24/2012, 3-4:30 pm Where: de Marneffe 218 Course Description: This program provides a General Overview of Cost Transfers and instructions for creating Journal Entries using data from Document Direct, PeopleSoft or Insight.  Overview topics include definitions, causes, descriptions of different transfer types and audit trail data.  Focus is provided on justifications and how to improve them. 

5 Insight Questionnaire
The Insight Committee group is requesting feedback from the administrators (initially) in an effort to improve Insight usability. Please take a few minutes to complete the survey: Due January 19th!

6 DOD Reminder For all DOD awards:
If there are any changes to animal or human subjects protocols associated with the award, those changes MUST BE submitted to and approved by the DOD prior to starting the revised work. IACUC or IRB approval is not sufficient until the DOD has also approved.

7 DRAW Highlights of the revised Research Cores Policy Updates on FY12 New Processes Natalie Nguyen, Associate Director January 17, 2012

8 Policy Statement It is the policy of Partners HealthCare (Partners) that all research core facilities which directly charge users for goods and services must document that user fees charged are allowable, reasonable and allocable in relation to the cost of goods or services provided. All research core facilities are required to have an approved business plan and user fee analysis in order to operate. User fees should include, at the minimum, the direct costs of providing the core service, and where applicable, an additional overhead component. Core facilities that process charges to federally sponsored awards for goods and/or services are subject to government regulations concerning service centers and are responsible for developing user fees in accordance with this policy and government regulations. Cores operate similar to a small business, with a few caveats: Dedicated lab/bench space, equipment, and personnel Required to have an approved business plan and user fee/cost analysis Document user fees charged are allowable, reasonable and allocable in relation to the cost of goods or services provided Operate on a revenue neutral model – set user fees at cost (or less) for federal users Follow applicable Federal Cost Principles and institutional policies & guidelines

9 Definitions NIH’s Definition: Core facilities can be defined as centralized shared resources that provide access to instruments, technologies, services, as well as expert consultation and other services to scientific and clinical investigators. The typical core facility is a discrete unit within an institution and has dedicated personnel, equipment, and space for operations.  In general, core facilities recover their cost of providing service in the form of user fees that are charged to an investigator’s funds, often NIH or other federal grants. (Taken from the NIH’s FAQs to Explain Costing Issues for Core Facilities, DRAFT) Partners’ Definition: A core facility is a discrete unit organized to provide specific goods and/or services on a fee-for-service basis to users within the Partners research community and its collaborators. (Partners Research Cores Policy)

10 90 approved Partners cores fall within 3 categories
Research Core Facility (~69 cores + 6 minis) Scientific, technical and consultative services or products Fee-for-service model: direct cost (+ indirect costs for non-Partners users) Research Support Core (Administrative, Supply, Lab Support) (~14 cores) Shared post-award administrative support and/or other common expenses (e.g., general supplies, equipment service contracts, etc) Serves primarily investigators of a single department or several labs within a department User fees are based on an allocation methodology When should a core become a Specialized Service Facility? Material effect on the institution’s F&A rate Operating cost upwards of $5M Space costs upwards of $2M Specialized Service Facility (1 – CCM) Highly complex and/or specialized services Must receive institutional designation as an SSF User fees include both direct and allocable indirect costs

11 Types of Core Customers
Researchers within the core’s institution Ex: PIs at BWH, MGH, etc. Researchers from external or non-Partners institutions Ex: PIs at MIT, Harvard University, University of Vermont, etc. Industry and commercial entities Ex: Pharmaceutical companies, biotech companies, etc. Q: How do you determine who is internal versus external? A: It depends on where the funding is coming from to pay for the core services. Internal: Partners PI paying with Partners-administered fund External: Partners PI and non-Partners PI paying with non-Partners fund; other AMCs and non-profits; industry Q: Is there a difference in user fees if you’re internal or external? A: Absolutely! Internal fees are set at direct costs only. External user fees include an overhead component. Fees charged to industry users may include additional mark-up.

12 User Fee Calculation: Direct & Indirect
Type of User Source of Payment Type of Fee (user fee component) Indirect Cost Impact Internal PI (PHS & entities) PHS administered research fund Internal User Fee (direct cost only) User pays indirect cost at the F&A rate associated with the fund Check payment/Wire* External User Fee – AMC/Non-profit (direct cost + indirect cost component) User may pay indirect at the institution issuing payment External AMC/Non-profit (including International) Industry/For-profit External User Fee – Industry/For-profit N/A *Additional banking fees may apply for wire transfers

13 Does your department plan to start a core facility?
Your facility qualifies if it: Charges a fee for goods or services Has $50,000 or greater of annual expenses Provides services to 5 or more PIs New cores must: Obtain approval from Department Chief Draft a business plan Perform a cost analysis to set fees at cost Identify start-up funds that will fund up to 50% of the identified annual shortfall upon opening the core, and annually thereafter during the start-up period (first three years of operation). The start-up funds will be used to fund the remaining 50% of the identified shortfall plus any additional cost overrun at the end of each 12-month period during the start-up period. Identify a guarantor account to be used for future deficits Receive the approval of the Department Chief, the RCFO and the Sr. VP for Research

14 Budgeting: New and Existing Cores
All cores are required to have an annual review of core finances, including an updated operating budget and user fees approved by the RCFO. (Cores Policy paragraph 8.1) New Cores: During the business planning process will lay out a 3 year budget. Depending on time of year when the core is opened, RCFO will assess financial status and determine if the core will take part in the annual budgeting process or wait for the following year. Existing Cores Required to submit a budget on an annual basis that will be reviewed and approved by the RCFO

15 Budgeting: Annual Budget Process
Timeline: Mid-April: Volume data due to RCFO Late-April: Trainings held on completing the budget template First BD in May: Pre-populated budget templates sent to cores Last BD in May: Budget templates due to RCFO June – September: RCFO reviews and confirms budgets and user fees October 1: New fees go into effect

16 Budgeting Reminders: General Pricing Principles
Fees should not discriminate against any individual or group of users Charges should be on actual costs (direct and indirect) and actual usage Depreciation should be included for equipment purchased with non-federal funds Surpluses should be used to lower user fees, reinvest in the core or pay back the guarantor account or start-up fund Deficits (excluding bad debt) should be included in the operating budget to be recovered through the user fees Subsidies can be applied to charge lower fees Fees should be reviewed, updated and published on an annual basis

17 Department: Management of Core Facilities
Operational management Develop internal SOP’s regarding the provision of services Financial management Remain revenue neutral Track AR Ensure only allowable and appropriate expenses are charged to the core Perform a monthly variance analysis comparing actual expenses and volume to budget Billing practices Use current approved and published fees Obtain customer’s research fund number and expiration date & point of request for service Ensure timely billing/recording of internal charges via journal entry Ensure the billing of overhead to external customers is that the prescribed policy rate Invoice users on a monthly basis and only after the services have been rendered Retain key documents for at least 5 years: business plan, cost analysis, new fund application, financial reports, correspondences, service price sheets, invoices

18 Policy Primer: Top 10 Follow a revenue neutral model; +/- 15% breakeven status Allocate costs for Service X to the users of Service X Administrative/lab support cores: use unrestricted fund to pay for services provided to K awards or other awards exempt from admin costs Depreciate (i.e. include equipment depreciation in user fees) only those pieces of equipment purchased by Partners non-federal funds Surplus? Reinvest in core or lower user fees. Deficit? Cover using guarantor account or raise user fees. Bill monthly to avoid lost revenue due to expired funds Use only fees approved by the RCFO when invoicing customers Invoice and bill only after services are rendered Keep a log of customers’ fund numbers and expiration dates Retain invoices for at least 5 years

19 R&R: Core Business Manager/Dept. Admin
Rolling basis: Monitor customer’s payments for invoices (accounts receivable) and inform the core facility director/PI of delinquent accounts (> 90 days overdue) Monitor changes to service volume, user fees, personnel, equipment purchases, etc. Submit purchase orders, payments for accounts payable Maintain all core facility records for monitoring review and A-133 audit Monthly: Verify billing is accurate, complete, timely and adequately documented Invoice users and submit journal entries by the 15th business day of the month Review revenue postings are correct and reconcile with billing log/journal log Review expenses to assure they are correctly allocated as stated in the approved budget including core facility personnel (correct percent effort), supplies, and other expenses Assist the core facility director/PI with the review of the fund cash balance

20 R&R: Core Business Manager/Dept. Admin
Annually: Assist Core Director/PI in reviewing budget/user fee analysis and submissions to RCFO for review Incidental: Coordinate with core director and the RCFO on the formulation and execution of deficit resolution plan

21 Key processes implemented in past two years and in FY12
Annual budget and user fee review and approval Journal review process and cost transfer of previously billed core charges New core revenue journal for internal billing (FY12) PeopleSoft Billing module for external billing (FY12)

22 Need Attention from DA: funds requiring further review as part of monthly JE review process
As department administrators, you may be contacted by either the core or the RCFO for the following issues with funds used to pay for core services: Outreach to department administrators by the core Non-research sundries, PO funds and hospital cost centers Funds past their project end date Inactive/invalid fund numbers Outreach to department administrators by the RCFO Research sundries or other non-federal awards in deficit and over budget Federal awards in their final project year that are in deficit and over budget Cost transfer for previously billed core charges Completing the Request to Transfer Core Charges form including 90 day justification and required signature from requestor when a fund management issue or any other issue for which the customer is responsible

23 Insight View of core expenses
Expense Details tab

24 Insight View of core expenses
Transaction Details tab

25 Core Charge Transfer Request & Journal Process
DA reviews fund and identifies core charge that needs to be transferred to another project DA reviews list of Cores’ journal contacts lists (contains core facility acronyms) and contacts the Core’s administrator (i.e. person that submits core revenue journal) DA fills out the Core Charge Transfer Request Form (will be posted on RM Website this week) including over 90-day justification questions then sends to Core administrator to complete the rest of the required information Core administrator completes the form and sends to Cores JE mailbox Cores Analyst reviews request for completeness; prepares the JE and posts to general ledger

26 Core Charge Transfer Template Completion
Step 1. DA reviews fund under Insight “Financial Details” tab and identifies core charge that needs to be transferred to another project Step 2. DA reviews Cores’ journal contacts list and contacts the Core’s administrator Step 3. DA completes Core Charge Transfer Request Form and sends to Core’s administrator

27 Core Charge Transfer Request: Over 90 Days Justification

28 New Core Journal Entry Template

29 Resources Research Cores Team webpage on RM Website: Research Cores Policy: Partners Research Cores Website: Natalie Nguyen, M.P.H., Associate Director, Partners Research Core Facilities (phone) Elaine Zive, M.B.A., Manager, Research Core Facilities for BWH & McLean (phone) Yovani Edwards, Financial Analyst, BWH & McLean Research Core Facilities (phone)

30 NIH Updates NIH Policy Statement 2011 Revisions
See Research Intranet site: NIH FY12 Budget The recently approved Health and Human Services (HHS) Appropriations Bill included a small increase of approximately 1% in the NIH budget.  It also included language that reduces the NIH salary cap on extramural grants from Executive Level I, $199,700 in FY11, to Executive Level II, $179,700.  More on this to follow….

31 McLean Research Quarterly Close Meeting FY 11 Research Balance Sheet Analysis November 16, 2011

32 MCL Research Balance Sheet Trends – Summary
The overall Research Receivable decreased by $1,200K (49%) from Sept FY10. The components of the change are as follows: $ (632)K LOC, Billed A/R and Unbilled A/R $ (837)K Grants Receivable $ K Lockbox and Reserve $(1,200)K 32 32 PHS, Research Finance Analytics Last Updated 4/15/2017 Last Updated 4/15/2017

33 MCL Research AR Trends 33 33 PHS, Research Finance Analytics
Last Updated 4/15/2017 Last Updated 4/15/2017

34 MCL Grants Receivable – Cost Transfer Aging
34 Last Updated 4/15/2017

35 MCL Research AR Trends Days A/R, Billed AR Only:
Days A/R, Total Research Receivable (including Grants Receivable, excluding LOC): 35 Last Updated 4/15/2017

36 MCL FY11 Billed AR Rollforward
Total Billed AR: Billed Contracts/Subcontracts Detail: 36 Last Updated 4/15/2017

37 Questions?

38 Contact Raquel Espinosa Phone: 617-855-2868

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