1. Facilities and Administrative Costs Presentation by Grants & Contracts Accounting

2. Facilities and Administrative Cost Rate Today’s session will: –Define facilities and administrative costs –Eliminate the myths relating to F & A recovery –Provide an overview of F & A Cost Rate Calculation Negotiation Recovery Distribution

3. What the PI Knows Facts and Myths about Facilities & Administrative Cost Rate Negotiated organized research F & A is 46 percent 5 percent of F & A returned to the PI Consistently told certain expenses can’t be charged direct to a federal grant Reason: The cost is being reimbursed through the F & A Rate PI is generating the F & A costs, so should be receiving greater return F & A recovery is Profit Grants and Contracts Accounting controls how much F & A is returned to PI

4. FACILITIES AND ADMINISTRATIVE (F & A) COSTS WHAT ARE THEY?

5. Cost of indirect services to support sponsored and non-sponsored programs and are essential for the overall operation of an institution.

6. But Really! What are F & A Costs?

7. They are the costs of: Janitorial and Utility Services Repairs and Renovation Buildings & Grounds Maintenance University Housekeeping Physical Plant/Safety Environmental Safety Facility Planning Central Receiving Public Safety Physical Assets

8. Real Estate Insurance Office of The President General Counsel Office of VP Finance & Administration Purchasing Payroll Internal Audit Human Resources Bursar’s Office Budget Office University-Wide Committees continued

9. Accounts Payable Accounting Services Office of Grants & Contracts Accounting Office of Research and Sponsored Programs Office of Research Development Office of Research Integrity Deans Offices Department Chairs Department Business Officers continued

10. How are These Costs Developed Into an Overall Facilities and Administrative Cost Rate?

11. Expenses Grouped into Cost Pools Depreciation –Building –Equipment –Interest Operation and Maintenance Expenses General Administrative and General Expenses Departmental Administration Expenses Sponsored Projects Administration Library Student Administration and Services

12. Once Cost Pools are Established Step down allocation performed Costs in each pool are allocated to the benefiting functions Order of pool allocations prescribed by OMB Circular A-21

14. Example

16. Next Steps In Rate Process Certified F & A Cost Rate Proposal Submitted to DHHS-DCA Negotiations Are Held Final Rates Are Established –Usually for a Three-year Period F & A Negotiated Rate Agreement Signed by –Director, DHHS-DCA –VP Finance and Administration, MUSC

17. Example Certificate of F&A Costs

18. How Do We Get F & A Recovery F & A Expenses: –Calculated monthly based on project expenditures Actual Recovery Ranges from 0% to 46% –Depending on Terms of the Grant/Contract Actual Recovery in FY00 was $15,863,619; however, actual allocated expenses were $25,048,735

19. What Happens to the F & A Recovery Distributed Based On Predetermined Formula Established by the Provost Current F & A Distribution: –Provost 35% –Infrastructure20% –Dean/college 40% –PI 5%

20. Any Allocation to the Department is Determined by the Dean/College GCA Makes No Decisions on How Much is Returned to the Respective Areas. Merely Performs the Distribution Functions as Directed. continued

21. Rising Issues Which Could Increase F & A Recovery The American Association of Universities (AAU) and The Council on Governmental Relations (COGR) entered discussions with Federal Officials that could significantly - Increase the Administrative 26 Percent Cap - Increase the 8 Percent F & A Rate on Career Development and Training Grants Proposal for 15 Percent VA add-on