1. Indirect Cost Recovery Fund Huron Consulting Final Report Jim Rankin Report to Faculty Senate April 13 2011

2. Project Objectives and Scope To identify recommended revisions to the current formulas, policies, and procedures that might enhance the impact of these important funds to support overall strategic research objectives.

3. Summary Observations Recovered F&A is approximately $7-8M per year UA stakeholders state the indirect cost distribution lacks transparency and clarity. Significant other sources of university funds – above and beyond recovered F&A – also support the research enterprise. Significant opportunities available for F&A funds, including core research facilities, research administration, and research development. 21 recommendations in the report

4. Research Activity Recommendations 1.Research Activity – Invest in strategies aimed at strengthening the research enterprise and capturing increasing amounts of externally- funded research and other sponsored projects 2. Effective Indirect Cost Recovery – Increase effective indirect cost recovery Possibly limit distribution of RIF to generating units only on projects for which the maximal allowable F&A rate is being recovered. – Develop a policy on F&A rates – Effective rate over recent two year period: 11.5%

5. Research Activity Recommendations 5. Supporting Centers and Institutes – Explore a more uniform approach to distributing a share of RIF to productive research centers and institutes on campus 6. Council of Center Directors – We recommend that UA create a “Council of Center Directors.” 11. Guidelines for Voluntary Cost Sharing – Develop guidelines for voluntary cost sharing aimed at minimizing such expenditures with less than optimal effectiveness and return on investment.

6. Research Management Recommendations 4. Unit Expenditure Accountability – Explore development and implementation of enhanced research investment accountability processes for its units. 20. Research Investment Report – Develop, and share with the university community, a “Research Investment Report.” 21. Research Management – Conduct additional examinations related to strategic management of the research enterprise.

7. F&A Investment Recommendations 7. Research Administration – Devote a share of the RIF to bolster and support central research administration services – e.g., RSSP 8. Core Facilities – Devote a share of RIF to supporting central core research facility coordination, management, and support

8. F&A Investment Recommendations 9. Faculty Start-Up – Devote a share of RIF toward faculty start-up 10. Cost Sharing – Devote a share of RIF for cost share funds

9. F&A Investment Recommendations 12. Research Development – Devote a share of RIF to establish an Office of Research Development with defined goals and activities 16. Radiation and Hazardous Waste Disposal – Devote a share of RIF to support radiation and hazardous waste disposal costs 19. Joint Research Opportunity Fund – Devote a share of RIF to a “Joint Research Opportunity Fund” directed by the VPRED, Provost, and VCFA

10. General Fund Recommendations 13. Graduate School – Transition RIF supporting Graduate School to General Funds 14. Academic Affairs – Transition RIF supporting Academic Affairs to General Funds 15. Research Facility Debt Service – Transition RIF supporting current research facility debt service to General Funds

11. General Fund Recommendations 17. General Fund Investment in Research – We recommend that UA no longer explicitly distribute recovered indirect costs to UA’s General Fund – Although General Funds are being used for research- related activities and investments, it lacks transparency 18. Libraries – Continue to support the libraries’ missions using central and unit General Funds – Explore mechanisms by which library-specific research costs can be funded by faculty start-up packages.

12. College/Unit Recommendations 3. Generating Unit Distribution – We recommend that UA transition over time to distributing a common, reduced share of recovered indirect costs to all generating units. – This is being separated into two parts: College of Engineering RIF percentage reduced from 80% to 40% RIF percentage for all units reduced from 40% to 35%

13. Timeline Timeline for implementing recommendations – Immediate (FY12) – we will be considering those items that impact VPRED, Academic Affairs, and General Fund – Intermediate – Core facilities, center and institute support, Research Development, – Longer term/ Phased in – Changes to College and Unit F&A

14. THE FULL REPORT MAY BE FOUND ON THE VPRED WEBSITE AT: HTTP:// VPRED.UARK.EDU