2. Lunch & Learn Facilities & Administrative (F&A) Costs Presented by: Roberta McManus

3. Agenda F&A Costs F&A Costs F&A Proposal Process F&A Proposal Process F&A Cost Recovery and Distribution F&A Cost Recovery and Distribution Cost Accounting Standards (CAS) Exemption Cost Accounting Standards (CAS) Exemption 2

4. OMB Circular A-21 …compliance guide

5. What are F&A Costs? “those that are incurred for common or joint objectives [of the University] and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity or another institutional activity” 4

6. 5 OMB Circular A-21 F&A Rate Components F&A Rate ComponentExamples General Administrative CostsCentral administrative offices (Payroll, accounting, purchasing) Department AdministrationAcademic Departments/Colleges Sponsored AdministrationSRAS, SRS, OVPR, LAR Operation & MaintenanceRepair & maintenance, utilities, grounds, police Building and Equipment DepreciationStandardized asset classifications and lives Interest Costs on Building & EquipmentThird Party Interest Costs LibrariesCentral/Campus and College Libraries * NOTE: Admin “capped” @ 26% Administrative * Facilities

7. 6 F&A Rate Formula & Concept Allocated Organized Research F&A Costs Organized Research Direct Costs (“BASE”) Concept: As “base” increases rate will decrease (if no increase in F&A costs) = Research Rate Proposed to Federal Auditors

8. Why Should We Care? FSU incurs “real” costs to support performance of work on sponsored agreements FSU incurs “real” costs to support performance of work on sponsored agreements F&A Rates applied to grants generated $27M (FY2010) in reimbursements F&A Rates applied to grants generated $27M (FY2010) in reimbursements Cost recovery mechanism – not a “tax” on grants Cost recovery mechanism – not a “tax” on grants Costs that sponsors will reimburse based on a calculated rate developed and negotiated, per A-21 Costs that sponsors will reimburse based on a calculated rate developed and negotiated, per A-21 7

9. F&A Proposal Process …it takes a village!

10. FSU F&A Proposal Proposal team Proposal team –Consultants  Goal to educate/train SRAS staff –FSU staff  Helen McCann – Business Analyst  Qiong (June) Wu – Cost Analyst  Judd Enfinger – Controller’s Office  Iris Chung – Controller’s Office  Katie Martindale – Budget Office  Lori Pinkerton – Facilities  Dan Dayhoff - Facilities Specialized software is used to prepare the proposal Specialized software is used to prepare the proposal –Comprehensive Rate Information System (CRIS)  Data analysis  Generates proposal –WebSpace  Space Survey 9

11. F&A Proposal Process Base year FY 2010 Base year FY 2010 Start with audited financial statements Start with audited financial statements Identify/treatment of unallowable & excludable costs Identify/treatment of unallowable & excludable costs Determine direct costs – “BASE” Determine direct costs – “BASE” Determine F&A costs & related pools Determine F&A costs & related pools Conduct Space Survey – very important! Conduct Space Survey – very important! Distribute F&A costs to “Major Functions” Distribute F&A costs to “Major Functions” 10

12. F&A Proposal Process Calculate Rates Calculate Rates Submit Proposal Submit Proposal –Due 12/31/2010 –Extension to 6/30/2011 Negotiate with Cognizant Agency Negotiate with Cognizant Agency –Department of Health and Human Services (DHHS) 11

13. Space Survey Purpose Purpose –Document building room usage –Allocate facilities costs –Provide productivity analysis Space survey tool WebSpace Space survey tool WebSpace –On-line –Integrates with F&A proposal analysis software –Enables management of survey process and results 12

14. F&A Allocation Space Sq Ft FTE & S&W MTDC Building Depreciation Interest Equipment Depreciation Operations & Maintenance Library Admin Organized Research Instr & Dept Research Other Sponsored Activity Other Inst. Activity Facility Pools Space Sq Ft Space Sq Ft Space Sq Ft Space Sq Ft FTE & SW MTDC Allocation Method DENOMINATOR NUMERATOR 13

15. F&A Recovery and Distribution …giving back!

16. F&A Rate Application As previously discussed, a Rate Agreement must be approved by cognizant agency (DHHS) prior to applying rates As previously discussed, a Rate Agreement must be approved by cognizant agency (DHHS) prior to applying rates Multiple Rates are allowed: Multiple Rates are allowed: –On Campus – comprised of both facility and administrative costs –Off Campus – comprised of administrative costs only (26%) –Separate functions – rates for instruction, organized research, and other sponsored activity –Other – separate rate for NHMFL at FSU The actual charge to the sponsored project is calculated by multiplying the F&A rate and the distribution base The actual charge to the sponsored project is calculated by multiplying the F&A rate and the distribution base 15

17. FSU Provisional F&A Rates 16 Effective: July 1, 2006 ActivityLocation Federal Neg RateApplied Rate Non NHMFL Research (RES)ON47.00 ResearchOFF26.00 Instruction (INS)ON54.5047.00 InstructionOFF26.00 Other Sp Activity (OSA)ON32.50 Other Sp ActivityOFF22.00 NHMFL - NON NIH RES/INS/OSAON67.0055.00 RES/INS/OSAOFF24.50 NHMFL - NIH RES/INS/OSAON67.00

18. FSU F&A Recovery 17

19. F&A Bases Federal base Federal base –Modified total Direct Costs (MTDC)  Excludes: –Equipment –Rent –Tuition –Scholarships/Fellowships Non Federal base Non Federal base –Total Direct  Excludes –Tuition 18

20. Example Calculation TDCMTDC Salaries$10,000$10,000 Benefits2,0002,000 Materials and Supplies2,0002,000 Tuition1,0001,000 Equipment5,0005,000 Total Direct Costs $20,000$20,000 F&A Base$19,000$14,000 F&A Rate5%47% F&A Amount9506,580 Total Project Cost$20,950$26,580 19

21. F&A Costs Recovered Accounting for F&A in OMNI Accounting for F&A in OMNI –F&A process run nightly –Posts F&A to projects PI can obtain F&A waiver to reduce F&A rate from OVPR PI can obtain F&A waiver to reduce F&A rate from OVPR Accumulates “revenue” into the Sponsored Research Trust Fund (SRTF) Accumulates “revenue” into the Sponsored Research Trust Fund (SRTF) Policy to administer SRTF Policy to administer SRTF –http://www.research.fsu.edu/contractsgrants/srad.html http://www.research.fsu.edu/contractsgrants/srad.html Distribution priority Distribution priority –Operating costs for research administration –SRAD fund distribution  Quarterly (NHMFL and Rent differentials)  Annual –1/3 to OVPR –1/6 to CRC –1/8 to Deans –3/8 to Departments 20

22. SRAD Funds Must support other research or sponsored training programs Must support other research or sponsored training programs Appropriate uses (examples) Appropriate uses (examples) –Graduate research assistant salaries –Equipment for research lab –Travel costs to conference to present paper –Animal use care per diem Inappropriate uses (examples) Inappropriate uses (examples) –Graduate teaching assistant salaries –Classroom supplies –Tuition costs for faculty’s advanced study degree –Food for holiday party 21

23. OMB Circular A-21 Cost Accounting Standards …charging F&A as direct costs?

24. A-21 Cost Accounting Standard (CAS) CAS 502- Consistency in allocating costs incurred for same purpose All costs incurred for same purpose, in like circumstances, are either direct costs only or indirect costs only. 23

25. CAS Exemption In exceptional circumstances it may be appropriate to charge F&A costs directly to a sponsored project In exceptional circumstances it may be appropriate to charge F&A costs directly to a sponsored project –If the nature of a sponsored project requires an extensive amount of administrative and/or clerical support or goods/services significantly greater than the routine level provided by an academic department, then the effort is deemed an exceptional circumstance and such costs can be accounted for as direct CAS exemption must be approved in advance of charges normally classified as F&A being charged directly to a project CAS exemption must be approved in advance of charges normally classified as F&A being charged directly to a project –Complete CAS form –http://www.research.fsu.edu/contractsgrants/forms.html http://www.research.fsu.edu/contractsgrants/forms.html –Submit to Director, Sponsored Research Services 24

26. Coming Soon…. Lunch & Learn series Lunch & Learn series –Proposals to Receive a Subcontract – May 4 –Cost Sharing – May 18 Year end activities – calendar on Controller’s website soon! Year end activities – calendar on Controller’s website soon! 25