Lunch & LearnLunch & LearnFacilities & Facilities &

Administrative (F&A) Administrative (F&A) CostsCosts

Presented by: Roberta Presented by: Roberta McManusMcManus

AgendaAgenda

F&A CostsF&A Costs

F&A Proposal ProcessF&A Proposal Process

F&A Cost Recovery and DistributionF&A Cost Recovery and Distribution

Cost Accounting Standards (CAS) Cost Accounting Standards (CAS) ExemptionExemption

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OMB Circular A-21OMB Circular A-21

…compliance guide…compliance guide

What are F&A Costs?What are F&A Costs?

““those that are incurred for common those that are incurred for common or joint objectives [of the University] or joint objectives [of the University] and, therefore, cannot be identified and, therefore, cannot be identified

readily and specifically with a readily and specifically with a particular sponsored project, an particular sponsored project, an instructional activity or another instructional activity or another

institutional activity”institutional activity”

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OMB Circular A-21OMB Circular A-21F&A Rate ComponentsF&A Rate Components

F&A Rate Component ExamplesGeneral Administrative Costs Central administrative offices

(Payroll, accounting, purchasing)

Department Administration Academic Departments/Colleges

Sponsored Administration SRAS, SRS, OVPR, LAR

Operation & Maintenance Repair & maintenance, utilities, grounds, police

Building and Equipment Depreciation Standardized asset classifications and lives

Interest Costs on Building & Equipment Third Party Interest Costs

Libraries Central/Campus and College Libraries

* NOTE: Admin “capped” @ 26%

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*F

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F&A Rate Formula & F&A Rate Formula & Concept Concept

Allocated Organized Research Allocated Organized Research F&A CostsF&A Costs

Organized Research Direct Organized Research Direct Costs (“BASE”)Costs (“BASE”)

Concept: As “base” increases Concept: As “base” increases rate will decrease (if no rate will decrease (if no increase in F&A costs)increase in F&A costs)

=Research RateProposed to FederalAuditors

Why Should We Care?Why Should We Care?

FSU incurs “real” costs to support FSU incurs “real” costs to support performance of work on sponsored performance of work on sponsored agreementsagreements

F&A Rates applied to grants generated F&A Rates applied to grants generated $27M (FY2010) in reimbursements$27M (FY2010) in reimbursements

Cost recovery mechanism – not a “tax” Cost recovery mechanism – not a “tax” on grantson grants

Costs that sponsors will reimburse based Costs that sponsors will reimburse based on a calculated rate developed and on a calculated rate developed and negotiated, per A-21negotiated, per A-21

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F&A Proposal ProcessF&A Proposal Process

…it takes a village!…it takes a village!

FSU F&A ProposalFSU F&A Proposal Proposal teamProposal team

– ConsultantsConsultants Goal to educate/train SRAS staffGoal to educate/train SRAS staff

– FSU staffFSU staff Helen McCann – Business AnalystHelen McCann – Business Analyst Qiong (June) Wu – Cost AnalystQiong (June) Wu – Cost Analyst Judd Enfinger – Controller’s OfficeJudd Enfinger – Controller’s Office Iris Chung – Controller’s OfficeIris Chung – Controller’s Office Katie Martindale – Budget OfficeKatie Martindale – Budget Office Lori Pinkerton – FacilitiesLori Pinkerton – Facilities Dan Dayhoff - FacilitiesDan Dayhoff - Facilities

Specialized software is used to prepare the proposalSpecialized software is used to prepare the proposal– Comprehensive Rate Information System (CRIS)Comprehensive Rate Information System (CRIS)

Data analysisData analysis Generates proposalGenerates proposal

– WebSpaceWebSpace Space SurveySpace Survey

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F&A Proposal ProcessF&A Proposal Process

Base year FY 2010Base year FY 2010 Start with audited financial statementsStart with audited financial statements Identify/treatment of unallowable & Identify/treatment of unallowable &

excludable costsexcludable costs Determine direct costs – “BASE”Determine direct costs – “BASE” Determine F&A costs & related poolsDetermine 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”

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F&A Proposal ProcessF&A Proposal Process

Calculate RatesCalculate Rates Submit Proposal Submit Proposal

– Due 12/31/2010Due 12/31/2010– Extension to 6/30/2011Extension to 6/30/2011

Negotiate with Cognizant AgencyNegotiate with Cognizant Agency– Department of Health and Human Department of Health and Human

Services (DHHS)Services (DHHS)

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Space SurveySpace Survey

PurposePurpose– Document building room usageDocument building room usage– Allocate facilities costsAllocate facilities costs– Provide productivity analysisProvide productivity analysis

Space survey tool WebSpaceSpace survey tool WebSpace– On-lineOn-line– Integrates with F&A proposal analysis Integrates with F&A proposal analysis

softwaresoftware– Enables management of survey process and Enables management of survey process and

resultsresults

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F&A AllocationF&A Allocation

Building Depreciation

Interest

EquipmentDepreciation

Operations& Maintenance

Library

Admin

OrganizedResearch

Instr & DeptResearch

Other SponsoredActivity

Other Inst.Activity

Faci

lity

Poo

ls

SpaceSq Ft

SpaceSq Ft

SpaceSq Ft

SpaceSq Ft

FTE &SW

MTDC

Allocation Method

DENOMINATOR

NUMERATOR

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F&A Recovery and DistributionF&A Recovery and Distribution

…giving back!…giving back!

F&A Rate ApplicationF&A Rate Application As previously discussed, a Rate Agreement As previously discussed, a Rate Agreement

must be approved by cognizant agency (DHHS) must be approved by cognizant agency (DHHS) prior to applying ratesprior to applying rates

Multiple Rates are allowed:Multiple Rates are allowed:– On Campus – comprised of both facility and On Campus – comprised of both facility and

administrative costsadministrative costs– Off Campus – comprised of administrative costs only Off Campus – comprised of administrative costs only

(26%)(26%)– Separate functions – rates for instruction, organized Separate functions – rates for instruction, organized

research, and other sponsored activityresearch, and other sponsored activity– Other – separate rate for NHMFL at FSUOther – separate rate for NHMFL at FSU

The actual charge to the sponsored project is The actual charge to the sponsored project is calculated by multiplying the F&A rate and the calculated by multiplying the F&A rate and the distribution basedistribution base 1515

FSU Provisional F&A RatesFSU Provisional F&A Rates

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Effective: July 1, 2006 

ActivityLocatio

nFederal Neg

Rate Applied RateNon NHMFL

Research (RES) ON 47.00 47.00

Research OFF 26.00 26.00Instruction (INS) ON 54.50 47.00

Instruction OFF 26.00 26.00Other Sp Activity (OSA) ON 32.50 32.50

Other Sp Activity OFF 22.00 22.00NHMFL - NON NIH

RES/INS/OSA ON 67.00 55.00

RES/INS/OSA OFF 24.50 24.50NHMFL - NIH

RES/INS/OSA ON 67.00 67.00

FSU F&A RecoveryFSU F&A Recovery

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F&A BasesF&A Bases

Federal baseFederal base– Modified total Direct Costs (MTDC)Modified total Direct Costs (MTDC)

Excludes:Excludes:– EquipmentEquipment– RentRent– TuitionTuition– Scholarships/FellowshipsScholarships/Fellowships

Non Federal baseNon Federal base– Total DirectTotal Direct

ExcludesExcludes– TuitionTuition

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Example CalculationExample CalculationTDCTDC MTDCMTDC

SalariesSalaries $10,000$10,000 $10,000$10,000BenefitsBenefits 2,0002,000 2,0002,000Materials and SuppliesMaterials and Supplies 2,0002,000 2,0002,000TuitionTuition 1,0001,000 1,0001,000EquipmentEquipment 5,0005,000 5,0005,000Total Direct CostsTotal Direct Costs $20,000 $20,000 $20,000$20,000F&A BaseF&A Base $19,000$19,000 $14,000$14,000F&A RateF&A Rate 5%5% 47%47%F&A AmountF&A Amount 950950 6,5806,580Total Project CostTotal Project Cost $20,950$20,950 $26,580$26,580

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F&A Costs RecoveredF&A Costs Recovered Accounting for F&A in OMNIAccounting for F&A in OMNI

– F&A process run nightlyF&A process run nightly– Posts F&A to projectsPosts F&A to projects

PI can obtain F&A waiver to reduce F&A rate from PI can obtain F&A waiver to reduce F&A rate from OVPROVPR

Accumulates “revenue” into the Sponsored Research Accumulates “revenue” into the Sponsored Research Trust Fund (SRTF)Trust Fund (SRTF)

Policy to administer SRTFPolicy to administer SRTF– http://www.research.fsu.edu/contractsgrants/srad.html

Distribution priorityDistribution priority– Operating costs for research administrationOperating costs for research administration– SRAD fund distributionSRAD fund distribution

Quarterly (NHMFL and Rent differentials)Quarterly (NHMFL and Rent differentials) AnnualAnnual

– 1/3 to OVPR1/3 to OVPR– 1/6 to CRC1/6 to CRC– 1/8 to Deans1/8 to Deans– 3/8 to Departments3/8 to Departments 2020

SRAD FundsSRAD Funds Must support other research or sponsored Must support other research or sponsored

training programstraining programs Appropriate uses (examples)Appropriate uses (examples)

– Graduate research assistant salariesGraduate research assistant salaries– Equipment for research labEquipment for research lab– Travel costs to conference to present paperTravel costs to conference to present paper– Animal use care per diemAnimal use care per diem

Inappropriate uses (examples)Inappropriate uses (examples)– Graduate teaching assistant salariesGraduate teaching assistant salaries– Classroom suppliesClassroom supplies– Tuition costs for faculty’s advanced study degreeTuition costs for faculty’s advanced study degree– Food for holiday partyFood for holiday party

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OMB Circular A-21OMB Circular A-21Cost Accounting StandardsCost Accounting Standards

…charging F&A as direct costs?…charging F&A as direct costs?

A-21 Cost Accounting Standard A-21 Cost Accounting Standard (CAS)(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.

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CAS ExemptionCAS Exemption

In exceptional circumstances it may be In exceptional circumstances it may be appropriate to charge F&A costs directly to a appropriate to charge F&A costs directly to a sponsored projectsponsored project– If the nature of a sponsored project requires an extensive If the nature of a sponsored project requires an extensive

amount of administrative and/or clerical support or amount of administrative and/or clerical support or goods/services significantly greater than the routine level goods/services significantly greater than the routine level provided by an academic department, then the effort is provided by an academic department, then the effort is deemed an exceptional circumstance and such costs can deemed an exceptional circumstance and such costs can be accounted for as directbe accounted for as direct

CAS exemption must be approved in advance of CAS exemption must be approved in advance of charges normally classified as F&A being charges normally classified as F&A being charged directly to a projectcharged directly to a project– Complete CAS formComplete CAS form– http://www.research.fsu.edu/contractsgrants/forms.html– Submit to Director, Sponsored Research ServicesSubmit to Director, Sponsored Research Services

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Coming Soon….Coming Soon….

Lunch & Learn seriesLunch & Learn series– Proposals to Receive a Subcontract – Proposals to Receive a Subcontract –

May 4May 4– Cost Sharing – May 18Cost Sharing – May 18

Year end activities – calendar on Year end activities – calendar on Controller’s website soon!Controller’s website soon!

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