Facilities & Administrative Costs and Sponsored Programsat Chico State

March 27, 2012

Sponsored ProgramsSupporting the Scholarship of

Discovery

Sponsored ProgramsSupporting Professional Development

The Enterprise of Sponsored Research

$650,000,000 in the CSU system in 2009-10

Supports research projects otherwise unpaid for by general fund

Allows faculty to build professional development dossier, enrich teaching

Engages students in real-world, hands-on learning

Provides resources to campus

Supporting Sponsored Projects

Prior to WWII, federal government only provided funding for the direct costs of University research

Since the war, federal agencies recognize the benefit received from university research warrants supporting the F&A (indirect) on research costs

Federal regulations prescribe the process for establishing the F & A rate for each university

Direct vs. F&A Costs

Direct costs are readily assignable to a specific project or activity.

F&A costs are incurred for common or joint objectives, e.g., shared services.

Examples of direct costs

Salaries and fringe benefitsTravelOperating expenses

◦ Materials and supplies◦ Expendable equipment (under $5000)◦ Postage/shipping◦ Printing

Equipment (over $5000)SubcontractsStudent support: stipends or tuition

Examples of F & A costs

F = Facilities Costs Depreciation on buildings & equipment Interest on debt Repairs & maintenance Utilities Custodial costs Library costs

Examples of F & A costs

A= Administration Institution-wide administration

Business & FinanceHRPresidentProvost and Deans

Departmental administrationChairs

Sponsored projects administrationRESPFoundation Administration

Who determines the federal F & A rate?

Federal regulations prescribe calculationsUniversity and Foundation work together to

prepare rate proposal to federal Department of Health/Human Services every 4 years to 5 years

Based on audited financial statements and supporting documentation

DHHS reviews proposal and negotiates rates

How does DHHS calculate the rate?

F & A Rate =

Facilities + Administrative Costs ÷ Modified Total Direct Costs (MTDC)

What is MTDC?

Total direct costs (TDC) less: - Equipment at $5000/item and over- Amount of subcontracts over $25,000- Student support (i.e., stipends,

scholarships, tuition remission)- Capital improvements- Off-campus rent/utilities

What was Chico’s proposal?

Total F & A Costs = $70 million◦CSU, Chico = $66.2 million◦Research Foundation = $3.8 million

Total MTDC = $127 million◦CSU, Chico = $104 million◦Research Foundation = $23 million

Chico’s Rate Calculation

F & A = $70 Million = 55% MTDC $127 Million

Eventually negotiated with DHHS 44% on campus 23% off campus

What are the current Chico State rates?

Federal on-campus projects – 44% MTDC*

Federal off-campus projects – 23% MTDCState/local government/NPOs – 30%

MTDCAgency published rates – capped Not allowed by sponsor

*MTDC = Modified Total Direct Costs

In general, proposals to for-profit entities should utilize a rate

of 44% MTDC.

Sample Budget - MTDC

PERSONNELSalaries and wages

Dr. ABC @ 20% RT AY $13,000 $13,693 $26,693

Dr. XYZ - 200 hrs add'tl. employment @ $42.64/$44.87/$47.26/hr $8,528 $8,974 $17,502

Undergrads - 2 for 10 hrs/weekx32 AY wks @ $8/hr $5,120 $5,120 $10,240Total S&W $26,648 $27,787 $54,435

Fringe benefitsDr. ABC - AY @ 38% $4,940 $5,203 $10,143Dr. XYZ AC @ 18% $1,612 $1,697 $3,309Undergrads - AY @ 7% $358 $358 $717

Total FB $6,911 $7,259 $14,169TravelConference travel for 3 each year $2,400 $2,400 $4,800

Total travel $2,400 $2,400 $4,800Equipment $5000 and over Photo micronometer $10,000 $0 $10,000

Total equipment $10,000 $0 $10,000Operating expensesMaterials and supplies $2,500 $1,500 $4,000Lab consumables $800 $1,000 $1,800Computer $1,200 $0 $1,200

Total OE $4,500 $2,500 $7,000ContractualLab Analysis, Inc. $25,000 $35,000 $60,000

Total contractual $25,000 $35,000 $60,000Participant support10 students @ $1000 each $10,000 $10,000 $20,000

Total PS $10,000 $10,000 $20,000

Total direct costs $85,459 $84,946 $170,404Facilities and administrative costs @ 44% MTDC $28,802 $17,576 $46,378

TOTAL PROJECT COSTS $114,261 $102,522 $216,782

Direct costs applicable to the project on which F&A is calculatedDirect costs applicable to the project on which F&A is NOT calculated

Requested funds Year 2

Cum Funds

Requested

Requested funds Year 1

How much F&A is collected?

Research Foundation – FY 09/10◦Total grant & contract expenses =

$27.5 M◦Total direct costs = $24.8 M◦ Total F & A recovered = $2.7 M◦ Average “recovery rate” = 10.8%◦Chico is in the lower half of CSU

system for percentage of F & A recovery

CSU Auxiliary Organization Association Data Warehouse – Comparisons FY 09/10CSU Campus

On Campus Rate

Off Campus Rate

BaseDirect

ExpendituresF & A

RecoveredEffective

Rate

San Jose 43.40% 26% MTDC $47,886,442 $7,829,929 16.35%

San Luis Obispo 40% 22% MTDC $23,910,077 $3,762,982 15.74%

San Diego 49.50% 26% MTDC $145,931,765 $22,875,424 15.68%

San Marcos 48% 28% MTDC $6,895,092 $1,040,613 15.09%

Long Beach 44.50% 26% MTDC $30,239,804 $4,539,794 15.01%

Northridge 45% 26% MTDC $16,940,049 $2,442,672 14.42%

Sonoma 48% 22.70% S & W $10,739,422 $1,456,606 13.56%

San Francisco 53.50% 26% MTDC $48,955,137 $6,397,198 13.07%

Monterey Bay 44% 26% MTDC $10,246,155 $1,332,380 13.00%

Los Angeles 45% 26% MTDC $22,855,281 $2,961,456 12.96%

Sacramento 38% 22% MTDC $47,130,403 $5,488,605 11.65%

San Bernardino 43% 15% MTDC $25,153,064 $2,757,239 10.96%

Chico 38% 18% MTDC $24,800,069 $2,676,439 10.79%

Humboldt 40% 18% MTDC $13,979,379 $1,404,920 10.05%

Pomona 42% 26% MTDC $13,520,263 $1,292,996 9.56%

Fullerton 35.10% 14.80% MTDC $16,408,490 $1,547,748 9.43%

Dominguez Hills 42% 19% MTDC $10,845,342 $906,332 8.36%

Stanislaus 47% 21% S & W $5,905,727 $444,438 7.53%

Fresno 38.40% 17.30% MTDC $27,955,776 $1,990,925 7.12%

Chancellors Office 17.10% 8.40% MTDC $4,693,619 $129,478 2.76%

How is F & A Spent?Research Foundation General Fund

Operations25/35 Main Debt Service & O/M Incentive Awards to Units & PIsCapacity Awards to Units IRG Foundation Scholars GrantsOutstanding Professor/Scholar AwardsEmergency Equipment FundPresident’s Discretionary FundReimbursement to Campus for Facilities Use*

*Effective 7/1/12

The Research Foundation: Auxiliary with Fiduciary Responsibility

Foundation Administration OfficeHuman resourcesRisk managementProperty managementEnterprise management

Office of Research and Sponsored ProgramsInternal Research GrantsTraining & faculty professional developmentPre-award support to Principal InvestigatorsContract review and negotiationPost-award management of grants/contractsPost-award audits & close outs

Foundation’s cost of doing business ~17.9 %

Cost of Business vs. F & AFY 10/11

G & C direct expenditures = $24.8MG & C w F& A < 17.9% = $19.6M Only 21% of G & C expenditures

recovered the Foundation’s cost of business

Unrecovered F& A @ 17.9% = $2.1 M

Resources Provided by Foundation 14 Years of Support to the Campus

Summer Scholars $ 644,664 New Faculty Support $ 384,000 Unit Incentive $ 2,593,813 Unit Capacity Building $ 500,000 PI Incentive $ 918,574 Faculty Professional Development $ 277,209

Replace CSU Research & Creative Activity $ 61,829 Research Mentor Program $ 15,619 Infrastructure $ 75,604 Total $ 5,471,312

F&A Recovery at Chico State

Opportunity = 44%

Reality = 10.8%

Minimum Goal = 18% campus average

What’s Next? As state funding for the campus

continues to decline, funds from sponsored research projects is more important than ever.

RESP will work in partnership with faculty and staff to help sponsors understand the importance of F & A recovery.

Questions? Comments?

Handouts available at: http://www.csuchico.edu/resp/formspoltravel/policies/facadm.shtml