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Indirect  Rate  Methodology  Change  

Rate  Methodology  Change    Steering  Commi7ee  

November  2012  

About  the  Change    •  The  method  by  which  NCAR,  

UCAR,  and  UCP  annual  indirect  rates  are  determined  will  be  changed  effec9ve  for  FY  2014.  

•  This  change  comes  as  a  result  of  an  NSF  direcEve  shiFing  our  rate  methodology  from  a  fixed  rate  with  carry  forward  to  a  provisional  and  final  rate.  

 •  NSF  is  moving  toward  

consistency  in  methodology  to  be7er  manage  their  oversight    responsibiliEes  for  all  awards  for  which  they  have  cognizant  responsibiliEes.    

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Background  •  Appeal  process  –  NSF  originally  slated  this  change  for  FY  2012.  

We  successfully  negoEated  to  obtain  a  two-­‐year  delay  making  change  effecEve  FY  2014  –  Provides  us  with  addiEonal  Eme  to  prepare  the  organizaEon  for    the  change    

•  OMB  guidance  does  not  provide  step-­‐by-­‐step  implementaEon/management  process  –  Conferred  with  peer  organizaEons  to  be7er  understand  how  they  

manage  under  a  provisional/final  methodology  –  Received  high-­‐level  guidance  from  NSF  

What  This  Means  FROM  

Fixed  w/Carry  Forward    

•  Fixed  indirect  rates  are  determined  based  on  budgeted  revenues  and  budgeted  expenses  

•  Fixed  indirect  rates  are  applied  throughout  the  fiscal  year  

•  Variances  based  on  actual  revenues  and  expenses  are  carried  forward  (2  years)  in  order  to  adjust  future  indirect  rate  calculaEons  (up  or  down)      

TO  Final  and  Provisional  Rate  

•  Provisional  indirect  rates  are  determined  based  on  budgeted  revenues  and  budgeted  expenses  

•  Provisional  indirect  rates  are  applied  during  the  fiscal  year  

•  Final  rates  are  calculated  based  on  audited  actual  revenues  and  expenses  

•  Final  rates  are  applied  to  award  expenses,  thereby  recalculaEng  indirect  charges  

•  All  indirect  cost  pools  will  have  zero  variances  at  the  end  of  the  fiscal  year  

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Known  Impacts  of  the  Change  •  Assump9ons  governing  award  management  and  award  close  out    

AND  indirect  budge9ng  and  monitoring  processes  will  change  to  address  the  risk  of  not  having  fixed  indirect  cost  rates  

 •  May  impact  how  NCAR  monitors  and  sets  uncommi7ed  carryover  

thresholds  for  NSF  base  funds  to  stay  within  8%  threshold    •  UCAR  Contracts  Office  staff  will  need  to  review  and  negoEate  

changes  to  impacted  awards,  esEmated  to  take  6-­‐12  months  and  1.5  FTE  

 •  System  and  administraEve  changes  will  be  required,  esEmated  at  

over  2000  hours  effort  

Managing  the  Change  Steering    

CommiLee    

Katy  Schmoll  (ExecuEve  Sponsor)  Rena  Brasher-­‐Alleva  Rachael  Drummond  Hanne  Mauriello  Melissa  Miller  Gina  Taberski  

Shawn  Winkelman  

Project  Team  (Milestone  Managers)  

JusEn  Young    (Project  Manager)  Beverly  Broach  Caron  Chambers  Karla  Edwards  Dee  Huddle  

Anita  Monk-­‐Ryan  Kelly  Smith  

Stakeholder  Advisory  and  Focus  Groups  

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Project  Management  Goals  •  Encourage  parEcipatory  approach  with  all  stakeholders  by  

establishing  two-­‐way  communicaEon  channels:  •  Advisory  and  focus  groups  •  Workshops  and  informaEon  sessions  •  Mailing  list  (Q&A)  

•  Manage  an  effecEve  transiEon  and  minimize  impacts  by:    •  PI/Administrator  assessment  of  programmaEc  impacts  •  AdapEng  administraEve  processes  and  procedures    •  Developing  new  tools  and  reports  (leveraging  FinTools)  •  Providing  training  and  ongoing  support  •  Developing  new  indirect  cost  rate  development  guidance  for  FY2014  and  beyond  

•  Where  feasible,  acceleraEng  effort  on  direct  awards  due  to  expire  in  FY13  or  early  FY14  

Phased  Approach  

Phase I Preparing for

change

 Phase II

Organizational Readiness

Phase III Implementation

 Phase IV Review & Update

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Project  Phases  -­‐  Overview  Phase  I  (Nov  2012  –  Jan  2013)  –  Preparing  for  Change  

§  Project  launched  §  Steering  Commi7ee  and  Project  Team  established  §  Web  resources  developed  §  Stakeholder  Advisory  Group  and  Focus  Groups  to  be  established  §  InformaEon  sessions  and  workshops  §  Assessment  and  feedback  on  programmaEc  impacts  §  IdenEficaEon  of  awards  scheduled  for  close  out  during  FY2013  and  early  FY2014    §  SpecificaEons  developed  for  new/modified  management  tools  and  reports  §  Issue  guidance  on  FY2014  indirect  budget  development  

 

Phase  II    (Feb  2013  –  Aug  2013)  –  Organiza9onal  Readiness  §  Guidance  issued  on  direct  and  indirect  budget  development  and  management  §  New  processes  and  procedures  developed  and  implemented  §  New/modified  management  tools  and  reports  tested  and  implemented  §  AccounEng  system  development  and  tesEng  to  implement  the  new  methodology  §  InformaEon  sessions  and  workshops    

   

Project  Phases  -­‐  Overview  Phase  III  (Sep  2013  –  TBD)  –  Implementa9on  

§  Roll  out  of  accounEng  system  changes  §  Ongoing  budget  monitoring  §  Ongoing  administraEve  support        

Phase  IV  (Post  FY  2014  Implementa9on)    §  Review  &  Update    

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AcEon  Plan  for  Stakeholders  

•  PIs  and  Administrators  – ParEcipate  in  workshops  and  informaEon  sessions  – Sign  up  for  mailing  list  – Visit  web  site    

Next  Steps  

•  Launching  project  website  and  mailing  list  (Nov.  14)  –  Project  Website:  h7ps://www2.fin.ucar.edu/irmc  –  Subscribe  to  mailing  list  at:    h7p://mailman.ucar.edu/mailman/lisEnfo/indirect_rate  

•  Scheduling  working  sessions  with  administrators  and  PIs  (Dec.  2012)    

•  Issuing  guidance  for  FY  2014  indirect  cost  rate  development  

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QuesEons