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Agenda

Preparing for a F&A Proposal Base Year 2011 NCURA Region VI & VII Conference Presented By: Adrienne Clifton and Ginger Baker, MAXIMUS. Agenda. Overview of F&A Calculation Preparing for a Base Year Negotiations. Overview of F&A. Facilities and Administrative Costs.

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Agenda

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  1. Preparing for a F&A Proposal Base Year2011 NCURA Region VI & VII ConferencePresented By: Adrienne Clifton and Ginger Baker, MAXIMUS

  2. Agenda • Overview of F&A Calculation • Preparing for a Base Year • Negotiations

  3. Overview of F&A

  4. Facilities and Administrative Costs • Costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, instructional activity or any other institutional activity. (OMB Circular A-21, Section B.4)

  5. Facilities & Administrative Costs • Administrative components • General Administration and General Expenses • Departmental Administration • Sponsored Projects Administration • Student Administration and Services • Administrative components are capped at 26% of modified total direct costs (OMB Circular A-21 G.8)

  6. Facilities & Administrative Costs • Facilities components • Building Depreciation • Equipment Depreciation • Interest • Operations and Maintenance • Library

  7. Facilities & Administrative Costs • Order of allocation • Building Depreciation • Equipment Depreciation • Interest • Operations and Maintenance • General Administration

  8. Facilities & Administrative Costs • Order of allocation (continued) • Departmental Administration • Sponsored Projects Administration • Student Administration and Services • Library

  9. Facilities & Administrative Costs • Bases represent an institution’s direct cost activities: • Instruction and Departmental Research • Sponsored instruction and training • Departmental research • Organized Research • Sponsored research • University research • Other Sponsored Activities • Other Institutional Activities

  10. Preparing for a F&A Proposal Base Year

  11. This is my base year, what do I do? • Define your objectives • Review past problems • Identify resources • Plan • Get resources commitment • Start early

  12. Major Problems • Base / Space Relation • Space Survey / Space Inventory • Reclassifications of Financial Statement functions to F&A functions • Rates are decreasing, lower Administrative components also • Time constraints • Compliance with Disclosure Statement (DS-2)

  13. Major Opportunities • Special studies • Interest • New construction since last proposal • Should be occupied • Equipment by room • Quality space survey

  14. Where To Start • Is the F&A Proposal due date realistic? • Resources • Internal resources • Staffing • Financial systems • External • Auditors • Consultants • Goals – Expectations for the rate • Rate increase, maintain rate or minimize staff effort

  15. Define Base • Define the base • Financial Statement reconciliation issues • Financial Statement reclassifications out of Organized Research • Financial Statement reclassifications that are large amounts (i.e. into Operations and Maintenance) • Cost sharing

  16. Need For Special Studies • Library Study • Requires full year of data • Componentization Study • The components of a building have different useful lives and this results in accelerating the recognition of depreciation. • Requires change on Financial Statements for building depreciation.

  17. Interest • Get it in the State Wide Cost Allocation Plan (SWCAP) • Get it by building • Get it by department • Get it by the total amount for interest associated with Campus Wide Improvements

  18. New Construction/Projection • What new research intensive buildings are coming on line? • When will the building be completed? • What departments are moving into that space? What is happening to the space they vacate? • Will this building support new or existing research?

  19. Equipment • Ideally, want to match 90% of equipment to a valid building and room. • Accurate inventory • Well documented • Split funded equipment • Service Center equipment

  20. Space Survey • Best if done in the final months of the base year (spring) or some schools are conducting the survey after the base year ends • Identify source and quality of base inventory • Identify departments to survey • Identify survey tools • Identify resources

  21. Space Survey • Develop Survey Plan • Develop Survey Materials • Train Surveyors • Conduct Survey • Quality Assurance • Review Results

  22. Anticipate Results • Conduct a practice year • Use partial year data to model results • Make adjustments in the accounting system before year end • Review physical plant accounting

  23. Results • The more you can do before year end, the better • No surprises during the rate calculation • Maximize rate calculation • With cleaner data, you can spend more time focusing on data analysis, instead of data clean up

  24. Review • Are there significant percent changes in the individual components of the rate when compared with your last base year? • What is the value of a point? • How many Administrative dollars are required to increase the Administrative component by one point? • How many Facilities dollars are required to increase the facilities rate by one point? • How much Organized Research space is needed to increase the rate?

  25. Review • What departments have large Direct Charge Equivalent (DCE) ratios, why? • Does your system coding facilitate the proper identification of other expenses? • Does the campus have a clearly defined definition for Organized Research? Other Sponsored Activities? OIA? • Do you have a common consistent understanding of University data?

  26. Review • What three things are you most comfortable with? • What three things do you have the most concern about? • Where are there possibilities for an increase in the rate? • If you were the government, where would you look to decrease the rate?

  27. Negotiations • What is the submitted rate? • What is the minimum rate the University will accept? • What rate can the University live with? • What is the ideal rate the University would like? • What is the actual rate of recovery?

  28. Negotiations • How many years should you negotiate for? • Do you have new research intensive buildings coming on line? It is ideal to have a full year of costs in your proposal. • Do you need to change your off-campus definition? • Are you considering an equipment capitalization change?

  29. Post Analysis • What did you do right? • What can you do better next time? • Would a practice year benefit you? • Document, document, document • Fix it before you start the next one!

  30. Questions/Comments • Adrienne Clifton • 773-575-2599 (Mountain Time Zone) • AdrienneClifton@MAXIMUS.com • Ginger Baker • 702-994-2999 (Pacific Time Zone) • VirginiaBaker@MAXIMUS.com

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