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Facilities Administrative FA Cost Recovery Report April 22, 2009 Carol Hollingsworth, Director, Grants Contracts Fina

What is F

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Facilities Administrative FA Cost Recovery Report April 22, 2009 Carol Hollingsworth, Director, Grants Contracts Fina

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    1. Facilities & Administrative (F&A) Cost Recovery Report April 22, 2009 Carol Hollingsworth, Director, Grants & Contracts Financial Services & Janet Parker, Associate Vice President, Financial Affairs

    2. What is F&A? OMB Circular A-21 term for what was formerly referred to as indirect cost recovery. Also known as “overhead” Cost recovery mechanism – not a “tax”

    3. What is F&A? Facilities & Administrative (F&A) costs are “Costs incurred for common or joint objectives and, therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.” Not Direct Costs – direct costs are specifically identified to individual research projects, instructional programs or other major functions. Examples: Salaries, fringe benefits, travel related to project, lab supplies, subcontracts, etc.

    4. F&A Cost Basis Universities that receive $10M+ from federal sources must use a modified total direct cost (MTDC) basis for calculating F&A. MTDC includes all project costs except equipment, renovations, subcontract costs in excess of the first $25,000, rent, scholarships, fellowships, tuition. F&A is recovered as the sponsor’s funds are expended (and billed) for direct cost items allowed per the project budget.

    6. F&A Rates F&A Costs are recovered based on F&A Rates Rates are developed based on cost studies. UTSA contracted with Huron Consulting Group to develop our most recent cost study. Significant effort. Proposals are submitted to cognizant federal agency for review, audit, negotiation & approval. Once approved, rates are applied to each grant & contract to determine the amount of indirect costs to be charged/recovered.

    7. F&A Cost Rate Agreement

    8. F&A Cost Rate Agreement

    9. F&A Rate-Actual vs. Negotiated

    10. Net Effective F&A Rate The net effective F&A rate is computed as follows: TOTAL F&A Recovery Revenue divided by Restricted Sponsored Program Expenditures (Net of F&A)

    11. F&A Net Effective Rate

    12. Why is F&A Recovery Important? Supports the cost of conducting research If sponsors don’t pay, someone else must Important new revenue source to UTSA

    13. F&A Revenue Recovery by Source

    14. Sources of F&A FY07 Revenue

    15. Sources of F&A FY08 Revenue

    16. FY08 F&A (Federal) Sources

    19. How is F&A Allocated? In FY07, the VPs for Research, Business Affairs and Academic Affairs entered into a formal Memorandum of Understanding (MOU) to document the allocation of F&A. The MOU is: Flexible - has been amended twice with another change pending. Transparent

    20. Allocations to Generating Units The MOU currently allocates 10% of actual F&A recovery to PI’s, Colleges, Centers and Institutes based on prior year actual earnings. These funds are allocated on a one-time basis Not part of the recipient’s base budget due to year-to-year fluctuations in earnings. Funds are currently treated as discretionary incentive. Provost & VPR are reviewing alternate models to assure strategic usage of the funds.

    21. Debt Service A significant amount of F&A recovery is pledged towards servicing debt: Renovations to West Campus (Margaret Tobin) Lab Facility financed through bond series 2006B will be retired August 15, 2036: FY07 debt service paid $665,350 FY08 debt service paid $667,600 FY09 payment due $666,000

    22. Debt Service Faculty Start-Up Costs Beginning FY04, faculty start-up costs were financed with F&A to service the debt. All debt under this program will be retired August 31, 2012. Estimated remaining payments are: FY09 $1,383,495 FY10 1,251,908 FY11 924,722 FY12 34,795

    23. Building Maintenance, Leases & Capital Improvements Reserve for capital requirements, leases and building maintenance for research related facilities. In FY08, funds were used for previously pledged faculty start-up costs to forego incurring additional debt. Unused balances roll forward to reserves.

    24. VP Administrative Overhead The following VPs receive a base budget allocation to support salaries & related administrative overhead in support of research: Academic Affairs Research Business Affairs

    27. FY 10 Budget Outlook FY10 Budget will be set 2.5% higher than FY09 (1.6% higher than FY08 actual recovery) New allocation will cover a portion of the estimated utility costs for the new Engineering building. Each VP area will receive an increased base budget allocation: VPR $ 95,000 Academic Affairs $100,000 Business Affairs $ 60,000

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