Cost Recovery

1. Cost Recovery Cindy Buxton Jackie LaMuth http://osuebusiness.ag.ohio-state.edu EMPOWERMENT THROUGH EDUCATION

2. Topics Cost Recovery • Why • Definitions • Guiding Principles • Public – Private Good continuum • What is changing Program Budget Tool • Use • Examples Program Activity Summary • Use • Examples Questions and Answers

3. Other Revenue July 2009 - June 2010 Cost Recovery can be considered any money collected or money saved that does not come from appropriated funds (state, federal, or county). For fiscal year 2010 this accounted for 22% of our Extension budget.

4. Cost Recovery - Why? • Respond to specific requests from exclusive audiences • To avoid undercutting private providers • Assure public funding is used for public work • Expand or improve program elements

5. CR Guiding Principles • Policies & strategies consistent with our mission, vision, values • Costs are reasonably calculated • Flexibility based on specific audiences &/or programs • Consistent practice throughout Extension • Fair distribution of revenues • Administration & colleagues aware Handout

6. Definitions • Cost Recovery • Facilities & Administrative Rates (F&As) – overhead, indirects, administrative fees • State Program Fees • Cost Savings • Sponsor Paid Appointments (Release Time) • Direct Appointments • Cost Share – match, in-kind

7. Cost Recovery uses Cost recovery is intended to recover costs for operating, salaries and overhead costs associated with the programs, grants and contracts that we conduct. Costs occur at multiple levels Educator Unit University State level Extension State Specialists and Prog Area Support

8. Public – Private good Continuum Program & Audience Public Private Good Good What to charge No/Some All direct costs direct costs All Indirect costs Handout

9. Public vs. Private Private Good Restricted Audience Customized materials Materials not for general distribution Requires considerable development time Considerable delivery time Extension subject matter but expertise not readily available Public Good Anyone may attend Part of ongoing program Materials already developed and reusable Reasonable delivery time Topic fits Extension priorities No formal credits

10. Including Grants and Contracts running through the Business Office or the OSU Foundation Sources of Cost Recovery Such as… free space, free or discounted stuff, volunteer time, free speakers 25% returned for OSP Projects, 100% returned for others 60% returned to unit for educators on OSP projects, 100% for all others

11. What is staying the same? • Release Time from OSP Grants still distributed • 60% to Unit 40% to State level administration • F&A’s from OSP Grants still distributed • 25% to Unit 75% to State level administration • Fees generated for PAT still need to be sent in. Now use the Deposit transmittal form. • Membership fees for the Leadership Center are still to be processed. • Still expected to charge for programs. • Still expected to build in overhead on grants. Handout

12. What is changing for 2011? • Units keep F&A’s on Grants or Contracts through the Business Office to be used to cover Unit level costs and Educator costs. • Units keep the user fees collected for programs like CARTEENS and New Start to cover Unit level costs and Educator costs. The costs for these programs that occur at the state level will be absorbed by others sources of funding. • Forms removed – Project Transmittal, State Program Fee Transmittal • One form for all deposits – Deposit Transmittal Form • Program Budget Tooldeveloped to assess costs and revenue locally • Program Activity Summarydue annually from the County Director

13. Focus at Program Level Annually the Program Activity Summary is due from each unit. • Tracks totals for programs • Tracks multi-unit activities • Program area summary • Program frequency and number of attendees • Summary of costs and revenue • Where it falls on the public/private good continuum However, many units don’t currently have the capability or process in place to easily capture this information. That’s where the Program Budget Tool comes in . This tool is good for: Actual costs/revenue analysis Pre-Planning Providing detail for the yearly Activity Summary Capturing hidden costs/revenue

14. Handout

15. Program Budget Tool Ex. Estimated costs for Educator, PA, Support Staff or CED time Ex. Room fees, Publications, Printing, Postage, Travel, State Specialist Fees, Administrative fees • Optional tool • Intended for use by Extension Educators or Program Assistants • County Directors can make it required for their units. Ex. Volunteer time, Free Space, Discounted supplies Ex. Registration Fees, Sponsorships, Donations

16. Program Budget Tool Handout Example 1: Cloverbud Camp 1,761 6,510 8,360 9,957 Program Total: $10,046 Cash Total: $6,599

17. Program Budget Tool Handout Example 2 4-H Camp 28,212 5,598 22,350 18,414 Program Total: $6,954 Cash Total: ($5,862)

18. Program Budget Tool Handout Example 3: Agronomy Day 5,488 3,006 9,275 1, 417 Program Total: $ 2,198 Cash Total: $ 3,787

19. Program Budget Tool Handout Example 4: Counselors’ Camp 20,652 4,925 7,625 333.60 Program Total: ($17,618) Cash Total: ($13,027)

20. Reducing your costs • Use other people’s materials • Spend a few minutes searching for existing materials rather than starting from new • Don’t allow open choice on one-time presentations – offer topics already prepared • Be focused at meetings • Have agendas – set ending times, be on time • Needed outcomes, Make assignments, Follow up w/emails • Limit the number of meetings with travel & travel time • Do what you do best – find others to do the rest

21. Program Budget Tool Summary • Use the tool on the computer, there are built in help features such as: • Average Salaries by job title • Auto calculations • Average volunteer costs • Help page included in document • Use for one program at a time or planning for a total year’s worth of programs. • This is meant to be used all year long. Don’t wait until the report is due to start trying to collect the data needed.

22. Focus at program Level Annually the Program Activity Summary is due from each unit. • The report will be due on October 1st every year • Submitted electronically by the County Director to michel.5@osu.edu • The reporting period will be July 1 - June 30 (Univ. Fiscal Year) • Note: The first report will cover only January 1, 2011-June 30, 2011 The summary will be used for a variety of reasons. • Accountability • Facilitate discussion with RDs and Educators • Help CEDs with budget planning • Allow Program Areas to establish best practices. The Future • The goal is to integrate this type of reporting into OSU Pro. • Eliminate duplicate reporting, simplify the reporting process and provide Directors with a tool for decision making.

23. What to include in the report? • Activity within program • Ex. Conference Presentation to Peers about New Start You should plan to report at the program or Program level.

24. Fair Activities What to include in the report? DO Include Don’t Include

25. What to include in the report? Levels of Involvement – What level are you? DO Include Don’t Include

26. Program Activity Summary Handout

27. Program Activity Summary Includes a place for both Operating and Salaries and Benefits. Number of times the program took place, number of participants attending, Public >>> Private score • Required Tool • Intended for use by County Directors • Capture information from Educators and reports program name, did you share the program with another unit?, Initials of those in your county that coordinated the event, PROGRAM areas the program relates to. Costs less Earned. Most Extension programs will net to a negative number. Handout Includes Revenue and In Kind support

28. Activity Summary Tool - A few insights • Type this into the computer when completing, if you put your mouse over a column heading it will provide some useful information for how to complete. • Report the same or similar programs together • MU? – Are you working with another county, EERA or State unit on this program • Initials? – List the initials of the primary person responsible (educator, PA, etc.) • List one or several program areas • Count all presentations and participants • From the Program Budget Tool report total costs, income earned, and Net • Mark the Public-Private Continuum

29. Recommendations • Keep cost recovery fees in your budgets. • Agree as an office team how your share of the fees collected will be used • The person who generates them • The local office to cover local expenses (support, heat, lights, etc) • Decide as a team how you combine sub-programs into programs • Use Budget tool throughout the year • For Planning • To Prepare Annual Activity Summary • When in doubt, ask!

30. Questions?

31. Resources • Business Office Website: http://osuebusiness.ag.ohio-state.edu • Click ABOUTfor contact information • Jackie LaMuth • Cindy Buxton • Lisa Murphy • Click FORMS for the electronic versions of the forms discussed today • Deposit Transmittal Form • Program Budget Tool • Program Activity Summary • Click LINKSfor a link to the cost recovery policies for Extension