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Transcript of © Huron Consulting Services LLC. All rights reserved. © Huron Consulting Group Inc. All rights...
© Huron Consulting Services LLC. All rights reserved.
© Huron Consulting Group Inc. All rights reserved. Neither Huron Consulting Group Inc. nor any of its affiliates is a CPA firm.
East Carolina UniversityApril 20, 2010
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Agenda
1. Introduction
2. Background for Preparing a F&A Cost Rate Proposal
3. Overview of the F&A Cost Rate Proposal Process
4. Space Inventory
5. The F&A Cost Rate Proposal
6. Components of the F&A Cost Rate
7. Questions and Answers
For additional information about the ECU F&A proposal process – Please contact Kathleen Hall, Office of Grants & Contracts, [email protected]
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Current Status
• ECU needs to submit its F&A cost rate to be submitted to the Division of Cost Allocation, Department of Health and Human Services by December 31, 2010.
• Current negotiated rates:– Organized Research 43.5%– Organized Research – Off Campus 26.0%– Vicinity 27.7%– Instruction 48.0%– Other Sponsored Activities: 43.5%
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Rate Goals/Objectives
• What’s your rate and where does it need to be?
• What is the rate impact?
• What’s your effective recovery rate?
• Will current costs support your current rate?
• DCA rate thresholds (regional)
• How many years?
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Universities are Complex
• Large very complex billion dollar organizations– Highly regulated– Highly competitive– Diverse priorities
• Different types of businesses– Retail Operations– Landlords– Basic Research– Education– Health Care– Welfare agency (financial aid)– Banking – Professional and Amateur sports - not for profit
• Sophisticated systems are needed to manage the business
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General Support Partners
• The Players– Provost/Dean– VP for Finance– VP for Research– Director of Sponsored Programs– Budget Committee– Director of Facilities/Facilities Planning– Director of IT– Department Administrators
• Huron Consulting Group– Space survey– Final space review– Calculate and Submit F&A cost rate proposal– Provide Negotiation Assistance – Periodic analysis during proposal preparation– Additional resources
• Senior Management– Top level support throughout the process
is best practice– Proposal is challenging and time-
consuming—should be an institution-wide priority
– Requires participation and input from all levels of the organization
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Essential Data Elements for FY2010*
• Financial– All financial activity by fund, org/dept, program, account, amount– Additional information – grant title, agency, F&A Rate, on/off campus designation– Financial statement classification
• Payroll– Entire payroll activity by person, title, employee class, fund, org/dept, program, account,
amount– FTE (if available)
• Fixed Asset– Building/Infrastructure – bldg number/name, total cost, annual deprecation amount, fund,
org/dept, sponsor– Equipment – asset tag, annual depreciation, fund, org/dept, room, sponsor
• Space– Physical data – bldg number/name, dept number/name, room type code, room type,
assignable square feet, floor plans
*sample list of requested data elements7
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Negotiation Submit
F&A Cost Rate
Calculate
F&A Cost Rate Space Inventory
April/May June - December December 31, 2010 TBD ~ 6-9 months
• Space Inventory
–Conduct interviews of personnel in research-intensive areas
–Document and record results of space usage for research rooms
–Obtain results of space survey on remaining rooms
• Calculate and submit the F&A rate proposal
–Gather data required; incorporate into cost model
–Prepare draft F&A rate proposal
–Review draft proposal with ECU management
–Finalize and submit proposal
Overview of the F&A Cost Rate Proposal Process
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Negotiation Submit
F&A Cost Rate
Calculate
F&A Cost Rate Space Inventory
April/May June - December December 31, 2010 TBD ~ 6-9 months
• Provide Negotiation and Audit Support
–Prepare negotiation strategy
–Prepare for DCA site visit, if necessary
–Support the negotiation of F&A rates
Overview of the F&A Cost Rate Proposal Process
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What is the purpose of the study?
• The space survey is used to help develop ECU’s facilities and administrative (F&A) cost rate proposal.
• This rate is negotiated with the federal government and allows ECU to recover the costs associated with supporting the research mission.
• The space survey classifies rooms based on the activities performed in the rooms.
• Space surveys are used to allocate the following F&A costs to research, instruction, and other functions:–Operations and Maintenance (utilities, maintenance, etc.)–Building Depreciation–Interest–Equipment Depreciation
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“Let’s see now, what can I do to get this rate to what I think it should be.”
The F&A Cost Rate
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FACILITIES & ADMINISTRATIVE COST CALCULATION – OVERVIEW
Space
Space
Space
MTC
Cross Allocations
Building andEquipment
Depreciation
Building andEquipment
Depreciation
InterestInterest
Operations andMaintenance
Operations andMaintenance
GeneralAdministration
GeneralAdministration
DepartmentAdministrationDepartment
Administration
Sponsored ProjectsAdministration
Sponsored ProjectsAdministration
Library1Library1
Student Services2Student Services2
F&A Cost Pools
OtherSponsoredActivities
OtherSponsoredActivities
Instruction andDepartmental
Research
Instruction andDepartmental
Research
OrganizedResearch
OrganizedResearch
OtherInstitutional
Activities
OtherInstitutional
Activities
F&A Costs Allocated To
MTDCOther
SponsoredActivities
MTDCOther
SponsoredActivities
MTDCInstruction andDepartmental
Research
MTDCInstruction andDepartmental
Research
MTDCOrganizedResearch
MTDCOrganizedResearch
Distribution Base
%%
%%
%%
F&A Cost Rates
Allocation Bases
Space
Space
Space
MTC
MTDC
MTDC
Pop/FTE
Instr
=
=
=
1 Population including students/FTE of employees
2 Generally allocated to the Instruction
function
1 Population including students/FTE of employees
2 Generally allocated to the Instruction
function
/
/
/
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• Facilities costs: Relate to the space in which the awards take place.– Cost to Construct Building– Cost to operate building (ex- heat,
power, custodial, repair, etc.)– Interest expense– Library– Equipment– Campus Infrastructure
• Administrative costs: Include the expenses associated with the overall administration on campus as well as the costs of administering sponsored projects.– President’s Office– Legal– Human Resources– Sponsored Programs– Pre-award and Post-award Staff– Department Administrators– Financial Officers– Clerical and Support Staff– Data Management Professionals– Faculty AllowanceCapped at 26% of MTDC (G.8)
Facilities and Administrative Costs
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• Facilities cost pools: – Building Depreciation– Interest Expense– Equipment Depreciation– Operations & Maintenance– Library
• Administrative cost pools:– General Administration– Departmental Administration– Sponsored Projects Administration– Student Services Administration
Facilities and Administrative Costs