it’s all about space – maximizing the “ f ” in your f&a rate
DESCRIPTION
It’s All About Space – Maximizing the “ F ” in your F&A Rate. Presenters: Steve Cofield: Manager of Cost Analysis, Oregon Health Sciences University Deston Halverson: Director, Huron Consulting Group Josh Rosenberg: Director of Cost Studies, Emory University. AGENDA: - PowerPoint PPT PresentationTRANSCRIPT
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It’s All About Space – Maximizing the “F” in your F&A Rate
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Presenters:• Steve Cofield:– Manager of Cost Analysis, Oregon Health Sciences
University• Deston Halverson:– Director, Huron Consulting Group
• Josh Rosenberg:– Director of Cost Studies, Emory University
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AGENDA:• Role of space in the F&A proposal• University processes for managing space• Options for space surveys• Maximizing the “F”• Be Aware!• Closing
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The Role of Space in the F&A Proposal• The pools in F that are driven by space– Building Depreciation– Equipment Depreciation– Interest– Operations & Maintenance (O&M)
• In other words, around 90% or more of your F!
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The Role of Space in the F&A Proposal• The other pools:– Library (the “other” F pool)• Driven by FTEs, typically a very small F pool
– Administration pools• Driven by MTDC/MTC• 26% cap prevents growth.
The bottom line: Space is where the growth is!
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The University Process• Timelines (proposal v. space)– Your proposal is due Dec. 31, 2014.– The following timeline is recommended (Add
dates):• Educate community (Date)• Meet with departments• Survey• Review of survey by department
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The University Process• Who at the university is involved?– Facilities Management/Campus Services– Cost Studies – Post-Award Office– Individuals in schools/depts. who complete the
survey
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The University Process• Education
– Executive Administration:• What they are saying: We have brand new “research” buildings. • What they are thinking: 100% of the building is research, that will really help
our F&A rate.• What YOU are thinking: I bet the real percentage coded to research is less
than 50%! – Those who fill out the survey
• The importance of accuracy• Who occupies what rooms and how are they funded• Watch out for over AND undercoding.
– Overcoding: The room is 100% research!– Undercoding: Don’t make it a S&W model.
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Space Survey Options• Full space survey (all departments, all room
types)– Provides very useful data to executive
management– Helpful for external reports/surveys– Very thorough but…..– Extremely time consuming and labor intensive
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Space Survey Options• Partial space survey (research intensive
departments, specific room types)– Less time intensive– Allows you to focus on research space only– Incomplete
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Space Survey Options• Salaries and wages model– Feds may ask for this as a baseline.– Undercodes labs and other research space which
is typically costlier (and helps us more in the proposal)
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Maximizing the “F”• Newer buildings– They cost more to build –> more costs in the pool– Take awhile to occupy fully.– The more pure research in there, the better
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Maximizing the “F”• Bigger labs– The bigger the square footage, the costlier the
room is to run….and the bigger the contribution to the pools.
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Maximizing the “F”• Faculty placement– Put your more heavily funded faculty in the larger
labs. Better justification for higher research percentage.
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Maximizing the “F”• Debt Financing– Issue bonds to cover some of the construction
costs.– Goes into the Interest pool. Let indirect cost
recovery pay for your debt financing costs.
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Maximizing the “F”• Tying equipment to a room.– Scientific equipment, annual depreciation expense:
$10,000. • By Room: Equipment in a lab coded 90% to research…..$9,000
depreciation in the pool.• By Building: Building is coded 40% to research….$4,000
depreciation in the pool.• By Department: Dept. is (S&W) 20% research….$2,000
depreciation in the pool.• Bottom line: KNOW WHERE YOUR EQUIPMENT IS (ESPECIALLY
YOUR SCIENTIFIC, EXPENSIVE EQUIPMENT)!
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Maximizing the “F”• Componentization– Components of a building have a shorter useful
life than standard straight line. – Lower useful life = more depreciation expense
each year = bigger Building Depreciation pool.
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Maximizing the “F”• Coding of service center space– Look at functional coding of user accounts
charged. – Allocate based on functional revenues, which
means picking up research square footage.
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Be aware of:• Space to Base Ratios– Examples:• University average: $150/1 ($150 in on-campus S&W
per 1 research square foot)• Economics Dept: $374/1• Physics Dept: $58/1• Govt: Drop Physics to University Average, Keep
Economics the same!!!
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Be aware of:• Variances between relative research space
and relative research dollars• Chemistry Research Space (relative): 54%• Chemistry Research Dollars (relative): 39% • Variance: 15% (borderline)
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Be aware of:• The time lag between proposal and site visit
(how this can hurt you)– Lab was occupied when you did the survey, now
vacant!
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Be aware of:• Chatty Kathy, PhD, Live at the Site Visit: “I am
getting TONS of new funding in”– Why are Feds happy? More dollars in the base
(Lower F&A Rate), no space adjustment.
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Be aware of:• Red Flags for Feds
– The fundamental divide:• University: We want a lower denominator (sponsored dollars) and higher
numerator (indirect costs driven largely by space).• Feds: Your space is too high; we want a higher denominator and lower
numerator.– Departments with space to base ratios favorable to the university– “100% rooms”– Family photos in labs…so there ARE students in here!– The lights are on, nobody is home (vacant labs).– Non-lab room types with high research coding.
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In closing:• Space drives 4 of the 5 F pools• Growth in your F&A rate comes from the F side, and
F is driven largely by space• Maximizing F means finding strategies to grow those
pools and paying close attention to how you code your space
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Questions?
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Contact information:• Steve Cofield– 503-494-1287– [email protected]
• Deston Halverson– 312-912-5406– [email protected]
• Josh Rosenberg– 404-727-1677– [email protected]