UMass Low ell Core Research Facilities Rate Model Calculations - - PowerPoint PPT Presentation

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UMass Low ell Core Research Facilities

Rate Model Calculations Theresa Hamelin, Director Core Research Facilities Presentation ABRF March 2015

Learning w ith Purpose

UMass Low ell Core Research Facilities

Talk Highlights

• Quick review: Federal Guidance

“Core Facilities”

• UMass Lowell CRF Model & Criteria
• No federally funded “Cores”
• Brief financial compliance basics
• Direct costs
• Indirect costs
• Rate calculations basics
• Two examples of rate formulation
• Indirect rate application and rationale
• Summary

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UMass Low ell Core Research Facilities

: Federal Guidance Core Facility definitions:

• “ The typical core facility is a discrete unit within

an institution and may have dedicated personnel, equipment, and space for operations. In general, core facilities recover their cost, or a portion of their cost, of providing service in the form of user fees… ”(NIH FAQ)

• “…

These centers function as nonprofit businesses, funding operations through fees from users.” (DHHS Audit Findings 1994)

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UMass Low ell Core Research Facilities

UMass Lowell Core Research Facilities Model (distinct from other “campus shared services”)

• Professional directors, managers, staff
• Annual revenue > $50K < $1M
• Multiple instruments/ services servicing several

departments/ schools

• Annual review & budgets approval
• Rates calculations-cost recovery model
• Published rates on website (according to user

group)

• Uniform application of F & A (indirect) costs, by

user group classification, for all CRF

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UMass Low ell Core Research Facilities

CRF Financial Compliance Basics

• Expenses, revenue (including subsidy) identified as a

unique financial account per Core

• Direct costs -Allowable, reasonable, allocable
• Application of F & A (indirect) to direct base
• Rate Calculation: Direct costs + F & A
• Charged on actual use
• Rates adjustments: Min. 2 years
• Over/ under recover apply to “direct” cost base for next year

rates.

• Establish “Reserve and Replacement account” for excess

resulting from non-federal indirect costs

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UMass Low ell CRF

• “Direct costs

are those that can be identified specifically with a particular final cost objective ( labor, m aintenance,

supplies, etc)

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UMass Low ell CRF

Indirect Costs

are those that have been incurred for common or joint objectives and cannot be readily identified with a particular final cost

• bjective (Institution F & A)

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• 1. What does it cost to run your lab? Budget
• Budget= Forecasted Expenses

i.e. (labor, materials & supplies, instrument specific training, maintenance and repair costs)

2 . In what “measurable unit” do you sell your service? Service Units:

• Define “service unit”

May include hours, service, samples, runs, etc”

3 . Direct Cost Base:

• Calculate:

Direct cost base= Budget/ Service unit

Core Research Facilities ?

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• When historical data is unavailable, forecast

labor, ODC’s and use. Provide justification for rate calculation as part of the business plan. Use historical data when available to project future annual costs and use

• Supplies, materials and labor requirements may

vary—consider when establishing bill out rate

• “Exact costs” per instrument is not required—

may “group” instruments within same lab

• Two rate calculations examples are provided:

Guidance see: http: / / grants.nih.gov/ grants/ guide/ notice-files/ NOT- OD-13-053.html

Determ ining Expense per “Service Unit”

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Budget Labor & fringe: $150,000 Non-Labor Expenses (ODC’s) $250,000 Total $ 4 0 0 ,0 0 0 Service Units= 1843 (Possible lab operating hours) “Direct Cost” per “Service Unit” = Lab hour cost $ 4 0 0 ,0 0 0 / 1 8 4 3 = $ 2 1 7 .0 0 cost per hour to

• perate lab

Establishing Rates

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• 1. Direct Costs for lab per operating hour:

$217.00

• 2. Number of

Instruments: 20

• 3. Direct Costs per

$10.85 (SU) instrument

• 4. Service unit is based on operating hours

$217/ 20= $10.85 per instrument service unit Assumption all instruments require equal proportion of labor and ODC’s

Rate Breakdow n 1

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• 1. Direct Costs to run lab per operating hour= $217.00
• 2. Number of Instruments: 20
• 3. Equation:
• Multiply total lab costs per hour by the proportional percentage
• f applicable labor and ODC’s
• Next divide that sum by the number of instruments grouped

within “tier”,

• Result in hourly rate per instrument per hour for all

instruments within the “tier” Tier 1 ( 5 instrum ents) $217.00* 10% = $21.70/ 5= $4.34 per hour, per instrument Tier 2 ( 1 0 instrum ents) $217.00* 40% = $86.80/ 10= $8.68 per hour, per instrument Tier 3 ( 5 instrum ents) $217.00* 50% = $108.50/ 5= $21.60 per hour, per instrument Total “cost recovery” aim is $217.00 per core hour

“Tier” Direct Cost Breakdow n

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Application of I ndirect Rates for Rate Calculation

Note: Are costs billed by CRF or ORA?— When costs are billed directly by a Core to Government for on-site use, the rate should be the same as when billed as a “odc”-service under faculty federally sponsored research billed by ORA.

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Rate Type Cost Basis Basis of rate calculation Rationale

I nternal Cost

Recovery

Direct (base) cost is billed internally. Governm ent Cost Recovery DHHS approved indirect rate Meet fed capped for adm cost recovery Academ ic Full Cost Recovery Actual indirect rate Achieve full cost recovery I ndustry Partners Actual Cost Plus Full cost recovery X2 Under recovery

• ff-set

I ndustry Actual Cost Recovery plus off- set Full cost recovery X3 Under recovery

• ff-set and

replenish equipment “reserve” account

I ndirect Rate Justification

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Rate Calculation Sum m ary

• Base “direct costs” on related allowable costs
• Direct cost base should be the same for all users,

unless federal grant terms are otherwise (separately funds group of researchers)

• If billing direct from CRF

, apply DHHS approved F& A (indirect rate) to establish Government rate

• Document and explain indirect rate and allocation

for non-government users

• Document direct rate calculation formula and

instrument/ service proportional allocation

• Document rate calculation rational
• Be consistent! Say what you are doing and do what

you say

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Resources

a.. CFR PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS b. OMB A-21: Cost Principles for Educational Institutions, section J44 on specialized service facilities b. OMB A-110: Uniform Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations c. OMB-133 Compliance Supplement (Part 3, Compliance Requirements) d. NSF Grant Policy Manual-Notice 122 e. Code of Federal Regulations .215-34 Equipment f. Internal Revenue Code: Sec. 115. Income of States, municipalities, etc. g. Internal Revenue Code 512(b) 9 Private Use h. DCA Best Practices Manual for Reviewing College and University Long-Form Facilities & Administrative Cost Rate Proposals U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES DEC 2006 Website: MEMORANDUM FOR SECRETARIES OF THE MILITARY DEPARTMENTS, THE UNDER SECRETARY OF DEFENSE, 3010 DEFENSE PENTAGON WASHINGTON, DC 20301-301, SUBJECT: Contracted Fundamental Research, dated May 24, 2010 i. Website: Federal Regulations Reference http: / / www.bis.doc.gov/ policiesandregulations/ ear/ index.htm j. Website: http: / / grants.nih.gov/ grants/ policy/ core_facilities_faqs.htm# 3631

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UMass Low ell

ABRF- Thank you for the invitation! UMass Lowell CRF appreciates your support! Visit us: http: / / www.uml.edu/ Research/ CRF