Enclosure 1:
June 14, 2002, memo from Ray/Moore/Shkurti on
Facilities and
Administrative costs associated with sponsored research
Principle: The guiding principle of the new budget process is that the allocation of revenues and costs should be explicitly linked to the generating units. Costs are defined by Federal regulations and F&A recoveies associated with these costs need to go to the unit(sP providing the facilities and administrative services. Annual changes in indirect cost recoveries will be returned to colleges and vice presidential areas. Those involved in and benefiting from the research projects are expected to share both the annual changes in costs and the annual changes in indirect cost recoveries.
It is also imperative that faculty who develop and/or administer large program project or center grans should receive needed staff support through the marginal growth in indirect cost returns that are attributable to these projects.
Process for distributing IDC's across units: It is the responsibility of the PI to include all investigators working on the project on the PA005. The deans, department chairs and center directors have the responsibility to negotiate a fair distribution of both the facilities and administrative components of the indirect cost returns on grants that cut across mulitple colleges, departments or units as indicated on the PA005. Typically these allocations should go to the unit that is responsible for the costs associated with the project. There are, however, other factors that may mitigate the flow of IDCs during the negotiation process. For example, startup costs are required expenses for supporting research, although not allowable costs for F&A negotiations, that logically require a return on investment so that the pool of dollars available for future startup costs will be renewed and available for subsequent hires. In addition, lab renovatin costs are unit expenses that deans, chairs and center directors can rightfully expect to recoup. The process of negotiation is not whithout cost and, therefore, the most cost effective plan should be to distribute IDCs in proportion to the PIs' appointments.
What Gets Negotiated? Indirect cost returns consist of "facilities" and "administrative" components. FOr the current 47.5% IDC rate the full 26 units of administrative and 20.2 units (all except 1.3 units for the library) of the facilities component will be distributed to the dean(s) or center director(s). Thus, the location of the investigator's laboratory shoul ddetermine where the "F" component of IDC resides. If a number of spaces, under the aegis of different units, are being used in the project it will be necessary to partition the facilities costs based on laboratory size and the percen to fhte project carried out in each facility. The facilities statement of the proposal should be used to elucidate the location of the research in those cases where an investigator uses departmental and center laboratory spaces.
Who does the negotiation? The Office of Research strongly believes that the deans, chairs and center directors are the individuals most intimately involved and with the best knowledge-base for establishing the proper distribution of the IDC return. Faculty time should be protected to ensure their productivity, while recognizing that IDCs repreent allocatins that cover real costs to the college and centers. PI's may however, need to negotiate changes in their effort level.
Who will act as the final arbiter in unresolved situations? In those rare cases when deans and/or center dirrectors are unable to come to a mutually agreeable decision on the distribution of f&A associated with a specific program it will be the responsibility of the oFfice of Research to serve as the final arbiter in these cases. The VP for Research (or designee) will meet with the appropriate deans and investigators to determine the appropriate split. For this ervice the OR will charge a fee equal to 5% of the total IDC pool of the F&A that is under negotiation.
Case Studies:
Case 1 - Joint Appointments: A principal investigator holds a joint appointment, split between two colleges. When offers of such positions are made, the unites are required to sign an agreement detailing the resource and personnel arrangements. In the future such negotiations should also require units to agree on teh distribution of indirect cost recoveries as well. The default position is that IDCs will be distributed in the same relative percentages as the joint appointment percentages. Other arrangements are permissible, but should be justified by showing that the facilities or college administrative commitments or costs do not match the split in appointment.
Case 2 - Multidisciplinary Programs Within Colleges: If the investigators on a multidisciplinary grant hold appointments within one college but in different departments and are using administrative support services and research space assigned to that college for the project, then it is the responsibility of the dean to determine how to equitably distribute the marginal changes in indirect cost recoveries across the TIUs within the college.
Case 3 - Multidisciplinary Programs Across Colleges: A sponsored research program includes investigators from different colleges in a multidisciplinary consortium. Each uses administrative support service and research space assigned to their colleges. The default position is that each PI will be assigned an amount of the IDC return equal to their participation in the research program. Other arrangements are negotiable if one college is carrying a heavier burden of the administrative or facilities costs.
Case 4 - Research Centers: A research center, reporting to a central administrative unit, has faculty appointed to TIUs in college X. The research Facilities and thier costs are assigned to the center and the administrative suport is provided by staff memebers paid by the center. In this case, the research center bears the full responsibility of the administrative and facilities costs to carry out the project. As such, the center should receive teh IDC return. However, other distributions to the TIU may be considered if, for instance, the TIU had made significant recent investment in either a startup package or laboratory renovations for one or more of the investigators involved in the project. It would be necessary to negotiate the conditions of the IDC return to assure an equitable return on the TIU's investment.