Facilities (F) & Administrative (A) Costs Rate
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1 Facilities (F) & Administrative (A) Costs Rate Board of Regents Research & Innovation Committee October 1, 2015 Office of Research Services Yaa Yin Fong
2 Purpose of F & A Rate Reimburse university for facilities and administrative costs (indirect costs) incurred to support grants and contracts. Based on incurred expenditures during the base year audited financial statement. FY 2016 ( July 1, 2015 June 30, 2016) Base Year. Administrative rate cap at 26%. 2
3 3 F & A Research Rate Formula
4 Last 5 Negotiated Cycles Manoa Research On Campus F & A Rates Administrative component Facilities component Negotiated F&A Rate FY 1996 FY 1998 FY 2003 FY 2007 FY
5 Last 3 Negotiated Cycles Kakaako Research on Campus F & A Rates FY 1998 FY 2003 FY 2007 FY Administrative component Facilities component Negotiated F&A Rate 5
6 62% Rate Increase Falls in the 1 to 3 Points Range 40% 35% Rate Increase Points 36% 30% 25% 26% 20% 15% 18% 16% 10% 5% 4% 0% 0.5 to 1 1 to 2 2 to 3 3 to 4 > 4 6
7 Average Rate Increase by Region 3.00 Average Rate Increase by Region Northeastern Western Mid Atlantic Central ONR 7
8 Planning and Preparing Review prior proposal deliberations Focus on the greatest impact areas to the rate Evaluate OMB UG key changes on utility adjustments cap at 1.3% Develop a communication network to plan for base year New capital improvement projects considerations Rate extension considerations yes/no 8
9 Primary Reasons for Rate Increases FY 2011 Implement F & A software (Maximus CRIS) increase admin (20.6% 24.0%) Updated F & A space survey for UH Manoa research intensive buildings Update and maintain electrical meters by building Claim selected O & M costs by building New C MORE Hale research intensive building 9
10 Not Permitted or Corrections Made by our HHS Region Negotiators Accelerated depreciation for building components useful life not supported by actual experience Equipment depreciation by room for moveable equipment often not found in room per inventory Vacant lab space had no concrete plans for extramural research Space survey adjustment for student use of space 10
11 Greatest Impact Areas 11 11
12 Timeline Next rate proposal is due December 31, 2016 Any major non capital renovation costs must be incurred during July 1, 2015 June 30, Space Survey must be completed by September 30, 2016 Physical inventory of the research equipment must be completed by June 30, 2016 New Building should be occupied within next rate agreement period (July 1, 2017 to June 30, 2021) 12
13 Key Factors Impact UH Rates Must have enough CIP costs incurred in the base year FY 2016 to support an increase? Must follow renewal and replacement plan for existing facilities, which could support accelerated depreciation Must maintain and update space usage plan as usage changes for all campuses if possible UH faculty that conduct research paid from grants would result in higher S & W to allocate or justify research use of space. 13
14 Questions for Extension How are the CIP costs trending for FY 2016 vs. FY 2017? Are there enough new costs in FY 2017 to support an increase? What are new research base projections associated with new construction considerations? Can we justify for the extension? 14
15 Peer Rate Comparison FY 2015 Public or Research Institution Private Cognizance Rate University of Hawaii, all except Kakaako Public HHS SF 41.00% University of Hawaii, Kakaako Public HHS SFSF 52.00% University of South Florida, all Public HHS WA 49.50% Arizona State University Public HHS SF 54.00% Washington State University Public HHS SFSF 51.00% SUNY Albany Public HHS NY 53.00% California Institute of Technology Private ONR 66.75% University of Virginia, all campuses Public HHS WA 54.00% University of California Los Angelas Public HHS SF 54.00% University of California Berkeley Public HHS SF 56.50% University of California San Diego Public HHS SF 55.00% 15
16 Description Examples of Cost Impact (Buildings or Major Renovations) Where it goes Administrative buildings Athletic facilities Classrooms, including class labs Dormitories Libraries Parking structures Research buildings Recoverable, if used mostly for sponsored projects administration NOT RECOVERABLE Mostly UNRECOVERABLE NOT RECOVERABLE Mostly UNRECOVERABLE Mostly UNRECOVERABLE Recoverable, if used mostly for extramural research 16
17 17 Mahalo!
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