University of Toronto 2012/13 Federal Indirect Costs Program (ICP): Summary Report
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1 University of Toronto 2012/13 Federal Indirect Costs Program (ICP): Summary Report Research has Direct and Indirect Costs When people think about the cost of research, what comes to mind are things like specialized equipment, salaries for graduate students, post-doctoral fellows and research assistants, travel, and so forth. These are the direct costs of research and normally include all of the budgeted expenditures for carrying out a specific research project at the University. Less likely to be associated with the cost of research, however, are things like the building where the researcher works, the electricity used to power the specialized equipment, the staff that provide support for research contracts/applications/oversight and compliance, and so forth. These indirect costs are the hidden costs of conducting research; the real dollars spent by the University, or affiliated institutions, to support research activities. It can be difficult to assign these costs to specific projects since these necessities for conducting research are often shared. Description of the Federal Indirect Costs Program The Federal Indirect Costs Program (ICP) provides partial support to universities and their affiliates for the indirect costs of research associated with eligible Tri-Council awards (i.e., NSERC, SSHRC, CIHR and Networks of Centers of Excellence (NCEs)). This funding helps institutions to meet the financial burden of hidden costs of research, such as lighting, heating, and increasingly complex oversight and compliance requirements that insure the safety of researchers, as well as their human and animal subjects. This support allows researchers to concentrate on cutting-edge research. Positive impacts of the ICP at the University of Toronto and Affiliated Institutions In 2012/13, the University of Toronto and its affiliates allocated their ICP grant across the five expenditure categories as shown in the following graph (affiliated institutions are included): Total ICP Funds: $38.3 M
2 In this report we discuss the use of ICP funds at both the University of Toronto (U of T) and our affiliated institutions. For each expenditure category we first summarize information from U of T alone (affiliates excluded) and then provide information from our affiliated colleges and hospitals. We open each expenditure category by communicating three important figures pertaining to the University of Toronto as an institution (affiliated hospitals excluded): (1) The total indirect costs for research within the category, (2) the amount of indirect costs associated with funding that is eligible for ICP funds (e.g., tri-council funding, NCE funding), and (3) the amount allocated to the category from the funds received from ICP. Together these numbers show that 30% of our total indirect costs of research are associated with projects eligible for ICP funding. Of these, only 34% of the true costs incurred by the University was recovered through the ICP grant. Facilities The University of Toronto (U of T) alone spent a total of $143.1M on indirect costs of research related to facilities in 2012/13. Of these total costs, $43.2M can be attributed to research projects which earn credits under the Indirect Costs Program (ICP). However, we were able to allocate only $14.6M of funding from the ICP to this expenditure category. U of T s physical assets (e.g. properties, facilities, equipment) are operated and managed by a facilities and services team with over 600 staff who provide a safe, clean, comfortable and sustainable environment for the university s research (and teaching). This includes the operation and maintenance of over 11 million square feet encompassing over 120 buildings, plus the operation and management of an extensive district energy system supporting more than 150 buildings. At U of T affiliated Mount Sinai Hospital (MSH), core facilities are a central and essential part of research endeavours and require highly skilled individuals to maintain and operate equipment. Through ICP funds MSH can provide salary support for the Manager of the Robotics Laboratory, which uses robotics and related technologies to design and implement high throughput screening procedures (these are also made available to other researchers in Canada at low cost). The ICP funds have also allowed MSH to upgrade and expand its computer support area to better serve researchers who are increasingly relying on advanced computational methodologies and depend on reliable computing facilities. Research Resources The University of Toronto (affiliates excluded) spent a total of $25.1M on indirect costs related to research resources in 2012/13. Of these total costs, $7.6M can be attributed to research projects which earn credits under the ICP. However, we were able to allocate only $2.6M from the ICP funds for this expenditure category. This year the largest proportion of our research resources related expenditures went to library acquisitions and holdings. The U of T library system has placed among the Association of Research Libraries (ARL) s top five research libraries in North America since and comprises 44 individual libraries that hold more than 12 million volumes in 341 languages and over 28,000 linear metres of archival material. It is the largest publicly funded research collection in Canada and it provides a wealth of resources to the University s researchers and students. The library system s extraordinary staff have expanded electronic resources to more than 1.5 million items, acquired extraordinary historical materials with global research value and developed cutting-edge services to support students and faculty. At U of T affiliated SickKids (the Hospital for Sick Children), ICP funding was allocated towards the enhancement of computer and technological resources in support of research in 2012/13. Funds were allocated to the Research Information Technology department (RIT), which is focused on fostering research through the provision and support of core computing resources, services and infrastructure. This ensures that day-to-day business can be conducted efficiently and that computer systems are well run. Failure of technology and its supporting systems would
3 have a direct effect on the management of research-related information and communication, ultimately impeding productivity. Research Management and Administration The University of Toronto (affiliates excluded) spent a total of $23.1M indirect costs related to research management and administration in 2012/13. Of these total costs, $7.0M can be attributed to research projects which earn credits under the ICP. However, we were able to allocate only $2.4M from the ICP funds for this expenditure category. This year the largest proportion of our research resources related expenditures went to human resources and payroll. Research at U of T is a mammoth operation: each year the Research Services Office receives over 2800 new funding applications, and oversees over $400 million in research funding awarded to over 2800 independent researchers across over 900 active accounts involving more than 2000 different funding programs. To most effectively manage this volume of research administration, U of T is putting resources into maintaining and upgrading the information systems used to track grant applications and awards. In we launched My Research Applications (MRA), an online automated research application approval system. MRA reduces the time associated with obtaining the necessary divisional and institutional approvals for research funding applications. Furthermore, MRA is not just a technology project put in place to save time (and paper). Consultations were held across the University community about different business processes in order to establish priorities and optimize key procedures. MRA ensures the collection of more complete, accurate and reliable data on U of T s research by collecting information on research proposals, budgets, ethics protocols, health and safety permits, and so forth into a single platform. This information is then routed through an approval process that links principal investigators, academic administrators and staff research administrators in a seamless chain ensuring that everyone understands and endorses the research to be undertaken, and the budgetary, legal and ethical standards that must be followed. The result is an innovative new system that makes it easy for everyone involved in research at U of T to be more responsible. At the U of T-affiliated Center for Addition and Mental Health (CAMH), ICP funding contributed to hiring a Pre-Award Grants Specialist whose main focus is to assist researchers with proposal development, and to further increase the quality of proposals being submitted through CAMH Research. ICP funding also allowed key staff within the Research Services group to become members in CAURA for Access to a research administration community such as CAURA increases professional development through networking with like-minded research administrators, agency representatives and industry professionals. Through attending webinars and conferences, research administrators keep up-to-date on changes to funding policies and practices related to major funding agencies. Regulatory Requirements and Accreditation Regulatory requirements continue to evolve in complexity and increase the level of responsibility placed on research organizations such as U of T. In 2012/13, U of T (affiliates excluded) spent a total of $4.2M on indirect costs related to regulatory requirements and accreditation. Of these total costs, $1.3M can be attributed to research projects which earn credits under the ICP. However, we were able to allocate only $0.4M from the ICP funds for this expenditure category. This year the largest proportion of our regulatory requirements and accreditation related expenditures went to technical support for animal care, and the handling of dangerous substances and biohazards. U of T researchers conduct ground-breaking research that sometimes requires the use of animals and potentially dangerous substances and biohazards. To ensure the highest ethical and safety standards, an enormous effort is required. U of T manages five animal care facilities (when most universities have one or two), and personnel at these facilities are highly trained to ensure the safety and ethical treatment of animals used by over 200 researchers representing over
4 600 animal care protocols annually. Likewise, U of T has hundreds of research laboratories requiring over 500 active environmental health and safety permits for the use of potentially dangerous substances and biohazards. ICP funds also contributed to U of T s Research Oversight and Compliance Office (ROCO). ROCO ensures accountability, transparency and ethical conduct in research across the U of T system. ROCO staff and procedures are instrumental in protecting the University and its research community from potentially harmful errors in research administration and financial reporting on more than 10,000 active research fund accounts. Finally, ROCO is responsible for ensuring that U of T meets the financial reporting expectations of its research sponsor agencies and oversees the compilation of approximately 7,000 financial reports per year. At U of T affiliated Baycrest, ICP funds supported the Research Ethics Board (REB). In Baycrest saw a 31% increase in the number of studies submitted for review and approval, as well as an increase in the complexity of the research proposed. The REB recommended more than 135 amendments across studies covering topics including traumatic brain injury, the use of art therapy in clinical settings, and the impact of green space on health. Intellectual Property The University of Toronto (affiliates excluded) spent a total of $3.5M on indirect costs related to intellectual property in 2012/13. Of these total costs, $1.1M can be attributed to research projects which earn credits under the ICP. However, we were able to allocate only $0.4M from the ICP funds for this expenditure category. This year the largest proportion of our intellectual property related expenditures went to the maintenance and improvement of our technology transfer services. Ideas developed at universities benefit all of us every day in everything from improved technologies within our smart phones to new life saving drugs. ICP funds are used to support the Innovations and Partnerships Office (IPO) at U of T. IPO helps turn ideas and research into products, services, companies, and jobs. Each year IPO manages over 150 invention disclosures on behalf of over 1200 researchers and these numbers are increasing. An excellent example can be seen through Professor Geoffrey Hinton s work on machine learning and artificial intelligence. Prof. Hinton pioneered deep learning techniques in neural networks, which help programmers make machines learn to sift through vast quantities of data and put together patterns, much like the human brain. This year Google acquired the U of T start-up DNNresearch, with support from IPO, facilitating the process that is transforming Prof. Hinton s basic research into disruptive innovation that may one day change our lives. At U of T affiliated Holland Bloorview Research Institute, ICP funding has been critical to the on-going administration of the intellectual property portfolio and the support of technology licensing for the Bloorview Research Institute scientists in the Centre for Leadership in Applied Innovation. In partnership with industry and community agencies, scientists in this Centre discover, develop and evaluate assistive technology solutions to clinical challenges through excellence in applied science and engineering. Overall Impacts Finally, there are stories that reflect the overall impact of having strong supports for research, which span ICP expenditure categories. For example, on the evening of July 8 th the importance of our investments in facilities, research resources, management and administration, and regulatory requirements became crystal clear. Within a matter of hours, over 100 mm of rain fell on Toronto and the city struggled with flooding and power outages. U of T implemented its disaster recovery plan and dispatched trades personnel, campus police and caretakers to the 29 buildings affected by the storm. Special attention was paid to locations with animal colonies, libraries and labs holding high-tech equipment. ICP funds contribute to keeping these dedicated people well-trained and to ensuring that our facilities and equipment meet important safety requirements.
5 A Widening Gap The research environment is becoming more complex, both in terms of the research itself and in terms of associated facilities, regulations, and funding agreements. To address this increasing complexity, federal funding for direct costs of research has increased, but ICP funding has not kept pace with the actual indirect costs of research, resulting in a widening gap between direct and indirect funding for research (data on eligible funding based on lagged three-year rolling averages with affiliated institutions included). For the University of Toronto, this means that for every dollar spent on ICP eligible Tri-council research in 2012/13, only 17.5 cents were recovered through the ICP program. This is a substantial decrease from 21.7 cents on the dollar at the program s inception in 2003/04. The actual indirect cost rate at the University of Toronto is approximately 51.9 cents for every dollar, leaving a significant gap (34.4 cents on the dollar) that needs to be met by other sources. Thus, although the ICP program provides universities with invaluable support towards the hidden costs of research, it covers only a fraction of the actual indirect costs. What does this mean for the University of Toronto and Canada in real terms? Canada aims to unleash its potential as one of the world's innovation leaders, and the University of Toronto is a front runner in this endeavour. Our publically funded global counterparts include the University of Michigan and the University of California, Berkley, both having federal indirect cost rates of 55.5 and 56.5 cents on the dollar respectively (data from the institutional websites). The University of Toronto aims to be one of the world s top ten research universities. This means competing in a global marketplace with private institutions such as Harvard, an institution with a federal indirect cost rate of 69.0 cents on the dollar (data from the institutional websites). We can sustain our global competitiveness only if our facilities, resources, administrative, regulatory, and IP supports can meet the increased demands placed on them. The ICP program has been vital since its inception in While we face a challenge in meeting indirect costs not covered by the program, without federal support for the hidden costs of research it would be impossible for the University of Toronto, and for Canada, to remain globally competitive in an increasingly research intensive world. ICP funding provides essential support to the University of Toronto s research enterprise and we hope to continue fruitful dialogue with the Federal Government about how best to support the indirect costs of research well into the future.
Indirect Costs Outcomes Report
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