Faculty Orientation Series

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Faculty Orientation Series

• Sponsored Budgets
• Debi Galloway
• Executive Director
• Sponsored Research Services
• March 9, 2007

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Agenda

• Process
• Tools
• Different strokes for different sponsors
• Key compliance areas

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Process Model
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Additional Assistance

• SRS can provide additional support for budget
  development if a faculty member seeks assistance
  well in advance of the sponsors deadline
• 30 days in advance of deadline

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Key Factors for Success

• Read the directions thoroughly
• Read the directions thoroughly
• Read the directions thoroughly

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• 95 of errors found are due to not reading the
  directions

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Funding Mechanisms -Federal

• Traditional
• Grant (NSF, NIH, USDE)
• Non traditional
• Department of Defense
• Procurement

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Who Made All the Rules?

• Office of Management and Budget (OMB) Circular
  A-21 Cost Principles for Educational Institution
• Cost Accounting Standards

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Division of Budget

• Direct costs
• Indirect costs
• facilities and administrative costs
• or overhead

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Direct Costs

• Costs which can be clearly identified and
  directly accounted for in support of a specific
  research or sponsored agreement

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Facilities Administrative

• Costs associated with conduct of sponsored
  projects that cannot be clearly identified and
  cannot be clearly accounted for on an individual
  project basis.

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Allowable Cost Test

• Reasonable
• prudent person test
• Allocable
• cost must directly benefit the project
• Treated consistently
• Institutional policies
• Limitations
• sponsor restrictions

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When Is A Cost Reasonable?

• The federal regulations say
• Does the cost incurred reflect an action that
  a prudent person would have taken under the
  circumstances prevailing at the time?

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When Is a Cost Allocable?

• The federal regulations say
• A cost is allocable to a sponsored agreement
  or the FA rate calculation if it is shown that
  the cost benefits the agreement or institution.

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Beware

• Labor hours
• Loaded labor rates
• Employment restrictions
• Restrictions on a particular cost element

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Special Attention Collaborations

• Consultants
• Can the service be performed more economically by
  employment ?
• Is the individual qualified and are fees
  customary and received (individual) for
  comparable services?
• Subawards
• Must have infrastructure in place to manage
  sponsored activity
• Federal regulations mandate
• UC is responsible

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Areas of Concern

• Key personnel with no effort direct charged to
  the activity
• Committed effort on all projects
• Desire to cost share when it is not required
• Requests for reduced overhead rates

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Available Budget Tools

• Excel spreadsheets

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Action Fund Requests

• OBR Action Fund Policies
• Total project cost 250,000
• Capital cost 120,000
• Minimum 50K per item
• OBR Match 60,000 3,000,000
• UC Match equal to above
• 1/3 department 1/3 college
  1/3 VP Research

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Funding Non Federal

• State
• Non-profit
• Industry

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State

• State of Ohio agencies have many different forms
  for budgets
• Usually state agencies will not support UCs full
  overhead rate
• Restrictions on overhead must be articulated in
  the sponsors policies or funding announcement

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Non- Profit

• Specific forms to fill out
• Various restrictions often apply
• Salary and or fringe benefits
• Travel
• Overhead
• Cost share may be necessary
• Many allow PI to submit application

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Industry

• Process is more efficient but feels
  non-traditional
• Total project cost is key
• Cost elements are not of concern
• Flexibility

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Industry Way

• Average rate of pay for a specific group of
  employees
• Add fringe and overhead (normally way over 100)
• Add other direct costs
• Add profit margin (3-10)

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Do It Their Way Kind Of

• Dont talk about UCs overhead rate it will
  scare them
• Present project costs as a total rather than
  detail
• Dont sell yourself short
• Remember industry expects to negotiate

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Questions

• What are your concerns?