Jennifer Bunge Joni Rippee Debra Driskill ANR Research and Extension Center System Rate and Recharge for WRAOM 2017 Jennifer Bunge Joni Rippee Debra Driskill

ANR Research and Extension Center System Geographically diverse- covering just about every ecosystem across the state Intermountain-140 acres Sierra Foothill-5,700 acres Hopland-5,300 acres Kearney-330 acres Lindcove-175 acres Westside-320 acres Hansen-27 acres SouthCoast-200 acres Desert-255 acres Total = > 12,000 acres 9 Research Centers mangaged

Budget Reductions/constant rising costs. 85% of Operating budget in salaries Increase demand for research Method of charging for services that conforms to Policy Why Rate and Recharge

Guiding Principles UC PPM 340-25 Recharge Activity Business & Finance Bulletin A-56 OMB- Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (formerly A-21) Contract & Grant Manual

How to Develop a Recharge Rate Identify costs to be included in cost pool. Allowable costs normally include but are not limited to: Salary, wages and benefits Supplies and services Cost of leased non-capital equipment Equipment depreciation Administration costs of recharge unit (if not included in indirect cost rate) Repairs and maintenance

How to Develop a Recharge Rate Unallowable costs Costs of capitalized renovations or leasehold improvements Internal interest expense Bad debts Fine/penalties (except in compliance) Inventorial/capital equipment purchases Fund raising expense Contingency reserves

How to Develop a Recharge Rate Unallowable costs continued Cost paid by Federal Government Alumni activities Entertainment (alcohol, event tickets, flowers, gifts, etc.) Donations/contributions Memberships/civic/community/social org. Abnormal (non-operating) deficits

How to Develop a Recharge Rate Direct charges for costs that have been included in an indirect administrative cost pool are unallowable costs to federal customers. Example: Research administration services historically paid from 19900 funds. The Federal Government doesn’t like to pay twice!

How to Develop a Recharge Rate Inventoried/capital equipment with useful life > 1 year and value > $5,000 shall be depreciated on a straight line basis. Recommended useful life can be found in CAMS or at http://eulid.ucop.edu/index.php Useful lives other than those in the UCOP tables should be noted on the self certification form and coordinated with Financial Services.

How to Develop a Recharge Rate Depreciation expense is included as a cost in the rate development, except when: Equipment is funded by the federal government Equipment is funded by an incomplete private contract or grant Equipment is identified as cost sharing to a federal research project

How to Develop a Recharge Rate Through depreciation entries a reserve fund is established. Entries should be done preferably monthly, but at least annually. Equipment reserve funds should be used to purchase replacement equipment needed for the recharge operation.

UC-ANR Research Rates 2009 Established Rate process aligned with UC Recharge Policy and OMB A21 Circular Required Center management to review Operating Budgets and understand which costs directly support research. Rolled out the process one Center at a time.

Rate and Recharge Process Each Center determines Rates annually based on Research Program year. Only costs directly associated with research project support are included. Unit of measurements are specific to the type of research. All Rates are reviewed by a Committee that includes Research Project Investigators with recommendations to Associate Vice President, Business Operations. Centers are expected to break-even.

STEP BY STEP INSTRUCTIONS Plan Step 1 Determine if a Rate is Needed But is it a Recharge Activity Step 2 Determine Activity Scope Identify Direct Costs Step 3 Develop the Rate Submit Step 4 Submit to Control Unit Step 5 Greater than 15K in Revenue? Step 6 Control Unit Submits to Rate & Recharge Committee Implement & Monitor Step 7 Establish Account Step 8 Post Rate & Notify Users Step 9 Implement Accounting Process Step 10 Implement Billing Process Step 11 Monitor Your Rate Step 12 Is Rate Covering Cost?

STEPS FOR CREATING A RATE Step 1 Determine if a Rate is Needed - What is our mission? Is there a sound business case supporting the activity. - Are services identifiable and provided on a regular and continuing basis? - Can rates be stated in measurable units of goods or services? (per acre, labor hour, per project)

Step 2 Determine Activity Scope Identify Direct Costs-Those costs that can be directly and consistently traced to the product or service of the activity. Personnel-Salary and benefits -include anticipated salary increases Supplies -irrigation water, fertilizer, fuel for tractors -maintenance and minor repair of equipment Equipment Depreciation

Step 3 Develop the Rate Determine Unit of Measurement per acre, labor hour or per project. List the research projects for program year. Include all direct costs Include any deficit or overage from previous year.

Rate Methodology-Full Cost Rate Total Operating Cost to Directly Support Research Personnel + S&E + Depreciation Divided by number of total unit of measurement = Full Cost Rate This rate will be charged to non-UC affiliated researchers.

Estimate supply expense

Equipment Depreciation

Rate Calculation Sheet

Rate Calculation sheet part 2

CHALLENGES

Rate and Recharge web site http://ucanr.edu/sites/recharge/ Training, resources, step by step instructions Resources Forms FAQ’s Rate Preparer Assessment “Understanding Rate and Recharge” video

THANK YOU Debra Driskill, Business Manager –Research & Extension Center System :dldriskill@ucanr.edu Joni Rippee, Director Program Planning and Evaluation: Joni.Rippee@ucop.edu Jennifer Bunge, Director Resource, Planning and Management : Jennifer.Bunge@ucop.edu