1. Overview of Rate Calculation TWO COST GROUPS: DIRECT COSTS INDIRECT COSTS FACILITIES ADMINISTRATION

2. Direct Costs Costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity; or that can be directly assigned to such activities relatively easily with a high degree of accuracy.

3. Direct Costs

4. Indirect Costs Costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. Indirect Costs Are Real Costs

5. Indirect Costs

7. Examples of Facilities Costs ANNUAL DEPRECIATION EXPENSE OF BUILDINGS, CAPITAL IMPROVEMENTS TO LAND & BUILDINGS, AND EQUIPMENT INTEREST EXPENSE ON DEBT ASSOCIATIED WITH BUILDINGS, EQUIPMENT & CAPITAL IMPROVEMENTS UTILITIES, SECURITY, JANITORS, PROPERTY INSURANCE, SAFETY, HAZARDOUS WASTE, MAINTENANCE OF FACILITIES AND PLANT ADMINISTRATION

8. Examples of Administrative Costs ADMINISTATIVE OFFICES OF ENTIRE UNIVERSITY SUCH AS PRESIDENT, PROVOST, FINANCE (ACCTS PAYABLE, BUDGET, ETC), PERSONNEL (PAYROLL, ETC), COMPUTING, GENERAL COUNSEL, ETC. ADMINISTRATIVE & SUPPORT SERVICES THAT BENEFIT ACADEMIC DEANS AND DEPARTMENTS SUCH AS CHEMISTRY, BIOLOGY, CHILD STUDY, ETC. OFFICES OF GRANT AND CONTRACT ADMINISTRATION INCLUDING SPONS ACCTNG & ASSOC PROVOST FOR RESEARCH EXPENSES FOR THE OPERATIONS OF LIBRARIES

9. Administrative Costs ADMINISTRATIVE COSTS ARE CAPPED AT 26 POINTS ON THE F&A RATE CURRENTLY TUFTS IS 6 POINTS ABOVE THE CAP ALL ADMINISTRATIVE INDIRECT COSTS ABOVE THE CAP ARE NOT RECOVERED BY THE UNIVERSITY

10. PROCESS FOR ALLOCATING INDIRECT COSTS TO DIRECT COSTS FOR FINAL RATE CALCULATIONS Building Depreciation Interest Equipment Depreciation Operations & Maintenance Library Admin Organized Research Instr & Dept Research Other Sponsored Activity Other Inst. Activity Space Sq Ft Space Sq Ft Space Sq Ft Space Sq Ft FTE & SW MTDC Allocation Method DENOMINATOR NUMERATOR

11. Example of Rate Calculation F&A COSTS ALLOCABLE TO RESEARCH $65,000,000 ORGANIZED RESEARCH BASE $100,000,000 65%

12. Different Rates and Their Uses ORGANIZED RESEARCH – 65.0% All research and development activities of the University that are separately budgeted and accounted for on a specific project basis, and research cost sharing. Organized research activities include: Sponsored Research Projects: Research projects sponsored by Federal agencies and non- Federal organizations (e.g. states, cities, foundations, corporations, etc.) through grants, contracts, and cooperative agreements. Sponsored Research Training: Training of individuals in research techniques sponsored by Federal agencies and non-Federal organizations through grants, contracts and cooperative agreements. Common examples include Career Development (“K”) awards, institutional training grants (T-32), individual fellowships (F-32), etc. Organized research projects typically require a proposal or other application to obtain funding, have a defined scope of work associated with the project, anticipate a “deliverable” result, and require that periodic financial and progress reports be submitted to the sponsor.

13. Different Rates and Their Uses OTHER SPONSORED ACTIVITIES – 37%: Programs and projects financed by Federal and non- Federal agencies and organizations that involve the performance of work other than instruction and organized research. Examples are health service projects, public service projects, clinical trials performed in clinical space, and public service OFF CAMPUS – 26% All sponsored research activities that take place off campus in non Tufts owned facilities

14. Breakdown of Rate Calculation BUILDING DEPR 9.1% EQUIPMENT DEPR 1.4% INTEREST EXP 7.2% OPERATIONS & MAINT 18.9% ADMIN COSTS - CAPPED 26.0% LIBRARY 2.4% TOTAL ORGAN RES RATE 65.0%

15. Breakdown of Rate Calculation BUILDING DEPR 4.9% EQUIPMENT DEPR 1.5% INTEREST EXP 3.0% OPERATIONS & MAINT 17.2% ADMIN COSTS - CAPPED 26.0% LIBRARY 2.4% TOTAL ORGAN RES RATE 55.0%