1. It’s All About Space – Maximizing the “ F ” in your F&A Rate

2. Presenters: Steve Cofield: – Manager of Cost Analysis, Oregon Health Sciences University Deston Halverson: – Director, Huron Consulting Group Josh Rosenberg: – Director of Cost Studies, Emory University

3. AGENDA: Role of space in the F&A proposal University processes for managing space Options for space surveys Maximizing the “F” Be Aware! Closing

4. The Role of Space in the F&A Proposal The pools in F that are driven by space – Building Depreciation – Equipment Depreciation – Interest – Operations & Maintenance (O&M) In other words, around 90% or more of your F!

5. The Role of Space in the F&A Proposal The other pools: – Library (the “other” F pool) Driven by FTEs, typically a very small F pool – Administration pools Driven by MTDC/MTC 26% cap prevents growth. The bottom line: Space is where the growth is!

6. The University Process Timelines (proposal v. space) – Your proposal is due Dec. 31, 2014. – The following timeline is recommended (Add dates): Educate community (Date) Meet with departments Survey Review of survey by department

7. The University Process Who at the university is involved? – Facilities Management/Campus Services – Cost Studies – Post-Award Office – Individuals in schools/depts. who complete the survey

8. The University Process Education – Executive Administration: What they are saying: We have brand new “research” buildings. What they are thinking: 100% of the building is research, that will really help our F&A rate. What YOU are thinking: I bet the real percentage coded to research is less than 50%! – Those who fill out the survey The importance of accuracy Who occupies what rooms and how are they funded Watch out for over AND undercoding. – Overcoding: The room is 100% research! – Undercoding: Don’t make it a S&W model.

9. Space Survey Options Full space survey (all departments, all room types) – Provides very useful data to executive management – Helpful for external reports/surveys – Very thorough but….. – Extremely time consuming and labor intensive

10. Space Survey Options Partial space survey (research intensive departments, specific room types) – Less time intensive – Allows you to focus on research space only – Incomplete

11. Space Survey Options Salaries and wages model – Feds may ask for this as a baseline. – Undercodes labs and other research space which is typically costlier (and helps us more in the proposal)

12. Maximizing the “F” Newer buildings – They cost more to build –> more costs in the pool – Take awhile to occupy fully. – The more pure research in there, the better

13. Maximizing the “F” Bigger labs – The bigger the square footage, the costlier the room is to run….and the bigger the contribution to the pools.

14. Maximizing the “F” Faculty placement – Put your more heavily funded faculty in the larger labs. Better justification for higher research percentage.

15. Maximizing the “F” Debt Financing – Issue bonds to cover some of the construction costs. – Goes into the Interest pool. Let indirect cost recovery pay for your debt financing costs.

16. Maximizing the “F” Tying equipment to a room. – Scientific equipment, annual depreciation expense: $10,000. By Room: Equipment in a lab coded 90% to research…..$9,000 depreciation in the pool. By Building: Building is coded 40% to research….$4,000 depreciation in the pool. By Department: Dept. is (S&W) 20% research….$2,000 depreciation in the pool. Bottom line: KNOW WHERE YOUR EQUIPMENT IS (ESPECIALLY YOUR SCIENTIFIC, EXPENSIVE EQUIPMENT)!

17. Maximizing the “F” Componentization – Components of a building have a shorter useful life than standard straight line. – Lower useful life = more depreciation expense each year = bigger Building Depreciation pool.

18. Maximizing the “F” Coding of service center space – Look at functional coding of user accounts charged. – Allocate based on functional revenues, which means picking up research square footage.

19. Be aware of: Space to Base Ratios – Examples: University average: $150/1 ($150 in on-campus S&W per 1 research square foot) Economics Dept: $374/1 Physics Dept: $58/1 Govt: Drop Physics to University Average, Keep Economics the same!!!

20. Be aware of: Variances between relative research space and relative research dollars Chemistry Research Space (relative): 54% Chemistry Research Dollars (relative): 39% Variance: 15% (borderline)

21. Be aware of: The time lag between proposal and site visit (how this can hurt you) – Lab was occupied when you did the survey, now vacant!

22. Be aware of: Chatty Kathy, PhD, Live at the Site Visit: “I am getting TONS of new funding in” – Why are Feds happy? More dollars in the base (Lower F&A Rate), no space adjustment.

23. Be aware of: Red Flags for Feds – The fundamental divide: University: We want a lower denominator (sponsored dollars) and higher numerator (indirect costs driven largely by space). Feds: Your space is too high; we want a higher denominator and lower numerator. – Departments with space to base ratios favorable to the university – “100% rooms” – Family photos in labs…so there ARE students in here! – The lights are on, nobody is home (vacant labs). – Non-lab room types with high research coding.

24. In closing: Space drives 4 of the 5 F pools Growth in your F&A rate comes from the F side, and F is driven largely by space Maximizing F means finding strategies to grow those pools and paying close attention to how you code your space

25. Questions?

26. Contact information: Steve Cofield – 503-494-1287 – cofields@ohsu.edu cofields@ohsu.edu Deston Halverson – 312-912-5406 – dhalverson@huronconsultinggroup.com dhalverson@huronconsultinggroup.com Josh Rosenberg – 404-727-1677 – Josh.rosenberg@emory.edu Josh.rosenberg@emory.edu