Conducting
Space
Surveys
Leading Excellence in Research
Costing Practices
Conference October 13 - 15, 2015
Presenters
 Mike


Director, Costing Policy and Analysis
University of California, Davis
 Nick


Legrand
Schulte
Manager, F&A Cost Recovery
Huron Consulting Group
2
Agenda
 Facility
Costs and Guiding Regulations
 Space Surveys
 Alternative Methods to the Space Survey


Salary and Wage
Full Time Equivalents (FTE)
 Conclusion
– Selecting a Method
3
Facility Costs and Guiding
Regulations
4
The Importance of Space
Surveys

F&A cost recovery dollars are unrestricted funds for the Institution

F&A rate calculations are based on:

Facilities costs (F)

Administrative costs (A)

Administrative costs are legislatively capped at 26%

Therefore ALL increase in F&A rate over 26% comes from the
Facilities portion of the calculation

Space Survey are used to allocate the Facilities costs

This is why SPACE SURVEYS are so important
5
2 CFR 200 (Uniform Guidance)
A. General
2. Criteria for Distribution




d. Selection of distribution method.
(1) Actual conditions must be taken into account in selecting the method or base to
be used in distributing individual cost groupings. The essential consideration in
selecting a base is that it be the one best suited for assigning the pool of costs to
cost objectives in accordance with benefits derived; with a traceable cause-andeffect relationship; or with logic and reason, where neither benefit nor a cause-andeffect relationship is determinable.
(2) If a cost grouping can be identified directly with the cost objective benefitted, it
should be assigned to that cost objective.
(3) If the expenses in a cost grouping are more general in nature, the distribution
may be based on a cost analysis study which results in an equitable distribution of
the costs. Such cost analysis studies may take into consideration weighting factors,
population, or space occupied if appropriate. Cost analysis studies, however, must
(a) be appropriately documented in sufficient detail for subsequent review by the
cognizant agency for indirect costs, (b) distribute the costs to the related cost
objectives in accordance with the relative benefits derived, (c) be statistically
sound, (d) be performed specifically at the institution at which the results are to be
used, and (e) be reviewed periodically, but not less frequently than rate
negotiations, updated if necessary, and used consistently. Any assumptions made in
the study must be stated and explained. The use of cost analysis studies and
periodic changes in the method of cost distribution must be fully justified.
(continued on next page)
6
2 CFR 200 (Uniform Guidance)
A. General
2. Criteria for Distribution
(continued from previous page)


(4) If a cost analysis study is not performed, or if the study does not result in an
equitable distribution of the costs, the distribution must be made in accordance with
the appropriate base cited in Section B, Identification and assignment of indirect
(F&A) costs, unless one of the following conditions is met:
 (a) It can be demonstrated that the use of a different base would result in a
more equitable allocation of the costs, or that a more readily available base
would not increase the costs charged to Federal awards, or
 (b) The institution qualifies for, and elects to use, the simplified method for
computing indirect (F&A) cost rates described in Section D, Simplified method
for small institutions.
(5) Notwithstanding subsection (3), effective July 1, 1998, a cost analysis or base
other than that in Section B must not be used to distribute utility or student services
costs. Instead, subsections B.4.c Operation and maintenance expenses, may be
used in the recovery of utility costs.
7
2 CFR 200 (Uniform Guidance)
B. Identification and Assignment of Indirect (F&A) Cost
2. Depreciation

b. In the absence of the alternatives provided for in Section
A.2.d, Selection of distribution method, the expenses included
in this category must be allocated in the following manner:


(1) Depreciation on buildings used exclusively in the conduct of a
single function, and on capital improvements and equipment used in
such buildings, must be assigned to that function.
(2) Depreciation on buildings used for more than one function, and
on capital improvements and equipment used in such buildings,
must be allocated to the individual functions performed in each
building on the basis of usable square feet of space, excluding
common areas such as hallways, stairwells, and rest rooms.
(continued on next page)
8
2 CFR 200 (Uniform Guidance)
B. Identification and Assignment of Indirect (F&A) Cost
2. Depreciation (continued from previous page)

(3) Depreciation on buildings, capital improvements and
equipment related to space (e.g., individual rooms,
laboratories) used jointly by more than one function (as
determined by the users of the space) must be treated as
follows. The cost of each jointly used unit of space must be
allocated to benefitting functions on the basis of:


(a) The employee full-time equivalents (FTEs) or salaries and
wages of those individual functions benefitting from the use of that
space; or
(b) Institution-wide employee FTEs or salaries and wages
applicable to the benefitting major functions (see Section A.1) of
the institution.
4. Operation and Maintenance Expenses
b. In the absence of the alternatives provided for in Section A.2.d,
the expenses included in this category must be allocated in the
same manner as described in subsection 2.b for depreciation.
9
Facility Cost Allocation Options
Space
Survey
•Industry standard used and typically results in
highest calculated rate
•Requires a significant amount of judgment
•Requires the most time and effort
Salary and
Wages
•Considered the default method ,
•Doesn’t require a space survey
•Doesn’t require detailed space information
•Accepted at face value by Government
FTE
•Default method under A-21
•Doesn’t require a space survey
•Doesn’t require detailed space information
•Doesn’t require Academic judgments
10
Space Surveys
11
Space Survey Pros and Cons
 Pros
 Space
survey should lead to the highest rate calculation
 Most detailed way to document the exact rooms / costs used for
Organized Research
 Common practice accepted
by government
 Cons
 Labor intensive
/ expensive
 Extra unwanted work
for campus participants
 Arbitrary nature leads to negotiation risk
12
Space Survey Reality
 Space
surveys are resource intensive (systems, labor,
etc.)
 Space
surveys are not intuitive
 Space
surveys are often done only for the F&A process
(if they are done for other purposes, the concept of
“functionalization” may be different)
 Department
personnel already have a lot to do!
Therefore finding a way to make the survey easy and
valuable becomes very important……
13
High Level Decisions
 Central Administration decides:
 WHICH Buildings
and Departments are involved in the base
year’s space survey
 WHEN will the survey
will be conducted.
Research-intensive rooms and departments
All rooms, research intensive departments
All rooms, all departments
14
Space Survey – When

Preparation Time Needed

Conducting Space Surveys during Base Year


Begins (and presumably completes) the process earlier

Space survey participants are thinking about the current base year

Not all data is complete
Conducting Space Surveys after completion of Base Year

Fiscal Year Data is complete – Account and Occupant

Space survey participants must think back upon prior year

Key personnel may be away from the Institution
15
Space Survey – Who

The following people must be identified early and also must
understand the importance of the survey:

Facilities/Campus Services contacts

IT (those who support the survey)

Administrative liaisons at the school (Medicine, Arts & Sciences,
Engineering) level

Contact person (and ideally a back-up) for each department who will be
filling out the survey….watch out for inevitable turnover.
16
Space Survey – What

Maintain an accurate physical inventory including department and
room type assignments in a format than can easily be downloaded
(or uploaded) to the space survey system.

An update of the physical space should be done annually, regardless if
it is the institution’s base year.

This inventory should include all buildings on campus that are owned or
leased centrally by the institution.

Building and room numbers should be used consistently across the
institution.
17
Space Survey – What

What “tools” are needed in completing the space survey

Listing of rooms, this could include floor plans

Funding sources (accounts)

Personnel paid in the department, this could include effort
reports

Mechanism to collect the required documentation

A21 functions, accounts and people (paid and unpaid).

Discussion – what “tools” have been provided or utilized
at your institution?
18
Space Survey – How

Develop and communicate concrete directions in steps

Step 1: Verify physical inventory

Step 2: Identify and record the PI assigned to the survey space

Step 3: Identify and record the people (paid & unpaid) working in that
PI’s space

Step 4: Identify and record the funding sources used to support the
activities in that survey space

Step 5: Assign A21 functions, in percentage terms, to the survey space
based upon how the room was used

Step 6: Review all information recorded for accuracy, including pay and
funding sources
19
Space Survey – How
 Super
simple, right?
Should the steps above be divided and completed at
various times throughout the FY instead of all at once?
 Requirements
for a well-documented space
survey
Should all sources of funds be recorded?
Should all occupants – paid and unpaid be recorded?
Should all rooms be examined against blueprints for
accuracy?
20
Space Survey – How
 Concept
of “chunking” or “clustering” or
“grouping”

Simplify the approach by identifying a group of survey
rooms (lab and lab service) utilized by a PI and his/her
occupants and funding sources.

Assign A21 functions for a PI and extrapolate the
functional coding, accounts, and occupants to the
series of survey rooms utilized by the PI’s group.
21
Space Survey – Analysis





Ratio: Dollars/SF
 Comparisons across institutions and within institutions (across years)
% Space coded to Research vs. % Dollars coded to Research
 Expectation that dollar % < space %, within a reasonable threshold
 If space % < dollar %, there is opportunity
 Check for each department
 Did folks filling out the survey pay attention to occupants and their
sources of income? Is there too much of a match….making it a
S&W model?
100% Rooms
 Audit red flag
 No flexibility for other activities
Flat coding
 E.g., all labs in a department are 90/10 or 95/5.
 Each room should be examined independently.
Information on all occupants
 Are occupants identified?
 How are they funded?
22
Possible Government
Review Questions
Question #1
I have selected the following five departments for our
on-site research space review. By Principal Investigator
(PI) or other responsible person, please provide a listing
of all research rooms by building for these depts. Each
room should be classified by ASF by functional area
(OR, INSTR, etc.). If possible, please subtotal this ASF by
PI. The total departmental ASF for all PIs should tie into
the department totals given in your Report for FY,
“Summary of Space by Department .”
23
Possible Government
Review Questions
Question #2

For (PIs) from the [previous] departments. For each room
that was assigned to these PIs during the FY, please provide
the following:
 All funding accounts from all functional areas (OR, IDR,
OSA).
 Assigned people to those rooms with titles. This should
include anyone that would have worked or spent time in
the space during the FY, whether they received any
compensation or not.
 All compensation paid to the PI and these staff during FYE
from all funding sources, as described above. Please
include all stipends paid, where applicable.
 All Effort Reports for the PIs only
24
Alternative Methods to the
Space Survey
25
Facility Cost Allocation Options
Space
Survey
•Industry standard used and typically results in
highest calculated rate
•Requires a significant amount of judgment
•Requires the most time and effort
Salary and
Wage
•Considered the default method ,
•Doesn’t require a space survey
•Doesn’t require detailed space information
•Accepted at face value by Government
FTE
•Default method under A-21
•Doesn’t require a space survey
•Doesn’t require detailed space information
•Doesn’t require Academic judgments
26
Salary and Wage
Allocations
27
Salary and Wage Pros and Cons
 Pros
 Least time consuming
/ lowest cost method
 Negotiation with government will be calculation
 Good method for institutions
based
that do not have high-priced
research buildings
 Cons
 Most likely
a lower rate calculation than a Space Survey or an
FTE allocation
 Does not maximize
the allocation to Organized Research for
high-priced research buildings
28
Salary and Wage Methods

Allocate Facility Costs by department to all
functions



Determine space in each building by department
Allocate each room within a single department by
the department S&W statistic
Allocate Facility Costs by total institution to major
functions (OR, IDR, OSA, OIA)



Must first allocate single function buildings
Joint use buildings allocated by institution wide S&W
statistic
Allocating to just the major functions can raise the
facility calculation and lower the administrative
calculation
29
FTE Allocations
30
FTE Pros and Cons
 Pros

Less time consuming than Space Survey

Most likely a higher rate calculation than S&W method

Negotiation with government will be calculation based

Good method for institutions that have high-priced faculty
 Cons

Most likely a lower rate calculation than a Space Survey

Does not maximize the allocation to Organized Research for highpriced research buildings / rooms

Government negotiators are less familiar

Can sometimes be difficult to get reliable FTE data
31
FTE Methods

Allocate Facility Costs by department to all functions



Allocate Facility Costs by Room or “PI Cluster”




Determine space in each building by department
Allocate each room within a single department by the
department FTE statistic
Collect information on space occupants
Use occupants to calculate FTE statistic
Can be done on a room by room basis or a “PI Cluster”
basis
 PI Cluster – allocate all space belonging to an individual
PI using the same FTE statistic based upon occupant
information collected
Use FTE allocation for “Joint Use” space


Usually on a department wide basis
Can produce better results than typical S&W joint use
allocation
32
Example S&W vs. FTE Calculation

FTE typically calculates a higher Research percentage than
S&W
Employee
Professor
Asst. Professor
Post Doc
GTA 1
GTA 2
Dept Admin
Grand Total
Percents



Salaries and Wages
General Fund
Research Grants
120,000
10,000
60,000
15,000
40,000
20,000
20,000
50,000
250,000
85,000
74.6%
25.4%
Total
130,000
75,000
40,000
20,000
20,000
50,000
335,000
100.0%
Full Time Equivalents
General Fund
Research Grants
0.69
0.06
0.80
0.20
0.00
1.00
0.50
0.00
0.00
0.50
1.00
0.00
2.99
1.76
63.0%
37.0%
Total
0.75
1.00
1.00
0.50
0.50
1.00
4.75
100.0%
High salaried faculty are counted at a maximum of 1.0 FTE (and
maybe even less)
Faculty typically have a lower percentage of time charged to
research grants
FTE method is closer to space survey results
33
Considerations for S&W and FTE Methods

Information needed from Departments




How to account for unpaid Students?
How to account for unpaid “Other” users (Visiting
Professors, Professor Emeriti, etc.)?
Faculty treated as 0.75 FTE for 9 months of work






Dependent on methodology
Summer work increases them to 1.0 FTE
Part-time and partial year employees
Cost Sharing
DCE adjustment for Department Administration
Service Centers
Animal Facilities
34
Conclusion
Selecting a Method
35
Selecting a Method

Type of Institution






Rate Considerations





Amount of Research at Institution
Amount of Grants with Full Indirect Cost Rate
Medical School
Salaries of Faculty
High Cost Research Buildings
Current Negotiated Rate
Desired Rate
Likely Calculated Rate with each method
Cost / Time Constraints
Other Considerations



Past negotiations with government
Current environment of institution
Changes at institution (recent or future)
36
Contact Information
Mike Legrand
Director, Costing Policy and Analysis
University of California, Davis
mrlegrand@ucdavis.edu
530-752-4621
Nick Schulte
Manager, F&A Cost Recovery
Huron Consulting Group
nschulte@huronconsultinggroup.com
530-902-7812
37