FUNDING STREAMS INITIATIVE
SUMMARY REPORT
Indirect Cost Recovery
Report to the Funding Streams Budget & Tax Workgroup
Summary
• Current process and treatment:
 Indirect cost recovery (ICR) funds from extramural activities are collected by the campus and transmitted to
OP at fiscal year end.
 The allocation of ICR is currently made by OP to the campus based on the overhead generated through
federal and private contract and grant activity in the previous year
 The UCSD allocation of federal ICR funds derives from agreements between the University and the State, as
well as OP’s policy.
 State indirect costs are currently retained at OP except for the Cellular Institute for Regenerative Medicine
(CIRM).
 Under the current process, ICR is returned to campus as a combination of funds, including 19900, 19933,
05397, 07427, 69750 and 19941 (CIRM).
• Future process and treatment:
 Distribution: all funds returned to campuses.
 Campus will have to swap the 19900 portion of the ICR for other funds (estimated $30M).
Current Funds Flow
• Attachment 1 shows the fund flow of federal indirect cost recovery during the years 2000 – 2010.
 100% of the federal ICR generated in Garamendi funded research buildings goes directly back to the source
campus to pay the debt service and O&MP costs related to those facilities.
 The balance remaining after the Garamendi allocation is split, with 19.9% going to an “Off‐the‐Top” fund
(69750) and the remaining 80.1% balance distributed between the UC General Fund (55%) [19900 and 19933]
and Opportunity funds (45%) [05397 and 07427].
 UCOP retains 6% for administration, Systemwide programs, and initiatives with the remaining 94% returned
to the source campuses.
o The “Off‐the‐Top” funds are used to help cover the costs of contract and grant administration.
o The Opportunity funds are available to fund high priority needs at the University’s discretion.
 The UC General fund is used by OP to cover the 2000 base budget, with only the growth over the 2000 base
distributed as 19933 funds.
Local Resource Allocation Process
Current allocation of revenue and budget:
• Attachment 2 shows the 2010/11 allocation of 2009/10 indirect cost recovery funds.
 The funds allocated to the campus from OP are subject to campus ICR funding agreements, including campus
Garamendi, lease funding arrangements and the SIO ship‐rate funding agreement (total $16M in 2010/11).
 OP has directed that a portion of the ICR funds ($151K ) be used to fund several local programs, including the
Pre‐Tenure Award Program, the U/G Scholars Program, Pre‐Graduate Mentorship Program and the E. Cota‐
Robles Fellowship Program .
 OP has also designated $7.462M to be used to cover inflationary costs in the general funds budget.
 ICR funds are also subject to special budget committee allocations, which currently include next generation
network (NGN) [$200K in 10/11] and energy funding ($7M in 10/11). FY 10/11 is the last year of NGN funding.
FSIWG - Indirect Cost Recovery
Page 1 of 4
April 18, 2011
FUNDING STREAMS INITIATIVE
SUMMARY REPORT
 The remaining funds are distributed 60% Academic/40% Administrative. The Academic distribution is based
on a rolling two‐year average, with a portion of the Academic share allocated to the Library (5.3%) and the
Academic Senate (3%). The remaining Academic share funds are distributed to the VC areas based on actual
recovery.
Future Funds Flow
• Each location will retain all indirect cost recovery funds generated from its own contract and grant activity,
including state ICR.
• Attachment 3 shows the projected ICR return to the UCSD campus based on 2009/10 indirect cost recovery
funds.
• Attachment 4 shows the projected ICR local distribution based on 2009/10 indirect cost recovery funds with the
OP proposed tax amount of 1.64% applied to both direct and indirect costs. The UCSD local distribution to
campus units is based on the existing model. This is provided as an example only of what the tax might look like
to each VC unit if the tax were applied based on fund source. Direct costs of research cannot be assessed the
OP tax, therefore, it is shown here as being paid from the ICR funds.
• Attachment 5 shows the projected clinical trial and CIRM ICR distribution with the OP proposed tax amount of
1.64% applied to both direct and indirect costs (based on 2009/10 amounts).
Known or Potential Issues Identified
• Campus must swap the funds previously allocated as 19900 to a UCGF number. OP has provided three funds
that campuses may use, one or all (19933,19941,19942). Need to decide whether to combine fund numbers or
keep them separate. Should CIRM continue to have a separate fund number?
• Campus has the latitude to combine the non‐GF ICR funds into one fund number but must still ensure
expenditure of 19.9% on contract and grant administration..
• Campuses have been instructed to establish a permanent budget for CIRM, however, the CIRM funding is
expected to expire in 2017
• Campus must decide whether to revisit local distribution model with the return of additional ICR.
• Campus must decide whether Clinical Trial fund, CIRM funds and ARRA funds should be subject to 1.64% OP tax.
• The campus must decide whether to address that ICR funds are currently designated to fund a portion ($151K)
of several local programs, including the Pre‐Tenure Award Program, the U/G Scholars Program, Pre‐Graduate
Mentorship Program and the E. Cota‐Robles Fellowship Program
• The campus must decide whether to address that ICR funds ($7.462M in 10/11) are currently embedded in the
general funds budget as inflationary costs.
Recommendations
• The campus should swap the 19900 portion of ICR for 19933 funds and maintain that fund as ICR only, including
CIRM (i.e. separate from other funding streams).
PROS:
 Creates more transparency for the campus community regarding the allocation and use of ICR funds.
CONS:
 Changing 19900 to 19933 (or other fund) eliminates reimbursement from central benefits pool
FSIWG - Indirect Cost Recovery
Page 2 of 4
April 18, 2011
FUNDING STREAMS INITIATIVE
SUMMARY REPORT
• Permanently budget CIRM funds centrally and allocate on a current year basis to specific organizations
identified only as CIRM funds.
PROS:
 Allows the campus to continue to track and report CIRM overhead‐related expenditures.
CONS:
 Loses the historical tag of fund 19941.
• Combine the educational and opportunity funds share of the ICR into fund 07247 and keep the separate fund
number (69750) for contract and grant administration.
PROS:
 One less fund number eases administration.
 Keeping fund number 69750 also eases the administration of ensuring the 19.9% is budgeted and expended
for contract and grant administration.
CONS:
 One‐time workload involved with changing funds for personnel, etc.
FSIWG - Indirect Cost Recovery
Page 3 of 4
April 18, 2011
FUNDING STREAMS INITIATIVE
SUMMARY REPORT
Attachment 1 -Federal Indirect Cost Recovery Flow from 2000- 2010
Gross FederalIndirect
Cost Recovery
Garamendi
Funding
Returned to Source Campuses
949{,
Remainder
19.9%
Off-the-Top Fund
6%
80.1%
Q491.
45%
Returned to Source Campuses
University Opportunity
Fund
fi
UCOP Common Fund
Returned to Source Campuses
Designated Campus Programs,
Systemwide Programs,
UCOP Common Fund
55%
GeneralFunds
2000-01Base
Growth Since 2000
9491.
6%
FSIWG - Indirect Cost Recovery
General Funds Base Budget
Returned to Source Campuses
as 19933 Funds
Designated Campus Programs,
Systemwide Programs,
UCOP Support
Page4of4
Apri/18, 2011
Schedule 4a
2010/11 ALLOCATION OF
2009/10 RESEARCH INDIRECT COST RECOVERY
I.
Summary of 2010/11 Indirect Cost Recovery Allocations to UCSD
A. Allocation to UCSD
1. Federal Indirect Cost Recovery
Gross Federal recovery
Less: Garamendi allocation retained by UCSD - detail below in section III.B.
$
140,696,500
(12,279,500)
Net Federal recovery available for Office of the President (OP) allocation
$
128,417,000
Less: OP adjustments
1999/00 "Base" of the Federal UC General Fund
OP Support allocation - 6% deduction
Federal UC General Fund Inflationary Block adjustments - Since 1999/00
OP designated programs
Total OP adjustments
Less: Campus adjustments - self supporting investments
Research facility funding arrangements (Campus Garamendi)
$
(28,368,000)
(6,003,000)
(7,462,000)
(151,000)
(41,984,000)
$
One-Time Savings from Debt Restructuring (Campus Garamendi)
Net Research facility funding arrangements (Campus Garamendi)
Lease funding arrangements
SIO Ship-rate funding arrangement
Total Campus adjustments - self supporting investments
(11,708,800)
3,401,800
(8,307,000)
(3,054,600)
(1,171,300)
(1 )
(12,532,900)
Net Federal recovery available for allocation
$
2. State Indirect Cost Recovery
Gross State recovery
Less: State recovery retained by OP
$
73,900,100
1,623,700
(1,623,700)
Net State recovery available for allocation
-
3. Private and Local Indirect Cost Recovery
Gross Private and Local recovery
Less: Educational Fund base and inflationary adjustments retained by OP
$
34,811,000
(6,849,000)
Net Private and Local recovery available for allocation
27,962,000
Total Net Indirect Cost Recovery Available for Allocation
$
101,862,100
B. Special Budget Committee Allocations
1. Less: NGN Funding from Indirect Cost Recovery
(200,000)
2. Less: Energy Funding from Indirect Cost Recovery
3.8 points of 54.5% ICR Rate
(7,028,000)
Total Net Indirect Cost Recovery Available for Unit Allocation
$
94,634,100
$
56,780,500
II. Distribution of UCSD Allocation to Campus Units
A. Campus Distribution to Academic & Administrative Areas
The academic/administrative % split is set to reflect the 2006/07 net allocation percentage.
Academic Share
60.0%
Administrative Share
40.0%
B. Allocation within the Academic Area
Academic share of net recovery allocation - per section II.A.
60.0%
LIBRARIES: The Libraries' allocation of $3,009,000 is based on 5.3% of the Academic share.
1. Start-up funding of $6 million (one-time) is proposed for the first two years of Research Cyberinfrastructure Initiative (RCI):
a. $3.4 million funding from Research ICR (Schedule 4) resulting from debt restructuring of some Campus Garamendi facilities and
b. $2.6 million from student fee income, reflected in Sources & Uses (Schedule 7).
A funding plan to support a permanent budget, beginning in 2011/12 and ramping up to $3.6 million in 2015/16, needs to be revisited.
Page 4a - 1
CBO
12/2/2010
Schedule 4a
2010/11 ALLOCATION OF
2009/10 RESEARCH INDIRECT COST RECOVERY
ACADEMIC SENATE: The allocation to Academic Senate - Committee on Research (COR) of $1,603,000 is based on 3% of the
Academic share, less the campus supplement of $100,000, which has been phased down in $100,000 increments per year with 2010/11
being the final year.
ACADEMIC UNITS: The remaining funds are allocated based on generation of indirect cost recovery by Academic Units for
the prior two-year period. The 2008/09 and 2009/10 fiscal years are used in this year's allocation distribution.
ACADEMIC ALLOCATION TABLE: The table below shows gross recovery by VC Unit, minus Garamendi and Campus
arrangements. The net recovery is the basis for the relative share allocated to each Academic VC.
Unit
General Campus
Federal
(Garamendi/Campus Adj.)
State
Private/Local
Subtotal
Health Sciences
Federal
(Garamendi/Campus Adj.)
State
Private/Local
Subtotal
Marine Sciences
Federal
(Garamendi/Campus Adj.)
State
Private/Local
Subtotal
Total
%
2009/10
%
Two-Year
Average
34.6%
$42,712,477
(7,887,217)
301,914
14,522,499
$ 49,649,673
32.9%
33.8%
51.3%
$81,880,125
(15,951,011)
452,559
15,152,092
$ 81,533,765
54.0%
52.6%
27,440,600
$ 15,072,216
(1,991,350)
897,660
5,419,623
$ 19,398,149
14.1%
$15,642,380
(1,774,164)
850,535
5,135,034
$ 19,853,785
13.1%
13.6%
7,094,900
$ 137,204,533
100%
$ 151,037,223
100%
100%
2008/09
$ 40,379,985
(5,601,371)
261,132
12,383,247
$ 47,422,993
$ 74,891,155
(18,828,411)
482,417
13,838,229
$ 70,383,390
Allocation
2010/11
$
$
Libraries
Academic Senate
17,633,000
52,168,500
3,009,000
1,603,000
Total Academic Allocation
$
56,780,500
$
37,853,600
C. Allocation within the Administrative Area
Administrative share of net recovery allocation - per section II.A.
40.0%
CAMPUS RESERVE: The Campus Reserve's allocation of $3,028,300 is based on 8% of the total Administrative share. The 8%
split is fixed to reflect the 2006/07 ICR allocation percentage within the administrative area.
ADMINISTRATIVE UNITS: The remaining funds are distributed based on the relative share of the 2009/10 Core Funds
budget exclusive of Purchased Utilities.
Percent of
Total
7.4%
40.3%
46.3%
6.0%
100%
Unit
Chancellor's Organizations
External & Business Affairs
Resource Management & Planning
General Campus - OCGA/TTIPS
Subtotal
Allocation
2010/11
$
2,584,900
14,037,700
16,116,000
2,086,700
$
34,825,300
Campus Reserve
3,028,300
Total Administrative Allocation
$
Page 4a - 2
37,853,600
CBO
12/2/2010
Schedule 4a
2010/11 ALLOCATION OF
2009/10 RESEARCH INDIRECT COST RECOVERY
III. Summary of 2010/11 Distribution
A. Permanent Distribution
Allocation
Unit
General Campus
Health Sciences
Marine Sciences
Libraries
Academic Senate
Academic Subtotal
$
$
Model
2009/10
16,316,600
23,165,000
6,480,700
2,645,000
1,297,000
49,904,300
Allocation
$
$
60.00%
Chancellor's Organizations
Campus Reserve
External & Business Affairs
Resource Management & Planning
General Campus - OCGA/TTIPS
Administrative Subtotal
$
1,768,600
2,661,600
13,145,800
13,876,500
1,817,000
33,269,500
$
$
83,173,800
6,594,000
89,767,800
$
Permanent
Distribution
$
727,000
3,257,600
477,900
264,000
249,000
$
4,975,500
60.00%
$
$
40.00%
Subtotal
Special Budget Committee Allocations
Total Permanent Allocation
Model
2010/11
17,633,000
27,440,600
7,094,900
3,009,000
1,603,000
56,780,500
2,584,900
3,028,300
14,037,700
16,116,000
2,086,700
37,853,600
$
$
729,700
265,300
422,000
1,700,100
199,900
3,317,000
40.00%
$
$
94,634,100
7,228,000
101,862,100
$
$
8,292,500
400,000
8,692,500
B. Special One-Time Allocations - deducted from Model allocation at I.A.1.
Unit
General Campus
Health Sciences
Marine Sciences
Total Special Allocations
$
$
2009/10
5,575,000
18,111,700
1,921,300
25,608,000
$
$
2010/11
7,740,800
15,372,200
1,699,400
24,812,400
Permanent
Change
$
3,299,400
(471,300)
(221,900)
$
2,606,200
2010/11
25,373,800
2,086,700
42,812,800
8,794,300
3,009,000
1,603,000
83,679,600
Permanent
Change
$
4,026,400
199,900
2,786,300
256,000
264,000
249,000
$
7,781,600
C. Total Distribution
Unit
General Campus
General Campus - OCGA/TTIPS
Health Sciences
Marine Sciences
Libraries
Academic Senate
Academic Subtotal
$
$
2009/10
21,891,600
1,817,000
41,276,700
8,402,000
2,645,000
1,297,000
77,329,300
$
$
71.09%
Chancellor's Organizations
Campus Reserve
External & Business Affairs
Resource Management and Planning
Administrative Subtotal
$
$
1,768,600
2,661,600
13,145,800
13,876,500
31,452,500
70.06%
$
$
28.91%
Subtotal
Special Budget Committee Allocations
Total Distribution
$
$
Page 4a - 3
108,781,800
6,594,000
115,375,800
2,584,900
3,028,300
14,037,700
16,116,000
35,766,900
$
$
729,700
265,300
422,000
1,700,100
3,117,100
29.94%
$
$
119,446,500
7,228,000
126,674,500
$
$
10,898,700
400,000
11,298,700
CBO
12/2/2010
Attachment 3
OP Funding Streams Model
Indirect Cost Allocation Comparison
Using 2010/11 Allocation of 2009/10 Indirect Costs Generated
2010/11
Funds Flow
Federal Indirect Cost Recovery
Gross Recovery
Less
Garamendi
OP Base
6% Incremental Tax
Inflationary Block
(2)
Future
Funds Flow
140,696,500
140,696,500
(12,279,500)
(28,368,000)
(6,003,000)
(12,279,500)
-
(7,462,000)
(2)
OP Designated Programs
Campus Garamendi
One-Time savings from Debt Restructuring
Other Adj (Lease/SIO Ship)
Net Federal Recovery
State Indirect Cost Recovery
Gross Recovery
Less:
OP
(151,000)
(11,708,800)
3,401,800
(4,225,900)
73,900,100
1,623,700
(1,623,700)
Net State Recovery
Private/Local Indirect Cost Recovery
Gross Recovery
Less
OP Base/Inflationary Adj
34,811,000
(6,849,000)
Additional
Projected
ICR Available
28,368,000
6,003,000
7,462,000
(11,708,800)
(4,225,900)
112,482,300
151,000
(3,401,800)
38,582,200
1,623,700
1,623,700
1,623,700
1,623,700
34,811,000
-
6,849,000
Net Private/Local Recovery
27,962,000
34,811,000
6,849,000
Total Net Indirect Cost Recovery
Other Local Ajustments (1)
Total Net Indirect Cost Recovery
101,862,100
(7,228,000)
94,634,100
148,917,000
(7,228,000)
141,689,000
47,054,900
47,054,900
Notes
(1) Special Budget Committee Allocations = $200K NGN funding + $7M Energy funding
(2) These funds are currently distributed throughout the campus' 19900 budget. They would be available
as part of the funding for redistribution if the allocation model is revisited. Additional funds from
other sources would be needed to fill in general fund gap.
FSIWG - Indirect Cost Recovery
4/18/11
Attachment 4
OP Funding Streams Model
Indirect Cost Allocation Comparison with OP Proposed Tax
Using 2010/11 Allocation of 2009/10 Indirect Costs Generated
Current
Funds Flow
Federal Indirect Cost Recovery
Gross Recovery
Less
Garamendi
OP Base
6% Incremental Tax
One-Time Savings from Debt Restructuring
Campus Garamendi
Other Adj (Lease/SIO Ship)
Net Federal Recovery (A)
(2)
Inflationary Block
OP Designated Programs (2)
OP Proposed Tax Directs- 1.64%
OP Proposed Tax Indirects- 1.64%
Net Federal Recovery (B)
State Indirect Cost Recovery
Gross Recovery
Less:
OP
Net State Recovery (A)
OP Proposed Tax Directs- 1.64%
OP Proposed Tax Indirects- 1.64%
Net State Recovery (B)
Private/Local Indirect Cost Recovery
Gross Recovery
Less
OP Base/Inflationary Adj
Net Private/Local Recovery (A)
OP Proposed Tax Directs- 1.64%
OP Proposed Tax Indirects- 1.64%
Net Private/Local Recovery (B)
Total Net Indirect Cost Recovery (A)
Total Net Indirect Cost Recovery (B)
Other Local Ajustments (1)
Total Net Indirect Cost Recovery (B)
Allocation to Academic Area
60%
Allocation to Administrative Area
40%
Academic Distribution
Health Sciences
Marine Sciences
General Campus
Libraries
Academic Senate
Administrative Distribution
Chancellor's Organizations
External & Business Affairs
Resource Management & Planning
General Campus - OCGA/TTIPS
Campus Reserve
FSIWG - Indirect Cost Recovery
Future
Funds Flow
Additional
Projected
ICR
Available
140,696,500
140,696,500
(12,279,500)
(28,368,000)
(6,003,000)
3,401,800
(11,708,800)
(4,225,900)
81,513,100
(12,279,500)
3,401,800
(11,708,800)
(4,225,900)
115,884,100
28,368,000
6,003,000
34,371,000
(8,217,700)
(2,106,000)
105,560,400
7,462,000
151,000
(8,217,700)
(2,106,000)
31,660,300
(7,462,000)
(151,000)
73,900,100
1,623,700
1,623,700
(1,623,700)
-
1,623,700
(234,700)
(26,600)
1,362,400
-
-
1,623,700
1,623,700
(234,700)
(26,600)
1,362,400
34,811,000
34,811,000
-
(6,849,000)
27,962,000
27,962,000
34,811,000
(2,426,392)
(570,900)
31,813,708
6,849,000
6,849,000
(2,426,392)
(570,900)
3,851,708
109,475,100
101,862,100
(7,228,000)
94,634,100
56,780,500
37,853,600
152,318,800
138,736,508
(7,228,000)
131,508,508
78,905,105
52,603,403
42,843,700
36,874,408
36,874,408
22,124,605
14,749,803
Current
Future
Delta
60.0%
52.6%
13.6%
33.8%
Total
5.3%
3.0%
56,780,500
27,440,600
7,094,900
17,633,000
52,168,500
3,009,000
1,603,000
78,905,105
38,059,200
9,840,400
24,456,300
72,355,900
4,181,971
2,367,153
22,124,605
10,618,600
2,745,500
6,823,300
20,187,400
1,172,971
764,153
40.0%
7.4%
40.3%
46.3%
6.0%
Total
8.0%
37,853,600
2,584,900
14,037,700
16,116,000
2,086,700
34,825,300
3,028,300
52,603,403
3,581,200
19,503,200
22,406,900
2,903,700
48,395,000
4,208,300
14,749,803
996,300
5,465,500
6,290,900
817,000
13,569,700
1,180,000
Notes
(1) Special Budget Committee Allocations = $200K NGN funding + $7M Energy funding
- Based on FY 10/11 allocation model
- Assumes no deviations from current distribution methodologies, although methodologies may
need to be addressed
- Academic distribution based on rolling 2-year average of IDC generated for FY 08/09 & FY 09/10
- Does not include CIRM, ARRA or clinical trial indirects.
(2) These funds are currently distributed throughout the campus' 19900 budget. They would be available
as part of the funding for redistribution if the allocation model is revisited. Additional funds from
other sources would be needed to fill in general fund gap.
4/18/11
Attachment 5
OP Funding Streams Model
Indirect Cost Allocation Comparison with OP Proposed Tax
Using 2010/11 Allocation of 2009/10 Indirect Costs Generated
Current
Funds Flow
Future
Funds Flow
Additional
Projected
ICR Return
Clinical Trial Indirect Cost Recovery
Gross Recovery
OP Proposed Tax Directs- 1.64%
OP Proposed Tax Indirects- 1.64%
Net Clinical Trial Recovery
2,872,000
2,872,000
2,872,000
(218,200)
(47,100)
2,606,700
(218,200)
(47,100)
(265,300)
Academic Distribution - Health Sciences
Administrative Distribution
External & Business Affairs
Resource Management & Planning
2,614,200
257,800
128,900
128,900
2,372,700
234,000
117,000
117,000
(241,500)
(23,800)
(11,900)
(11,900)
3,107,000
3,107,000
(214,000)
2,893,000
2,893,000
(214,000)
2,893,000
(131,400)
(51,000)
2,710,600
(131,400)
(51,000)
(182,400)
1,736,000
1,024,000
568,000
1,592,000
1,626,400
959,000
532,400
1,491,400
(109,600)
(65,000)
(35,600)
(100,600)
52,000
92,000
48,800
86,200
(3,200)
(5,800)
1,157,000
79,000
429,000
492,000
64,000
1,064,000
1,084,200
73,800
402,000
461,800
59,900
997,500
(72,800)
(5,200)
(27,000)
(30,200)
(4,100)
(66,500)
93,000
86,700
(6,300)
90%
10%
5%
5%
CIRM Indirect Cost Recovery
Gross Recovery
Less:
Energy Funding
Net CIRM Recovery (A)
OP Proposed Tax Directs- 1.64%
OP Proposed Tax Indirects- 1.64%
Net CIRM Recovery (B)
Academic Distribution
Health Sciences
General Campus
Libraries
Academic Senate
60%
64.3%
35.7%
Total
3%
5.3%
Administrative Distribution
Chancellor's Organizations
External & Business Affairs
Resource Management & Planning
General Campus - OCGA/TTIPS
40%
7%
40%
46%
6%
Total
Campus Reserve
8%
FSIWG - Indirect Cost Recovery
-
April 18, 2011