Facilities & Administrative (F&A)
Cost Recovery Report
April 22, 2009
Carol Hollingsworth, Director, Grants & Contracts Financial Services
&
Janet Parker, Associate Vice President, Financial Affairs
What is F&A?
OMB Circular A-21 term for what was formerly
referred to as indirect cost recovery.
 Also known as “overhead”
 Cost recovery mechanism – not a “tax”
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What is F&A?
Facilities & Administrative (F&A) costs are
 “Costs 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.”
Not Direct Costs – direct costs are specifically
identified to individual research projects, instructional
programs or other major functions.
 Examples: Salaries, fringe benefits, travel related to project,
lab supplies, subcontracts, etc.
2
F&A Cost Basis
Universities that receive $10M+ from federal sources
must use a modified total direct cost (MTDC) basis for
calculating F&A.
MTDC includes all project costs except equipment,
renovations, subcontract costs in excess of the first
$25,000, rent, scholarships, fellowships, tuition.
F&A is recovered as the sponsor’s funds are expended
(and billed) for direct cost items allowed per the
project budget.
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F&A Rates
F&A Costs are recovered based on F&A Rates
 Rates are developed based on cost studies.
 UTSA contracted with Huron Consulting Group to develop
our most recent cost study.
 Significant effort.
Proposals are submitted to cognizant federal agency
for review, audit, negotiation & approval.
Once approved, rates are applied to each grant &
contract to determine the amount of indirect costs to
be charged/recovered.
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F&A Cost Rate Agreement
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Recent COGR survey:
F&A Cost Rate Agreement
F&A rates have held
F&A payments as a % of
total NIH awards was
stable at 28.5% for FY0305 accdg to GAO.
2000 Rand study
estimated that universities
were subsidizing between
$700M and $1.5B of F&A
relatively constant at
~51% for the past 6 yrs!
FY06 NSF survey showed that
universities contribute more than
$9B of their own funds to support
R&D activities or nearly 20% of
total R&D expenditures.
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F&A Rate-Actual vs. Negotiated
Actual
Negotiated
General & Administrative
Departmental Administration
Sponsored Projects Administration
Administrative Subtotal
13.9 %
13.7
9.8
37.4 %
9.6 %
9.6
6.8
26.0 %
Building Depreciation
Equipment Depreciation
Interest
Operations & Maintenance
Library
Facilities Subtotal
12.2 %
5.6
5.0
14.9
0.5
38.2 %
4.0 %
3.0
2.0
9.0
0.5
18.5 %
On Campus Rate (FY 2007 Cost Study)
75.6 %
44.5 %
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Net Effective F&A Rate
The net effective F&A rate is computed
as follows:
TOTAL F&A Recovery Revenue
divided by
Restricted Sponsored Program
Expenditures (Net of F&A)
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F&A Net Effective Rate
Includes all
NACUBO
Programs
FY 07
Basis
Net
Effective
Rate
FY 08
Basis
Net
Effective
Rate
All Restricted
$5,703,051 /
$31,442,181
18.1%
$6,055,402 /
$34,035,958
17.8%
Restricted
Federal
$5,404,985 /
$26,194,640
20.6%
$5,753,973 /
$27,725,858
20.8%
Restricted NonFederal
$298,066 /
$5,247,542
5.7%
$301,429 /
$6,310,100
4.8%
Restricted
Research Only
$4,973,465 /
$20,283,600
24.5%
$5,188,035/
$21,908,637
23.7%
We are subsidizing ~50% of the negotiated cost of overhead for
restricted research (69% of cost study developed costs)
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Why is F&A Recovery Important?
Supports the cost of conducting research
If sponsors don’t pay, someone else must
Important new revenue source to UTSA
UTSA F&A Revenue - 5 Year History
$7,000,000
$5,703,051
$6,000,000
$5,201,496
$5,000,000
$4,000,000
$6,055,402
$3,933,801
$2,978,543
$3,000,000
$2,000,000
$1,000,000
$FY 04
FY 05
FY 06
FY 07
FY 08
F&A revenue grew by $3.1M over the last 5 years, an increase of 103%
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F&A Revenue Recovery by Source
FY 04
Federal
FY 05
FY 06
FY07
$2,872,068 $3,781,347 $5,032,063 $5,404,985
FY08
$5,753,973
State
31,627
68,132
52,261
65,799
65,992
Local
16,321
17,805
30,175
22,842
37,325
Private
58,527
66,517
86,997
209,425
198,112
$2,978,543 $3,933,801 $5,201,496 $5,703,051
$6,055,402
TOTALS
95% of F&A is from federally sponsored activities.
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Sources of F&A FY07 Revenue
Sources of F&A Revenue FY 2007
Local,
$22,842 , 0%
Federal 94.8%
State
1.2%
Local
0.4%
State,
$65,799 , 1%
Private,
$209,425 ,
4%
Private 3.7%
TOTAL 100%
Federal,
$5,404,985 ,
95%
Federal State Local Private
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Sources of F&A FY08 Revenue
Sources of F&A Revenue FY 2008
Federal
95%
State
1.1%
Local
0.6%
Private
Local,
$37,325 , 1%
3.3%
Private,
$198,112 ,
3%
State,
$65,992 , 1%
Federal,
$5,753,973 ,
95%
TOTAL 100%
Federal
State
Local
Private
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FY08 F&A (Federal) Sources
0.4%
0.1%
0.2%
0.3%
0.5%
0.6%
0.7%
0.9%
1.2%
3.2%
3.2%
3.3%
4.4%
8.3%
55.1%
17.5%
USAID
$7,493
HUD
$12,370
Interior
Energy
$17,926
$25,575
EPA
$27,770
Labor
$32,971
Transportation
Agriculture
$38,158
$53,283
NASA
$71,524
Homeland Sec
$181,283
SBA
$182,672
Commerce
Education
$250,513
NSF
$476,779
DOD
$1,009,757
DHHS
$3,173,306
$192,594
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F&A Recovery by Area
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F&A Recovery by Area
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How is F&A Allocated?
In FY07, the VPs for Research, Business Affairs and
Academic Affairs entered into a formal Memorandum
of Understanding (MOU) to document the allocation
of F&A.
The MOU is:
 Flexible - has been amended twice with another change
pending.
 Transparent
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Allocations to Generating Units
The MOU currently allocates 10% of actual F&A
recovery to PI’s, Colleges, Centers and Institutes
based on prior year actual earnings.
 These funds are allocated on a one-time basis
 Not part of the recipient’s base budget due to year-to-year
fluctuations in earnings.
 Funds are currently treated as discretionary incentive.
 Provost & VPR are reviewing alternate models to
assure strategic usage of the funds.
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Debt Service
A significant amount of F&A recovery is pledged
towards servicing debt:
Renovations to West Campus (Margaret Tobin) Lab
Facility financed through bond series 2006B
 will be retired August 15, 2036:
FY07 debt service paid $665,350
FY08 debt service paid $667,600
FY09 payment due
$666,000
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Debt Service
Faculty Start-Up Costs
 Beginning FY04, faculty start-up costs were financed with F&A
to service the debt.
 All debt under this program will be retired August 31, 2012.
 Estimated remaining payments are:
FY09 $1,383,495
FY10 1,251,908
FY11
924,722
FY12
34,795
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Building Maintenance, Leases &
Capital Improvements
Reserve for capital requirements, leases and
building maintenance for research related
facilities.
 In FY08, funds were used for previously pledged
faculty start-up costs to forego incurring additional
debt.
Unused balances roll forward to reserves.
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VP Administrative Overhead
The following VPs receive a base budget
allocation to support salaries & related
administrative overhead in support of research:
 Academic Affairs
 Research
 Business Affairs
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FY 2008 Total F&A Allocations
$7,090,575
Academic Affairs
Support, $875,000
, 12%
Research Support,
$1,130,580 , 16%
Business Affairs
Support, $522,200
, 7%
Faculty Start-Up
Costs, $1,000,000
, 14%
CAR Staff
Vac/Sick Leave,
$46,892 , 1%
Debt Svc - West
Campus (Tobin)
Lab, $667,600 , 9%
Debt Service Faculty Startup
Loans, $1,348,693
, 20%
Reallocation to
Generating Units,
$1,221,523 , 17%
Bldg Mtnc & Capital
Imprvmts,
$278,087 , 4%
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FY 2009 F&A Budget $6,482,482
Faculty Start-Up
Costs, $38,000 ,
1%
Academic Affairs
Support, $875,000
, 13%
Research Support,
$1,130,580 , 17%
Business Affairs
Support, $522,200
, 8%
Debt Svc - West
Campus (Tobin)
Lab, $666,000 ,
10%
Ctr for Arch Res Vac/Sick Leave,
$50,000 , 1%
Debt Service Faculty Startup
Loans, $1,383,495
, 22%
Bldg Mtnc, Leases
& Capital Imprvmts,
$522,000 , 8%
Reallocation to
Generating Units,
$1,295,207 , 20%
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FY 10 Budget Outlook
 FY10 Budget will be set 2.5% higher than FY09 (1.6%
higher than FY08 actual recovery)
New allocation will cover a portion of the estimated
utility costs for the new Engineering building.
Each VP area will receive an increased base budget
allocation:
 VPR
$ 95,000
 Academic Affairs
$100,000
 Business Affairs
$ 60,000
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FY 2010 Proposed F&A Budget
$7,550,188
Academic Affairs
Support, $975,000 ,
13%
Research Support,
$1,225,580 , 16%
Faculty Start-Up
Costs, $750,000 ,
10%
Business Affairs
Support, $582,200 ,
8%
Ctr for Arch Res Vac/Sick Leave,
$50,000 , 1%
Debt Svc - West
Campus (Tobin) Lab,
$667,500 , 9%
Debt Service - Faculty
Startup Loans,
$1,251,908 , 17%
Bldg Mtnc, Utilities,
Leases & Capital
Imprvmts, $733,000 ,
10%
Reallocation to
Generating Units,
$1,315,000 , 16%
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