GIM 22
Attachment A
A Primer on Facilities and Administrative Costs
17. How important is F&A cost reimbursement to the University?
Chart X shows growth of both direct
and F&A cost at the University of Washington during the last ten years. F&A cost
reimbursement is the primary source of infrastructure support for the UW's extensive
graduate education and research programs. The F&A cost reimbursements pay for a wide
range of support services and administrative activities. They make it possible for
the institution to operate a first-rate library system for research and scholarship;
they allow us to service, maintain and renew our research facilities. Without the
F&A cost reimbursements, our research and graduate teaching enterprise would be only
a shadow of its present size and quality. Indeed, without the growth in revenues
from F&A costs since 1983, the UW would have been faced with very painful budget
cuts in the late eighties and early nineties, and recent budget cuts would have been
much worse than those experienced.
Anyone who has submitted grant proposals during the last ten years is aware that the
on-campus research F&A cost rate has been fairly stable. It varied between 53% in
1990 to 52% in 2000 with a slight decrease to 48.5% in the middle of the decade.
While the rate has been quite stable, the amount of F&A cost reimbursement has
increased from $61 million in 1990 to $119 million in 2000 primarily because of the
increase in grant and contract awards. F&A cost reimbursement is combined with other
local revenue to make up the Designated Operating Fund (DOF). F&A cost reimbursement
made up 68% of Designated Operating Fund revenue in FY 2000. Other significant
revenue sources are investment income with 16% of the total, Summer Quarter tuition
with 7% and institutional overhead on self-sustaining budgets 5%. It should be noted
that investment income can vary considerably from year to year based on the
performance of the University's investment portfolio. If investment income were to
decline sharply, the percentage of the total fund provided by the other revenue
sources would necessarily increase proportionately. Even taking the other DOF
revenue sources into account, by far the biggest contributor to the increase in the
fund revenue has been the increase in F&A reimbursement.
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