GIM 22
Attachment A
A Primer on Facilities and Administrative Costs

5. How are F&A cost components calculated?

Buildings and Improvements
Interest
Equipment
Operations and Maintenance
Library
General Administration
Departmental Administration
Sponsored Projects Administration
Student Services Administration

• The Buildings and Improvements cost pool (the first of nine cost pools) contains three major types of costs. The first and largest segment is the building depreciation. Depreciation is calculated on a straight-line basis by building component, such as foundation (100 years), roof (20 years) and so on. Building costs paid from federal funding are not included in the depreciation calculation.

  Based on an extensive "space study" carried out by the University, an estimate is made of the fraction of building use which can be attributed to the research effort. The building cost pool also allows for the cost of land improvements (such as sidewalks, exterior lighting, landscaping), and the cost of off-campus rental space (if not charged to a grant directly).

• The Interest cost pool includes interest on debt associated with certain buildings, equipment and capital improvements. These costs are assigned to research projects proportionally in the same manner as the depreciation or use allowance on the items (buildings, equipment and capital improvements) for which interest is paid.

• The Equipment cost pool includes items of equipment not purchased with federal funds. An annual depreciation amount is computed on each equipment item using "useful life" periods established by the State of Washington. If the equipment is located in a room identified in the University's space study as research space, the corresponding equipment depreciation amount is considered an F&A cost of the research carried out in that room.

• The Operations and Maintenance cost pool includes physical plant operations and maintenance expenses. This category recovers the cost of utilities, maintenance, custodial services, environmental health and safety, transportation services, campus security, and facilities management associated with organized research. The University's space study is used to apportion the majority of these expenses to research, instruction and other activities.

• The Library cost pool recovers centralized library costs incurred by the Suzzallo, Allen, and Odegaard Libraries as well as Branch Libraries. Recoverable operating costs include administration, book acquisitions, and the cost of periodicals. Libraries operated by academic departments are considered departmental administration costs, and are recoverable through that cost pool. The various groups utilizing library services must be identified and assigned a portion of library costs when establishing what fraction of the total cost of the library enterprise is attributable to the research activities of the University.

• The General Administration cost pool includes expenses for general executive and administrative offices, which provide services to all activities of the University. This category encompasses personnel, payroll, and purchasing services, financial management, and a variety of other central administrative functions. In addition, expenses in the offices of the President, the Provost, and the Executive Vice President are included in this cost pool. These expenses are distributed proportionally in relation to the many other activities conducted at an educational institution.

• The Departmental Administration cost pool includes expenses for program support and administration which occur at both the college/school and departmental levels. This cost pool includes an allowance (3.6% of MTDC) for the administrative effort of faculty and other professional personnel. In addition, the Departmental Administration cost pool includes a calculation of the portion of personnel costs for non-faculty and non-professional technical and administrative staff, and for supplies, travel, telephone services, etc. which are typically paid from general operating budgets.

• The Sponsored Projects Administration cost pool recovers the cost of organizational units established primarily to support the research or training effort regardless of the funding source. The primary elements in this pool are the costs associated with the offices of Grant and Contract Accounting, Office of Sponsored Programs, and some costs in the office of the Vice Provost for Research.

• The Student Services Administration cost pool provides for graduate student services. This includes a portion of the costs of graduate student counseling, health services, the Graduate Admissions office and similar activities. However, current DHHS practice requires the allocation of all student services administration costs to instruction. Therefore, no student services administration costs are included in the existing F&A rate for research.

Once all F&A costs attributable to research are identified and calculated for a fiscal year, the sum becomes the numerator in the F&A cost rate calculation shown in Chart I. The modified total direct costs (MTDC) for the corresponding year are placed in the denominator. The resulting quotient is the proposed F&A cost rate. A component rate is calculated for each of the nine cost pools as shown in Chart II.