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Merger Transition Sub-Team on Facilities & Administration (F&A) Cost Return to Units Including Principal Investigators

January 31, 2002

Mun Y. Choi, Associate Dean for Research & Graduate Studies, College of Engineering
Jane Clifford, Professor and Chair of Biochemistry
Yury Gogotsi, Professor of Materials Engineering
Marla Gold, Associate Professor of Medicine
Adbul Rao, Senior Associate Dean for Research, College of Medicine
William Regli, Associate Professor of Math & Computer Science
Richard Rest, Professor of Microbiology and Immunology
Michel Vallieres, Professor and Chair of Physics

        Our team was charged by the Merger Transition Team to provide guidance on the issue of F&A cost return to units and principal investigators. The specific questions that were posed by Harvill C. Eaton, Senior VP for Research and Graduate Studies, to the sub-committee include:

1. Should there be return of F&A cost to the units and PI?
2. If so, what distribution models for the F&A cost return should be used for the various units and PI?

Recommendations:

1. We recommend that the Drexel policy of returning 32% of the recovered F&A costs to the units with the distribution of 12% to the college, 12% to the department, and 8% to the PI be maintained in the merged institutions. This policy should be implemented with all NEW grants at MCPHU beginning in July 1, 2002. Since grants typically have a funding duration of 2 to 5 years, the policy of F&A cost return will be gradually and fully implemented within five years.
2. We recommend that the returned F&A Costs to the units be used for purposes of developing new research enterprise. Mechanisms to identify current sources of funding to be replaced by the returned F&A costs must be developed with a consensus of department chairs and college administrators.
3. We recommend that a committee involving faculty, department chairs, and college administrators be appointed to develop mechanisms to assist programs experiencing periods of difficulty or growth.
4. We recommend that the F&A sub-committee be retained to provide guidance to the Merger Transition Team and university administration during the implementation of the F&A return policy.

Impacts:

1. Return of the F&A costs is an excellent INCENTIVE to stimulate new research
2. The direct stakeholders in the research enterprise can have more autonomy to invest as they deem necessary to grow the research enterprise
3. Policy of a uniform return of F&A cost will provide a simpler accounting system for the merged institution and will generate goodwill among the faculty members of the newly merged institution
4. An advantage of using a fixed percent distribution of F&A cost return is the SIMPLICITY that it provides. This model reduces misunderstandings from the different groups and also reduces the administrative costs.