Blog
February 27, 2023
Attain Partners takes pride in keeping our clients and the community informed on current issues across the research administration realm. During a recent presentation at the iSRA Financial Management Conference, we discussed some of the emerging issues related to facilities and operations including the current landscape, how space decisions impact future Facilities and Administrative (F&A) recovery, building depreciation and interest, operations and maintenance (O&M), and the treatment of rebates.
As institutions transition to the new economic and regulatory market, there are various ways to create greater efficiency and improve margins in the research administration area.
The Current Landscape
The Great Resignation/retirement has impacted the four regional Cost Allocation Services (CAS) offices, which negotiate fringe benefits and F&A rates for colleges and universities. Short staffing continues to cause delays in the review and negotiation process.
Covid has changed how and when people work, impacting the F&A review process. Institutions are now conducting all aspects of space surveys remotely including training staff and Q&A review. CAS is also conducting virtual site visits to review space and equipment in place of traditional in-person site visits.
Space Decisions Impacting Future F&A Recovery
Space functional usage statistics drive the allocation of facilities-related costs, including building depreciation, equipment depreciation, interest expense, and operations and maintenance. Performing an accurate, well-documented space study is the first and most critical step toward ensuring the fullest recovery of costs associated with your institution’s sponsored programs.
When making space decisions, consider:
- Why is assigning the correct space classification important for F&A recovery?
- What impact has remote/hybrid work had on space functionalization?
- Why is identifying occupants for lab areas critically important for the space study and F&A recovery?
- How can my organization determine efficient use of research space that will maximize F&A recovery?
- What incentives can our institution employ to increase our effective F&A recovery rate?
Attain Partners employs AttainSpace, a web-enabled tool to compile, update, review, and retrieve the data necessary to generate a precise and comprehensive space study. AttainSpace also reduces the Federal compliance burden by facilitating rapid and accurate information collection and reporting capabilities. Contact us to learn more.
Building Depreciation and Interest
Implementing space productivity analyses for research programs, evaluating facilities and capital planning, and/or recovering as much cost as possible from the F&A function can help create greater efficiency and improve margins.
When looking at building depreciation and interest, consider:
- What can be done prior to the base year to ensure your depreciation component of the F&A rate is maximized?
- Does it make sense to debt finance a new research building?
Operations and Maintenance
As more jobs move to computational and remote, operations and maintenance (O&M) costs have shifted dramatically. When building O&M pools it is important to search for O&M type costs that are not naturally assigned to an O&M pool.
In reviewing your O&M costs, consider:
- Where can you find O&M costs that may be hidden in your financial accounting system?
- What are IT infrastructure and IT security costs? How can they impact my F&A rate?
Treatment of Rebates
Treatment of rebates has become a focus of the federal government in recent years. Historically institutions treated rebates they received from vendors as an offset to O&M costs in the F&A proposal. Recent audits by Office of Inspector General (OIG) have resulted in this method of treatment being discontinued, favoring rebates that offset the costs of the award that generated the rebate.
When looking at your institution’s treatment of rebates, consider:
- Why has the treatment of rebates changed?
- How do I determine the amount of rebates due to the federal government?
- What are my options for ensuring the government gets its fair share?
When to Enlist Expert Support and How Attain Partners Can Help
If you see any of these issues emerging at your institution, it is time to consider F&A reimbursement and compliance management. Attain Partners’ skilled professionals bring over 30 years of experience and expertise in executing the complex process of preparing, submitting, and negotiating F&A cost recovery proposals with the Federal government and other program sponsors.
Our team has unmatched experience in:
- Implementing industry best practices
- Reviewing, deploying, and applying costing methodologies
- Interpreting the dynamic regulatory environment that affects cost recovery rates
Attain Partners can help your institution identify issues and their impact, strategically plan tactical improvements, implement AttainSpace, prepare F&A cost proposals, and negotiate F&A rates to increase your margins and improve efficiency.
If you have questions about any of these issues or other F&A related topics, please reach out. Contact us now for more information.
About the Author
Mr. Bill Lambert is a Specialist Leader in the Research Enterprise Services practice of Attain Partners. Prior to joining Attain Partners in January 2022, he had over 25 years of experience in research administration, management, and leadership at Emory University. He is an experienced university research administrator focused on strategic planning, collaborative problem solving, and all aspects of financial research administration including award management, closeouts, effort reporting, service center rate review and approval, shared service center implementation, fringe benefit rate development and negotiation, equipment inventory management, policy development and implementation, and F&A rate development and negotiation for the National Primate Center and University. He has leadership role experience in both school/departments settings and central administrative offices.
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