OREGON STATE UNIVERSITY

Oregon State negotiates facilities and administration rate for next four years

09/07/2010

CORVALLIS, Ore. – Research is booming at Oregon State University and the amount of scientific grants and contracts has doubled in the past decade.

But there’s a cost to doing research on campus. The expenses range from the equipment used in experiments, to maintenance on the buildings that house labs, to the administrative costs of keeping the researchers and their teams up and running.

No one knows the cost of research better than Karen Steele and Charlotte Rooks in the OSU Business Affairs office. Steele, who has just retired, and Rooks have been working for two years with Aaron Howell, director of Business Affairs, to identify and document every cost associated with research. The four-inch high stack of documents that resulted from the work was used to negotiate the university’s facilities and administration (F&A) rate with the federal government for the next four years.

The federal government establishes the rate at which universities can charge facilities and administrative costs that are indirectly related to the project. Direct costs include faculty salaries, benefits, travel and supplies. Those costs are included in grant funding requests by researchers. Universities must provide extensive records of the amount of indirect costs associated with research, including facilities maintenance, utilities, and administrative costs, before negotiating the F&A rate with the government.

The costs can go up and down, depending on a variety of factors, including new buildings, deferred maintenance, and the amount of research taking place at the university. This is why each time Oregon State renegotiates its rate, an extensive amount of work is required.

“There are no made up costs,” Steele said. “We have to absolutely reconcile these numbers to the financial statements put out by the Oregon University System.”

The rate approved by the federal government for on-campus research for the next four years is 45 percent of the modified direct cost of research for 2010-11. The rate will go up to 46 percent the following fiscal year after the completion of the Linus Pauling Science Center.  That rate is applicable to all research grants except those with a legal limitation on overhead rates, which includes some private foundations and some government agencies.

The money received from facilities and administration rates is distributed between the college of origin, the university and the Oregon University System, in order to pay for the costs associated with the projects.

Oregon State is in the ‘middle-of-the-pack’ of land grant universities with its facilities and administration rates, according to Steele. OSU’s rate is steady, in part because of new buildings such as the Energy Center and the upcoming Linus Pauling Center, as well as internal studies, a thorough space audit, and an equipment inventory on campus.

Steele said Oregon State’s recovery of the F&A costs associated with research is important to maintaining the vitality of the university and its Carnegie Foundation’s top designation, awarded to institutions with “very high research activity.” OSU is the only university in Oregon to have this designation.