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Announcements & Updates: Upcoming Workshops & New Registration Process, Spending Sponsored Funds: Case Studies, New ARRA Specialist
Proposed Policy on Proposal Submission Deadlines
Update on Audit Activities Across the University
Hot Topic of the Month: Indirect Costs at FAS: Executive Summary
Announcements & Updates:
1. Upcoming Workshops & New Registration Process: The next round of RAS Workshops will be held in May and June. Workshops will include CREW Sponsored Basics, CREW Beyond the PER, GMAS Essentials, Spending Sponsored Funds: Case Studies, Introduction to FASSPAR, FASSPAR Projections, Budgeting for Proposals and Awards Using the RAS Budget Template, and Equipment Management. Click here for more information and to register using your Harvard PIN.
2. Spending Sponsored Funds - Case Studies: Alan Long and Nuala McGowan will be facilitating a new workshop using case studies illustrating the AARC (Allowability, Allocability, Reasonableness, and Consistency) concepts for deciding what may be purchased with sponsored funds. The workshop will use small breakout groups that report back to the full group with answers to case-study questions. The first session will be held on May 25 and will be repeated the next day. Click here for more information and to register using your Harvard PIN.
3. New ARRA Project Specialist: RAS is pleased to announce that Radostina "Rady" Rogers has been hired as our third ARRA Specialist, to help out with American Recovery and Reinvestment Act reporting and management of ARRA grants.
Proposed Policy on Proposal Submission Deadlines — Cathy Gorodentsev and Pat Fitzgerald
Cathy and Pat presented a preliminary version of a new University-wide policy on proposal submission deadlines that was subsequently changed very significantly by the Sponsored Administration Leadership Committee (SALC), based in part on the excellent feedback provided by the RAS Friday participants. Because the changes were so extensive, we will wait to post the details until the policy is finalized.
Questions, suggestions, and comments may be addressed to Pat Fitzgerald pwf@fas.harvard.edu. Stay tuned for more information.
Update on Audit Activities Across the University — Cathy Gorodentsev
Audit activity has increased across the University this year, and there is an expectation that audit activity will continue to grow. A major agency is auditing a nine-year, twenty-five million dollar project at the Kennedy School right now, and eight other agency audits are ongoing. In addition, the Office of Inspector General is starting to focus on the application of cost principles to American Recovery and Reinvestment Act funds.
Proposed Statement of Principles for the Application of Indirect Costs to Non-federal Sponsored Awards — Alan Long
Significant points regarding the proposed statement of principles, still in draft form as of 4/12/10:
1. Harvard is committed to the recovery of facilities and administrative costs incurred to support non-federal sponsored activities, and must attempt to recover as much of those costs as possible.
2. Proposals should be submitted using the maximum indirect cost rate the sponsor will allow.
3. Proposers need to figure out the maximum overhead rate allowed and ask for that rate. To facilitate this, OSP will establish a database documenting indirect cost rates paid by non-federal sponsors.
4. When proposing a project at a lower rate than the full federal rate, proposers should, where allowed by the sponsor: a) budget expenses normally considered indirect costs as direct costs, and b) apply the sponsor-allowed indirect cost rate to all direct costs budgeted for the project.
5. Schools must quantify the amount of indirect expense not recovered and share it with other schools and with OSP.
Questions, suggestions, and comments regarding the points above may be addressed to Alan Long aklong@fas.harvard.edu. Stay tuned for more information.
Hot Topic of the Month: Indirect Costs at FAS: Executive Summary — Alan Long
It is important for researchers and administrators to be aware that indirect costs (also called facilities and administrative costs or overhead costs) are expenses incurred and required to support the research enterprise. Actual facilities and administrative costs in Cambridge equal more than 90% of direct costs, and our negotiated rate is only 68%. Our effective overhead recovery is actually closer to 40% of direct costs, at least in part because non-federal sponsors often prohibit Harvard from applying the federal negotiated rate to awards. Why is our negotiated rate lower than our actual costs? We lose about seven of the above-mentioned 90 points because of a cap on administrative costs, the Department of Health and Human Services won't negotiate a rate higher than 69.5% , and there are many research costs that we cannot include in our rate calculation. Bottom line: indirect income comes nowhere near covering the facilities and administrative costs incurred to support sponsored research.
Points to consider when thinking about the overhead rate:
1. Indirect costs are real costs, needed to perform research.
2. The two major categories of indirect costs are facilities costs and administrative costs.
3. Administrative costs are capped at 26% and have been for a long time.
4. Facilities costs are very high because of our location: overhead rates are historically higher in the Northeast, and utility rates are high because of cold winters.
5.
Harvard is committed to providing state-of-the-art facilities for research. Construction is very expensive here and, because of Harvard's substantial borrowing power, Harvard tends to incur interest expense on construction projects.
6. We hire a lot of graduate students and postdocs, who require extra space.
7. The FAS policy of not charging academic year faculty salaries to grants drives up our rate.
Download "Indirect Costs at FAS: An Executive Summary" here
