New F&A Waiver Strategy

Current F&A Challenges

• Large amounts of foregone F&A restrict institutional capabilities

• Institutional risk exists due to inconsistent treatment

• F&A Waiver process needs to be streamlined

• $1.87M waived in first four months of FY08– 76 requests

• ~50% for projects under $50K direct costs/yr

– Spread across all fund sources

Peer Positions• F&A Waivers not granted to for-profits

(UC all campuses, Stanford, Michigan, Washington, MIT, Michigan State, Purdue)

• F&A Waivers not granted to foreign entities (UC all campuses, Stanford, Penn State, MIT, Michigan State, Purdue)

Minnesota F&A Rates are Competitive

• U of Washington 56.0%• UC San Diego 54.5%• UC San Francisco 54.0%• UC Los Angeles 54.0%• UC Berkeley 53.5%• U of Illinois 53.0% (UIC at 57%)• U of Michigan 52.0%• U of Minnesota 51.0%• Ohio State 50.0%• Wisconsin 48.5% • North Carolina 46.0% (FY08 under

negotiation)

SPA•PI Transfers• Non-profits with published policy• Special governmental programs•Projects which move from off-campus to on-campus.

Proposed New Strategy

F&A WaiverRequests

AdministrativeWaivers Strategic

WaiversRegularWaivers

Deans• Small Project Waiver(<$50K direct cost/yr)

• Other Reductions above minimums

VPR• Waivers or reductions below minimums

Tracked Tracked

Proposed F&A Rate Minimums

(awards over $50K direct costs/year)• Federal ……………………………… Federally negotiated rate*• Foreign government ………………... Federally negotiated

rate*• For-profit …………………………… 34%• State of Minnesota ………………….. 0% (for now)• Non-profit/foundations ……...…….. Published policy or

10% TDC**• Corporate affiliate programs ……….. 10% TDC• Industry-funded clinical trials …… 26% TDC

* or as approved by SPA

** Use published policy if itexists, otherwise, 10% TDC

Waivers No Longer Available for:

• Projects that did not receive institutional endorsement prior to submission to Sponsor

• F&A waivers or reductions of rates negotiated by PIs with Sponsors

If reduced F&A is needed in these instances, the Unit must set up a cost-sharing account to pay the difference between the Sponsor-approved rate and the federally negotiated rate or approved minimumfor this type of project.

Potential Reasons to Approve Waivers

• Seed grants which may attract larger awards• Hardship for new PI• Awards which include equipment or building funds• Community relations or library projects• Student services projects (or increase funding to pay for

students)• Capped awards• Department committed to undertake the research regardless of

external funding (e.g., any dollar gained is better than nothing)• Small cost• Junior faculty or incoming faculty member• Enhance cultural/artistic activities (small projects only)• Only available source of funds in an area• Strategic partnerships

Potential Reasons to Disapprove Waivers

• Precedent setting• Grounds on which the waiver might be justified to other

faculty whose projects carry full overhead• Consistency with similar sponsors or programs• Large total cost to the University• Any IP rights granted to the sponsor• Past history of PI requesting waivers• Profit-making entities• Foreign entities

F&A Waiver Process Improvements

1. Eliminate formal waiver process for projects less than $50K/year –dean’s signature on PRF will signify approval

2. SPA has created a list of agencies with pre-approved rates (based on policy); proof of agency policy is no longer required to accompany PRFs when submitting to these entities

3. SPA has new “Foregone F&A calculator” to help Deans and SPA better understand and track foregone amounts

4. Waiver requests must be submitted in advance (4 business days for regular waivers, 7 business days for strategic waivers) Can’t make the deadline? Submit with full F&A!

Approval TimelinesRegular Waivers• Day 1: Info to Dean(s)• Day 2: PI notified by Dean of approval/disapproval• Day 3: PI/Dept adjusts proposal if needed & submit to SPA• Day 4: SPA proposal review

Strategic Waivers• Day 1: Info to Dean(s)• Day 2-4: Dean(s), VPR, Chair, PI, SPA confer• Day 5: PI notified of approval/disapproval• Day 6: PI/Dept adjusts proposal if needed & submit to SPA• Day 7: SPA proposal review

TimelineStill under

Consideration!

TimelineStill under

Consideration!

Proposal for New Waiver Strategy Rollout

Proposed for April 1, 2008• Streamlined waiver approval process implemented• Dean’s approval for small waivers implemented • SPA endorsement for administrative waivers

implemented• No waivers granted for proposals submitted without

endorsement• Reductions for for-profits and foreign governments

beyond pre-set minimum level requires VPR approval• Other F&A minimums considered “targets” • PIs informed that they may not negotiate F&A ratesProposed for January 1, 2009• F&A minimum levels for all categories implemented

Questions?