Working Group #1:

Charge - The effect our new rates may have on the competitiveness of our funding requests.






Mis-Perceptions by the Campus Community




Concerns of Research Faculty and Staff




PREMISE
Typical Proposals Sponsored Programs Budget

Old Rates
FB 38/25%
IDC 47%
2 - PhD's		 ONR Rates
FB 38%
IDC 51%
2 - PhD's		 Percent
Increase		 Dollar
Increase
PI @ salary of 75K
CO-PI @ salary of 55K
Subtotal		 1 mo su
1 mo su		 $8,333
$6,111
$14,444		 $8,333
$6,111
$14,444		 0% $0 $0
Fringe Benefit $ 3,611 $ 5,489 52.00% $1,878 _
2-GRA's $29,760 $29,760 _ _ $0
Tuition $13,592 $16,614 22.23% $3,022 _
Travel $4,000 $4,000 _ _ $0
Materials $5,000 $5,000 _ $0 _
Equipment
(Computation/Analytical Charges)		 $7,000 $7,000 _ $0 _
Other Costs $3,000 $3,000 _ _ _
Indirect Costs $31,403 $35,033 11.56% $3,630 _
Total $111,810 $120,340 7.63% $8,530 _





PREMISE
Typical Proposals Sponsored Programs Budget


POSSIBLE REDUCTIONS






Other Concerns of Research-Active Faculty
  • The current 15-week semester calendar discourages proposal preparation during academic breaks.

  • Reduced and/or mis-targeted REF awards

  • Erosion of operational charges covered by overhead. Contracts are increasingly being charged directly for items like phone and computer connections, which should be overhead expenses.

  • Uncomfortable working conditions during proposal preparation periods (e.g., turning the heat off during winter breaks and weekends; no climate control in summer).

  • General lack of clerical and staff support for proposal preparation





Concerns of the Institutes to
Higher Fringe Rates on Competitiveness
  • 57% FB Rate sends a negative impression to our sponsors.

  • 57% FB Rate sends a negative message to institutes, increasing the polarization of the academic departments and the research institutes.

  • 46% FB + 47% ICR to 57% FB + 51% ICR results in 10.46% to 16.90% increase over last year without including wage increases - this will result in lost business.

  • 57% FB rate will discourage faculty/soft money collaboration. . .contrary to strategic plan.






Problems with Rising Fringe Benefit Rates
  • The ONR approved faculty composite summer fringe benefit rate of 38% (currently 25%) on salaries is far in excess of the discrete actual cost of about 20.5%

  • Explicitly including vacation, bereavement, holiday, and sick time in the fringe benefit rate for staff comes to 57%. This is very unattractive to granting agencies and industrial clients, squeezes research budgets, and discourages hiring and support of regular, full-time staff.

  • Higher fringe benefit costs are the potential cause of:

    1. Loss of competitiveness in winning grants and contracts;

    2. Reduction in effectiveness at performing the research we do get;

    3. Drop in scholarly production;

    4. Disincentive to hire and retain professional staff and post-docs; and

    5. Fewer graduate students produced





Comparison of Rates at Other Universities

University Soft Money
Rate		 University Funded
Rate		 Vacation, Holiday,
etc.included		 Faculty
Rate-AY		 Faculty Rate
Summer		 Indirect Cost
Rate
MTU 57% 38% Yes1 38% 38% 51%
WMU 39% _ Yes 22% 11% 45.5%
MSU 32% 32% No 7.5% 47%
UM-AA 26%2 26% No 26% <26%3 51%
WSU _ 21.3%4 No 22.2% 22.2% 50%
Virginia Tech 34% 34% No 25% 9.0% 45%
Iowa State5 _ 29.2-35.5% No 23.2% 23.2% 45%
  • 1 Yes means fringe benefit pool pays for vacation, holiday time. No means contract is charged directly for vacations/holidays. For MTU, the Yes applies to soft money personnel but not for faculty.

  • 2 This is a university-wide average. UM-AA practice is to charge specific (i.e., individual) benefits for each person on grant/contract money.

  • 3 The < signifies that health and life benefits are not charged as fringe benefits on faculty summer salary.

  • 4 The 21.3% is a university average. Rates vary from 17.6% to 32.5% depending on classification of employee.

  • 5 29.2% for professional and scientific personnel. 35.5% for "merit" employees. Actual charges to contracts are specific benefits to each employee whose salary is charged to contract.


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