Facilities and Administration Revenue Share FAQ

Facilities and Administrative (F&A) costs: Overhead and administrative allowance are costs incurred in support of sponsored programs, in general, but not identifiable with any single project. Most of these costs are tied to the buildings and utilities where research is done; other costs, such as clerical, accounting, and legal, are built into this negotiated rate. The Office of the Vice President for Research (OVPR) negotiates the rate and distributes the F&A revenue collected from sponsored awards.

Under current procedure, F&A revenue is distributed as follows:

• 80 percent: Central Budget (with a minimum of $7.5M)
• 5 percent: PIs
• 5 percent: Departments
• 7 percent: Deans
• 3 percent: OVPR

The new procedure sets a flat rate of return to the central budget of $7.5M and distributes every additional dollar as follows:

• 45 percent: PIs
• 25 percent: Departments
• 15 percent: Deans
• 15 percent: OVPR

Looking at the distributions from FY17, we have compared the old formula to the new one:

	FY 17 Actual Distribution		New Formula
Total F&A	$9,416,8178	100%	$9,416,818	100%
Central	$7,533,455	80%	$7,500,000	79.6%
PIs	$470,841	5%	$862,568	9.2%
Chairs	$470,841	5%	$479,205	5.1%
Deans	$1,130,018	7%	$287,523	3.1%
OVPR	$282,505	3%	$287,523	3.1%

 

The OVPR is currently predicting 6 percent growth in F&A Revenue during FY18. If that happens, the distribution would be as follows:

	FY 17 Actual Distribution		FY18 Projected
Total F&A	$9,416,8178	100%	$9,981,827	100%
Central	$7,533,455	80%	$7,500,000	75.2%
PIs	$470,841	5%	$1,116,822	11.2%
Chairs	$470,841	5%	$620,457	6.2%
Deans	$1,130,018	7%	$372,274	3.7%
OVPR	$282,505	3%	$372,274	3.7%

 

Based on the numbers through the end of February, faculty could anticipate a return of at least 10 percent of the F&A associated with their grants. Because the central budget portion is capped, the percentage returned to faculty and schools grows quickly if SLU has a growing research enterprise.

Under the old formula, many decisions about scholarly and scientific investments were made centrally. The new formula puts more of those investment decisions in the hands of those faculty pursuing funded research.

Nevertheless, operating SLU's research enterprise costs far more than $7.5 million. $7.5 million represents a minimal recovery for the central budget. SLU is investing in faculty now to grow the whole enterprise with the hope that in future years, it will recover enough F&A revenue to support both central and local investments.

This is true. We have not elected to change from the current procedure in this regard. We must work together as a University to grow the research enterprise.

Under the new procedure, faculty and schools will receive 85 percent of the F&A revenue above $7.5 million, creating both the capacity to invest in sponsored research programs and a strong incentive to do so. This incentive also encourages faculty to support each other across departments and schools – individual PIs gain more when the entire university succeeds.

This is an investment by the University in our scientific and scholarly enterprise. We have committed to this revenue-sharing agreement for five years, so PIs can plan for investments in personnel and equipment during the periods of their funded research using their portion of the recovered F&A dollars.

The university will eventually need to collect a larger portion of F&A revenue. We will therefore revisit the procedure periodically to see if there are opportunities to return some of the growth in revenue to the central budget without adversely impacting our faculty’s ability to invest in research.

We need many forms of investment. Faculty, departments and schools must have the resources necessary to invest in the most promising new research areas – and those closest to the research often know best where the opportunities are. This procedure supports local investments.

It is equally important to ensure that the other forms of central funding remain available to seed new areas of opportunity or provide partial matches when PIs, departments and schools decide to invest F&A dollars in new opportunities. The OVPR share of F&A revenue goes entirely to support new research programs. We will also continue seeking philanthropic support to grow these types of central funding programs.

Distributions will normally occur after the fiscal year books are finalized, typically in September of the following academic year. The OVPR will include monthly results and annual forecasts throughout the year in the weekly research news. In years where the central budget amount is met early in the year, the OVPR may elect to provide a partial distribution to PIs during the academic year.