Ross,

We have the same difficulties. The way we have approached the problem is to
:

1) Annualize the direct and indirect costs of each award we currently have
that will have a budget period within the next fiscal year.

2) From this list, determine the percentage of total budget period funding
spent in each of the last x years of the award (i.e. spending trend of the
PI) and apply that % to the amount in (1)

3) Determine a list of pending awards at budget time (the later the
possible), then :

 a) Evaluate submission by submission by talking with PI and dept.
head to determine likelihood of success
 b) Take an historical success rate for each major agency and apply
that to the submissions

Once we have our budgeted total indirect cost revenue, we evaluate the
historical monthly pattern of indirect cost revenue and determine estimated
monthly revenue based on this figure. This is more useful than it may sound
as the assumption that revenue is constant each month is certainly not valid
in our institution (whereas trends in revenue streams are relatively
constant), and it is much easier to spot problems ahead of time by
monitoring this on a month by month basis.

My final strategy is to continually harass our accounting office and
executive committee by pointing out that the primary purpose of budgets is
to provide a tool which allows managers to more effectively make use of
their limited resources. One of the key assumptions of budget theory being
that items on the budget are controllable by the person held responsible.
There is little or no point in making a sponsored research office (or
research institute) a profit center based on indirect costs revenue unless
they have control of faculty/researcher hiring, allocation of researcher
effort, and the success of the research taking place. The day I get any
influence in the three above will be the day I feel somewhat responsible for
the revenue from indirect costs.

-David
David Higginson, ACMA
Administrative Director
Arkansas Children's Hospital Research Institute
Tel: (501) 320-3757
Fax: (501) 320-3547
Email : xxxxxx@exchange.uams.edu
WWW : http://achri.ach.uams.edu

-----Original Message-----
From: Ross, Stuart [mailto:xxxxxx@EXCHANGE.FULLERTON.EDU]
Sent: Friday, March 20, 1998 4:50 PM
To: Multiple recipients of list RESADM-L
Subject: forecasting indirect cost revenues

Has anyone figured out a good method or algorithm for forecasting and
budgeting indirect cost revenues?
We currently use a rough combination of extrapolating recent trends and
estimating the likelihood of future awards, and we are often wrong.  Not
disastrously wrong, but uncomfortably so, and we'd like to do better.
As a relatively small office, we are relatively vulnerable to (a) the
gains and losses of single large grants, as well as (b) the level of
activity on campus and (c) the prevailing national grants climate.
Any tips, advice, or full-blown solutions would be welcome.....

Stuart A. Ross
Cal State Fullerton
xxxxxx@fullerton.edu