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Re: F& A Waiver Herbert B. Chermside 04 Dec 1998 09:12 EST

Suzette, this is a question which has to ve decided at high executive
levels of your institution. You've outlined the variables:

1) failure to collect full F&A means that the institution is subsidizing
the work (I bet your F&A rate is less than full recovery, anyuway!)

2)  collecting F&A GIVES THE APPEARANCE that the recipients of the social
services are being shortchanged.  (Consider, however, that these same
"overhead" costs would be necessary for anyone providing the services, it
just might not be separately identified in their budget,  e.g., the County
Health Department might provide the services, and their "overhead" for the
project is buried in their operating cost.)

3)  "service" may be a specific mission of the institution.  In that case,
it can be successfully argued that these "overhead" costs should be born by
the insititution.  (I'd suggest that, either in considering this approach,
or after selecting it in keeping it operational, the insititution find a
plausable method of extimating what these subsidized overhead costs are,
and examine the practice foe fiscal impact on a regular basis.  Otherwise,
it could rapidly shift from a little bleeding to a hemorage!)

Anyway, these are top l;evel policy decisions.

FYI, these are our published guidelines on reducing F&A, designed for a
Research I university:

http://views.vcu.edu/views/ospa/manual/guide_recover.html

Good luck in getting a clear decision made; too many insititutions waffle,
and end up with certain powerful faculty members getting reductions where
others cannot.

Chuck

At 08:25 AM 12/4/98 -0500, you wrote:
>We are a Masters I institution and our funding is under
>10.0 million. We are looking for policies that institutions
>may have in regard to waiving F&A for service contracts
>described below. Please respond directly to me at
>xxxxxx@appstate.edu. Thank you for any response!
>
>We handle a number of service contracts with various state
>and local agencies.  Among these service contracts are some
>in which various units of the university provide services
>to certain social agencies (group homes, foster care,
>half-way houses, etc...).  These agencies may be state,
>county, or private and may also have policies in effect
>which relate to the payment of F&A.  We are seeking to
>recover a certain percent, when allowed,  of the contract
>amount in the form of F&A.  Recently, faculty members and
>academic administrators who provide these services came to
>us arguing that it is inappropriate, unethical, and not in
>good conscious to apply F&A costs to contracts of this type
>and that any F&A charge reduces the dollars that can go
>into the social service provided by the university.  The
>inclusion of F&A creates a situation where  (1) services
>would have to be reduced to offset the inclusion of F&A,
>or  (2) the social agencies, who are on the financial edge
>anyway, could no longer afford to contract with us.  The
>net effect would be that those who need the services the
>most, would lose.  We recognize that service is, and always
>has been, a distinct portion of our mission.  But, where do
>we draw the line?  We do have other faculty members who
>provide services of a different nature and F&A is not
>really an issue.  Could you provide us with any thoughts or
>insights?
>----------------------
>Suzette S. Mauney
>Appalachian State University
>Assistant Director, Sponsored Programs
>(704)262-2694*fax(704)262-2709
>xxxxxx@appstate.edu
>
>
>=============================================================================
>
Herbert B. Chermside, CRA
Director, Sponsored Programs Administration
Virginia Comonwealth University
PO BOX 980568
Richmond, VA  23298-0568
Express Delivery Only:
 Sanger Hall, Rm. 1-073
 11th & Marshall Streets
 Richmond, VA  23219
Voice:  804-828-6772
Fax     804-828-2521
OFFICE e-mail   xxxxxx@VCU.EDU
Personal e-mail xxxxxx@vcu.edu
http://views.vcu.edu/views/ospa/

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