Auxiliary & Self-Supporting Activities Task Group Summary & Recommendations · 2021. 1. 16. · initial Tiger Team, thus maintaining the crucial continuity needed to ensure timeline

Auxiliary & Self-Supporting Activities Task Group Summary & Recommendations

May 27, 2010

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Table of Contents

EXECUTIVE SUMMARY ............................................................................................................ 2

Recommendations and Next Steps .............................................................................................. 4 PROJECT DESCRIPTIONS, EXPLANATIONS, & OPEN ITEMS ............................................ 5

Introduction and Process ............................................................................................................ 5 Rate Development ....................................................................................................................... 6 Identified Activities and Classification ....................................................................................... 8 Other UC Campuses ................................................................................................................... 9 Response from Health Sciences ................................................................................................ 10

RECENT DEVELOPMENTS AND FUTURE CONSIDERATIONS ........................................ 11 Senate Administration Task Force ............................................................................................ 11 Bureau of State Audits .............................................................................................................. 12 Post-Task Group Reactions and Recommendations ................................................................. 12

Health Sciences ..................................................................................................................... 12 Student Affairs ...................................................................................................................... 13 Academic Affairs .................................................................................................................. 13

ATTACHMENTS

Attachment A – Administrative Overhead Rate Calculation Detail Attachment B – Overhead Rate Details (ICR, Differential Income, Admin Recharge) Attachment C – Projected Impact, Summary by Vice Chancellor Attachment D – Projected Impact, Detail by VC, Organization, Fund Attachment E – ACT Project Proposal for Automation of Overhead Recovery Attachment F – Responses from other UC Campuses with Medical Centers Attachment G – Updated UC Systemwide Survey Attachment H – VCHS Counterproposal PowerPoint Presentation

APPENDICES

Appendix A – Link to 2009 ASSA Tiger Team Final Report (June 2009) Appendix B – Charge Letter from Vice Chancellor Matthews (Nov 2009) Appendix C – Report of the Senate-Administration Task Force on Budget (Jan 2010) Appendix D – Senator Yee’s request to the Bureau of State Audits (Feb 2010) Appendix E – Task Group Membership and Contributing Staff from Campus

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EXECUTIVE SUMMARY The Auxiliary and Self-Supporting Activities (ASSA) Task Group was appointed in November 2009 at the request of the Chancellor. The charge was to ensure the campus is recovering all administrative overhead costs from this important and growing segment of campus operations. The task group was appointed as a result of the June 2009 ASSA Tiger Team’s conclusions that the campus was not fully recovering its overhead costs from campus auxiliary and other self supporting activities which represent almost 45% of total campus operations, and have grown by over 75% over the last 8 years. In light of this, the appointed Task Group was specifically charged with working toward some key goals outlined in the ASSA Tiger Team final report:

Develop an administrative overhead rate(s) by using the current cost-based overhead rate development approach and costing principles used by the University and federal government to set overhead rates for sponsored research projects.

Evaluate the assessment of campus overhead and other self-supporting activities and use of the actual calculated rate rather than the federally negotiated, and discounted, rate.

Address auxiliary and other self-supporting activities identified as not remitting, or under-remitting, overhead to the campus.

Standardize and automate the overhead recovery process, similar to the current process for sponsored research projects.

The task group included representatives from all Vice Chancellor units across the campus, as well as the Medical Center. One of the primary goals of the team was to finalize the administrative overhead rate(s) to be recommended to campus leadership, with ample time to communicate and implement for the 2010/11 budget planning process. By policy, all campus auxiliary and self-supporting activities are expected to ‘fully self-support’ and not receive institutional subsidy. Costing and pricing policies require that rates for sales to the general public shall recover both direct costs and indirect costs, or overhead. Direct costs are those costs that can be identified specifically with a particular service or product, or that can be directly assigned with relative ease and a high degree of accuracy. Overhead costs are those costs that cannot be easily, and with a high degree of accuracy, identified with a particular service or product, or that are incurred for a common or joint objective. For Auxiliaries and some specific self-supporting academic activity, overhead recovery now occurs largely via an ‘administrative recharge’ rate charged on expenditures, whereas a ‘differential income’ overhead rate is charged on revenues generated from self-supporting activities.

Recommendations, Impact and Next Steps Over the period of over four months the group researched and discussed the approach to rate development, surveyed local service providers and other institutions’ recovery processes, considered potential overhead recoveries and campus impacts, as well as options for automation.

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In brief, the task group’s recommendations are outlined below: 1. Administrative Overhead Rate(s) Development

It is proposed that the administrative overhead rate on Auxiliary and Self-Supporting Academic Activities be adopted effective July 1, 2010. While Auxiliary activities directly pay for facility related costs, the Medical Center also directly pays for a significant number of administrative services. In recognition of the significant differences between the Medical Center and other Auxiliaries, a special and reduced administrative overhead rate was developed and is proposed for the Medical Center. All other Auxiliary and Self-Supporting Academic activities such as Housing and Dining, Transportation and Parking, Bookstore, Medical Group, Recreation, and Extended Studies among others, will be subject to the same basic administrative overhead rate. The calculated and proposed preliminary Administrative Overhead Rates specifically for the Medical Center and campus Auxiliaries & other Academic Self Supporting activity are:

Hospital/Medical Center 1.8%

Campus Auxiliaries & Other Self Supporting 4.1%

The supporting detail used to derive these rates can be found in Attachment A. It is further proposed that the final rates be adopted and that these remain in place, until such time as the campus revisits the Federal indirect cost recovery rate development and, in parallel, reviews these administrative rates. Phasing in the rate over a 2-3 year period recognizes the significant impact on some units that have been paying little or nothing at all.

2. Differential Income Overhead Rate - Identified Activities and Classification

Campus recharge policy PPM 300-40 defines pricing policy and provides direction for the establishment, costing, pricing, and administration of recharge and other income producing activities with outside sales. Consistent with this policy, and working with their respective departments, Vice Chancellor representatives have reviewed the classification of activities as either subject to recharge policy and thus pay the current Differential Income Overhead Rate of 45% on their outside sales, or exempt from this policy and subject to the Administrative Overhead rate(s) noted above. This will facilitate automation for policy compliance, and addresses current issue of departments not remitting or under-remitting overhead to campus. A breakdown of the current Differential Income Overhead Rate subtotaled by component is included in Attachment B. For activities that the task group members have identified as possible waivers to policy, PPM 300-40 has an existing process in place to request a waiver of overhead from an oversight committee.

3. Automation

The task group worked with General Accounting and ACT to better understand how the automated process works for Federal ICR and how it might benefit the ASSA project. The task group proposes that a small work group of campus experts and customers be identified

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to work with ACT over the next several months to assist in the automation effort. Until automated system is ready, the group recommends calculating each unit’s overhead amounts as proposed in this report and using actual 2009/10 revenues and expenditures, and effecting the transactions via global batch process. Further, we recommend the campus invests in this automation initiative with future reimbursement from increased overhead recovery.

Projected Impact

- Differential Income Overhead – The most significant weakness with the current

Differential Income process is that the responsibility of collecting and remitting overhead to the campus is left up to each activity, with no consequence for lack of or under-remitting. As a result, it appears that while the campus should have collected well over $12 million in 2008/09, only $2.7 million was actually remitted. The task group believes that automating the differential income process will eliminate this weakness and improve overhead recovery.

- Administrative Overhead – Preliminary administrative overhead calculations are based on the rates and activities described in the previous sections and are projected to be around $20 million compared to the $2.5 million collected in 2008/09. Attachment C provides a summary level impact projection for Differential Income and Administrative Overhead, subtotaled by Vice Chancellor area. Attachment D provides the detail for these projections at the individual activity level. While there were some detail questions and concerns that arose throughout the process, these were not fully addressed by this group as they were outside the scope of group’s charge. However, these are noted and outlined in the “Recent Developments and Future Considerations” section toward the end of this report.

Next Steps

As next steps, the group proposes adoption of recommendations and that: 1) a small subset of task group members, and others as appropriate, work to discuss appropriate implementation details including first year roll-out, communications, policy revisions, etc.; 2) a small work group of campus experts and customers be identified to work with ACT to assist in the automation effort; 3) the campus financial officers discuss options for the disposition and allocation of this expanded overhead recovery income. Some crossover with existing group members would be necessary to ensure knowledge continuity and timely automation.

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PROJECT DESCRIPTIONS, EXPLANATIONS, & OPEN ITEMS

Introduction and Process The Auxiliary and Self-Supporting Activities (ASSA) Task Group was appointed by Vice Chancellor Gary Matthews in November 2009 at the request of the Chancellor. The task group was appointed as a result of the June 2009 ASSA Tiger Team’s conclusion that the campus was not fully recovering its overhead costs from campus Auxiliary and other Self-Supporting Activities which represent close to 45% of total campus operations, and have driven a large portion of campus growth over last 8 years. In light of this, the task group was charged with working toward the goals outlined in the June 2009 Auxiliary and Self Supporting Assessment Tiger Team Final Report (see Appendix A for a link to the entire document), specifically:

Development of administrative overhead rate(s) by using the current cost-based overhead rate development approach and costing principles used by the University and federal government to set overhead rates for sponsored projects.

Evaluate the assessment of campus overhead and other self-supporting activities and use of the actual calculated rate rather than the federally negotiated, and discounted, rate.

Address auxiliary and other self-supporting activities identified as not remitting, or under-remitting, overhead to the campus.

Standardize and automate the overhead recovery process, similar to current process for sponsored projects.

The task group included representatives from several Vice Chancellor units across the campus, including the Medical Center (see Appendix B for charge letter and a list of contributing members and departments). Many of the representatives also participated in the work of the initial Tiger Team, thus maintaining the crucial continuity needed to ensure timeline completion of this important campus work. One of the primary goals of the team was to finalize the administrative overhead rate(s) to be recommended to campus leadership, with ample time to communicate and implement for the 2010/11 budget planning process. The task group had its first meeting on November 20, 2009. Over the period of four months the group researched and discussed the approach to rate development, surveyed local service providers and other institutions’ recovery processes, considered potential overhead recoveries and campus impacts, as well as options for automation. Several sub-groups met to discuss specific items and many other meetings were held with campus departments as part of some survey processes. Some questions and concerns that arose throughout the process were not fully addressed by this group because they were outside the scope of group’s charge. However, these are noted and outlined in the “Recent Developments and Future Considerations” section toward the end of this report. The initial ‘kick off’ meeting focused on a review of the ASSA Tiger Team’s June 2009 report and key recommendations, a review of each goal outlined in the charge letter, and an

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introduction to the world of overhead cost recovery. Each successive meeting included a review of the group’s goals and provided updates on the progress made between meetings. - The Financial Analysis Office (FAO) provided the data and the tutorials related to UCSD’s

current overhead rate calculation for Federal sponsored projects. The group spent a significant amount of time trying to better understand how this rate is calculated and how to pare it down based on the perception of services provided from the units included in the calculation.

- The General Accounting office provided the initial data set that illustrated the magnitude of the under recovery problem with a comparison between the amount of outside revenues collected by campus departments, the amount of Differential Income and Administrative Recharge (Overhead) remitted, who is remitting overhead, and who is not. The FAO built off of this initial data set to produce some very rough estimates of how much overhead should be collected.

- The task group worked with General Accounting and ACT to better understand how the

automated process for Federal ICR works and how it might help inform the ASSA project. Based on these departments’ feedback and subsequent review and discussion at the ASSA meetings, an ACT Project Proposal was drafted and submitted in February 2010. This proposal was reviewed by the ACT executive committee and given a high priority ranking.

Administrative Overhead Rate Development All campus auxiliary and self-supporting activities are, by definition, expected to ‘fully self-support’ and not receive institutional subsidy. Costing and pricing policies require that rates for sales to the general public shall recover both direct costs and applicable campus overhead costs. Direct costs are those costs that can be identified specifically with a particular service or product, or that can be directly assigned with relative ease and a high degree of accuracy. Overhead costs are those costs that cannot be easily, and with a high degree of accuracy, identified with a particular service or product, or that are incurred for a common or joint objective. For Auxiliaries and specific self-supporting academic activity, overhead recovery now occurs largely via an ‘administrative recharge’ rate charged on expenditures, whereas a ‘differential income’ overhead rate is charged on revenues generated from self supporting activities. The FAO is the lead campus office with expertise and responsibility for negotiating campus Federal overhead rates for sponsored research as well as for staffing the campus Recharge Rates committee which administers rate setting as governed by campus policy PPM 300-40. Working with the ASSA Task Group, the FAO proposed two Administrative Overhead Rates specifically for the Medical Center and Auxiliary & other Self-Supporting Academic Activities using the Comprehensive Rate Information System (CRIS). CRIS is the standard rate development system used by the vast majority of educational institutions to prepare Facility & Administrative (F&A) research overhead rates used for Sponsored Research proposals. The FAO has provided the following description of their rate calculation method:

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UCSD ADMINISTRATIVE/INFRASTRUCTURE SUPPORT COSTS

BENEFITTING AUXILIARY ENTERPRISES As defined in University and campus policy, Auxiliary Enterprises must be fully self-supporting activities, and are expected to fully reimburse the campus for all services and resources received. In the past, this was accomplished by identifying detailed transactional data for various services, benefiting the auxiliaries. Because this burdensome bean-counting effort required extensive time by Accounting staff, it was not carried out regularly or effectively, and gradually the basis for the administrative recharges became increasingly incomplete and lagged in the level of recovery. In order to more comprehensively, consistently and effectively comply with campus overhead recovery policy and make the recharges more applicable to current services provided, we proposed the development of an Auxiliary overhead rate calculation based on the methodology used to develop campus overhead rates for sponsored projects with the Federal government. The rates would be calculated using annual campus financial statements data, reasonably allocating cost to benefit, and deriving a ratio that serves as a valid basis for cost reimbursement. METHOD SUMMARY Using the same annual financial expenditure data as used for negotiating campus overhead rates for federal sponsored projects, identify the following beneficiary cost pools: Hospitals/Clinics All Other Auxiliary Enterprises (Housing & Food Services, Parking, Bookstore, etc.) Other Self-Supporting I&R Activities (Academic recharge activities, student activities, Extended

Studies, and other alternative degree programs such as the Master of Advanced Studies.) All Other major functional Activities (Mission - Instruction, Research, Public Service, etc.) Identify the following Administrative/Infrastructure Support (AIS) cost pools, adjusted to modified total direct costs to exclude cost of goods sold, equipment and capitalized expenditures, facility rentals, etc.: AIS benefitting all campus activities (Chancellor, etc.) AIS benefitting all campus activities except Hospital/Clinics AIS not benefitting/separately funded by Hospital/Clinics and Other Auxiliaries In addition, certain expenses are set aside and excluded from the calculation. (year-end closing entries, vacation and other accruals, capitalized expenses, etc.) Allocate the AIS cost pools to the appropriate beneficiary cost pools, and identify the resulting AIS rates for the beneficiary categories. Application of the resultant rates for Hospital/Clinics and Other Auxiliaries to their annual expenses will determine their share of the campus AIS expenses. Under the federal costing principles that govern sponsored project overhead rate calculations, all costs in designated AIS cost pools must be consistently allocated to all benefitting activities, even where certain costs are incurred for a common institutional objective and do not directly benefit some of those activities.

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While Auxiliary activities directly pay for facility related costs, only the Medical Center also directly pays for a significant number of core administrative services. In recognition of the significant differences between the Medical Center and other Auxiliaries, a special and

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reduced administrative overhead rate was developed and is proposed for the Medical Center. All other Auxiliary and self supporting activities such as Housing and Dining Services, Transportation and Parking Services, Bookstore, Medical Group, Recreation and Extended Studies among others, will be subject to same basic administrative overhead rate. The calculated and proposed preliminary Administrative Overhead Rates specifically for the Medical Center and campus Auxiliaries & other Academic Self-Supporting activity are:

Hospital/Medical Center 1.8%

Campus Auxiliaries & Other Self Supporting 4.1%

Identified Activities and Classification UCSD Policy and Procedure Manual (PPM) 300-40 provides guidance and direction for the establishment, costing, pricing, and administration of recharge and other income producing activities on campus. These activities include auxiliary enterprises (includes hospitals), service enterprises, academic support activities, support group activities, and miscellaneous sales activities. Certain activities are listed as “exceptions” to some of the procedures outlined in the PPM, among these are: - Hospital activities - Medical Group services - Auxiliary Enterprises - University Extension - Office of Continuing Medical Education - Intercollegiate Athletics - Campus Recreation and intramural sports - Long-term rental or lease agreements - Technology Transfer agreements - Sales of surplus property - University Events - Departments of Theatre and Music The ASSA task group has classified all revenue generating activities into two broad categories, as either: - Activities Subject to the Recharge Policy – Includes primarily recharge activities that are

mostly housed in State or campus funded space and do not pay directly for facilities costs like debt service, building maintenance, or utilities. These activities exist primarily to service internal departmental needs, rather than to generate outside sales revenue. To the extent these activities do engage in external sales then an appropriate level of campus overhead is to be charged. A few examples of activities housed in campus funded space and with outside sales include service agreements, SIO and campus machine shops, animal care, academic based recharges, Chemistry Mass Spectrometer Facility, Surplus Sales, Cancer

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Center Transgenic Mouse Facility, Storehouse, and Imprints among others. Because of this, PPM 300-40 requires all such on-campus activities to charge the full 45% Differential Income overhead rate on all external sales. (Off-campus and Nimitz/MPL activities employ reduced differential income rates.) These rates are similar in concept to those applied to federal research activity and negotiated with the Department of Health and Human Services (DHHS), less four components; equipment depreciation, sponsored project administration, student administration and services, and libraries. The biggest issue with Differential Income overhead recovery is non-compliance with campus policy. Departments are responsible for collecting and remitting differential income but the majority of departments either do not collect, or are collecting but do not remit overhead to campus.

- Activities Listed as an Exception to the Recharge Policy – Certain activities are listed as “exempt” from the recharge policy because they pay for their own facilities costs (construction, debt financing, maintenance, utilities) and many of their own administrative needs, thus are largely self-supporting. Specific examples include the Medical Center, Housing and Dining, Transportation and Parking, Bookstore, Recreation, Extended Studies, and various rental facilities among others. These activities are expected to reimburse the campus for indirect costs, or overhead costs, incurred by the campus for central administrative offices, such as Business and Financial Services, Budget and Planning, Human Resources, Administrative Computing, and Campus Communications among others. They will be assessed the Administrative Overhead Rates listed in the previous section.

Projected Impact

- Differential Income – The most significant weakness with the current Differential

Income process is that the responsibility of collecting and remitting overhead to the campus is left up to each activity, with no consequence for lack of or under-remitting. As a result, it appears that while the campus should have collected well over $12 million in 2008/09, only $2.7 million was actually remitted. The task group believes that automating the differential income process will eliminate this weakness and improve overhead recovery.

Importantly, the Task Group recommends that the Differential Income rate be applied to expenses adjusted for recharge income and other excludable costs. This is a change from present policy which assesses Differential Income on revenue. Switching from a charge on revenue to a charge on expense will allow a number of adjustments to be made to the cost basis that will more fairly recognize the administrative workload associated with the outside revenue.

- Administrative Overhead – Preliminary administrative overhead calculations are based

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on the rates and activities described in the previous sections and are projected to be around $20 million compared to the $2.5 million collected in 2008/09.

Automation The task group worked with General Accounting and ACT to better understand how the automated process works for Federal ICR and how it might benefit the ASSA project. Based on their feedback and discussion at the ASSA meetings, an ACT Project Proposal was drafted and submitted in February 2010. This proposal was reviewed by the ACT executive committee and given a high priority ranking. The ACT Project Proposal can be found in Attachment E.

Other UC Campuses Below is a summary of the more recent feedback we received from three of four UC campuses with hospitals and included their detailed responses in Attachment F. This supplements an earlier UC systemwide survey collected by the ASSA Tiger Team included in Attachment G. - UC Irvine collects 7.6% from campus self-supporting activities ($7.6 million) and 2.3%

from their medical center ($9.7 million).

- UC Los Angeles collects $8.9 million in central administrative fees from campus self-supporting activities and from their school of medicine.

- UC San Francisco charges about $36 million in fees-for-services negotiated between the central campus service units and the medical center each year.

Response from Health Sciences The two representatives from the Health Sciences area, one representing the School of Medicine and one representing the Medical Center, have recently expressed opposition to the direction of the group. In Health Sciences’ view, the “use of an overhead rate applied to the Medical Center’s expense is not an accurate allocation of the campus services we use.” They have also stated that in their view, “developing and applying a standard overhead rate to fully recover costs does not provide for any accountability on the part of the campus to manage costs or improve operating efficiencies.”

Recommendations and Next Steps As outlined in this report, the task group invested a significant amount of time educating themselves on a broad range of topics (rate, activities, impact, automation), to arrive at the following set of recommendations. Rate Development – It is proposed that the rates outlined in the prior section be adopted

effective July 1, 2010. Because of the work involved in automating the assessment, charging

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the rates in fiscal 2010/11 will remain somewhat manual process. Task group members requested a service inventory and survey of some departments to accompany the administrative overhead calculations. This inventory provides a description of the general administrative services provided to the medical center and campus auxiliaries to ensure there is no overlap with specific and direct services these activities currently pay for directly. It is further proposed that the final rates be adopted and that these remain in place, until such time as the campus revisits the Federal indirect cost recovery rate development and, in parallel, reviews these administrative rates. “Phasing” – Recognizing each unit’s planning needs and the significant financial impact for some units that have been paying little or nothing, the group proposes phasing in the implementation of the overhead rate over a two or three-year period starting in 2010/11.

Identified Activities and Classification – Working with their departments, Vice Chancellor representatives have reviewed the classification of activities as either subject to Differential Income or Administrative Overhead. For the activities that task group members have identified as possible exemptions to the campus policy, PPM 300-40 has an existing process in place to request a waiver from an oversight committee.

Automation and Implementation – The task group proposes that a small work group of campus experts and customers be identified to work with ACT over the next several months to assist in the automation effort. Some crossover with existing group members would be necessary to ensure continuity and timely automation. Knowing that the automation of overhead recovery will not be ready for the 2010/11 fiscal year, the group recommends calculating each unit’s overhead amounts as proposed in this report and using actual 2009/10 revenues and expenditures, and effecting the transactions manually.

At this time, ACT does not have the resources to dedicate to this project and may be requesting campus funds to support the development effort. We recommend the campus invests in this automation initiative with future reimbursement from increased overhead revenues.

RECENT DEVELOPMENTS AND FUTURE CONSIDERATIONS

Senate Administration Task Force In January 2010, the UC San Diego Senate-Administration Task Force on Budget released a set of budget-related recommendations to the Chancellor. One of the recommendations specifically asked for an examination of all auxiliary and self-supporting activities to ensure that they are truly self-supporting. A link to the final report can be found in Appendix C. The section related to auxiliary activities is provided below:

Auxiliaries to Become Self-Supporting: Auxiliary enterprises are self-supporting activities that provide non-instructional support in the form of goods and services to students, faculty and staff. These units receive no funding from the state and are operated from revenues they generate.

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Examples of auxiliary enterprises are housing operations, non-housing food service operations, parking operations, bookstores, student centers and unions, and child-care centers. The ability of the auxiliary units at UC San Diego to contribute to a resolution of our budget problems should be thoroughly explored. Auxiliaries that are not self-sustaining should be carefully examined, reorganized, and made to be self-supporting. They should pay in full for the University services they use. The ability of auxiliaries to operate as profit centers, in accordance with prevailing market costs and practices, should be explored with realized profits used to offset campus shortfalls in state funds, without imposing additional burdens on students.

Bureau of State Audits On February 11, 2010, California State Senator Leland Yee has requested that the Bureau of State Audits (BSA) perform a comprehensive audit of the University of California with a focus on the use of public funds, student fees, and auxiliary organizations. Specifically in regard to auxiliary organizations, the BSA will be looking at the “policies and practices the UC has in place to ensure that state funds are not used to supplement … auxiliary organizations.” This development is right in line with the ASSA Task Group’s charge to fully recover costs for administrative support provided to these activities, and in line with the Academic Senate-Administration Task Force’s recommendations. A copy of Senator Yee’s request and the BSA notification can be found in Appendix D.

PostTask Group Reactions and Suggestions

Health Sciences On May 13, 2010, Vice Chancellor for Health Sciences submitted a PowerPoint presentation to the Chancellor (see Attachment H) outlining their response to the ASSA Task Group’s recommendations. The presentation indicates that Health Sciences agrees that it should pay for the campus administrative services it uses and benefits from, but has issues with the modified expenditures base methodology developed by the Task Group and offers a counterproposal to the recommendations included in this report. Some of the issues that Health Sciences specifically outlined in the presentation include: Disagree with expense-based methodology. Suggest ‘lack of’ consideration for other fund flows such as ICR, gift and interest from

Foundation activity, NGN assessments, and Clinical Trial overhead. No way to match the cost to the benefit of the cost. The Health Sciences counterproposal offers an alternative to the recommended overhead rate calculation based on a leadership oversight rate of 5% for VC offices, a medical center / campus staff ratio of 21% for offices that support the entire campus community, and application of direct effort for other central administrative offices based on surveying such offices for direct effort. The Health Sciences counterproposal recommends a ‘flat’ $2.4 million overhead contribution to

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the campus, subject to an annual inflation increase not to exceed 5%, for a period of 5 years.

Student Affairs “Essentially, the Vice Chancellor of Student Affairs accepts the purpose, methodology, and results of the Auxiliary & Self Supporting Activities (ASSA) Task Group’s Summary & Recommendations Report, including the established overhead recovery rates and efforts to automate the process in the interest of full compliance by self supporting activities. Lastly, given the large amount of new discretionary funds the automated overhead recovery process is projected to recuperate, the Vice Chancellor of Student Affairs looks forward to being included in the imminent conversation regarding the long-term plan for redistribution of those funds to the campus.”

Academic Affairs As a next step, the Task Group should continue to meet to discuss appropriate changes following the implementation of these recommendations. One significant issue will be the disposition of the new revenue that is collected from these new charges and collection processes. There are many options which include considering existing Core budgets that are supporting central administrative offices as well as the new collected income. Core principles should be developed to assist in making recommendations. Examples of core principles include:

1. Providing sufficient resources to adequately and efficiently carry out the essential administrative and core services to support the academic mission.

2. The various recommendations of the recent Senate Administrative Task Force on the Budget.

Appendix B – Link to 2009 ASSA Tiger Team Final Report (June 2009)

http://www-cbo.ucsd.edu/PDF/TigerTeamReports/Auxiliary%20&%20Self%20Supporting%20Assessment%20Tiger%20Team%20-%20Final%20Report.pdf

RHannahsTypewritten TextAppendix A

RHannahsTypewritten Text


RHannahsTypewritten TextAppendix B (Charge Letter)


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Report of the Senate-Administration Task Force on Budget January 2010

The Senate-Administration Task Force on Budget was charged with providing general recommendations to Chancellor Marye Anne Fox and Academic Senate Chair William Hodgkiss for sustaining UC San Diego’s academic excellence and stature as a world-class research university, while protecting its core mission of accessibility, teaching, and research through cost savings and increased efficiency, augmented non-state revenues, and strong alignment of academic programs and institutional priorities. The Task Force was co-chaired by Paul Drake, Senior Vice Chancellor-Academic Affairs, and Daniel Donoghue, Immediate Past Chair-Academic Senate, San Diego Division. Introduction The Task Force convened to address the worst economic crisis in the history of UC San Diego. At this crucial juncture, it is imperative to remember that this university became a world-class institution of higher learning by an extraordinary emphasis on academic quality. An intense focus on stellar faculty conducting advanced research accompanied by outstanding teaching and service has propelled the General Campus, the Health Sciences, and SIO into the top national and international ranks. UC San Diego’s sterling reputation has also attracted superb students and staff. Only by preserving and enhancing the excellence of its academic core can the university survive and thrive through the current crisis. All other areas of the institution must contribute vital services and support to that academic enterprise. By building on its tradition of creativity, innovation, and entrepreneurship, UC San Diego can craft novel solutions to the “great recession” and emerge even stronger. The key to our future consists in reasserting and reinventing our central academic mission, in designing targeted budget adjustments to favor peaks of academic excellence, and in generating new revenues to support the kinds of academic activities that made us a great research university in the past and will continue to do so in the years ahead. The Task Force considered three main issues: 1) qualities and values to be preserved, the campus’ ability to continue the breadth of world-class research and teaching programs at a time of reduction in permanent faculty, and our capability to bolster UC San Diego’s local impact, national influence and global reach; 2) overall approaches to budget reductions, and ways in which the campus can accelerate efficiency in its business practices and other operations; and 3) opportunities to generate new revenues, mechanisms to stimulate research and contracts and grants, and solutions that reduce our reliance on state funds permanently, rather than temporarily.


RHannahsTypewritten TextAppendix C (Senate-Admin Budget Report)


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The Task Force also assessed other research university models, and discussed ways in which some of their successful organizational components and funding strategies might be adopted at UC San Diego. To assist with its charge, the Task Force was provided numerous informational documents, including system-wide reports, copies of budget presentations from each Vice Chancellor area, reports evaluating previous UC San Diego financial crises, statistical budgetary, enrollment and staffing analyses, and background articles regarding budget problems in higher education. Many of the materials considered by the Task Force may be found at: http://academicaffairs.ucsd.edu/satf/. Along with these documents, each Vice Chancellor was asked to address criteria for preserving and enhancing quality in each of their units. The Task Force invited the entire campus community to submit ideas regarding ways in which the campus could address the budget crisis. A campus email address ([email protected]) was established to facilitate this communication, and a confidential website was developed to house campus comments for the Task Force members’ review. In addition, a Town Hall meeting provided an opportunity for faculty, staff and students to communicate their concerns directly to the Task Force. The Task Force thoroughly considered this broad campus input in its deliberations and recommendations. The Task Force designed its recommendations to be broad and complementary to the more detailed strategizing being carried out simultaneously by the Vice Chancellors, Deans, Provosts, Department Chairs and the Committees of the Academic Senate. The Task Force hopes that these groups will consider and act upon its recommendations. The recommendations are separated into three categories: Mission and Vision, Budget Guidelines and Process Enhancements, and Increasing Revenues. The Task Force agreed upon general principles as the foundation of the mission and vision of the UC San Diego of tomorrow. These priorities formed the basis for the budgetary recommendations. The Task Force reached consensus on the following recommendations, which are presented in an unranked order. Mission and Vision

Protect and Strengthen the Academic Core: The Task Force endorses the existing campus mission statement, which can be found at: http://www.ucsd.edu/explore/about/index.html.

UC San Diego is dedicated to the advancement of knowledge through excellence in education, research, discovery and innovation at the undergraduate, graduate, professional school and postdoctoral levels. The campus is committed to community engagement, public service and industry partnerships in order to advance the health and well-being of our region, state, nation and the world. Our academic community of world-renowned faculty, bright students and dedicated staff is characterized by a culture of interdisciplinary collaboration and innovation which spans the globe. To foster the best possible working and learning environment, our university strives to maintain a climate of fairness, cooperation, and professionalism, which is

http://academicaffairs.ucsd.edu/satf/http://www.ucsd.edu/explore/about/index.html

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embodied in our campus Principles of Community. UC San Diego embraces diversity, equity, and inclusion as essential ingredients of academic excellence in higher education.

Protecting and strengthening the academic core of instruction, research and discovery should be the central campus priority. Recruitment and Retention of Outstanding Faculty: Without a stellar faculty, UC San Diego cannot perform any of its missions, nor maintain its outstanding rankings. Lifting the faculty hiring freeze should be a high priority for the campus as soon as the budget permits. Highly selective recruitment of new faculty in areas of academic excellence should be based on very competitive and stringent measures of quality. In addition, UC San Diego should do all it can to retain its premier faculty and provide them with the support necessary to succeed. Successful future retention of our faculty requires the resumed maintenance of a competitive salary standard. Identify Academic Areas of Strength: The campus should identify, enhance and invest in specializations of current and potential strength. A process needs to be established for determining, in a comprehensive and far-sighted way, how “excellence” should be measured and recognized. Fields of excellence may well include cross-disciplinary and collaborative efforts among the General Campus, Health Sciences and SIO. Cross-disciplinary targeting might require redeploying existing faculty and staff to new priority topics. Maintain a Liberal Arts Core Capacity: Offering all students access to a liberal arts education in the core domains of knowledge should continue to be, as it was for the founders of UC San Diego, a central campus commitment. Discovery-Enriched Curriculum: A core competency for all undergraduates in today’s knowledge-based world should include the discovery of what it means to create and communicate new knowledge. Expanding opportunities through a discovery- and innovation-enriched curriculum will enable us to fortify our campus community, use our current funding more effectively, and attract and create new revenue streams. Increase Graduate Student Enrollment: As a research-driven university, UC San Diego should make increasing graduate student enrollment a priority, in order to sustain our next generation of academic leaders, help attract and retain top faculty, mentor undergraduate students, provide a high-quality workforce, and drive the regional industry. Preserve and Strengthen the College System: The college system at UC San Diego represents one of the unique and defining characteristics of our campus that can attract both resident and non-resident students. It should be preserved and strengthened. Unnecessary duplication of services and activities provided by the colleges, on the one hand, and Student Affairs and academic departments, on the other, should be identified and eliminated.

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Maintain and Enhance Diversity: Diversity of faculty, staff and students at UC San Diego must be preserved and expanded. It should be taken into account in budget deliberations across the campus. Broad campus leadership continues to be essential in embedding diversity as part of our campus culture and mission. Recognize, Retain and Support Outstanding Staff: The retention of excellent staff must continue to be taken into serious account in budgetary decisions. Initiatives to recognize and reward our outstanding staff, which plays a critical role in supporting the instructional and research enterprise, should be encouraged. Promote the Autonomy of UC San Diego to Shape its Future: To perform its essential service to the state and its people, UC San Diego welcomes and continues to seek increased state funding. To use its resources with efficiency and initiative, it must also seek the greatest possible decision-making autonomy from the state and the Office of the President (OP). Our campus should have the ability to maximize its own strengths and potential without compromising excellence to achieve system-wide goals. Enrollment management is one of the key areas in which UC San Diego should obtain relative autonomy, especially to expand the percentage of graduate students. The campus should also make an attempt to reduce or eliminate unfunded mandates dictated by OP and other organizations. Promote and Support Public Advocacy: A powerful public advocacy campaign is necessary to highlight the importance of higher education and UC San Diego’s contributions to the local, state and national economy and society. Greater advocacy for UC San Diego is needed with OP, the public and the government. Effective advocacy must be based upon a distinctive vision, and pursued by a skilled Office of Development and External Relations staff. A cohesive local plan for intensified advocacy should be developed and implemented, and the campus should encourage students, families, alumni, and the community to participate in promoting UC San Diego. Budget Guidelines and Process Enhancements Support the Instructional and Research Missions: State funds should be used mainly to support the instructional and research missions of UC San Diego. The campus should align its funding with these campus priorities. Adjust Local Use of Student Fees: Education Fees should be allocated primarily to support the teaching of the students who paid the fees. The campus should revisit its practices for the use of Registration and Education Fees so as to be optimal for advancing UC San Diego’s mission. Focus Resources on Peaks of Strength: The campus should focus its resources on fields it excels in, or has the potential to excel in, nationally and internationally, so long as those specialties remain at the leading edge of scholarship. It should not invest heavily in areas that

5

rank poorly or cannot be considered highly competitive based on comprehensive criteria. Areas that are neither currently successful nor very promising should receive diminishing resources. To better underwrite efficient and efficacious instruction of undergraduate and graduate students, incremental dollars should flow to the highest quality academic units. Among those units, funding allocations should also favor those that optimize student graduation credit requirements and time to degree, limit attrition rates to acceptable norms, eliminate under-enrolled classes that cannot be justified on grounds of necessity, maintain high enrollments generally, implement effective diversity plans, and, when possible, participate in interdisciplinary initiatives. Establish Grounds for Criteria and Process: Bold and effective actions such as those advocated in this report will be as difficult to achieve as they are necessary. We note that the assessment of “success” or “excellence” should include, in appropriate balance, qualitative as well as quantitative data. Campus units will need to characterize their significance in a consistent, efficiently usable format that facilitates probative decision-making. Here the Task Force is not advocating a greater elaboration of bureaucratic reports. If anything, communication about important issues should become easier, not harder, and clearer, not more mystifying. A transparent and consistent deliberative process is essential in all major campus actions. Such a process will encourage consensus and commitment behind any resulting reformulations. Apply Principles of Economy Across All Areas: The same principles of economy, necessity and quality that are applied to academic programs should be imposed on administrative and student services programs. However laudable, nonessential activities and expenditures should be minimized or terminated throughout the campus. Align Campus Budget Processes to Support the Campus Academic Mission: The campus should explore alternative budget models that reflect the academic mission as the central campus priority. The budget process should be reorganized to promote flexibility by eliminating barriers that prevent Vice Chancellor units from working together effectively. By recognizing all Vice Chancellor units as comprising one campus, and pooling their core funds (derived from state funds, student fees and indirect cost recovery), the budget can be better aligned with campus priorities. The campus should also address the need for a consistent strategy for arriving at major budgetary decisions. Adopt Non-Incremental Budget Processes: Budget adjustments should not be made across the board. The campus should not use the current Vice Chancellor pro-rated budget adjustment model, nor should it continue to use an incremental budget model. Information on new revenues along with new cuts should be some of the components examined when future budgets are determined. All permanent budget categories should be included in financial adjustment discussions. Reductions should be more targeted.

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Increase Budget Transparency of all Vice Chancellor Areas: There is a need for better communication and transparency of Vice Chancellor unit budgets to the campus community. This should include a readable and accessible annual report detailing the sources of revenue generated by each Vice Chancellor area, along with their income streams and expenditures, big picture budget issues, information regarding how each Vice Chancellor unit contributes to the academic mission and how it takes its cuts, and how the future is impacted by budget decisions in each area. All Vice Chancellors should routinely assess their reserves and projected uses, and should realign them with their current goals. Support Key Infrastructure Initiatives: To better support research, incremental support should also accrue to high-quality campus administrative units that provide the best return on investment for support staff, IT, space and electronic tools in terms of cost per transaction and user satisfaction. Investment should be made in infrastructure initiatives that will help campus scholars secure additional extramural support, when possible, as well as in tools that can expand opportunities in areas such as development and technology transfer for the campus.

Increased Revenues Aggressively Enhance New Revenue Streams: All revenue generation plans should be placed on a fast-track evaluation process, including approvals, if necessary, by the Academic Senate, local Administration and OP. The campus should aggressively streamline all operations that require OP endorsement, especially if any of them include new income sources. All new processes and procedures, particularly those aimed at potential revenue streams, should be required to expedite rather than extend current time to completion of such tasks. Engage with Alumni and Increase Philanthropy: The campus should increase philanthropy and alumni engagement with better and more stable support. A set of meaningful measures of success should be developed. UC San Diego should recognize that high quality student programs and educational experiences are necessary to develop a loyal base of future alumni. Development activities should mainly be supported out of development funds, and the campus should be prepared to invest appropriately in this area, especially in skilled Development personnel. Increase Non-Resident Enrollment: The campus can and should increase the number of non-resident students, without disadvantaging our California students. This could help with diversifying our student population as well as bringing in new monies. New non-resident enrollment fees are an essential revenue stream to enable the campus to recruit new faculty to teach the students. Increasing the numbers of non-resident students would also help us reach our goal of admitting more international students. There is compelling evidence to suggest that the campus should also move from comprehensive to holistic review in its admissions process, partly in order to place non-resident students on an equal footing with California students, similar to the current practice at Berkeley, UCLA and virtually all private universities.

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Increase Graduate Student Enrollment and Maintain Fee Level: The campus should strive to achieve its current goal of 20% graduate student enrollment. Graduate students are central to the research and discovery mission of UC San Diego and they enhance the competitive research programs of faculty members and facilitate procuring greater extramural funding. Graduate student fees should not rise commensurately with undergraduate fee increases; charging graduate students more escalates the financial burden to the campus in terms of graduate student support, as individual faculty members and departments are typically responsible for graduate student fees. Support Non-Traditional Education Programs: The campus should consider more self-supported executive and community education with a short-term, less formal format. The campus should also encourage high fee-based, revenue-generating masters programs. In addition, the campus should investigate increased use of distance-learning techniques and on-line education. Maximize Indirect Cost Recovery Return to UC San Diego: The capture of indirect cost recovery funds (IDC) by OP for its own internal use should be significantly decreased. UC San Diego should aggressively persuade OP that IDC be returned proportionately as it is generated by each campus. In times of declining state support, it is no longer appropriate to use IDC produced at one campus for the benefit of another campus. The current precedent of returning 100% of the Stem Cell Initiative and almost all of the Federal Stimulus (ARRA) IDC back to the campus where it is generated should be seen as a model for the future. Incentivize the Generation of New Indirect Cost Recovery: Within UC San Diego, IDC should be used mainly to support the research infrastructure and the research unit that spawned the funds. Administrators should provide greater transparency in the use of IDC, with an emphasis on greater return of IDC to those campus units that generated them. All campus units should consider returning some IDC to departments and PIs more directly. By providing greater linkage between the propagation of IDC and its return, the acquisition of additional IDC through extramural funding opportunities will be incentivized and can be expected to enhance our research profile. The campus should also find other ways to incentivize units and PIs to generate more grants and concomitant graduate student support. It is recognized that the access to extramural funding sources varies widely across disciplines. The campus will need to address the question of how to appropriately support the less extramurally intensive campus units that have been determined to be worthy elements in the larger UC San Diego profile. Streamline Service Agreement Processes: Successful service agreements with commercial entities can lead to new research contracts for UC San Diego. The campus should consider streamlining the process for creating service agreements and ensuring that there are consistent practices in place for them. This will help foster university-industry relationships that can give birth to new sources of funding.

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Promote Technology Transfer: Some of UC San Diego’s patents and copyrights can provide substantial revenue streams to the campus through licensing. The culture associated with technology transfer, however, varies widely across the campus. Campus leadership should promote technology transfer as a vehicle for bringing campus ideas to the marketplace to benefit society and associated funding to campus that supports our academic mission. Auxiliaries to Become Self-Supporting: Auxiliary enterprises are self-supporting activities that provide non-instructional support in the form of goods and services to students, faculty and staff. These units receive no funding from the state and are operated from revenues they generate. Examples of auxiliary enterprises are housing operations, non-housing food service operations, parking operations, bookstores, student centers and unions, and child-care centers. The ability of the auxiliary units at UC San Diego to contribute to a resolution of our budget problems should be thoroughly explored. Auxiliaries that are not self-sustaining should be carefully examined, reorganized, and made to be self-supporting. They should pay in full for the University services they use. The ability of auxiliaries to operate as profit centers, in accordance with prevailing market costs and practices, should be explored with realized profits used to offset campus shortfalls in state funds, without imposing additional burdens on students. Implement Tiger Team Recommendations: To ensure more cost-effective support services, recommendations of the Tiger Teams on IT, non-resident student enrollments, and auxiliary services should be implemented. Restructure Faculty Compensation Plan: The General Campus should consider a voluntary restructuring of the faculty compensation plan to free up state dollars, without affecting rank, tenure, guaranteed salaries, or the retirement plan. For some disciplines, a mixed funding model, similar to that in the health sciences, may be necessary to meet future recruitment and retention needs. Such a plan could help ensure the level of faculty excellence essential to maintaining the prominence of UC San Diego and the University of California. Conclusion The Task Force urges the Administration, all Vice Chancellor areas, the Academic Senate, staff, and students to adopt as many of these principles and proposals as possible. They can serve as general guidelines for creative, constructive, and appropriate solutions at every sector and level of the university. The Task Force believes that the brilliance and dedication of all the members of the UC San Diego community will lead the institution through the current crisis and on to a brighter future. As these recommendations are carried out, the Administration and the Academic Senate should continue to consult with the Task Force (or an equivalent body, such as the Senate-Administration Council). The Task Force discussed ways in which its proposals might be implemented effectively, and envisions several possibilities, as determined by the Chancellor and the Academic Senate to be in the best overall interests of the campus. These include:

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formation of new Task Forces focused on specific areas; creation of new Tiger Teams as used previously at UC San Diego to address budget issues; and direct implementation by the Chancellor, Vice Chancellors and Academic Senate of specific recommendations. In addition, members of this Joint Senate-Administration Task Force stand willing, individually and collectively, to continue to assist in any way possible. Joint Senate-Administration Task Force on Budget Committee Members: Senior Vice Chancellor Paul Drake (Academic Affairs) Co-Chair Professor Daniel Donoghue (Immediate Past Chair, Academic Senate, San Diego Division) Co-Chair Vice Chancellor David Brenner (Health Sciences) Professor Sandra Brown (Psychology/Psychiatry) Professor Stephen Cox (Literature) Vice Chancellor Arthur Ellis (Research Affairs) Vice Chancellor Gary Matthews (Resource Management and Planning) Professor Ken Melville (SIO) University Professor Roger Reynolds (Music) Vice Chancellor Penny Rue (Student Affairs) Kathleen Hay (Biological Sciences) Staff Representative Erik Van Esselstyn, (Aerospace Engineering) Undergraduate Student Representative Walter Talbott, (Cognitive Science) Graduate Student Representative Janice Klippel (Academic Affairs) Staff Consultant

RHannahsTypewritten TextAppendix D (State Auditor Letter)


Appendix E - Task Group Membership and Contributing Staff from Campus Task Group Membership Bill Brophy, Financial Analysis Mark Cunningham, Housing, Dining, & Hospitality Services Marianne Generales, Research Affairs Karilyn Greenwood, UCSD Medical Center Gene Hasegawa, Health Sciences John Hughes, Student Affairs Judy Johnson, External & Business Affairs Sylvia Lepe-Askari, Campus Budget Office (Chair) Debbie McGraw, Academic Affairs David Miller, Academic Senate-Administration Task Force Representative Melinda Ryan, Marine Sciences Contributions from the Campus: General Accounting – Alice Chen, Bob Colio, Clay Egan, Julie Staffiero, and Marlene Trivino Campus Budget Office – Robert Hannahs Financial Analysis Office – Darryl James Administrative Computing & Telecom (ACT) – Kian Colestock and Lynn Underwood ACT Business Office – Charlotte Clock, Sheryl Gerbracht, and Alison Kibble-Koshi Business and Financial Services – Don Larson and Bill McCarroll Human Resources – Tom Leet and Tina Waldrop

RHannahsTypewritten TextAppendix E (Members and Depts)


Attachment AUNIVERSITY OF CALIFORNIA, SAN DIEGO

Auxiliary & Self Supporting Activities (ASSA) Task GroupAdministrative Overhead Rate CalculationFY 2006/07 (year ending June 30, 2007)

ALLOCATION

ADMINISTRATIVE UNITSEXPENSE

(MTDC 1 )BUILDING

DEPRECATIONEQUIPMENT

DEPRECIATIONOM&P TOTAL

IN SUPPORT OF I&R MISSION

HOSPITAL/ CLINICS

AUXILIARY & OTHER SELF‐SUPPORTING

Academic Computing and TelecommunicationACT ‐ SYSTEMS 109,499 587 1,189 243 111,519 90% 3% 7%ACT ‐ OPERATIONS 5,820,812 31,218 63,225 12,942 5,928,197 90% 3% 7%ACT ‐ SERVICES 140,422 753 1,525 312 143,013 90% 3% 7%ACT‐ACADEMIC APPLICATIONS 1,391,094 7,461 15,110 3,093 1,416,757 90% 3% 7%ACT ‐ PAYROLL/PERSONNEL SYST 641,666 3,441 6,970 1,427 653,504 83% 5% 12%ACT‐IT APPLICATIONS GROUP 2,519,943 13,515 27,371 5,603 2,566,432 90% 3% 7%ACT ‐ DATA WAREHOUSE 564,557 3,028 6,132 1,255 574,972 90% 3% 7%ACT ‐ TRAINING & PUBLICATIONS 114,183 612 1,240 254 116,289 100% 0% 0%ACT‐BUSINESS PROCESS INITIATIVES 1,764,540 9,464 19,166 3,923 1,797,093 90% 3% 7%ACT ‐ SPEAR 89,206 478 969 198 90,852 100% 0% 0%

13,155,922 70,558 142,898 29,250 13,398,628 12,048,701 395,477 954,451 90% 3% 7%

Business and Financial ServicesBFS‐OFFICE OF THE CONTROLLER ‐ ‐ ‐ ‐ ‐ 0% 0% 0%ADMINISTRATION ‐ ‐ ‐ ‐ ‐ 0% 0% 0%SYSTEMS ‐ ‐ ‐ ‐ ‐ 0% 0% 0%Sys‐Central ‐ ‐ ‐ ‐ ‐ 0% 0% 0%SYSTEMS PROJECTS ‐ ‐ ‐ ‐ ‐ 0% 0% 0%BFS TRAINING PRO ‐ ‐ ‐ ‐ ‐ 0% 0% 0%BFS‐BUDGETARY CONTROL ‐ ‐ ‐ ‐ ‐ 0% 0% 0%BFS‐PAYROLL‐PERSONNEL SYSTEM ‐ ‐ ‐ ‐ ‐ 0% 0% 0%Payroll 1,632,528 134,385 108,903 93,867 1,969,684 60% 35% 6%Receiving 1,351,870 111,282 90,181 77,730 1,631,063 60% 35% 6%GA 1,880,136 154,767 125,421 108,104 2,268,429 92% 4% 4%BFS‐DISBURSEMENTS 2,746,421 226,078 183,209 157,914 3,313,622 88% 7% 5%Cashier 690,971 56,879 46,094 39,729 833,673 94% 2% 4%Procurement 2,402,215 197,744 160,248 138,123 2,898,329 96% 1% 4%Strategic Sourcing 501,042 41,244 33,424 28,809 604,519 94% 0% 6%

11,205,183 922,379 747,480 644,276 13,519,318 11,265,978 1,613,122 640,217 83% 12% 5%

Human Resources Department HUMAN RESOURCES DEPT 3,927,482 345,405 43,091 133,818 4,449,797 92% 2% 6%STAFF EDUCATION & DEV 74,171 6,523 814 2,527 84,035 93% 1% 6%HR‐LABOR RELATIONS 88,412 7,775 970 3,012 100,170 94% 0% 6%HUMAN RESOURCES‐LABOR RELATIONS 415 36 5 14 470 94% 0% 6%HR‐PERS SVCS 4 0 0 0 5 94% 0% 6%HR/PERSONNEL SERVICES 35 3 0 1 40 94% 0% 6%HUMAN RES/PERSONNEL SERVICES (47,750) (4,199) (524) (1,627) (54,100) 94% 0% 6%HR/COMPENSAT'N & POLICY 118,806 10,448 1,304 4,048 134,606 92% 2% 6%HUMAN RES/COMPENSAT'N & POLICY (54,369) (4,782) (597) (1,852) (61,600) 92% 2% 6%PERSONNEL‐BENEFITS OFFICE 241,763 21,262 2,653 8,237 273,915 79% 15% 6%HR‐COMPENSATION 44,514 3,915 488 1,517 50,434 94% 0% 6%HR‐DATA MANAGEMENT 200,886 17,667 2,204 6,845 227,602 94% 0% 6%HR‐PERSONNEL SERVICES 8,077 710 89 275 9,151 92% 2% 6%EMPLOYEE ASSISTANCE (5,411) (476) (59) (184) (6,131) 93% 1% 6%HR‐POLICY DEVELOPMENT 36,799 3,236 404 1,254 41,693 92% 2% 6%HR/EMPLOYEE RELATIONS 18,760 1,650 206 639 21,255 93% 1% 6%HR/EMPLOYM & STAFFING SVC 119,262 10,489 1,309 4,064 135,123 94% 0% 6%

4,771,856 419,664 52,356 162,588 5,406,464 4,972,682 133,847 299,93492% 2% 6%

VC Business AffairsVC‐BUSINESS AFFAIRS‐ 90,951 592 1,707 3,472 96,722 60% 35% 6%ASSOCIATION MEMBERSHIP 283,103 1,844 5,314 10,807 301,068 60% 35% 6%VC BUSINESS AFFAIRS 1,297,249 8,449 24,351 49,519 1,379,568 60% 35% 6%

1,671,303 10,885 31,372 63,798 1,777,358 1,060,225 618,531 98,60260% 35% 6%

Office of DevelopmentALUMNI AFFAIRS OFFICE 877,479 50,784 1,280 73,156 1,002,698 100% 0% 0OFFICE OF DEVELOPMENT 779,224 45,097 1,137 64,964 890,422 60% 35% 6%CAPITAL CAMPAIGN 4,717,223 273,008 6,881 393,276 5,390,387 100% 0% 0%

6,373,926 368,889 9,297 531,395 7,283,508 6,924,238 309,872 49,39895% 4% 1%

1 of 2ASSA Task Group

Revised : May 20, 2010

UNIVERSITY OF CALIFORNIA, SAN DIEGOAuxiliary & Self Supporting Activities (ASSA) Task Group

Administrative Overhead Rate CalculationFY 2006/07 (year ending June 30, 2007)

ALLOCATION

ADMINISTRATIVE UNITSEXPENSE

(MTDC 1 )BUILDING

DEPRECATIONEQUIPMENT

DEPRECIATIONOM&P TOTAL

IN SUPPORT OF I&R MISSION

HOSPITAL/ CLINICS


University RelationsVC/DEV & UNIVERSITY RELATIONS 1,834,286 9,766 599 3,551 1,848,202 60% 35% 6%UNIVERSITY RELATIONS/GOVT‐COMM REL 169,369 902 55 328 170,654 60% 35% 6%UNIV RELATIONS/SPECIAL EVNTS 525,417 2,797 172 1,017 529,403 60% 35% 6%UNIVERSITY RELATIONS/ADMINISTRATION 1,258,107 6,699 411 2,435 1,267,652 60% 35% 6%UNIVERSITY COMMUNICATIONS 2,044,075 10,883 668 3,957 2,059,583 60% 35% 6%UNIV COMM/PUBLICATIONS EXPENSE 248,657 1,324 81 481 250,543 60% 35% 6%UNIV COMM/PUBLICATIONS‐ART WORK 8,614 46 3 17 8,679 60% 35% 6%

6,088,525 32,417 1,989 11,786 6,134,717 3,659,465 2,134,916 340,33660% 35% 6%

VC‐Resource Management & PlanningADMINISTRATIVE RECORDS 525,190 13,307 2,221 26,132 566,849 60% 35% 6%AUDIT & MANAGEMENT ADVISORY SVCS 1,588,160 40,239 6,715 79,021 1,714,136 94% 0% 6%UCSD PROGRAMS 3,577 91 15 178 3,861 60% 35% 6%VC ADMINISTRATION 112,320 2,846 475 5,589 121,229 60% 35% 6%VC‐RESOURCE MANAGEMENT 795,954 20,167 3,366 39,604 859,090 60% 35% 6%ASSISTANT VC‐RESOURCE 24,350 617 103 1,212 26,281 60% 35% 6%FINANCIAL ANALYSIS OFFICE 327,158 8,289 1,383 16,278 353,109 60% 35% 6%CAMPUS BUDGET OFFICE 1,532,147 38,820 6,478 76,234 1,653,680 60% 35% 6%CAMPUS PLANNING OFFICE 497,014 12,593 2,102 24,730 536,438 60% 35% 6%ANALYTICAL STUDIES & SPACE 526,134 13,331 2,225 26,178 567,868 60% 35% 6%PHYSICAL PLANNING 898,585 22,768 3,800 44,710 969,862 60% 35% 6%

6,830,589 173,067 28,882 339,865 7,372,403 4,994,295 1,969,109 408,99960% 35% 6%

ChancellorORG RESEARCH‐GC‐UNAL 537 14 4 33 587 60% 35% 6%AFFIRMATIVE ACT‐STAF 7,829 199 52 476 8,556 60% 35% 6%ASSOC VC‐INTERNATION 12,026 306 80 731 13,143 60% 35% 6%OUTREACH PROGRAM 23,004 585 154 1,398 25,140 60% 35% 6%SAA TRAINING FUNDS 29,387 747 197 1,785 32,116 60% 35% 6%EMPLOYEE STAFF ASSN 36,024 915 241 2,189 39,369 60% 35% 6%DIVERSITY PROGRAM 86,443 2,197 578 5,252 94,470 60% 35% 6%LGBT RESOURCE OFFICE 221,606 5,632 1,482 13,464 242,183 60% 35% 6%OFFICE OF THE OMBUDS 330,626 8,402 2,211 20,088 361,327 60% 35% 6%OFFICE OF THE CAMPUS COUNSEL 447,463 11,371 2,992 27,186 489,013 60% 35% 6%CHANCELLORS OFFICE 1,473,401 37,443 9,853 89,518 1,610,215 60% 35% 6%

2,668,346 67,810 17,843 162,119 2,916,118 1,739,515 1,014,826 161,77760% 35% 6%

Institutional Support Benefiting I&R onlyAcademic Senate Office 801,270 ‐ 1,690 68,932 871,892 100% 0% 0%Auxiliary and Plant Services 22,193,389 572,702 127,811 238,501 23,132,403 100% 0% 0%Technology Transfer 953,479 96,116 2,322 46,371 1,098,288 100% 0% 0%University Events Box Office 442,865 7,353 ‐ 2,907 453,125 100% 0% 0%

24,391,003 676,171 131,823 356,711 25,555,708 25,555,708 ‐ ‐ 60% 35% 6%

Total 77,156,653 2,741,841 1,163,940 2,301,788 83,364,222 72,220,807 8,189,700 2,953,714

87% 10% 4%

1. MTDC ‐ Modified Total Direct Costs. Using OMB Curcular A‐21 as a guide, expenses exclude equipment and capital expenditures, inventorial equipment (and cost of goods sold), patient care, tuition remission, facility rentals, scholarships and fellowships.

ALLOCATION

FUNCTIONAL CATEGORIESTOTAL

EXPENSESIN SUPPORT OF I&R MISSION

HOSPITAL/ CLINICS


OVERHEAD RATE

OTHER SPONSORED ACTIVITY 39,596,601 3% 3,717,400INSTRUCTION & DEPT. RESEARCH 336,073,582 26% 31,551,195ORGANIZED RESEARCH 313,809,008 24% 29,460,956NIMITZ MARINE FACILITY/MPL 36,173,471 3% 3,396,031JOINT/INTERAGENCY PERSONNEL 7,404,221 1% 695,122OTHER INSTITUTIONAL ACTIVITIES 36,216,854 3% 3,400,104

Subtital I&R Actvities 769,273,737 60% 72,220,807 9.4%

HOSPITAL/CLINICS 448,791,039 35% 8,189,700 1.8%AUXILIARY AND OTHER SELF‐SUPPORTING 71,543,572 6% 2,953,714 4.1%

1,289,608,348 100% 72,220,807 8,189,700 2,953,714OVERHEAD CATEGORIES

INSTITUTIONAL SUPPORT 646,257,251EXCLUSIONS 128,663,401

774,920,652

2,064,529,000

2 of 2ASSA Task Group

Revised : May 20, 2010

Attachment BUNIVERSITY OF CALIFORNIA, SAN DIEGO

Auxiliaries & Self Supporting Assessment Task GroupComparison Between Administrative Overhead, Differential Income, and Federal ICR Rates

Negotiated CalculatedAdministrative Overhead Differential Federal Research Federal

(Campus) (Hospitals) (Med Group) Income Overhead ComponentsRate Components

AdministrativeDeptartmental Administration ‐ ‐ ‐ 16.80% 16.80% 17.20%General Administration ? ? ? 6.50% 6.50% 7.73%

Human Resources and 0.04% 0.06%Payroll 0.10% 0.17%Purchasing/Disbursements/Receiving 0.56% 0.00% 0.56%General Accounting 0.08% 0.01% 0.07%Travel 0.90% 3.76% 0.52%Cashier's Office variable 0.00% variable

Sponsored Project Administration ‐ ‐ ‐ ‐ 2.60% 3.37%Student Administration & Services ‐ ‐ ‐ ‐ 0.10% 0.10%

FacilitiesBuilding Depreciation ‐ ‐ ‐ 5.00% 5.00% 7%

Building Interest (2) ‐ ‐ ‐ 4.00% 5.00% 4.77%Equipment Depreciation ‐ ‐ ‐ ‐ 3.50% 3.84%Library ‐ ‐ ‐ ‐ 2.00% 3.95%Operations and Maintenance ‐ ‐ ‐ 13.00% 13.00% 12.64%Rounding ‐ ‐ ‐ ‐0.30% ‐ ‐

Rate ? ? ? 45.00% 54.50% 61%

Actual Cost Recovery (2008/09) 1,775,448$ 339,484$ 342,407$ 2,752,000$ 130,720,004$

(Campus) (Hospitals) (Med Group) Elig. Exp.* Federal ResearchMagnitude (2008/09 MTDC) * 146,952,667$ 501,627,039$ 122,732,139$ 39,580,516$ 451,634,937$ (total expenses)Effective Recovery Rate 1.21% 0.14% 0.28% 7.0% 28.9%

Potential Recovery at Calculated ASSA Rates: 4.1% 1.8% 4.1% 31.0%6,025,059$ 9,029,287$ 5,032,018$ 12,283,608$

Focus of Charge #1 Focus of Charge #2

Source: 4/22/10 ASSA Projectoins Source: 4/22/10 ASSA Projectoins

Source: Financial Analysis Office

* MTDC = Gross expendiutures related to outside sales, less cost of goods sold, inventorial equipment, and previously paid administrative recharges.

1.28%

Revised 5/20/2010

Attachment CUNIVERSITY OF CALIFORNIA, SAN DIEGO

Auxiliary and Self‐Supporting Activities Task GroupActivity Subject to Differential Income or Administrative Overhead ‐ All Expenditures Based

Based on Fiscal Year 2008/09

Differential Income Revenues Recharges Expenses Modified

Documents

Auxiliary & Self-Supporting Activities Task Group Summary & Recommendations · 2021. 1. 16. · initial Tiger Team, thus maintaining the crucial continuity needed to ensure timeline