CTI Podcast - Episode 38: Facilities & Administration Costs with SUU's SPARC Office
Matt Mckenzie: Welcome to the SUU CTI podcast. Have you ever had a great idea that you wanted to implement in your classroom but didn’t have the funds? This is where the SPARC office at SUU can help off in this episode, we’re going to talk to Sylvia Bradshaw, and Carrie Childs. But how to make the most out of your grant funds by utilizing facilities and administrative costs or better known as F&A. Greetings, everyone. My name is Matt McKenzie. And I know I’m not the host you’re used to hearing on this podcast, but during the summer months, I’m going to be taking over for Tony Pellegrini. And talking to different individuals around campus and in different organizations, about how they can impact teaching and learning in higher education. Today I have with me, Silvia Bradshaw, and Carrie Childs, with the sponsored programs, agreements, research in contracts group department, SPARC. I know you better a SPARC, which is why I’m slowing down there to make sure I say that right. I’ve got it written so I know I’ve worked a little bit with you. Our department CTI currently has a grant that’s going on. We’re definitely communicating with you about how to adjust things and where can we spend money but tell us a little bit about what this SPARC do. And how’s that beneficial to as you?
Sylvia Bradshaw: Awesome. I’d love to talk about this. Thanks for having us here. We’re excited to be here today. So sponsored programs. That’s the term that many people don’t understand. That’s really what the rest of our title is. Sponsored Programs, agreements, research and contracts. The agreements research and contracts are sponsored programs. Somebody just very smartly put that all together to make a catchy acronym for some time down the road and we inherited it and we liked the term SPARC we like to be called SPARC.
Matt Mckenzie: It’s an easy one to remember.
Sylvia Bradshaw: It is it is but so many people have no idea what that really means. But the actual what it means is grants. Not your student grants this they get Pell grants and sort but not that’s why we use the term sponsored programs is to try to differentiate from that. These are the grants the types that come from federal sponsors, state sponsors, foundation sponsors, some local government sponsors, that give us money to do a project or a program on behalf of something they want to benefit, but it also mutually benefits SUU.
Matt Mckenzie: So that would be like I know my wife Jen is has a grant where it pays for practicing teachers to get their Special Ed degree. It’s those kinds of grants that would go through your office.
Sylvia Bradshaw: Exactly. So the state gives her money to set up a program to attract teachers to come to SUU to learn more about getting that endorsement for special ed. So they give us funding so that Jen can then go create that program, and we pay for her time to do it. We pay for the travel for the participants that are in the program to make all that happen. So it benefits SUU because we’re able to be the leader, so to speak of that special ed environment and to help train our educators in the state and it also helps obviously the whole day, because we are now getting better trained educators. So yes, we love those types of grants. Jen’s a rock star.
Matt Mckenzie: So we’ll be happy to hear that. No, I because I also know that my department is involved with SPARC as we are working with the virtual and augmented reality grant. Now that we have that those funds, we have the MOU. We’re starting to do things and I know we’re trying to collaborate to figure out what can we do what can we not? And I know that as we talked about that and we talked about how that grant works, and it’s a learning process like everything else in life, it’s a learning process. And there was a key aspect of our grant that should have been included, but we did it. Do you want to talk about that for a second?
Sylvia Bradshaw: I would love to I believe what you’re referring to is the F&A rate. F&A stands for facilities and administrative rate. This is often a misunderstood concept with grants. The rate at SUU for F&A is 45% of salaries, wages and benefits. So that means if you have a $20,000 grant 10,000 of it is paying for salaries, wages and benefits. We would charge $4,500 On top of those salaries, wages and benefits. This often doesn’t come across if you’re a PI and you just put in all the work to to write a grant and you’re excited, you know exactly how you’re going to spend that $20,000 And then here comes SPARC and says, Oh, you gotta give me $4,500 of that. It doesn’t always feel so good. And so, we work really hard to help people understand upfront going into it what F&A is that those are actual real costs that we do have to to cover from the institution. So I’m gonna back up a little bit. This is a loaded question. Okay, if I get talking too deep you just stopped me and you you say hey, Sylvia, back up.
Matt Mckenzie: Don’t worry. No problem stopping anyone saying I have no clue what you’re talking about.
Sylvia Bradshaw: Great. Okay, so what is F&A? F&A is kind of like overhead. If you were to go to Walmart and buy a tub of toothpaste, you’re not just paying for the toothpaste. It’s inside that too. You’re also paying for the associates that stocked it on the shelves, you’re playing for the lights that are on so that you can see what’s on the shelf, you’re paying for the cashier that’s going to go in to check you out to pay for the building that you came to pick up that piece to pay so you’re also paying for the truckers that brought the toothpaste to Walmart you’re paying for all those costs. It’s really, really hard to say, to allocate to that one tube of toothpaste, it would really be too much to for any accountant anywhere to try to assign that. And so with grants is the same way. When you bring a grant to an institution you have it often affects payroll and HR because we’re hiring people to do the work, whether it’s students or whether it’s faculty members, or whether it’s people from outside, we’re hiring people. So that is creating an impact for all of our administrative type services. We’re also creating space to do that work. We’re creating a heavier burden on custodial. We’re also creating IT support, the sponsor programs offices support all of the administrate administrative offices, like the deans, the chairs, the admins in each different area. Those are all absolute real class that we’re paying for. And anytime we bring on a new project, we’re adding burden to those positions. So we have to pay for it somehow. They’re definitely costs that are real. So many people get a little confused though, because there’s this thing called sunk cost. Yeah, but SUU has to pay that anyway. So why do I have to pay for it out of my grant.
And so that’s where it comes into play that you have to start looking at the federal regulations and guidelines. So part of the process to come up with this 45% rate. You have to negotiate that with the federal government. Every four years our accounting services goes through this very long, long, long process of creating what they call cost pools. These cost pools are made up of depreciation on buildings, facilities, utilities, the library, the administration, and they have to account for all of those and find out how much does it cost the university to do business with outside entities. And so they have a formula where they divide that by the base, the base we have chosen is salaries, wages and benefits. We could have chosen to do what we call modified total direct costs. But for SUU we did not right now we are salaries, wages and benefits. So they basically said how much does it cost to administer work for SUU? They took those administrative and facilities cost divided up by the amount of salaries, wages and benefits that she pays. And it came up with 48.8% That’s what it came up in the year 2016. Now, we sent that in to the federal government, they looked over a great big huge spreadsheets and they said: “Ah, we’re gonna negotiate you down” and they were read landed was 45%. So it wasn’t this arbitrary rate that we just kind of pulled out of nowhere and said I want to take your money. It is an absolute federally regulated process.
Matt Mckenzie: You mentioned the cost of doing business with outside agencies. But really there’s a cost of doing business inside of our institution, with my department being involved with instructional design, Canvas support, multimedia creation, and several others. I can definitely see where we do a lot of things that maybe skirt that scope of our job or even go outside of our job just a little bit to help out a group that maybe has a grant and that costs us from doing things that might be more applicable to what we’re supposed to be doing. So that that internal doing business.
Sylvia Bradshaw: Absolutely. Yep, the cost is definitely there. I kind of like my paycheck and another myth that really comes out of this. Is that all that only applies to federal grants. You only have to apply that 45% rate to federal grants because it is a federally negotiated rate. But what you need to understand is that part of that negotiation, the federal government is saying what does it cost to do business with SUU? And how do you apply that consistently to all your grants because they don’t want to be charged for that rate. And then have an industry partner or the state not be charged that rate so that means that they are subsidizing what is not being recovered through those other types of grants. So we have to actually make an attestation that yes, we we treat that rate across the board consistently to our grants. Now that doesn’t mean that we charge it to all grants. Every single grant has its own way of being they all have their own guidelines, but we do if we don’t charge the full rate, we have to put in a justification and understanding as to why SUU chose to not charge the rate in this circumstance and how else are we going to cover those costs. That’s the other piece that so often is never talked about is who is going to pay those costs if we don’t recoup the F&A on it. Who does pay it? I know Marvin just gave a really great budget presentation a couple of weeks ago, and they always talked about How does SUU get their money? You have the portion that’s from the state from the taxpayer base and you have the portion that’s from the students from the tuition base. It’s usually 49 - 51% that swings kind of back and forth a little bit and that’s who has to pay if we don’t recoup those F&A costs. It goes back to that pool to that taxpayer base and that student base. So we have to be really careful that when we’re waiving the F&A costs, that we understand that yes, it makes sense. It makes sense to pass that cost on to the taxpayers and the students. And there are absolutely grants where that does make sense for sure. But we just want to be cognizant of the why behind what we do with that.
Matt Mckenzie: Well, or maybe that’s a great point, because when we think about the cost of higher education today, you know, Utah this year had a tuition freeze across the state and the governor asked that no tuition raised. You know that, that right there. If we think about all these grants that come through, and if that’s going to be passed on to either the taxpayers through legislative action, when we get our funds every spring or through the student tuition is it really fair to push that back on the students? You know, we don’t know what we’re gonna get at any point from the state until it’s done. So yeah, I mean, we want to keep tuition rates down. SUU has done a great job in the last several years of not raising tuition. So yeah, that definitely makes sense. We need to be thinking about, “Do we want to pass that on?” Is that something we need to make sure is included?.
Sylvia Bradshaw: Right. Yeah, we’re passionate about our students here at SUU. It’s always student first, so that’s why the SPARC office can sometimes get a little bit particular say, “Hey, have we thought about this?” An interesting side note. One of our student interns in our office is Carson Brown, who is the student body president for next year, and he understands who pays for F&A is not collected.
Matt Mckenzie: Yeah. You and I were talking about before we came in here and started the podcast that that was an area that on the AR/VR grant the augmented and virtual reality grant that CTI is overseeing right now. We failed to add that we didn’t add that to our grant. That cost is going to have to be covered one way or the other from either legislative funding or tuition dollars.
Sylvia Bradshaw: And again, that could be a very good example of how is this going to be benefiting students? Students are absolutely going to be benefited very positively by that VR grant but on the other hand, if we could have recoup some of those costs, we definitely would want to ask for it to recoup it. So our first rule of thumb is always ask. We always ask for it. A sponsor can come back and say, No, we don’t agree. We’re not going to pay for that. But we always ask upfront.
Matt Mckenzie: That’s the beauty of it. What’s the worst they’re gonna do? Tell us no? Fine they told us no, now we got to make sure we can accommodate it here inside of our own.
Sylvia Bradshaw: That’s right. That’s the law and the grant world if don’t ask you don’t get it.
Matt Mckenzie: Absolutely. Sylvia, we’ve already learned quite a bit just in this one grant that I’ve been involved with and getting into augmented and virtual reality studio created in in place. And one of the things we learned about was this is the facilities and administrative services, the F&A and what we should do there, but now we’ve now that we received a grant, we’re transitioning into a different phase of the grant. And we’re with you now Carrie.
Carrie Childs: Yes, that’s right. So I work a lot in our post toward functions. So that’s anything that happens after we receive an award. So we get our letter that says congratulations. Sometimes that’s good. Sometimes that’s a bad. It kind of just depends but always an adventure. But as part of these agreements, we’re promising to do something, right?. Whether we’re completing a program, there’s usually reporting requirements involved. We’re spending money that isn’t ours, but it’s been, you know, endowed, entrusted to us. And so my role is to make sure that we’re fulfilling those requirements that we’re spending the way that we should be. We’re completing the program the way that it should be and if things go off the rails, because you know, sometimes that’ll happen that we’re communicating with our sponsors, so that they know that there’s no surprises and that we’re still meeting our requirements when it comes to those agreements. So I have a lot of in that area. We have several on our team, though, that that helped. Katie is mainly in charge of our compliance. And so depending on what department you’re in and who you worked with, at the beginning, you’ll really there speak with me or you’ll speak with Katie. But, anyway, yes, but that’s kind of what we’re transitioning now to in your grant is that we’re fulfilling those responsibilities, right? You’re building your program. You’re creating content, you’re looking at hardware, and we’re looking at what was put into the grant and we’re making sure that we’re, we’re fulfilling those roles, those responsibilities.
Matt Mckenzie: So then a question for both of you, I guess. In a situation let’s and we’re gonna use the AR/VR grant where we know we did not but the F&A funds into it. Now that we’re into that transition of doing everything, how does that really impact the university? And someone that would be in my position as the PI what would they need to be familiar with when it comes to that aspect? I know we kind of talked about let’s put it let’s reframe it inside of here’s a grant that we know as he got did not have that. What’s the impact there?
Sylvia Bradshaw: Great question. I love that. And first of all, I got a comment on on how we use this term F&A or this is the only time we get to be vulgar. And not really being vulgar.
Matt Mckenzie: [laughter] It’s only vulgar if you’re using it in the inappropriate way and we’re not we’re it’s it’s hard to say financial and administrative services over and over again.
Sylvia Bradshaw: Absolutely. That’s exactly why we shorten it. But in the pre-award side, we do kind of use it and a little bit of hesitation there because it is hard to take away part of that budget. But on the post award site, this is when F&A gets really exciting and actually really fun.
Carrie Childs: Can I back up just a little bit. So there’s a lot of times that it’s meant to be planned into your award. When you’re looking at building your budget. Federal sponsors know that this is something that’s part of those budgets and so they kind of expect to see that. So it’s a matter of back to the we need to ask for it. Because a lot of times they do accommodate it. So you can ask for your whole budget, the whole $20,000 and then the FMD gets added on top of that if we know what we’re doing when we ask. So, right.
Sylvia Bradshaw: That’s why it’s so important to engage our office before you hit submit. We need to absolutely be part of that process to help develop those budgets that include the F&A, and Carrie brings up a really great point here. A lot of the programs with the federal agencies, you won’t even have your application reviewed if you have not included F&A because they consider that that as cost share. They know those costs are real. If you have not included it. It kind of think “Does this institution really know what they’re doing? They really know how to plan out their grants? They haven’t included this” It’s against federal rules to include cost share on a lot of the agency programs, and they won’t even review your application because you number one crossed that line of not including the full amount of costs that are involved. And so they they can’t they can’t have anybody buying an approval on a grant by putting in cost share so a lot of times they will just disqualify them if if they have included that.
Matt Mckenzie: But that’s great to know because I mean that doesn’t get you out the gate. Right? They take a look at your your application or your request and risk of moving to the side because they don’t know what they’re doing or they didn’t include this and so yeah, you don’t even get looked at, if you don’t have it. That’s that’s good to know.
Sylvia Bradshaw: And that’s not true a state the state is the opposite. We got to know who it is we’re dealing with and and just develop to to those partners of what their expectations are. But back to the fun side. Of the post award with the F&A. So we’ve now collected that $4,500 that we’ve talked about earlier, where does that go? Well, we have a memo from our VP of Finance that allows a distribution of those funds. So off the top, we redistribute the 6.5% of the $4,500 to the library to help with the support services they provide. 18.5% goes to the SPARC office to help keep our office up and running and to give us funding to help faculty and staff in training and understanding how to engage in grants. The rest of that 75% gets distributed differently depending on whether it’s an academic grant, or if it’s a non academic grant. Academic grants 20% goes to the provost 20% goes to the Dean 20% goes to the department chair and then 15% goes to the PI. What I mean by goes to we actually create an account we call it an IDC account for indirect costs. And it’s in the name of either that department that deemed the provost or the PI and they can use those funds for anything that furthers your scholarly or creative activities. That’s a pretty broad ability. And it is not tied to the grant at that point because once the funds are recovered to SUU, they’re not tied down to the regulations anymore. So those accounts become really golden. You can use those to hire students for publication costs, or traveling to conferences. Whatever it is you need to further your scholarly or creative activities. That is absolutely incredible. When we go to conferences and talk about this, so many people are just absolutely jealous and wanting to know now which institution do you work for? Let me know when opening opens up because it really is a very generous, generous way of supporting our faculty and staff.
Matt Mckenzie: But yeah, I’m kind of like well, because I’m thinking about the grant that I’m the PI on and what could we have done with some of the indirect costs or having an indirect cost account set up to where we could take some of that money and do additional things to support those initiatives?
Sylvia Bradshaw: And it’s great too, because then the chairs and the Dean’s have funding as well for whatever it is they want to promote within their areas of responsibility. So it’s really is a great way to to give back.
Matt Mckenzie: So that’s a really great point about thinking about how those indirect costs can go back to benefit additional things. Such as going to conferences or trainings or, or whatever the case may be. From a faculty perspective, because you mentioned that part goes to the provost office, because correct me if I’m wrong, if a faculty member submits agreement than that percentage is gonna go back to the provost office, their college,
Sylvia Bradshaw: Their chair and then 15% That to themselves and an IDC account. So it is still an issue you account but they have this spending control over that account.
Matt Mckenzie: What what is what I guess what would be a recommendation or common thing that you see faculty make a mistake with when they get this indirect costs account.
Carrie Childs: Can I answer that?
Matt Mckenzie: By all means! Yes.
Carrie Childs: So the main thing that I see it isn’t necessarily in in using the IDC account it’s in recognizing what it’s meant to cover. So a lot of times, we’ll have a piece of the grant that needs to be like an evaluation or a survey or something like that. They’ll actually assign those responsibilities to administrative employees, which because we’re already charging the F&A recovery to the grant. We actually can’t charge an administrative salary line to it or even given overload for it. So that time that they’re assigning off to an administrative employee is really hard to justify on a grant. Now, if they wanted to do something and work with the department and with the college, they could get approval, particularly if that administrative personnel wasn’t a full time employee, if they were on a shorter contract. They could then be hired essentially, to fulfill that work but it would come off of either the IDC or, or another source like that. So I mean, that’s something that I see a lot is they say, “Hey, we have this work that needs to be done. I want to pay my admin a little bit more because she’s taking on extra responsibility” Which is is valid, but it’s really hard to justify when we’re already charging an administrative costs to it. So I see that a lot.
Sylvia Bradshaw: Right so you couldn’t charge the grant for that extra amount. You want to pay your admin for being a rock star, you would then pay for that out of your indirect cost account.
Matt Mckenzie: Yeah, that makes sense because the government you got to be able to everything has to be justified. Right?. And so when it comes to that time, where you gotta justify this is what we did with funds, right? It’s it’s actually causing some headache.
Sylvia Bradshaw: It can! Well, and because it is, by definition, indirect, I mean, it’s really hard to track. So I mean, we can’t say, Well, my admin spent 5% of her time doing this. Well, how do you actually track that? How can you prove that and so yeah, that’s that’s why they make it the structure that they do. So that we can say it’s just a flat percentage, but we just need to make sure that we’re not double charging at that point.
Matt Mckenzie: That’s good to know. And I’m sure that’ll be good for faculty to know too and I think that’s an important thing. That’s why they need to keep going back to you. You helped me get this grant, helped me continue, help me do it. So, you know, obviously, keeping keeping involved with you all throughout the entire process, not just from getting the grant but the life of the grant and then the end of the grant making sure that as faculty or staff, we’re ensuring that our spending is appropriate that we’re not going to get SUU in trouble get ourselves in trouble. is really important. What other thoughts or final thoughts do you have for faculty that are listening Right now? When it comes to getting grants or making sure that the F&A is set up correctly?
Sylvia Bradshaw: And you know, I’d actually like to back away from the F&A discussion part of it. That’s that’s kind of the compliance of grants. And a lot of times people look at the SPARC office and they think about the compliance side. What I’d really like to leave with is the more fun side of this, what is the impact of grants here at SUU, we have so many incredible, incredible employees that are going above and beyond and doing amazing things with with the grants. Our largest grant is the Headstart program. What an incredible program for the community and these at risk kids to get them on the right track from the very beginning that I’m so proud of SUU and where we stand with that. How amazing are these TRIO programs where they add those extra services for the kids or that don’t usually make it to college and they help make sure that they get here with that is absolutely generationally uplifting. And it those are the sorts of things that are really the most fun when we watch a professor that’s put in several different grants for a specific research that they’re passionate about. And they finally get that letter that says, Congratulations, it is just an absolute beautiful day in our office we all celebrate and get excited and it is just so fulfilling. To just see people’s passions come to light, and to be able to have that green light to say go yes, go and do and make this amazing thing happen and engage the students. The experiences that are offered to the students because of grants that are brought in. They are transformational for the students they wouldn’t get this kind of experience anywhere else and I’m just so proud of those people that that dive into this and put that extra work into it and it makes for an exciting, exciting career for me and being here with SUU.
Matt Mckenzie: I can only imagine because I got the opportunity to watch Jen Mckenzie present her grant to some faculty up in Granite School District and basically told them you can get this certification for free all you have to do is fill this stuff out. And I remember watching their faces I was kind of out in the hallway. And I remember watching their faces like What?
Sylvia Bradshaw: What is that word again? Free?
Matt Mckenzie: There’s gonna be no [unintelligible], no it pays for it and so, you know, you’re right, that the impact that it has on our community, locally, statewide, is huge.
Sylvia Bradshaw: Now here’s enough bad in the world let’s let’s start talking about good or bad and this is an area where there is a whole lot of good.
Carrie Childs: My parting words would be don’t give up. If you get that first letter and it says no, sorry, not not this time. Don’t give up. Because it’ll come eventually. And we’re here to help you. And honestly, if you do get that letter that says congratulations again, don’t give up because we’re here to help. And, you know, we try to be friendly and responsive and honestly, we’re proud of you and we want to help you. So reach out.
Matt Mckenzie: That’s great. But I think that’s I think that’s a great note to end on. For those of you listening, if you’re interested in even to small grants, this doesn’t have to be some big multi million dollar grant. This could be you know, we were using an example of 20,000 but I’m sure there are grants that are smaller than that.
Carrie Childs: I think our smallest is 1000 right now.
Matt Mckenzie: So there you go. $1,000 To do something unique and innovative. in your classroom or with your curriculum. Reach out to the SPARC office. They’re wonderful to work with. I’ve been working with them for a while. We’ve been in the same branch of the Provost office for a while working directly with the grant for coming up on a year now. And they’re wonderful to work with, easy to work with. They don’t make you feel dumb when you ask questions or you forget to include F&A into your grant. They work to educate you and make you ready for that next grant you go for so please take some time reach out to the SPARC office and get some plans to do something unique or innovative in your classroom. Thank you to Sylvia Bradshaw and Carrie Childs for taking some time today to talk about how grants can help educators be innovative in their classrooms, and some of the key aspects of a grant such as F&A, that they sometimes may overlook. I hope you’ll join us throughout the summer as we start having other conversations not only with the SPARC office, but we’re going to have Steve Meredith, join us to talk about who is the new learner at SUU as well as ways that we can be more inclusive in the classroom for all of our students. We look forward to having you join us back again. Until next time, keep innovating.